House of Representatives
26 October 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 ask the Treasurer whether it is a fact that the Minister for National Development, when addressing the 1960 conference of the New South Wales division of the Liberal Party, stated that the Federal Government’s actions to prevent inflation getting out of hand had been successful. Does the Treasurer regard this as a statement of fact? If so, will he explain the continued increase in the cost of living as demonstrated by the figures which were released recently by the Commonwealth Statistician?


– My colleague, the Minister for National Development, can be relied upon to talk good sense on all occasions. When the honorable member for East Sydney quotes merely one sentence out of a lengthy speech, without giving any accompanying detail, he gives perhaps not merely an incomplete picture but a picture which calls for more amplification than I would be permitted to give under the Standing Orders. I believe that the four principal measures which the Government announced early this year have been achieving some useful effect. The general state of the economy calls for almost daily attention by the Treasury, and from time to time the developments and trends in the economy are reviewed by the Government. As the Government believes action becomes necessary in relation to those developments and trends, it takes its decisions and announces them or embodies them in legislation as circumstances require. That process will continue.

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– Can the Treasurer inform the House of some of the more significant causes and effects of the sharp rise in gold prices on the London market? Are there any indications of the likely duration of the fluctuations? Could these bring any benefits to the producers of gold, particularly those who are not members of the Gold Producers Association and, therefore, not able to sell gold on the open market?


– The interest of the honorable member for Kalgoorlie, who represents a great gold-producing area, is understandable, but I am sure that he will appreciate that the question is not one which lends itself to a brief reply if it is to be covered adequately. According to my information, the London market for gold is not very large. It normally responds to the pressures of supply and demand. Generally speaking, the fluctuations have been within fairly narrow limits. The information that 1 have been able to gather so far suggests that the recent increase in demand, which led to a sharp increase in the price of gold on the market there, appears to have been touched off by some advice which was given by Swiss bankers to clients who had put money on deposit with the banks but who, in the circumstances of the Swiss economy at present, had been charged a rate for depositing their money. This is the reverse of the normal practice in these matters. The Swiss bankers had given some advice to their clients that they would be well advised to put their money into gold rather than pay a charge for depositing it with the banks. There is also no doubt some element in this of a belief, which has tended to grow over recent times, that the United States Government may be forced to increase the price of gold because of the movement of gold from the United States. But the United States Administration has been quite emphatic that it has no intention of moving from the present price for gold, and it has behind it gold worth some 19,000,000,000 dollars - the equivalent of half the gold reserves of the free world - to back up its policy. We in Australia have supported the South African case for an increased price for gold on other occasions, but unless the United States Government moves in the matter the price is likely to remain unaltered. There is opportunity given to Australian gold producers to take advantage of premium prices offering on the world market, and I gather that some have done so. No doubt if this increased price continues they will do so even further in the future.

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– I direct a question to the Treasurer. I ask, Sir: In view of rising interest rates in the money market, and the fact that the Commonwealth has followed these rises by raising its rates on medium and short-term securities and special bonds - and, more recently, on seasonal treasurynotes - does the Government intend to raise the long-term rate or intend, if necessary, to support the present rate?


– I have always realized that the Deputy Leader of the Opposition exhibited a certain naivete in economic matters, but if he expects me to answer that one without notice he is simpler than I thought.

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Poisoned Water Supplies


– Has the Prime Minister seen a report that water tanks and troughs throughout the north of Western Australia have been poisoned with arsenic as part of a water-poisoning campaign against kangaroos, and that there is a great danger to the nomad aborigines who roam this area, who cannot read the warnings inserted in the press even if they could obtain newspapers? Will the Prime Minister make urgent representations to the Premier of Western Australia to see that every possible action is taken to prevent a tragedy which could occur if the aborigines should drink from these tanks and troughs?

Prime Minister · KOOYONG, VICTORIA · LP

– I regret to say that 1 have not seen the report referred to by the honorable member, nor would I be in too much of a hurry to tell the Premier of Western Australia what might be done about it. But I shall certainly find out from the Premier what the facts are and advise the honorable member.

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– T ask the Prime Minister what action has been taken or will be taken by this Government to bring down legislation to restrict the growth of mono*polies in this country in accordance with the assurance given in the GovernorGeneral’s Speech.


– As I said in reply to a question, last week I think, this matter has been under the very close examination of the Attorney-General, and just so soon as something can be said and done about it, it will he said and done.

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– I ask the Prime Minister: In view of the decision of the University of Sydney to limit its number of students, and in view of reports that the New South Wales Labour Government is examining a site near the Royal North Shore Hospital, Sydney, for a new university, will the right honorable gentleman make it mandatory that any Commonwealth funds granted for a new university in New South Wales will be granted only if the university is established away from the metropolitan area of Sydney, and preferably at Newcastle or some inland city?


– The problem referred to by the honorable member is one upon which the Government expects to receive advice from the Universities Commission. I have only just received the commission’s first report, whch is very comprehensive. Whether this type of problem is dealt with in it or not I do not yet know, although 1 imagine it probably is. But the honorable gentleman will appreciate that this is a problem which is not just political or even geographical; it is one in which the best interests of university education and the availability of that education to the people must be taken into account. Therefore, we would expect in the first instance to receive advice from the Universities Commission. Having received that, of course, we would have our own responsibility for what we did about it.

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– I preface a question to the Minister for Supply by reminding him that in September last he gave an answer to a question asked by the honorable member for Bendigo concerning the Bendigo ordnance factory. To refresh the Minister’s memory, I recall that the honorable member for Bendigo directed attention to the fact that the Department of Supply was said to be gravely concerned at the loss of first-class tradesmen from the ordnance factory because the factory was closing down. I think the honorable member asked the Minister to state the effects, if any, of the Australian-American mutual weapons agreement on the prospects of future employment in the factory. I recollect that the Minister said he would give the matter consideration. In view of the fact that a mission has recently visited Australia and that three Americans representing the mission visited the ordnance factory in Bendigo on Tuesday, 18th October, will the Minister inform the honorable member for Bendigo what has been done to save further unemployment in the ordnance factory?

Minister for Supply · PETRIE, QUEENSLAND · LP

– I am not aware that in an answer to a question, I expressed any concern on the part of the Department of Supply about technical officers leaving the Bendigo ordnance factory. In fact, at that time I said that the Prime Minister, the Deputy Prime Minister and the Treasurer had indicated that there were not likely to be any dismissals from the factory, but there might be some transfers between that factory and other factories controlled by the Department of Supply. Such have taken place and there has not been any reduction in the number of employees within the Bendigo ordnance factory. Even at this moment we are not concerned about this problem. I am not able to say precisely whether the ordnance factory can undertake work under any mutual aid arrangement between the United States of America and the Australian Government, but my impression at this moment is that there will not be any opportunity for such work.

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– I direct a question to the Treasurer concerning criticism expressed both inside and outside this House of his absence during the Budget debate to enable him to attend certain important international conferences overseas. Will the Treasurer inform the House why such conferences are held at that particular time of the year? Is it the common practice in other countries, as in the United Kingdom, for budgets to be introduced before the commencement of the financial year or, at any rate, earlier than the Budget is presented in this Parliament? Will the Minister inform the House whether it is the practice of other countries to send their Treasurers or principal Finance Ministers to represent them at these conferences? Finally, is it to be expected that the Treasurer will seldom or never hear criticism in this House of his Budget proposals and associated policies?


– I tabled in the House during the first week after my return a very bulky document which set out in some detail the substance of the proceedings at the conferences I had attended. In view of the honorable gentleman’s interest in the matter, I hope that, if he has not already done so, he will make some study of what I placed before the House at that time. The time-table that has become firmly established for an- >al meetings of the International Monetary Fund, the International Bank for Reconstruction and Development, and the International Finance Corporation provides that they normally meet for a week in the third or fourth week of September. As there are 68 member governments represented at the conference 1 think it would be difficult tor this country to persuade the majority that the time-table, which has now stood for several years, should be changed. I assume that some of the governments concerned would have brought in their Budgets well in advance of that time. Whether all would have done so is, I think, a matter for some research and I shall see what I can find out on that point. There are circumstances in Australia which make it difficult for us to bring down a Budget much earlier than the beginning or the middle of August.

The Finance Ministers of all the principal member countries - I cannot think of an exception - were present at the most recent conference. It has become the practice of British Commonwealth countries to hold a meeting in London in the week preceding the annual meeting of the other bodies that I have mentioned. At this London meeting, not only are our Commonwealth problems of common interest discussed but efforts are made to concert Commonwealth viewpoints on issues likely to arise at the annual meetings in Washington. Whether it is necessary for the Treasurer of this country to attend these meetings is, I think, a matter for the judgment of the Government and the Parliament. Certainly all the other countries to which I have referred think the meeting sufficiently important to have their Treasurers, or Finance Ministers as some of them are called, representing them there.

As to the problem of meeting Budget criticism inside Australia - I refer to the last two years, which are the only years in which I have been cast in this capacity - I arranged that the general debate on the Budget should occur while I was still in Australia. The Estimates were then debated in the presence of the individual ministers concerned. I can assure the honorable gentleman that I very carefully read “ Hansard “ and the press to see what has been said in the course of the Estimates debate. I do not deny that it would be of advantage for the Treasurer to be here, just as I believe that it is of great advantage to this country for him to be at the international meetings. Unfortunately, not being possessed of supernatural qualities, he cannot be in both places at the one time and he must do the best he can. The process of decision by international conference is, I think, moving very much more rapidly than most of us in this country realize. It is my conviction that Australia must be strongly represented at these international gatherings, not merely to have a band in decisions which might directly affect us, important though they may be, but also to play some part in the movement towards closer international cooperation on issues affecting the prosperity and peace of the world.

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– Will the Minister for Trade take action within the Government to appoint a royal commission to inquire into all aspects of marketing dried vine fruits, with special reference to the alleged dishonest leakage of information to dealers respecting appraised prices, to the disadvantage of growers? In order to prevent exploitation of growers and to ease the grave unrest in the industry, due to depressed markets and losses to growers, will the Minister, pending such inquiry, reconstitute the relevant board by removing the chairman, Mr. Malloch, who is stated to be associated with buyers and who is stated to disclose private board information to buyers?

Minister for Trade · MURRAY, VICTORIA · CP

– I am sure the Government would not consider the suggestion made by the honorable member that a. royal commission be appointed. The Australian dried vine fruits industry is. a very tightly organized primary industry. Its record of organization goes back further than that of practically any other primary industry. It also has an. enviable record of effective marketing. If the industry is faced with any problems, I am sure that its representatives know that they may come to me, as Minister for Trade, or to my colleague, the Minister for Primary Industry, and expect the best advice and the greatest measure of assistance that it is possible for us to give. Any suggestion that Mr. Peter Malloch has acted other than in the best interests of the dried vine fruits industry is, I think, outrageous, for he is one of the real leaders and one of the best men in primary industry in this country.

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Payment of Rates


– My question is addressed to the Minister for External Affairs. I preface it by saying that almost six months ago I raised with the then Acting Minister for External Affairs the question of the payment of rates on the large number of diplomatic and consular properties in my electorate. Some of these consulates and other diplomatic posts pay their rates, while others fail to pay them and deny all responsibility for such payment. I point out also that failure to pay these rates throws a considerable burden on the other ratepayers in the area, who are compelled to pay increased rates so that municipal services may be provided1 free to the diplomatic posts concerned.


– Order! I think the honorable member had better ask his question.


– Will the Minister instruct his officials to expedite the gathering of all the information which is said to be required before a decision on this matter can be made? If it is decided that these consulates and diplomatic posts are exempt from payment of rates, will the Commonwealth arrange for suitable compensation to be granted to the councils concerned?


– As the honorable member knows, this problem is not a simple one, nor is it confined to one area or related to one country. Rules bearing on diplomatic immunity are reciprocal, and I think my colleague, who was acting in my absence, informed the honorable member that if his particular problem was to be solved, it would involve quite lengthy discussions and negotiations with other countries. These are, in fact, in hand, and they will be pursued as vigorously as possible.

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– I ask the Minister for Air: Have the American U2 reconnaissance aircraft at present in Australia been sent here to test radiation and fall-out, or have they been on a spy flight, or are the crews here to investigate possible spy plane bases in Australia?

Minister for Air · EVANS, NEW SOUTH WALES · LP

– The purposes for which these aircraft have come to Australia were fully stated by the Minister for Defence some weeks ago. Any suggestion that there is any secrecy about their activities, or that any spying is involved in such activities, is simply disposed of by the fact that the Australian press was invited to meet the crews and inspect the aircraft when they arrived at East Sale this week.

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– My question is directed to the Prime Minister in his capacity as Minister for External Affairs. Is the Government able to satisfy all requests from Colombo Plan countries for technical and administrative assistance? If it is not, has any consideration been given recently to a suggestion made in October last year that Australia might encourage retired teachers, technicians and persons with extensive administrative experience to give further service in such countries, where their qualifications would be of great value?


– I am not aware of any failure to comply with requests made by Colombo Plan countries, but I will take the earliest opportunity to find out whether there has been some failure. If there has been, the suggestion made by the honorable member will be a valuable one to take into account.

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– I address to the Minister for Labour and National Service a question which relates to the diminishing employment and loss in earning power by employees at the smelting works of the Electrolytic Refining and Smelting Company of Australia Proprietary Limited, at Port Kembla. I ask the Minister whether it is a fact that this important national industry now employs about 70 fewer men than was the case at the beginning of the year. Is it a fact, also, that a further decline in the numbers employed at this works is certain to occur, not necessarily because of dismissals but because of failure by the company to replace labour wastage? I ask the Minister, also, whether it is a fact that this unhappy form of creeping unemployment and wage reduction is due to the inability of the company to obtain adequate supplies of copper concentrates because of the export of large quantities of this raw material to Japan.

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

– I think it is true to say that the Electrolytic Refining and Smelting Company of Australia Proprietary Limited, at Port Kembla, has reduced the number of its employees by something like 70, which I think was the number mentioned by the honorable gentleman. This has been done, not by dismissing men. but by not replacing wastage. 1 think, too, that the honorable gentleman is correct when he says that one of the reasons for this - it is perhaps the main reason - is the exporting of concentrates to other countries rather than the refining of them in Australia. I should like to tell the honorable gentleman - and this is the most important part of my answer - that there are more than 950 job vacancies for men in the Wollongong District Employment Office area, about 460 of them being for skilled personnel and 450 for semi-skilled workers. I think that the number of men registered for employment would be of the order of 300. So, although I do not expect the Electrolytic Refining and Smelting Company to lay off any personnel, I emphasize that there are many job opportunities in the district, and if we can find people to fill those jobs, we shall be very happy to do so.

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– My question is addressed to the Postmaster-General. As many centres throughout Australia, and particularly in my electoral division, are anxious to obtain the benefits of automatic telephone exchanges, will the Minister say what progress is being made in the installation of these systems?

Postmaster-General · DAWSON, QUEENSLAND · CP

– Very steady progress is being made by the Postmaster-General’s Department in carrying out its plan for the institution of a completely automatic telephone system throughout Australia, as I have said1 on a number of occasions in this chamber. The completion of that programme will take a number of years, of course, but already subscribers in many areas are able, by utilizing the automatic telephone system, to dial direct to other subscribers over very considerable distances. I have not in my mind exact details as to how far the coverage of that system extends at present, but as the honorable member has asked me for that information, I shall obtain it and supply it to him.

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Poisoned Water Supplies


– I wish to ask the Prime Minister a question supplementary to that asked by the honorable member for La Trobe. I ask the right honorable gentleman, in the first instance, to bear in mind that the Pilbara district, where the poisoning of waterholes is said to have taken place, is the home of the Pindan people, who have managed to survive as a distinct tribe by prospecting for minerals and hunting. When the Prime Minister is inquiring of the Western Australian Premier whether there vs a direct danger of the poisoning of waterholes resulting in the poisoning of aboriginal people, will he also inquire about the effect on the aboriginal people in that district, where game and water are scarce, of the destruction of the aborigines’ only sources of protein - wild turkeys and kangaroos - and of their being deprived of their scarce sources of water?


– I am grateful to the honorable gentleman for his suggestion. I will be very willing to inquire into the matter.

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– I wish to ask the Minister for the Army a question concerning the future of the Royal Australian Air Force base at Rathmines, in New South Wales. I understand that it is the intention of the Air Force to withdraw all its units from that base by December or January next, and 1 ask whether it is the intention of the Army to take over the base for its own purposes.

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

– The Rathmines base is of great interest to the Army for a special purpose. An examination of it is being made now but no recommendation has so far been brought to me. There are, I know, rumours circulating in the area, which is in the honorable member’s electorate, that the Army is moving in, but I do not think that he should take that for granted. This matter will have to be very thoroughly examined before a determination is made.

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– My question is directed to the Minister for Shipping and Transport. Is the Minister aware of the statement made by a New South Wales Minister that New South Wales intends to spend £450,000,000 in the next ten years on a road and bridge building programme? Will the Minister concede that this emphasizes the need for a national roads plan? Will he agree that the resources of the nation should be mobilized to overcome our road deficiencies and to co-ordinate developments in all States to meet the defence transport requirements of Australia?

Minister for Shipping and Transport · CORIO, VICTORIA · LP

– As the honorable member is aware, the Australian Transport Advisory Council, of which each State Minister for Transport is a member, meets each year to consider problems concerning the development of roads. The Commonwealth has agreed to contribute to the States some £250,000,000 in the next five years. The fact that New South Wales is facing its responsibilities does not mean that the Commonwealth should contribute any more than it is contributing. When the new Commonwealth aid roads plan was outlined, it was pointed out that the shires, municipalities, State governments and the Commonwealth would spend some £750,000,000 in the next five years. I think it is clear that the road situation is being considered and adequately met.

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– I ask the Treasurer whether it is a fact that practically every Western country to-day is heavily subsidizing rural primary production. Also is it a fact that, because of this policy, overseas products are steadily forcing our products into a non-competitive position? [ ask the Treasurer, also, whether it is a fact that the recent severe rise of the basic wage in New South Wales was mainly due to the increased price of certain foodstuffs. In the circumstances, has consideration been given to subsidizing basic foodstuffs so that consumers may live on a competitive wage and people on the land may produce at competitive prices?


– Well, Mr. Speaker, that is quite a question. I am sure the honorable gentleman has been informed by his leader, the Minister for Trade, far better than I could inform him at this point, of the special problems which Australian primary producers face in attempting to compete with the subsidized primary production of the industrialized countries of Europe. I know that my colleague has been most strenuous and forceful in his advocacy of a more reasonable approach by these countries. Indeed, he pointed out here as recently as last night that the terms of trade of relatively underdeveloped countries which must market their primary products abroad have suffered in recent years. Australia has much in common with them, since we have a major problem in the marketing of some of our primary products. If these countries are to be effectively assisted, there must be a more realistic price structure for their products. Australia has a very real interest in this issue, but whether we should meet the problem by a general process of subsidy, the kind of economic measure taken by us during the war years when our controls extended over the whole field of the economy, is a very moot question; indeed, it is a matter of policy which it would not be appropriate for me to discuss here.

So far as movements in the wage in New South Wales are concerned - movements which are automatically related to movements in the C series index - that matter certainly does concern this Government because these automatic adjustments widen the disparity between the Federal wage and the State wage. I would hope that it is also of some concern to the Premier of New South Wales and his colleagues who, no less than this Government, have a real interest in seeing that the standards of wageearners in this country are maintained and their employment opportunities continued.

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– I ask the AttorneyGeneral whether the practice of conviction upon accusation is subversive of our democratic institutions in that it displays a tendency towards fascism. Has his attention been drawn to the flagrant adoption of this practice by the Victorian executive of the Liberal Party in connexion with its selection of a candidate for the State electorate of Moorabbin?


– I have not seen anything connected with the matters to which the honorable member refers, nor do they come within the jurisdiction of my portfolio.

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– I ask the PostmasterGeneral whether he can give any information about the progress that has been made in connexion with the report furnished recently by the Australian Broadcasting Control Board on its investigation into the extension of television services, especially that part which will apply to the western district of Victoria. Further, can he inform the House when a decision on this very important matter is likely to be made?


– The honorable member for Corangamite asks about the report made by the Australian Broadcasting Control Board on its investigation of applications for licences in connexion with the extension of television services. As J have stated previously, the report has been in my hands for some little time. It is now under active consideration, and I expect a decision on it to be announced in the relatively near future.

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– I ask the Treasurer whether it is a fact that more and more banking functions of borrowing and lending are now being performed outside the orthodox banking system. If so, does this mean that; the effectiveness of the control exercised by the Reserve Bank of Australia over the trading banks is being whittled down by the growth of this substitute market? Is the Government contemplating taking any action to restore the efficacy of the control powers of the Reserve Bank?


– The answer to the first two questions asked by the honorable member would, I think, be “ Yes “. As to the third question, I have already indicated that the Government is giving consideration to the issues involved in that particular aspect.

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– I ask the Minister for Trade whether the Government has taken any action to protect Australian pig producers from the unfair competition of canned hams from overseas which have been sold to merchants at prices which indicate dumping. Is it desirable that goods of this nature should be imported at all when our own producers are quite capable of supplying the market?


– It is no part of the Government’s policy to prevent the importation of goods into this country, but imports are permitted subject to the tariff rates prevailing at the time. As we want our goods to have access to markets in other countries, so we give access to the goods of other countries to our markets, but with the reservation that we protect our own industries. Recently the incident of a sale to Australian merchants of some canned ham from Canada has come to notice. It is canned ham which was bought by the Canadian Government under a support price programme, offered for sale and eventually sold by merchants to Australia under conditions of government support which were a classic case of dumping. This matter falls within the jurisdiction or responsibility of my colleague, the Minister for Customs and Excise. In conjunction with me, and officers of our departments, he examined the facts of the case and made some inquiries, and he has taken the course of referring the matter to the Tariff Board, and in the meantime will be taking securities from importers at the rate of 4s. per lb., which is calculated to be the equivalent of the amount of the government subsidy which has been provided at the other end.

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Mr Clyde Cameron:

– My question is directed to the Prime Minister. Did either he or Dr. Subandrio, the Foreign Minister of Indonesia, during their recent luncheon in New York, mention the matter of the future political control of West New Guinea? If the subject was mentioned, what views were expressed and was any basis of agreement reached about the future action of either country to resolve this matter?


– All I need say about the matter is that our position has been made quite clear, as has the position of Indonesia. The Indonesian Government has repeatedly indicated that it does not propose to resort to force in relation to its claims to West New Guinea. We, from first to last, have indicated that in relation to our section of New Guinea - and, we would hope, in relation to West New Guinea - the ultimate object must be selfdetermination for the inhabitants of those areas.

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– My question is addressed to the Postmaster-General. Will he state whether a decision has yet been made about the location of the television broadcasting mast at Townsville? If so, has very full consideration been given to providing good viewing not only to the electorate of Herbert, but also to the very important educational centre of Charters Towers?


-I can well understand the interest of the honorable member for Herbert in the location of the television transmitter at Townsville because as he knows - and as he knows I know - it is a difficult problem owing to the terrain in that area. There are certain sites which have already been investigated by the engineers of the Postmaster-General’s

Department and the engineers of the Australian Broadcasting Control Board. It is obvious that although some of the best sites will present rather expensive road problems, a very greatly increased coverage can be obtained from such sites as Mr Elliott or Mr Stuart. No determination has yet been made on this point, but the sites have been carefully investigated. I can assure the honorable member that it will be the object of the Government, when the service is established, to ensure that the greatest possible coverage, which would include Charters Towers and well up the north coast beyond Ingham and down into the Ayr district, will be given by the site chosen.

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– My question is addressed to the Minister for Trade. Has he read the statement by the president of the Chamber of Manufactures of New South Wales that the Government appeared unconscious of the need for export incentives and had failed to move on any major recommendation of the Export Development Council? Will the right honorable gentleman give the House details of recommendations which have been made to him by the Export Development Council and the Manufacturing Industries Advisory Council, and the action, if any, that has been taken on them?


– I have not seen the statement to which the Deputy Leader of the Opposition has referred but I have been told of it. I shall secure a copy of the statement and study it. Both the Export Development Council and the Manufacturing Industries Advisory Council have made a series of recommendations to the Government and the Government, I believe, has acted in conformity with some advice and has not acted in conformity with other advice. This is comprehended by both these advisory bodies. It is their job to offer advice to the Government; it is the Government’s responsibility to consider that advice, with other advice that it receives, in the light of the circumstances of the moment. That is the understanding which exists between the Government and these advisory bodies.

I shall assemble such information as is available on the particular point which the honorable member raised and furnish him with it. But I am quite sure that the manufacturers of Australia do not take the view that they are not expected to contribute to Australia’s economic strength by exporting unless they are first given some concession by the Government. I am in close and constant contact with organizations of Australian manufacturers and commercial bodies, and they understand very clearly that it is in their own and the national interest that they endeavour to take advantage of export opportunities that they may discover for themselves or that Government agencies may discover for them.

Mr Whitlam:

– They are only asking for the same incentives as other exporting countries grant.


– No, they are not. In some instances they are asking for quite different things. One is the abolition of certain forms of taxation. This request has been advanced, but responsible manufacturers’ organizations are not advancing it as a condition precedent to their entering seriously into the field of exploiting export advantages.

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Message recommending appropriation reported.

In committee: (Consideration of Governor-General’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 States of Western Australia and Tasmania.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Harold Holt and Mr. Opperman 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

HigginsTreasurer · LP

– I move -

That the bill be now read a second time.

The main purpose of this bill is to authorize the payment in 1960-61 of special grants totalling £8,618,000 to the States of Western Australia and Tasmania. These grants have been recommended for payment by the Commonwealth Grants Commission in its twenty-seventh report which has already been tabled. The bill also authorizes the payment of advances to Western Australia and Tasmania in the early months of 1961-62, pending the authorization by Parliament of the special grants for that year. This provision is similar to that included in last year’s legislation.

In arriving at its recommendations for 1960-61, the commission has continued to follow the principle of financial need which was originally adopted in its third report in 1936. In accordance with this principle, the special grants are designed to enable the claimant States to function at a standard not appreciably below that of other States, providing they make comparable efforts in raising revenue and controlling expenditure. The application of this principle requires a detailed comparison of the budgets of each of the claimant States with those of the non-claimant States, particular account being taken of differences in levels of expenditure and in efforts to raise revenue.

Under the procedures currently adopted by the commission, the special grants recommended each year are composed of two parts. One part is based on the commission’s estimate of a claimant State’s financial needs for the year in which the grant is to be paid. This part is regarded by the commission as an advance payment subject to final adjustment two years later when the commission has completed its examination of the audited budget results of the States for that year. The other part of the grant represents a final adjustment, positive or negative, of the special grant paid two years earlier. The special grants which the commission has recommended for payment in 1960-61, and the special grants paid in 1959-60, are set out in a table which, with the permission of the House, I shall have incorporated in “ Hansard “.

In total, the special grants recommended for 1960-61 are £292,000 greater than those paid in 1959-60. However, the grants paid in 1959-60 included £1,426,000 for South Australia, which is no longer a claimant State. The special grants recommended for the two claimant States, Western Australia and Tasmania, total £1,718,000 more than the grants received by those two States in 1959-60. Further details concerning these grants can be obtained from the commission’s report.

The effect of adopting the commission’s recommendations would be to increase the total general revenue grants payable to the two claimant States, including the estimated financial assistance grants payable under the States Grants Act 1959, by about £5,300,000 this financial year. For Western Australia the increase would be approximately £3,300,000 and for Tasmania approximately £2,000,000. The estimated amounts of total general revenue grants payable to each State in 1960-61 and the amounts paid in 1959-60 are compared in a further table, which again I shall have incorporated in “ Hansard “ with the concurrence of honorable members.

I should mention that the estimates of the financial assistance grants given in the table differ from the estimates included in the Budget. Data available since the latter estimates were made have led the Commonwealth Statistician to revise them substantially. On the revised estimates, which are themselves based on incomplete data, the total of the financial assistance grants payable to the States in 1960-61 will be £2,300,000 greater than the Budget estimate. The precise amounts of the grants will be determined by the Statistician within the next few weeks.

The Government considers that the Commonwealth Grants Commission’s recommendations regarding special grants for Western Australia and Tasmania in 1960-61 should be adopted. I therefore commend the bill to honorable members.

Debate (on motion by Mr. Barnard) adjourned.

page 2375


Second Reading

Debate resumed from 20th October (vide page 2264), on motion by Mr. Harold Holt-

That the bill be now read a second time.


.- I desire to congratulate the Government on the introduction of this bill. I want to make a special reference to the provision regarding the age allowance. Under that provision a married couple of pensionable age will not have to pay income tax unless their com bined income exceeds £17 a week or £884 a year. A single person, widow or widower of pensionable age will not have to pay income tax unless his or her income exceeds £8 10s. a week or £442 a year. This, Sir, is a tremendous concession to the aged. The Menzies Government gained great credit when it first introduced the age allowance, and it continues to gain credit by amending the act from time to time in order to keep the allowance up to date and as close as possible to the pension plus the permissible incomes of pensioners. The effect of the present amendment is that persons of pensionable age in receipt of £17 per week will pay no tax, whereas, without the benefit of the age allowance, they would pay £60 15s. a year in tax. The single person of pensionable age who is now to he free from taxation up to £442 a year, or £8 10s. a week, would, were it not for the allowance provision, pay £19 8s. a year in tax.

The benefit, Sir, has not been a benefit only for aged people; it has been a benefit also to the community as a whole, for it has encouraged many people to remain in employment who otherwise would have retired and gone on the age pension. Under the Labour Government a person who remained in employment beyond pensionable age was worse off, because of the taxes that he or she had to pay, than the person who retired and went on the pension. This obvious injustice has been removed by the Menzies Government so that now a person in receipt of the basic wage of about £14 a week, for example, pays no tax if he remains at work, just as he is exempt from tax if he retires and claims the pension. The present provisions also mean that a man of pensionable age in receipt of £17 a week, which is about £3 above the basic wage, can remain at work and have no income tax to pay, whereas under the old legislation - Labour’s legislation - it paid him better to give up his work and take the pension rather than pay tax on a figure not much more than the pension.

So, Sir, I repeat that the Government is to be congratulated not only on introducing this beneficial legislation but also on keeping it up to date. I also want to congratulate the Government on its inclusion, as an allowable deduction in respect of income tax, of gifts to certain specified charities. Australia owes a lot to the public-spirited, charitable work done by its citizens. Australia would not be the country it is if a very large section of the community did not render a voluntary service to educational, public service and charitable organizations. It is only fair, Sir, that when people give of their savings to those excellent organizations they should not be taxed on the amounts they have given. So it is very welcome to see included among the organizations donations to which are allowable deductions for taxation purposes, seven new excellent organizations. I would, however, suggest to the Treasurer (Mr. Harold Holt) that consideration be given to this whole provision in the legislation, because there seems to be neither rhyme nor reason why some of those wonderful organizations should receive this benefit while others are denied it. Consideration should be given to allowing all gifts to public service, charitable or educational organizations which are carried on for the benefit of the community and not for profit, to be allowable deductions. I think that it would make the act very much fairer and very much clearer if the basis upon which these deductions were allowed were not simply that certain organizations had been selected out of many and covered by the act, but that the organizations to which the gifts are made are carrying on a public service on a nonprofit making basis.

My main purpose in rising to speak on this bill is to deal with certain statements made by the honorable member for Melbourne Ports (Mr. Crean), who, as usual, led for the Labour Party on this bill. The honorable member always presents a well- reasoned argument when he deals with any bill before us, and I think we can take it that he does speak for the Labour Party on matters of taxation and finance.

The honorable member for Melbourne Ports suggested that the system of taxing companies at a rate of tax of so much in the £1 was wrong. The only inference one can take from the honorable member’s speech is that he thinks that companies should be taxed at a progressive rate and not, as at present, at a rate of so much in the £1 of taxable income. A company’s profits are dealt with in three ways. First, tax is paid on them by companies at the rate provided for in the legislation - 8s. in the £1 over the first £5,000, 7s. in the £1 below £5,000. Profits are distributed as dividends to shareholders. The dividends immediately become taxable again in the hands of the shareholders, at a progressive rate of tax - that is, at the appropriate rate of tax applicable to the shareholder. The balance of the profits is retained by the company for the purpose of developing its undertaking - in other words, in order to provide further employment and increase capital expenditure on plant and buildings, thereby adding to the company’s productivity. If the honorable member for Melbourne Ports means that the present basis of company taxation should be altered, it would be idle for him to suggest that that portion of the company’s income which is already taxed at a progressive rate should be taxed at any other rate. Therefore, the honorable member can only mean that such portion of the company’s profits as are retained in the company for future development should be taxed at a higher rate.

Now, Sir, it has been repeatedly pointed out by leading economists, by Dr. Coombs, the Governor of the Reserve Bank of Australia, by the Bank of New South Wales in a report issued only recently and by the economist of the “ Sydney Morning Herald “ .in to-day’s issue of that newspaper that one of the great weaknesses of the nation at present is that savings are inadequate, and are not sufficient to maintain our present .rate of development. Because the savings of the community are inadequate, we have inflation and rising prices. Yet the honorable member for Melbourne Ports has suggested that the savings that are now being made by our public companies should be taxed at a higher rate, because if his argument means anything it means that that portion of the companies’ profits should be subject to increased taxation. If that were done, it would mean less money would be saved by the companies than is saved to-day. It would mean there would be unemployment, because the companies would be unable to expand and develop. It would mean that prices would rise, because money which is now being saved through being retained by the public companies could no longer be retained.

Therefore, I suggest that we must consider the suggestion of the Labour Party with the greatest concern. Contrary to its suggestion, every effort should be made to encourage public and private companies and private individuals to save more than they are saving now so as to place a brake upon increasing prices. I think it is now being accepted from several sections of the community that the greatest problem facing Australia to-day is the inadequacy of savings if we are to maintain the rate of development we wish to see. [ should like to refer to another point that was raised by the honorable member for Melbourne Ports. He again attacked the inducement given by this Government for saving. In an endeavour to encourage saving, this Government allows up to £400 per annum, saved through the medium of superannuation or insurance, as an allowable tax deduction. The honorable member for Melbourne Ports attacked this provision. In doing so, he was again making a direct attack on the savings of the community. When a private individual refrains from spending some of his income and puts in into insurance or superannuation, that money immediately -becomes available for capital development. It is either invested by the superannuation fund in government bonds or is placed in a savings bank and is used by the bank for housing or for some other purpose. But it is money that is not spent .by the person who invested in that way, and it is money that immediately becomes available ,for the capital development of Australia. Yet the honorable member for Melbourne Ports, in putting forward the Labour Party’s policy, has said that the Government is wrong in giving this encouragement. In other words, he would like to see less money going into superannuation and insurance.

I suggest that the Labour Party is quite on the wrong road. Instead of putting forward suggestions to encourage some saving, the Labour Party is putting forward a suggestion which will mean less saving. Yet wherever we look, we find figures which suggest that our problem is insufficiency of savings. I refer to the “ Review “ published quarterly by the Bank of New South Wales; the issue is dated August, 1960. In that issue, the Bank of New South Wales stated - and this is attacking the present Government -

  1. . the Government . . . has overlooked the need to encourage the savings necessary for economic -development.

One would have expected that the Labour Party, in its very great desire to attack the Government, would have attacked it on the grounds that the savings of the community were insufficient. Instead, we find that supporters of the Labour Party rise in this House and criticize us for such steps as we have taken to encourage savings and investment. The “ Sydney Morning Herald “ to-day contains an article which is stated to have been written “ By Our Economist “ whoever he may be; I do not know the gentleman. The heading on the article is, “Private Industry Requires Increased Local Capital “. In other words, it refers to more savings. The article contains this statement -

Inflation, with a low level of internal savings, largely accounts for Australia’s rapidly increasing external indebtedness.

Throughout that article, reference is made to the inadequacy of savings. These statements are made in several paragraphs -

Local private savings have been inadequate to do much more than provide for increased expenditure on dwellings, cars, station wagons and cycles since 1956-57 . . .

Undistributed profits of companies (the other source of savings for private industrial expansion) increased by only £17 million from £188 million in 1956-57 to about £205 million in 1959-60.

In view of the fact that all thinking people realize that our savings are inadequate, it is surprising to find the Labour Party supporters appearing in this House and suggesting a policy which would reduce savings and not increase them. So I warn the general public against Labour Party policy. On the other hand, I urge the Government - as I have done consistently since 1949 - to take the steps necessary to increase the savings of the community. There are many ways in which it can be done. The Government has taken a great step forward this year by introducing the merged means test and abolishing the penalty on thrift. There are many other avenues that could be exploited, through the tax machine, to encourage savings in one way or another. Unless we get more savings from the community - both company savings and private savings - one of two things will be necessary: Either we will have to do as Sir Douglas Copland has suggested in a newspaper to-day and increase direct taxation or we will have to stop our present rate of development.

I do not think that there is anybody in this House who would not want our development, our high rate of prosperity and our full employment to continue. If we are to maintain those very desirable objectives, one thing is perfectly obvious: The volume of savings, both company and private, must increase. Therefore, I believe that the Government should1 be commended for having encouraged saving; but further action is necessary, through the medium of tax concessions, to provide inducement to save. I hope the Government will give consideration to this very great problem within the next few months.


.- Mr. Deputy Speaker, the Income Tax and Social Services Contribution Assessment Bill (No. 2) is a fairly simple bill which hardly touches the income tax field at all. The honorable member for Sturt (Mr. Wilson) pointed out the very great significance of investment and development and’ said that unless funds were available for these purposes, investment and development would not take place. If the situation is as serious as was indicated by the honorable member, something far more fundamental and far less superficial than this bill is called foi from the Government. If the honorable member believes that the shortage of funds is obstructing investment to the extent that he seemed to indicate, I find it difficult to understand how he can be so congratula tory to the Government for having done nothing more than make very superficial changes in taxation legislation.

Let me look at some of his remarks in detail. First of all, he referred to the proposal to increase the age allowance for two persons to £884 a year and for one person to £442 a year. Of course, this is simply a reflection of the pension plus permissible income for a married couple or for a single person. This age allowance has moved up for a number of years in accordance with the upward movement of the pension plus permissible income. There is nothing new or different about this proposal. However, because of the merged means test, there has been a change in the amount of income that a person can have. So this proposal follows as a matter of course.

The honorable member went on to contrast the attitude of the Government with that of the Labour Party in relation to this matter. He said that the Government was correct and justified in taking a given amount of money and, in effect, transferring it to people who have considerably more than the pension income to start off with. This contrasts with the Labour Party’s point of view, which is that the money should be given primarily to those who have nothing more than the pension. That is the choice that any one in this Parliament has to make - what should be done with a given amount of money at any particular time?

Although the merged means test benefits people who need benefit, do not let us forget that 80 per cent, of approximately 500,000 age and invalid pensioners have no other income. Another 10 per cent, or 15 per cent., at least, have no income but the pension plus some amount up to the permissible additional income of £3 10s. a week. So, the Government has chosen to use the money that it has available to benefit 5 per cent, or 10 per cent, of pensioners and others who do not come into the pension field. In other words, it has made its distribution to the top end of the range. The honorable member for Sturt may also choose in favour of those people if he wishes to do so. But the social priorities of the honorable member for Melbourne Ports (Mr. Crean) and myself and of the Labour Party generally are different from those of the honorable member for Sturt. Our social priorities are such that if we had money to distribute, we would distribute it first at the lower end of the scale and move up the scale as more became available. There is nothing sacred and there is nothing objective about the point of view of the honorable member for Sturt or of the Government. It is a matter of social choice. You choose the kind of people whom you want to benefit. The choice invariably made by the Government is to benefit people who have most already. The choice of the Labour Party, as far as possible, is to benefit those who have least.

Mr Anderson:

– Rubbish!


– It is not rubbish. The facts show that this is so from year to year. If the honorable member would give some consideration to this he would see that that is true. His interjection reflects his attitude to all things. Anything said on this side of the House he regards as rubbish; everything said on the other side of the House he regards as particularly virtuous.

The honorable member for Sturt, in discussing the basis of taxing companies, said that the honorable member for Melbourne Ports wanted to interfere with the capacity of companies to save. He said that three things happened to company profits: First of all, tax was paid at the rate of 8s. in the £1 on profits of over £5,000 a year and at the rate of 7s. in the £1 on profits of £5,000 a year or less; secondly, company profits are distributed in dividends and progressively taxed in the hands of those who received them; and thirdly, a balance is retained for development. The honorable member for Melbourne Ports said that he believed that a too high and a growing proportion of national income was in the hands of private and public companies. I think that this can be demonstrated by the circumstances and facts. We know that there have been record profits made by Australian companies over the last few years both in the aggregate and in terms of percentages.

Mr Wilson:

– Consequently, there has been record taxation of companies.


– And record amounts left afterwards. How could the Broken Hill Proprietary Company Limited distribute £32,500,000 in bonus shares if record amounts had not been left to it? If that company is short of money for investment why has it not put some of that £32,500,000 into investment instead of distributing it to shareholders in the form of bonus shares? That money could be made available for investment. It has come out of past earnings.

Mr Opperman:

– It probably goes back again.


– If so, why is the company short of funds? This and many other companies have command of economic resources that the Government would envy.

The honorable member for Sturt, in trying to support his point of view, said that Dr. Coombs and others had said that the problem in the Australian economy is that because savings are inadequate there is less investment than there should be, therefore there is less production than there should be, and therefore there is inflation. That is not the correct way in which to interpret the view of Dr. Coombs. Dr. Coombs has said that one of the significant causes of inflation in this country is that the monopolistic elements, as he calls them, have the ability to determine their prices independently of the market, and that as a result of this independent price determining policy these companies are able to extract from the consuming community income in excess of what they would otherwise extract.

On the other hand, these companies are able to operate on a permanent system of cost-plus. Every element of their costs, whether in the form of payments for wages, raw materials, power or taxes, can be passed into their prices system and transferred to the community. Dr. Coombs implies that these companies have a degree of economic power which allows them to operate permanently on a cost-plus basis. He has also said that these companies have sufficient economic power to draw resources from the community so as to increase the rate of development in their own field at the expense of all other fields. His point is not that these companies are in any way short of funds or savings, but that they have an excess of power to acquire from the community funds to 6well those savings. These large concerns are not short of funds for investment, nor are they short of funds to distribute bonus shares to their shareholders or to buy up other concerns in the take-over procedure which has become a national characteristic and a national scandal.

Mr Wilson:

– Did he not say that the savings of the community were totally inadequate?


– He did say that the savings of the community were totally inadequate, but he did not say that the savings of these companies were totally inadequate. He said that the companies have a command over resources out of proportion, to what they need. Let us consider what he did, in fact, say. If you have regard to the logic of what he said, you must consider the position of these large concerns, and I just want in passing to give some idea of the kind of situation that exists to-day. Referring to the last report of the Commissioner of Taxation, we find that in the year with which the report was concerned 37,251 companies paid taxes. Those taxes amounted to £212,000,000. The 37,251 companies had a total income of well over £600,000,000, but in addition they allowed very large amounts of money for depreciation, and they held back in reserve in other funds further large amounts of money.

If we refer to the components of gross national income, we find that the income of these companies, upon which tax was levied - this is the point that is worrying the honorable member for Sturt - has risen from 9.8 per cent, of the gross national product eight or nine years ago to 10.4 per cent, to-day. There has not been a very remarkable increase in the amount of income, expressed as a proportion of gross national product, upon which taxes are levied. This seems to be the point that is worrying the honorable member. But let us have a look at depreciation allowances. These have increased considerably. Although they represented 4.2 per cent, of gross national product in 1948-49, and 5.2 per cent, in 1949-50, the proportion at present is 7.7 per cent. This shows an increase of more than 3 per cent., or of roughly £130,000,000.

However, other reserve funds, as car be seen by a reference to the accounts of companies that are not covered in that break-up of gross national product, have increased considerably. What has been happening in recent years is not that companies have increased their incomes, and the distribution from those incomes, very dramatically; they have rather increased the withheld funds dramatically - and 1 return again to the very question that seems to be causing the honorable member for Sturt some concern. By increasing the proportion of these withheld funds they have increased the proportion of total national resources that they can use for their own development, and that they can use also to acquire other companies by this widely used take-over procedure.

The honorable member for Melbourne Ports has emphasized the fact that unless something is done to exercise some degree of social control over these companies and their funds, whether by way of taxation or by some other means, the economy will be distorted. The basic thinking, the basic analysis, upon which Professor Copland’s comments were made comes from J. K. Galbraith’s work, “ The Affluent Society “. The basic problem dealt with in that work is this distortion as between one section of the private economy and all the rest of the economy.

There is a shortage of funds and savings for investment in many things. There is a shortage of savings particularly for financing government services, such as education facilities, sewerage and water supply, road construction, low-income housing and the eradication of the slums which are a disgrace to any city. Funds are certainly needed for these activities, and in these circumstances is it surprising that Professor Copland made the comment that unless something can be done there must be an increase in direct, non-transferable taxation?

It is important at this point to realize that the bill before us is a superficial measure which hardly touches the tax structure at all. At a time when some very important and fundamental changes need to be made, I find it difficult to approve in any way of this legislation. Let us look again at what has been happening in the case of the large companies. We have seen that the funds that they have been able to withhold, when expressed as a proportion of gross national product, have increased dramatically. These companies are not in any W3y short of funds for investment or for any other purpose.

Mr Wilson:

– You would agree that that is saving, would you not?


– Of course, it is saving, but that is by no means an end of the matter. We want to know for what purpose these savings will be used. What is going to happen to them? Making the rich man richer is not the only way in which savings may be accumulated, although that seems to be the basic proposition of the honorable member for Sturt. The only way he can suggest of providing sufficient savings is to increase the amount of money not spent on consumption in a given time. That is the crux of the honorable member’s argument. The only way he can see to achieve this end is to increase the wealth of those people who are already comfortable or wealthy. He wants the means test abolished. He has already succeeded in having it liberalized to a certain extent. As the next step he will want it liberalized even further, forgetting altogether those people who have no means to which a means test can be applied1 - and they include 80 to 85 per cent, of all pensioners. The honorable member will want to lift the means test, so as to give a little more to the people at one end of the scale, who are already sufficiently comfortably situated and who will then be able to save more.

But where will those savings go? They will go into the banking system and the insurance companies. What those people do with the savings will be no concern of this Parliament, because no social control can be brought to bear on them. In this sense they have an independent and irresponsible power. In our present economic circumstances the desired result cannot be achieved simply by increasing the amount of savings. The economic history of the last three or four centuries has shown that the greater is the inequality in the distribution of income the lower is the rate of economic progress. Other things being equal, if you increase the inequality of income distribution you reduce the rate Df economic progress. That is the b? lie

Keynesian philosophy behind the whole situation, from a theoretical point of view. If you increase the inequality of income distribution, you increase the amount that is not spent. You therefore reduce the amount spent on consumption and so you reduce the effective demand. The demand for goods produced then falls and the incentive to produce those goods is lessened. You then have a declining rate of activity. The problem is not to increase savings in a given situation but to maintain social balances. There is no automatic procedure available in the free-enterprise system to-day ti maintain those balances.

The honorable member may be very concerned about the present situation. In fact, he should be concerned, as we all should. He can also feel somewhat pessimistic about the possibility of this Government solving the problem. I would say that there is no way in which the Government can solve it, because in order to do so it would have to get away from the procedures ordinarily followed in a free-enterprise system. Capitalism will not solve this problem, because it cannot tackle the problem in any manner different from that in which it has been wrestling with the problem for a century and a half.

Mr Wilson:

– Capitalism has done more to solve it than socialism has.


– That is an opinion which the future will very severely test. One of the important propositions receiving attention in the world to-day springs from the fact that in socialist economies the rate of economic progress is very much greater than it is eVen in such countries as the United States of America. The honorable member may say, “ Yes, but that rate is achieved by a totalitarian system “. Let me say this in answer to such an argument: Other things being equal, a totalitarian system is not more efficient than a freer system. The factor in the economies of China and Russia which is giving them a rapid rate of economic progress is that what is needed for economic progress can be identified, and sufficient resources can be obtained to meet those requirements. They do not have a high rate of economic progress simply because they have a totalitarian system. That kind of system, other things being equal, is less efficient, as I have said, than a freer system. The great problem to-day, Mr. Deputy Speaker - and I am sure we are getting a little wide of the bill under discussion - is how to reconcile the civil liberties and freedoms of the capitalist system with the kind of direction of resources which will achieve the rate of progress and allow us to perform the economic tasks that are desirable.

Let me turn from that to one other point made by the honorable member for Sturt in attempting to answer the honorable member for Melbourne Ports. The honorable member for Sturt put the earlier point in another form when he said that the honorable member for Melbourne Ports had been critical of this allowable deduction of up to £400 for superannuation contributions and insurance premiums. I think that the honorable member for Melbourne Ports was right to be critical of that. How many people in this community to-day can afford to put £400 a year or anything like it into superannuation or insurance?

Mr Crean:

– That is about £8 a week.


– Yes. It is almost twice the age pension.

Mr Crean:

– It is half the income of some people.


– That is so. There are more than 500,000 people in Australia to-day who are living on a little more than half of £8 a week. Yet the honorable member for Sturt expresses admiration of a decision by this Government that will allow people to put about £8 a week, or £400 a year, into superannuation and insurance. There can be no more than a few thousand people in the whole of Australia who are in a position to put so much into superannuation and insurance. Suppose there are 2,000 or 3,000 of them and that they put £400 each into insurance. What is that worth in terms of resources? It is worth perhaps £800,000 or so. What will that give you in an investment fund? Practically nothing. This brings out the essence of the argument advanced by the honorable member for Sturt. His way of obtaining resources for investment is simply to make those people who are comfortable and wealthy a little better off - considerably better off, I should think. This will not solve the problem.

While 1 am dealing with this point, let me direct the attention of the House to something that is happening in relation to this system of allowable deductions.

Mr Wilson:

– Will the honorable member tell us how he would get the increased savings?


– Let me deal for the moment with the point that I have just introduced. I did not interfere when the honorable member was speaking. The system of allowable deductions that the honorable member admires works in this way: The latest figures that we have - those for the financial year 1956-57 - indicate that deductions from taxable income reduced taxable income in that year by a total of £681,793,000 and reduced the amount of revenue collected in taxes by £149,292,000. I think that every one on both sides of the House will agree that there should be a satisfactory system of deductions - that we must allow deductions from income in order to meet some important needs. The essential question is that of the importance of the needs. We should meet the most important needs first and move down the scale to the less important ones. We say that this Government starts at the other end of the scale. It meets the less important needs first by allowing the less important deductions first. And the deduction in respect of superannuation contributions and insurance premiums up to a total of £400 is perhaps the best example of this.

What effect does this system have? In 1956-57, of the total reduction of tax revenue by £149,292,000, £36,000,000 was attributable to deductions for spouses; £19,900,000 to deductions for first children; £14,000,000 to deductions for other children; £18,700,000 to deductions for medical expenses; £10,900,000 to deductions for educational expenses; and £49,600,000 to deductions for other purposes. The amount of £49,600,000 attributable to deductions for other purposes is very large. Here we have the category which has been expanded all the time by this Government.

Mr Crean:

– That figure represents about one third of the total.


– It is about one-third of the total. Only two-thirds of the total reduction of tax revenue attributable to allowable deductions is attributable to deductions in respect of children, spouses and medical and educational expenses. The reduction attributable to deductions in the category which this Government has been increasing all the time relative to the others has now grown to about one-third of the total reduction. What effect does this system have? First, the deductions in this large category are becoming increasingly available to people at the higher end of the income scale. One cannot put about £8 a week into superannuation or insurance unless one has a large income. Furthermore, the deduction allowable in respect of rates on property also will benefit the people who are well off more than it will benefit those who are poorer.

Let us look at what happens to the distribution of this reduction of tax between people with a gross income of less than £2,000 a year before deductions are made and people with a gross income of £2,000 a year or more. About 4 or 5 per cent, of the total number of taxpayers have gross incomes of £2,000 a year or more; so that about 95 per cent, of the taxpayers are at the lower end of the scale. In the financial year 1956-57, 3,412,906 taxpayers were at the lower end of the scale and 132,278 were at the upper end. The 5 per cent, of the taxpayers who received in that year £2,000 a year or more received the benefit of £7,700,000, or 21 per cent., of the £36,000,000 of the income tax reduction attributable to deductions for spouses People with incomes of £2,000 a year or more received the benefit of £3,260,000 out of £19,900,000, or 17 per cent, of the tax reduction attributable to deductions for first children; £4,300,000 out of £14,000,000, or 30 per cent, of the tax reduction attributable to deductions for other children; £4,000,000 out of £18,700,000, or about 22 per cent, of the tax reduction attributable to deductions for medical expenses; £3,400,000 out of £10,900,000, or 33 per cent, of the reduction attributable to deductions for educational expenses; and £16,700,000 out of £49,600,000, or 34 per cent, of the tax reduction attributable -to deductions for other purposes. These figures indicate that the benefit of the deductions is weighted in favour of those at the top end of the income scale. The emphasis is already on that end of the scale, and the honorable member for Sturt wants to increase it further.

Mr Bandidt:

– The tax paid is greatest at the top end of the income scale, too.


– Yes, and the income is still most unequally distributed after tax is paid. If 1 had time, 1 could quote figures to establish that.

Mr. Deputy Speaker, the Australian Labour Party says that this bill is inadequate because it is superficial, because it really does not come to grips with the problem of income distribution - the problem of what is left to taxpayers in the form of savings. This is characteristic not only of the present bill but also of all the legislation in this field that the Government has introduced since it took office. Unless something more fundamental is done, the problems lamented by the honorable member for Sturt will remain in existence. This problem that the honorable member describes so effectively has been with us throughout the period in which the present Government has been in office, but this Government has done nothing to change the situation substantially. In the circumstances, we on this side of the House find it most difficult to understand how any one can approve the Government’s policy and congratulate the Administration, as the honorable member for Sturt has done so extensively and so often, on legislation which in no way comes to grips with the situation. There is a way of attacking the situation, but it is not relevant to the bill and discussion of that method therefore would not be appropriate at this stage. It concerns more than taxation.

At any rate, with respect to taxation - and I want to conclude on this point - the figures show that 3 or 4 per cent, of the large industrial concerns in this country earn about 70 per cent, of the total income earned by all companies. This degree of economic power, which is identified by Dr. Coombs, the Governor of the Reserve Bank of Australia - the central bank - is the kind of economic power which must be faced up to. The honorable member for Melbourne Ports pointed out that the authorities in England have made some attempt to face up to this kind of economic power. The solution to the problem is not just a matter of levying tax, whether it be at a flat rate like 8s. or 7s. in the £1, or whether it be at a progressively increasing rate. The United1 Kingdom authorities have attempted to deal with the situation by negotiating agreements with the companies concerned.

Let us not forget that these companies are put in a special position of privilege. Tax is assessed on ordinary people and they have to pay whether they like it or not. But modern developments have placed big companies in a special position of privilege. We can determine how much they need for development and how much they need in order to make a fair return on their capital investment, and they should not be permitted to hold the rest. The consideration involved here is not a consideration of the development of inequality of income - a distortion in the social and economic situation. What we should keep in mind is: What is the social purpose of the community? Until we put the social purpose more in the forefront of our aims and disregard more the desire to pander to the old system - the outmoded system - of social and economic values, this problem will not be solved.


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


.- The House is now discussing a measure which could not properly be described as the most inspiring measure to come before it during this session. The fact that so many Government benches are empty would substantiate this impression. I have not prepared very much material on this bill, which is called the Income Tax and Social Services Contribution Assessment Bill (No. 2) I960, because 1 had hoped that a Government supporter would speak before I did, instead of there being two Labour speakers in succession, and that I would have had the opportunity to reply to a speaker from the other side of the House. The honorable member for Yarra (Mr. Cairns) had the opportunity to do this and he accounted for his point of view in a most impressive way. He pointed to the need to use a worthwhile scale of values in distributing our national resources. Of course, that is a desirable objective. Our taxation arrangements at present do not contribute a great deal towards this objective, and the honorable member for Yarra and his colleagues who have already spoken on this measure have served a very useful purpose in directing attention to this need.

The bill deals with a number of issues, none of which is highly controversial. First, provision is made for the exemption of income from certain mining operations and the deduction for subscriptions to trade, professional or business associations has been increased. Gifts to seven organizations, which are listed, are now allowable deductions, and other provisions relate to provisional taxation. In other words, this bill is comparatively narrow in its concept. That is, of course, necessarily so because this is one of the Government’s budgetary measures. Every one will recall that the Budget did not make any sensational departure from conventional taxation arrangements, and this bill gives effect to a small number of taxation concessions. These concessions were regarded by the whole of the community as miserable and unimaginative. Any one in the community can point to a large number of taxation anomalies, but unfortunately this bill does not resolve any of them. An element of speed can be found in some of the Government’s actions. When it is taking money from people, it acts rapidly. But this trait is not in evidence when it is necessary to introduce a bill that provides some taxation relief. I shall deal with that in a moment.

This bill aggravates the trend to indirect taxation rather than direct taxation. This trend is very bad and we have seen it developing since the Government has been in office. The incidence of direct taxation has decreased, but the use of indirect taxation has increased. The Opposition does not approve this trend because it involves the abandonment of the capacity-to-pay principle, which was established many years ago. Most of our great developments over the years, up to the time that this Government took office in 1949. have been financed by taxpayers according to their capacity to pay. But now people with small incomes are required, through indirect taxation, to pay more in taxes than ever before. Thistrend is being followed in this legislation. Admittedly, this is so with only compara- tively minor matters, but the trend is evident. Taxation on electric razors has been increased. This is an indirect tax; it is a sales tax.

Mr Turnbull:

– The bill providing for that has already been debated.


– Provision for it is made in this bill, and if the honorable member will look at it, he will see that that is so. This sales tax is increased from 12± per cent, to 25 per cent, and will provide an additional £290,000. This is the general trend of the Government’s policy, and it is a very miserable thing. The honorable member for Mallee (Mr. Turnbull), who will be pleased to have his name mentioned, I am sure, will recall that the Budget also increased the rate of tax on radio valves, and this will provide another £300,000. Although the amount is small, it results from the adoption of a very bad principle. This bill - I am dealing with the bill, the honorable member for Mallee will be pleased to know - withdraws the 5 per cent, income tax concession given last year.

Mr Bandidt:

– Don’t you like that?


– We may not like it, but what we really do not like is that this Government has a policy of “ on to-day and off to-morrow “. No one has explained with any conviction why a tax rebate of 5 per cent, was given last year and why it has been taken away this year.

Mr Clark:

– It was given at the time the postal charges were increased.


– That has been given as a reason. It has been said that the concession was granted to create an atmosphere in which very heavy postal and telegraph charges could be imposed. The amount to be raised by these charges, if I remember rightly, was in the vicinity of £15,000,000, so the Government reduced income tax by 5 per cent. I hate to think that an Australian government would resort to those tactics, but one wonders about it because no better reason has been given. This bill provides for the repeal of that concession. It also provides for the increase of company taxation. I do not want to give the impression that I was inspired by the tax rebate of 5 per cent, that is now being taken away by this bill. The rebate amounted to ls. in the £1 and cost the Government £20,000,000. It is. interesting to note what the rebate meant to the average wageearner. I do not think that he will weep tears of blood because the Government is taking it away. According to my colleagues who specialize in this sort of thing, the wageearner with a wife and two children, earning £1,000 a year, would have saved £2 14s. a year as a result of the rebate. That is not a very impressive figure. It is about ls. a week and would buy him one middy of beer a week, if he were a drinking man. The Government should not, therefore, expect him to be very upset about losing the rebate. But he is frothing at the mouth because of the very heavy indirect taxation imposed by this Government. Despite the imposition of heavy sales tax, all the Government’s 5 per cent, rebate meant to this wage-earner was one middy of beer a week.

Mr Nelson:

– Or a couple of stamps.


– Yes, less than three postage stamps. A man without dependants earning £1,000 a year saved £5 6s. a year as a result of the rebate. But the man without dependants on £5,000 a year received something worth while from the rebate. We can see how the face of the honorable member for Mallee lights up at this because these are the people he likes to think he represents. The man on £5,000 saved £85 ls. and he is probably unhappy that the rebate is now being taken away. The man on £10,000 saved £230 18s. and the man on £20,000 - the honorable member for Mallee represents quite a few of these - saved £554 5s. So that when the Government did give the 5 per cent, rebate it did not give very much to the great mass of the Australian people. As I pointed out earlier, the rebate granted to the man who had an income of £1,000 a year and who had a wife and two children was only £2 14s. a year. No one can be very upset at the Government’s decision to take that small concession away from the working man. It is interesting to note that the New Zealand Government set a limit on the amount of rebate which could be granted to any one person. I forget what the limit was, but here the Government gave very generous rebates to certain people. Admittedly they were given for only one year because this Government has no consistent policy in connexion with taxation; but, while the man on a £1,000 a year enjoyed a rebate of only £2 14s., the man in receipt of £20,000 a year was granted a rebate of £554 5s. Large rebates were slipped to high income earners almost surreptitiously and in such a way that the person earning £1,000 a year and enjoying a rebate of only ls. a week did not realize the tremendous extent to which the Government was assisting its friends.

The Government’s record in connexion with taxation is interesting. Honorable members on the Government side have spoken about the need to reduce taxes. For instance, the honorable member for Sturt (Mr. Wilson) has said that taxation mitigates against saving, and so on. Let me now give some idea of this Government’s activities in this connexion. In 1938-39, before the war, when the total amount of revenue derived by the Government from income tax amounted to £124,000,000, the average amount of tax paid per capita was £17 19s. 5d. Ten years later, in 1948-49, the average Australian was paying £67 12s. lid. in income tax. In that year, the Government’s revenue from income tax amounted to £527,000,000. In 1959-60, the average amount paid per capita was £135 2s. and the total amount of income tax levied by the Government in that year was £1,382,000,000. In other words, in the period during which this Government has been in office, the average amount of income tax taken from the people has more than doubled.

Mr Bury:

– And so have social services.


– I am referring now to the argument put forward by the honorable member for Sturt who has stated on many occasions in this chamber that taxation mitigates against saving. The fact is that there has been an increase of 100 per cent, in income tax since this Government attained office. Whereas in 1948-49 the average amount paid was £67 12s. lid., in 1959-60 it had jumped to £135 2s. This year, it will be even more. When we have regard to those figures, it cannot be said that the Government’s record is so very good. Taking as a basis the amount paid by the average householder, the position is equally as bad. For instance, in 1938-39, the average Australian with a wife and two children paid £1 6s. 8d. a week. In 1948-49, he paid £5 4s. a week, but by 1959-60, he was paying £10 7s. lOd. a week. Here again there is an increase of more than 100 per cent., and the figure for this year will be even higher. When he looks at that record, the honorable member for Sturt cannot help but feel disappointed.

An important point to remember about this Government’s method of taxation is that at the moment 40 per cent, of the taxes paid by Australian people are paid on the purchase of commodities. Whenever the average Australian spends money, he pays taxes. In other words, every time he spends money he is contributing towards some form of hidden or indirect tax. It is most unfortunate that this trend to indirect taxation has been so great. For example, in the little horror Budget introduced in 1956, the Government imposed an additional £115,000,000 by way of indirect taxes. At that time, the Government said that its corrective measures were all temporary measures, which would be imposed only for a certain period and then be withdrawn. I repeat that this was done by means of the little horror, or afterelection, Budget. The election was held in November or December, 1955, and the little horror Budget was brought down almost immediately afterwards. I remind honorable members that the people did not give the Government a mandate to introduce that Budget. It was something which the Government sneaked in soon after the election was over and about two years and nine months before the next election would be held. As I have said, by that little horror Budget, the Government imposed an additional £115,000,000 by way of indirect taxes. It is important to remember, too, that at that time eight renowned professors in Australia indicated that there was a need to draw off some of the spending power of the community.

Mr Chaney:

– What has this to do with the bill?


– If the honorable member will be patient, I shall explain it to him. Eight professors indicated that there was a need to draw off some of the spending power of the community, and they recommended the imposition of an additional £160,000,000 by way of income tax.

But the Government ignored the advice ot its advisers and, instead of imposing additional income tax amounting to £160,000,000, it levied an additional £115,000,000 by way of indirect taxes. This meant that the ordinary man in the street bore the burden equally with the wealthy people in the community. For instance, the age pensioner who bought a packet of cigarettes or a packet of tobacco paid exactly the same proportion of the £115,000,000 as did the man on £10,000 a year who bought a packet of cigarettes or a packet of tobacco, and that position still applies to-day. That is a most inequitable system, and it is one which we on this side deplore. Again I emphasize that the Government said that it proposed to impose additional taxation on cigarettes only temporarily. However, these temporary taxes were incorporated in the last Budget, just as they were in the one that preceded it and the one before that. This means that when a person buys a packet of cigarettes costing 3s. 3d. he is paying ls. lOd. in tax. In the same way, when he pays 3s. Id. for a bottle of beer he pays ls. lOd. in tax. In effect, he is paying for two bottles of beer - one for himself and one for the Treasurer. The same position obtains when a man buys a motor car. For example, on a car priced at £925, the purchaser is paying £175 in sales tax. And the Government is perpetuating this vicious system of imposing surreptitious taxes which mitigate against the interests of those in receipt of lower incomes, for it continues to levy tax on essential commodities. Take biscuits as an example. Biscuits are now considered part of our stable diet. When I say “ stable diet “ I do not mean horse diet although I do not think that any tax is imposed on biscuits for horses. Biscuits have now come to be looked upon as part of the staple diet of human beings because the average consumption of biscuits per person in Australia is now 16 lb. a year. The yield from the tax levied on biscuits amounts to £3,000,000 a year. And those who eat the biscuits do not realize what is going on! Why does the Government prefer this method1 of indirect taxation to the open method of direct taxation? This Government has been outstanding in its policy of imposing indirect taxes. It also collects £7,500,000 by way of tax on the sale of cakes, scones and buns. It levies £4,000,000 in tax on confectionery. Another £1,300,000 is derived from taxes imposed on the sale of ice-cream and, by taxing the sale of flavourings, fruit peel, toppings and essences, it derives another £1,000,000. In all, the people pay £13,800,000 each year by way of tax imposed on the sale of the commodities to which I have referred. 1 mention those figures to illustrate the enormous sum obtained by the Government by way of indirect taxes on those commodities which go to make up the staple diet of the average Australian.

Mr Bowden:

– It has been the same all your life.


– I find it very difficult to understand the honorable member. I do not think his remarks add much to the discussion.

Mr Bowden:

– You were not born when sales tax was introduced.


– I would like to be able to discuss this matter with the honorable member but, as I cannot understand what he is saying, I shall continue to deal with the bill.

One of the provisions of the bill exempts certain mining profits from income tax. This is covered by clause 3, which extends the operations of section 23a of the principal act. I understand that by this provision 20 per cent, of the profits derived from mining in Australia or the Territory of Papua and New Guinea will be exempt from tax. This exemption will cover mining operations connected with a total of 39 minerals and ores including asbestos, bauxite, chromite, rutile, zircon and the ores of tin, cobalt, copper and a number of other metals.

Neither the Treasurer’s second-reading speech nor the explanatory memorandum which was circulated by the right honorable gentleman contains any explanation as to why it has been found necessary to grant this exemption. There could well be every justification for it - I do not doubt that there is - but I think that the House is entitled to know why this exemption is to be continued for a further period. Is an incentive needed in the mining industry? Why pick on that industry in preference to others? Does not our national development require the overhaul or review of this sort of thing? It could well be the case. Perhaps the mining industry needs some encouragement - I do not know - but there should be some case made out for it since we are extending this assistance.

Mr Bury:

– It has been going on for years.


– Of course it has! The honorable member has ‘been going on for years, as the member for Wentworth, but does that mean that he should go on in the future? I think there is some need, when a provision of this nature is being extended, to make out a case to justify its continuance or extension. Honorable members on the other side of the House try to preserve the status quo. They believe that anything that has been going on for years, whether good or bad, must be perpetuated and go on ad infinitum. That is the unfortunate view that is holding Australia back. All I am putting to honorable members opposite who are getting so agitated and disturbed is that the Treasurer (Mr. Harold Holt) ought to make out a case in support of the extension of this subsidy to the mining industry. There could be many other industries which require the same kind of assistance. 1 turn now to that part of the legislation relating to the special depreciation allowance for primary producers. I am sure that primary producers everywhere are interested in this provision and that it will attract the interest of members of the Country Party. I refer to the provision which involves an extension of the depreciation arrangement in regard to farm workers’ cottages. It is the only provision in the last Budget which directly affects the welfare of the farming community. That is a fair thing to say, and no one can deny it. There may be some other aspects of the Budget which affect the farming community just as they affect the steel-working community or any other section, but this depreciation allowance is the only direct budgetary provision which affects the farming community.

I am sure that people throughout Australia will be interested in this provision which increases the amount upon which primary producers are entitled to a 20 per cent depreciation allowance on the cost of residential accommodation. At present this allowance is available to the limit of £2,750 for the cost of accommodation provided for employees, tenants or share farmers in the agricultural, pastoral or pearling industries, and the legislation proposes to increase that limit to £3,250. The interesting thing to note about this provision is that the only direct concession that the farmers are getting out of the Budget will cost £10,000 in the full year. As I see the plight of the farming community to-day there is a need for a great deal more assistance. When I was in the towns of Parkes and Forbes the other day I was able to ascertain that the farmers are not getting much of a go under the present Government. I was able to ascertain that 63 per cent, of the wool farmers in this country have flocks of 2,000 sheep or less. I doubted this figure, when I first heard it from a farmer, but I have since checked it from the official figures in the library and find that it is true. Most of these farmers have about £40,000 tied up in capital assets and their net income is in the vicinity of £2,000 a year.

It seems that there is a good reason why we should make greater assistance available to the farmers than is at present contained in the provisions of the bill. I think the Budget is shockingly deficient in this regard, and I am appalled to see that members of a party which pretends to represent the country people of Australia are not even participating in the discussion on this legislation.

Mr Turnbull:

– Let me hear a few of your suggestions.


– First, I shall give the honorable member some facts. I cannot blame the honorable member for never being interested in figures, because they are dull. I know you cannot assist the farmer unless you study his problems, and in order to do that you need to examine the figures. In 1949-50 farm income was £448,000,000 and in 1958-59 it was £408,000,000. In 1957-58 it had slumped to £335,000,000. The important point is that in the nine years between 1949-50 and 1958-59, farm income fell from £448,000,000 to £408,000,000. It is a little disturbing to note that whilst farm income declined there was no falling off in the exertions or efforts of the farmers. They worked harder and their output increased, yet their income fell. Their output increased over the last four years by 1 1 per cent., but in the same period farm income fell by 11 per cent. That was substantially due to the fact that prices in this country have risen to an unprecedented degree. Prices have risen by 90 per cent, and sapped the earnings of the farming community.

It is sad that while there are in this House members of the Country Party who represent the farming community some one representing a southern suburb of Sydney has to come here and tell the Government what should be done for the man on the land. Members of the Country Party should be on their feet advocating the provision of assistance for the farmers, who have never found it worse in the last ten years than they are finding it at the present time. That is what I suggest, and I hope that those honorable members will make some contribution, during the course of this debate, along the lines I have suggested.

I have already referred to the extension of the allowance for depreciation on cottages provided for farm workers. We certainly do not object to it, and we think it is highly desirable, but we feel that there should be some guarantee that the farm worker will get some benefit from this provision through reduced rental for the premises he uses. That may be worthwhile, but members of the Country Party are not even interested in that aspect of the matter, although the only assistance given to the farmer under the Budget is this £10,000 concession. If they have any genuine claim to represent the farming community, they should join with me in criticizing the Government for its failure to do something for the farmers, who are finding the going so tough at the present time. However, they have such a piecemeal approach to these taxation and budgetary arrangements that they do not know where they are going.

I notice in the bill a new provision to increase the amount of deduction authorized for subscriptions paid to trade, business or professional associations. The present maximum is £10, and is to be increased to £21. I do not know whether or not that is a good idea, and apparently no one knows why this amendment is being made. Who are the people that will benefit from it? Is there some little group that the Government is pandering to? I talked to some trade unionists in King’s Hall to-day and found among them many who paid union dues of £3 10s. a year. Five pounds was the highest union subscription that I was able to ascertain was paid. I noticed that members of the Country Party and members of the Liberal Party could not be seen when the trade unionists came here to protest that the Crimes Bill represented a dreadful suppression of liberty. I took the opportunity of their presence to gather some information as a basis for making what I hope is an intelligent contribution to this debate. Most trade unionists in this country pay less than £5 per year in union subscriptions and I am inviting honorable members opposite to point out who has to pay £21 and consequently can claim the maximum allowance which is provided for in the legislation. As a member of this place I have a right to know that and would like to be given the information. I ask the Treasurer to do something about these matters.

The same kind of attitude prevails in relation to the allowance for gifts of £1 or more to certain specified bodies. Seven organizations are mentioned and I will not have time to deal with them all, although they are very important. When has there been an overall review of the organizations which benefit in this way? I know lots of people who make substantial contributions to various worthy bodies, for instance, to parents and citizens’ associations and who, as the result of the Menzies Government’s approach to the general question of education, are called upon to contribute very heavily to the provision of equipment for public schools. Unfortunately, they are not able to claim for taxation purposes the amounts that they contribute. How can a taxpayer discriminate between contributions to parents and citizens’ associations and contributions to any other body?

Mr SPEAKER (Hon John McLeay:

Order! The honorable member’s time has expired.

Wide Bay

.- I listened with great interest to the honorable member for Hughes (Mr. L. R. Johnson) in the hope that I would hear something of advantage. He said, for example, that the Government is not doing enough for the farmers. The standard of his speech makes me hope that some day he will see the error of his ways and join the Australian Country Party. Then, after a suitable period of instruction, he will be able to give effect to the ideas which he withheld to-day. He did not make one positive contribution towards assisting the farmers. I hope that I do not have to wait too long to hear him make a speech after he has collected his thoughts. I may then learn the way in which he suggests the Government can help the farmers. However, he joined with his colleagues in making clear the Labour Party’s policy which is, in effect, one of confiscation. 1 support my contention in this regard by stating that any one who advocates taking from the big man, as the Opposition calls him, most of that which he hath advocates a policy of confiscation.

Some years ago, one of my friends came to Australia from England. When I asked him about conditions in England in the post-war period he told me that everything was satisfactory except for the high incidence of taxation. He told me that direct taxation in England was so severe that if a man wanted to have a net annual income of £5,000 he had to earn about £55,000 gross. Even the man in the middle income group who earned £2,000 a year had to pay what my friend considered was a punitive income tax. However, the only thing that my friend - a very sensible man - could find wrong with England was that taxation was far too high.

If we examine the principles underlying taxation we shall find that it is necessary in any community to raise the revenue that the government considers it requires to carry on the country’s business. Let me illustrate the necessity for taxation by pointing out that before the time of Magna Carta it was customary for Lord Fitzhugh, for example, to say before breakfast to his trusty retainer, “To-day we shall attend to Lord Macdonald “. So he, his trusty retainer and his followers would attend to Lord Macdonald and take over Lord Macdonald’s land. This activity continued for many centuries until finally the barons decided that there should be some stability and that, at least as far as they were concerned, the King of England should not be permitted to continue with his programme of take-overs. The barons got together and formulated a scheme which prevented the King of England from indulging in his extensive take-over programme which was depriving them of their land.

To-day it is not necessary to cope with that state of affairs but it is necessary, for example, to provide for defence, so an amount of about £200,000,000 a year is devoted to this purpose. That is one reason why taxation is necessary. But there are many other reasons which I do not need to recount.

Honorable members opposite have suggested that it is all right to take money from some one else, so I shall put a proposition to them. I regret that there are only two Opposition members in the chamber to hear my suggestion because I have been moved by the spirit of generosity that the Opposition has exhibited. I offer to draw up, without charge, a trust deed to provide that one-half of the income that Opposition members receive from their parliamentary salary and from any other source shall be paid into a fund, and from that fund contributions shall be made to all worthy causes by a trustee to be appointed.; I have no doubt that the honorable member for Melbourne Ports (Mr. Crean) would be only too glad to act as trustee of that fund. It is the easiest thing in the world to take money from some one who has had the initiative and the skill to make it and to give it to some one else. But we must fact facts. Any country which has the freedom of choice no longer will accept socialism. One of the troubles of the Labour Party in the United Kingdom to-day is that so many people have rejected socialism. As a result the Labour Party there is in a turmoil. It has failed with its socialization schemes. Surely it should be obvious to Opposition members in this august Parliament that socialism is and will be equally unsuccessful in Australia. They should have learnt their lesson by now, but some people never will learn. I am convinced that they will continue to advocate socialism in spite of the fact that the people of Australia demonstrate at election after election that they do not want it.

One very strange thing was noticeable last year. When income tax was reduced by 5 per cent, the Opposition complained because the big man, as he is called, received a considerable reduction in income tax. But I have not heard very many cheers from the Opposition now that that rebate has been abolished and the big man who pays high income tax has to pay another ls. in the £1. Honorable members opposite complained very bitterly last year when the man who would otherwise have paid £1,000 income tax saved £50, but we have not heard any cheers from them now that the man who otherwise would have paid £950 this year will have to pay about £1,000 when this bill is passed, as of course it will be passed. We do not hear the big cheers from them in that regard. All they point out is that the man who pays a small amount of income tax is being relieved now to the extent of only ls. in the £1. Of course, it scarcely needs to be emphasized by me that a man who makes a very big income has to pay, even under our present system, a very big direct tax. For example, a man who is fortunate enough and skilled enough to make an annual income of £45,000 will have to pay £30,000 in direct tax when this bill becomes law. That is a direct contribution by him to the running of his country. Surely, it must be admitted that any man who honestly makes £45,000 a year and has to pay £30,000 of it in tax is contributing very substantially indeed to his country.

We are told that the socialists believe in heavy direct taxation and the abolition of indirect taxation. I find it hard to square that objective with what we know to be happening in Russia, which is, of course, the prime exponent of the principles of socialism. It has been stated that in Russia, that powerful socialist country-

Mr Roberton:

– There are no McDonalds there.


– I am reminded by my friend, the Minister for Social Services, that there are no McDonalds in Russia.


– Order! I do not think I can find any in the bil! either.


– I am replying, if I may, Mr. Speaker, to statements made by members of the Opposition that direct taxes should be increased and that indirect taxation should be abolished. We are told that it will not be long before direct taxation in the Union of Soviet Socialist Republics, the leading socialist country of the world, no longer exists. We know also that at the same time indirect taxation, in the form of what amounts to sales tax, will be levied to the tune of more than 100 per cent, on many articles sold in Russia, when direct taxation has been abolished there.

The reason for this is obvious. There is not one country in the world that has been able to produce a money tree. There is nobody that I know of who has been able to produce a tree to yield revenue to a country. The only way a country can obtain revenue is by the exertions of individuals and companies. In short, all that a government can do financially is to receive revenue and then expend it in a proper manner. The Soviet Government is not immune from that principle. It must first receive revenue before it can spend it, and the way that it receives its revenue is from heavy indirect taxation. That is the way in which the Soviet Government will increasingly continue to receive its revenue - indeed, indirect taxation in Russia is going to become heavier. Other socialist countries are following the same policy.

There is no royal road, Mr. Speaker, to the gaining of revenue. The government of every country, mindful of its obligations, has to raise revenue in what it considers to be the best and fairest manner. This Government of ours has been, in effect, confirmed in what it has done over the years, since the electors have continued to return it to office. If members of the Opposition want to stay out of office there is no better way they can do it than by continuing to advocate increasingly their socialistic ideas, which have been proved to be unworkable and also thoroughly unpopular.


.- When the honorable member for Hughes (Mr. L. R. Johnson) was speaking a little while ago one of the first things he said was that unfortunately no Government supporter had risen for the call. He said that apparently Government supporters were not very interested in the legislation, since they were not taking as much part in the debate as were the supporters of the Labour Party. I could turn the argument against the honorable member now, because I am speaking after another member of the Australian Country Party. If Labour is so interested, why have not honorable members opposite taken their places in the debate?

However, I know that there is not much weight in the kind of argument that the honorable member used, because it is often in the best interests of everybody that certain members of a party who wish to advocate the same course of action should follow each other in a debate. So I will not make any case of my reply to the honorable member’s statement, because 1 do not think that the honorable member’s argument on that line had any logical point in it, and I would not be logical if I used the same kind of argument.

A few statements were made in the debate to which I should like to reply. The honorable member for Hughes said that he spoke as a member for a Sydney metropolitan electorate and was putting a case for the countryman that a member of the Australian Country Party should be putting. We asked the honorable member for some suggestions in relation to the tax laws that would help the primary producers further than they are now being helped by this Government. The honorable member made not one suggestion on that line. He said that my face lit up when he mentioned incomes of £5,000 and £10,000 a year, for there were many of these in the Mallee electorate. I suggest that, since I represent a great primary producing area, the honorable member must have been referring to primary producers. The Government’s programme cannot be hitting those primary producers too hard - certainly it cannot be hitting them in the way that the honorable member suggested - if they are making net incomes of £5,000 or £10,000. The whole of the honorable gentleman’s argument was devoid of logic.

He contended that the Government was making only one concession to primary producers under this tax measure, by increasing the allowable deduction in respect of expenditure on improvements and the building of homes for sharefarmers, tenants and employees. This will cost the country only £20,000. During many debates in this House it seems to be forgotten that concessions given in previous Budgets continue to operate, as such concessions usually do unless they are discontinued by legislation. I will not take up the time of the House by enumerating all the concessions made by the Government to the primary pro ducers, but I say that it is evident that the farmer in. Victoria is fairly pleased with the Government, because although the Australian Labour Party held some rural electorates in that State at one time there is no longer a Labour member of the House of Representatives representing a Victorian electorate in which he would be dependent for his vote on rural electors. Some one might say that the honorable member for Lalor (Mr. Pollard) represents a partly rural electorate. That is so but, as everybody knows, the honorable member for Lalor depends on the metropolitan vote in his electorate to return him to this Parliament, especially the Labour vote in the city of Sunshine. The Leader of the Opposition (Mr. Calwell) has often said, at election time, “ I will be satisfied with the decision of the people. The people finally decide.” If honorable members opposite want to have the final decision on whether the Government’s policy pleases the farmers let them tally the members of the House to see who represents rural electorates here - members of the Labour Party or supporters of the parties now in office.

This bill increases the concession applicable in respect of expenditure by farmers on accommodation from £2,750 to £3,250. That is very pleasing since, as everybody admits, the cost of housing has risen. Some one says that a larger concession should be granted. The farmer will be able to claim a deduction in respect of £3,250, and in relation to expenditure over that amount in one year he will have the benefit only of the ordinary depreciation provisions. Of course, if the primary producer wants to build a house for an employee or a sharefarmer at greater cost, he can still claim depreciation at 20 per cent, for five years on £3,250. He can also claim the concession on many other items, such as farm plant. A claim can be made for the cost of clearing and preparing land if he wants to make a seed bed, put down pasture or sow cereal crops. The whole of the expense is a tax deduction in the year that the farmer spends the money.

All these provisions have been made through the years. If a farmer wants to renew a fence, he can erect a line of new fencing on the old line and the cost is a full tax deduction in that year. The farmers of Australia have appreciated these provisions, and they know that the Labour Party has never given such concessions to primary producers. At various times, the Labour Party has placed on the statute book legislation which has retarded the progress of the man on the land. When this Government was elected to office, it found among the laws applying to income tax what has become known as the provisional tax. That impost had worked fairly smoothly when the income of primary producers was steady, but when wool prices went so high in 1951 the primary producers found themselves in real trouble simply because the Labour Government had introduced this form of taxation. 1 have not heard Labour supporters say this, but it is perfectly true, that the parties who form this Government, realizing the harm that was done to primary producers by the provisional tax, introduced the Canadian system of self-assessment which had proved so successful in Canada. Previously, if a farmer had a taxable income of £5,000 in one year and then his income was reduced in the following year to £500 because of almost complete failure of his crops, he was still charged, provisional tax on £5,000. But legislation introduced by this Government provided that in such a case the farmer, on receiving a tax demand for provisional tax based on £5,000, simply had to fill in a self-assessment form showing that his net income was only £500 and return it with his cheque for the appropriate amount of tax. As a result, the taxation office was not holding a large amount of the farmer’s money over a period of years.

These are practical things that this Government has done through its legislation to help the man on the land. From the time 1 was elected to this House at a byelection on 9th February, 1946, letters poured in to me asking me to try to get concessions for primary producers from the Labour Government. The farmers wanted legislation that would sponsor the main elements in our economy such as wool and wheat production. I get very different letters now. The provisional tax and other imposts and legislative provisions which harassed farmers until this Government went into action have been reviewed. Under the Labour Government, there wa» even a restriction_on the acreage that could be sown with wheat. If a farmer had 500. acres of beautiful fallow available at Minyip in the electorate of the honorable member for Wimmera (Mr. King) or at Sealake or somewhere else in my electorate, he could not use all of it because the Labour Government restricted his sowing. Shortly after acreage restrictions were operative, there was a drought and we were short of wheat. We had to import foreign grain. This contained a lot of weed seeds which we are still combating. The yield of our cereal crops has not been enhanced’ by those importations. Supporters of the Labour Party have forgotten these things. The Labour Government was responsible for the one-bid auction at Newmarket. Us. representative at the saleyards valued the stock. If a pen of lambs was valued at 25s. each, the auctioneer had to knock them down when the bidding reached that amount although the lambs might have, brought 30s. or 35s. at a free auction. These are all reasons why supporters of the Labour Party will sit on the Opposition benches for a long time if primary producers decide the issue.

This afternoon, we heard a speech by the honorable member for Hughes (Mr. L. R. Johnson) who comes from the Sydney metropolitan area. He would not know which side of the cow to sit to milk it. Ha would not know a comeback from a Shropshire. I think he would hardly know a Shorthorn from a Polled Angus. In contrast, we heard speeches from other honorable members with long experience in primary production - the honorable members for Wide Bay (Mr. Bandidt), Hume (Mr. Anderson), Wimmera (Mr. King) and Gwydir (Mr. Ian Allan). All are members of the Australian Country Party - the small party with the big reputation - whose members have’ formed the majority in this House this afternoon. We realize that somebody with knowledge of the facts has to rise to state the case for the primary producers clearly for the people of Australia. Even the Labour Party is becoming more conscious of the fact that primary industry is largely responsible for making- Australia prosperous and progressive. Supporters of the Labour Party have realized this more clearly since they have seen the results of this Government’s, legislative actions. Although the Government does not make Australia prosperous, it makes certain accoutrements available to the men on the land who have always been willing to play their part in pioneering Australia and furthering the interests of this great nation.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 5 - by leave - taken together, and agreed to.

Clause 6 (Gifts, calls on mining shares, pensions, &c).

Melbourne Ports

.- I wish to direct the attention of the Treasurer (Mr. Harold Holt) to a matter which has been referred to the Leader of the Opposition (Mr. Calwell) by a member of the Queensland Parliament, Mr. J. Burrows. The matter deals with a body in the metropolitan area of Brisbane known as the Queensland Ambulance Transport Brigade. In a letter to the Leader of the Opposition, Mr. Burrows stated -

I draw your attention to a recent ruling of the Commissioner of Taxes, which I enclose, and although I regard it as a quibble, it will probably call for an amendment of the act or for some one to go to the expense of an appeal to upset.

The position here in Queensland in respect to ambulance brigades is as follows: -

They give a service by qualified and generally full-time paid employees to the sick and injured, mainly involving the conveyance of patients to hospitals, but often the rendering of first-aid.

They get their mandate from the Hospitals Acts of the State and this may be a winning point in an appeal if some one decided to take the Commissioner to Court on the grounds that the payment was for medical expenses if not a deduction as a charitable donation. However, an appeal should not be necessary.

Their source of revenue is dependent upon public subscription which is endowed or augmented by the State at the rate of 10s. in the £.

These subscriptions or donations largely consist of group subscriptions by employees of works who authorise their employers to deduct small amounts weekly from their pay, and until this year any donations or subscriptions were allowable deductions for Tax purposes.

Of recent years like most charitable institutions these Ambulances have had to devise improved methods to induce or attract donations or subscriptions and as a result have decided to charge for their services unless the patient is a subscriber or donor to their funds.

In 90 per cent. of the cases the average subscriber would not take advantage of this and if forced to use the ambulance would feel disposed to increase his next donation, but because of this blanket rule that legally he can demand free service because he had previously subscribed, the Commissioner says he is not entitled to a deduction.

I shall quote now from the letter which the Deputy Commissioner of Taxation in Queensland sent to an individual who had claimed a subscription to the Queensland Ambulance Transport Brigade in his annual return. This is the relevant part -

You are informed that provision is made under Section 78 (1) (a) of the Income Tax and Social Services Contribution Assessment Act for the allowance, as deductions for Income Tax purposes, of gifts made for certain purposes.

The clause before the committee proposes to extend the ambit of that provision. The letter continues -

In this respect, the view is held that the principal element which distinguishes a gift is the entire absence of consideration. For gifts to be deductible under the section of the act mentioned, they must be essentially unfettered contributions for one of the purposes enumerated in that section.

From the information available on the point at issue, it would appear that a subscriber under the Q.A.T.B.’s new Financial Scheme makes a subscription annually, and in return, the subscriber becomes entitled to free ambulance service in the Brisbane area. In effect, the subscription is not an unfettered contribution to the Q.A.T.B. and, therefore, it would not qualify as a gift for the purposes of section 78 (1) (a) of the Income Tax aond Social Services Contribution Assessment Act.

Whilst not contesting the view of the deputy commissioner that for a donation technically to be a gift, no strings should be attached, I suggest that, at least, the Treasurer should consider this matter and that if donations to the brigade cannot be encompassed as a gift under this section, at least an extension should be made to section 82f of the act under which deductions can be made of contributions for medical purposes. I suggest that if this ruling is to remain and the person who subscribes to this organization cannot claim the subscription as an allowable deduction, consideration ought to be given by the Treasurer to widening the definition of the term “ medical expenses “, so that a subscription paid to this organization would be an allowable deduction under that head. I simply draw the attention of the committee to this matter and hope that the Treasurer will act upon my suggestion.


.- This clause deals with those organizations to which the Government decides to give special privileges in respect of donations from the public. Every year, we see one or two organizations added to an already very imposing list of organizations, donations to which may be claimed as deductions from taxable income. I have previously spoken in this chamber, and have asked questions, on the subject of the extension- of the provisions of the relevant section to include donations for the erection of new churches, church halls, new Sunday schools and new youth club buildings. It should be possible for donors to deduct such donations from their taxable income. I also feel that donations for the purpose of repairing churches, church halls, Sunday schools and youth club buildings should be deductible from taxable income.

We have hundreds of churches of many denominations and thousands of people support them in many ways. It would be a wonderful encouragement to the work of the Christian Church throughout Australia if this were done. The organizations that we are now being asked to incorporate in the section include the National Trust of Australia (Tasmania) Limited and the Art Gallery Society of New South Wales. Another one is the Australian Productivity Council. What do you think of that? Is is not rather amazing that the Australian Productivity Council, a baby organization, should be included? I feel that there are hundreds of organizations which should have priority over that one, particularly the churches which are doing far more good for the Commonwealth than the Australian Productivity Council could ever do.

Other organizations mentioned in the clause are the Australian Post-graduate Federation in Medicine, the College of Radiologists of Australasia, the Australian College of General Practitioners, and the College of Pathologists of Australia. AH these are subject to the proviso, “ where the gift is for the purpose of education or research in medical knowledge or science “. That is an important proviso. The term “ education or research in medical knowledge or science “ is all-embracing. Any encouragement of medical education or research is all to the good. But some organizations already included in the act by earlier legislation cannot compare with the churches for the good that they do for this country.

The Treasurer (Mr. Harold Holt) has hedged on the matter every time I have raised it. I do not think he is prepared to face up to it fairly and squarely. I do not know what he is afraid of. After all, it is great to see the new churches that are being constructed throughout the country. I admire the sacrifice of small groups of people all over this great Commonwealth who are working to have new churches erected. The modern church is a building that does credit to any town or city. The architectural design is outstanding. It gets away from the old type of closed-in building. I feel that to encourage the construction of new churches, Sunday schools, and youth club buildings in Australia is a very worthy objective indeed.

Is any group doing more to benefit the Commonwealth than are the churches? Of course not. We scream in this place about child delinquency. Thousands and thousands of words are poured out in this Parliament every year about the temptations that young people have to face to-day and the tragedy of delinquency, but words are worthless unless they are backed up with action. One way in which we can back up our words with action is to allow the deduction from income, for taxation purposes, of donations for youth club buildings on church properties. I believe that no member of this Parliament would be so cynical as to disagree with me about the value of Sunday school work and youth club work.


– Order! I think the honorable member is moving away from the clause before the committee. He is making almost a second-reading speech.


– I am sorry, Mr. Temporary Chairman. I just wanted to outline the reasons why I believe my suggestion should be considered by the Government when it is preparing the Budget for next year, and when it is turning its attention to the question of allowable deductions under section 68 of the principal act. We should keep pegging away at the Government with regard to this matter. If other honorable members wish to support me I will be pleased to hear them. I do not want to be a lone fighter for this cause, and I do not think I am. I believe I have many supporters in this Parliament on this aspect of income tax legislation. In conclusion, I trust that the Treasurer will have another look at my request, and that next year we may have the pleasure of congratulating the Government on introducing the suggested provision.


.- I feel impelled to join in the debate on this clause because of the remarks made by the honorable member for Wilmot (Mr. Duthie). There does seem to me to be a clear distinction between the kinds of contributions that are at present listed as allowable deductions for income tax purposes and the kinds suggested by the honorable member. The functions of the organizations, contributions to which are at present accepted as allowable deductions, could not be said to come under the heading of charitable functions, and this appears to me to show the distinction to which I have already referred.

I do not believe it is the function of the Government to encourage people to make contributions for charitable purposes. If a person has charity in his heart and thinks a particular cause is worth supporting, then he or she should be prepared to make a contribution without any cold calculation’ as to the benefits that may be derived in terms of income tax. I think we place too much emphasis on the fact that certain contributions may be deducted from income for taxation purposes. One of the results of this has been the drying up of the springs of genuine charity in the Australian community. For that reason I would be very much opposed to including, as allowable deductions under the act, the kinds of contributions spoken of by the honorable member for Wilmot. After all, if you are a member of a church and you believe in what the church stands for, you should be prepared to support its activities financially, and you should not need to be encouraged by any cold calculation of financial advantage of the kind suggested by the honorable member.

Clause agreed to.

Remainder of bill - by leave - taken as a whole, and agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

page 2396


In Committee of Ways and Means: Consideration resumed from 23rd August (vide page 268), on motion by Mr. Harold Holt -

– (1.) That, in this resolution . . . (vide page 264).

Melbourne Ports

.- The resolution before the committee sets out the rates of income tax that shall be payable by companies and individuals for income earned in this financial year. It deals also with the re-imposition of the 5 per cent, personal income tax that was remitted in the Budget last year, and also with the increase in the rate of company income tax from 7s. 6d. in the fi. These income taxes, paid by individuals and by companies, together yield revenue of something like £780,000,000, or more than half of the total revenues collected by the Commonwealth. Therefore, the resolution is a most significant one so far as this Parliament is concerned, and I feel that I cannot let the occasion pass without saying one or two things about the taxation rate structure as set out on pages 5 and 6 of the printed resolution.

A short time ago this Parliament debated the principles of taxation assessment, and reference was made to items that are allowable as deductions from income for taxation purposes. We are now concerned with the rates of taxation on what is called the taxable income, the residue after allowable deductions have been taken into account. This afternoon an honorable member, who unfortunately is not present at the moment, raised the question of the taxing of companies, and for his information I think I should say that there are virtually three rates in force for the taxing of companies. There is the rate that applies to proprietary companies as distinct from public companies. A distinction is made between the rate of tax payable on the first f5,000 of taxable income and the rate payable on the remaining income. In the case of proprietary companies there is also the device of taxing some part of the undistributed profits, the actual proportion to be taxed being arrived at by means of a formula.

The honorable member for Sturt (Mr. Wilson) suggested this afternoon that we on this side of the chamber had made alternative proposals. We do make alternative proposals. All that I direct attention to now is the fact that the new rates will constitute only one kind of rate structure that could be applied, and there is nothing final about this kind of structure. This bill will increase the rate of company tax on income after the first £5,000 from 7s. 6d. to 8s. in the £1- something that the honorable member regarded as an evil. He said that we shall be taxing away some of what he described as a source of savings.

What we on this side of the chamber sought to point out in the debate on the Income Tax and Social Services Contribution Assessment Bill (No. 2) 1960 was that in 1960 the Government ought to recognize that a large company with profits running sometimes into millions of pounds rather than just a few thousands, with thousands of shareholders and with thousands of employees cannot be put in the same category as a small private concern or even a small public company is put. Yet, apart from the first £5,000 of income, the law will treat all in the same way. The Australian Labour Party regards this as a rate structure which is inequitable, and also unrealistic in terms of the economic power that some of these big organizations wield in these times. I suggest that it is not incumbent on me at this point to suggest what the pattern of taxing ought to be. All I point out is that this is only one possible pattern of taxing, and that it will result in considerable inequalities and a great deal of unreality in relation to the economic circumstances of Australia in 1960. This committee ought to give a lot more attention to matters of this kind than it does.

With regard to the taxing of individuals, again it is pointed out that this is only one possible rate structure. At the present time, concessional deductions from income are allowed in such a way as to give the maximum benefit to the taxpayers on the highest ranges of income, because the deductions are taken off the income at the top, as it were, and only the residue is subject to tax. That kind of rate structure is responsible for anomalies of the kind that were pointed out in the debate on the Income Tax and Social Services Contribution Assessment Bill (No. 2) 1960 last week and again this afternoon by the honorable member for Yarra (Mr. Cairns). Although concessional deductions for family circumstances osten sibly are based on family considerations, under the present rate structure they inevitably work in such a way as to give the maximum advantage to the smallest number of taxpayers. I suggest that that, again, is contrary to the principles of social justice, and that for that reason, too, the committee should be more critical of this system of deductions than it is.

The rate structure in respect of the tax on individuals is based on a curve of some kind. Again, I point out that this is only one possible curve which can be used in computing the liability to tax, and I suggest that we could get an entirely different rate structure which, in my view, would possibly yield more in tax, or, even if it yielded the same amount as at present, would take less from the taxpayers with families - with a wife and two children, on the average - on incomes of, say, from £700 a year, or about £14 a week, to £1,400 a year, or about £27 or £28 a week. The statistics of the Commissioner of Taxation show that this group encompasses the bulk of the taxpayers with families and dependants, but because of the way in which the rate structure is determined and the way in which deductions are allowed, these taxpayers pay far too much in tax at the present time. The total paid by them - and therefore the burden - is inequitable. This situation is adverse to the interests of families and favorable to people with much smaller family responsibilities. I suggest, again, that that is a matter which calls for serious examination by the Parliament, and particularly by the Government, and I hope that the Treasurer (Mr. Harold Holt) will give it more consideration in the future than he apparently has given it in the past.

Question resolved in the affirmative.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Harold Holt and Mr. Cramer 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

Motion (by Mr. Harold Holt) proposed - That the .bill be now read a second time.

Melbourne Ports

.- This bill is, of course, based on the resolution dealing with rates of taxation. I draw the attention of .the Treasurer (Mr. Harold Holt) particularly to the provisions in the bill concerning the age allowance. An allowance is given to a man who has reached the age of 65 years, is qualified by age at least, to receive the age pension, and whose spouse is over the age of 60 years. This is to avoid the anomaly of a person with less income in total than two pensions and two permissible incomes paying income tax. I suggest that several anomalies and injustices still attach to this basis for taxing aged persons. The provision is co-ordinated, as it were, with social service benefits. As honorable members know, beside the age pension, there are other pensions. Widows’ pensions and invalid pensions are granted to people in somewhat similar circumstances and sometimes to people whose circumstances are more adverse than those who receive the age allowance. I hope the Treasurer will give sympathetic consideration to extending the benefit of this provision to a widow who, because her social service pension is inadequate to keep herself and her family, finds it necessary to take employment. At the present time, such a widow is required to pay tax on all income over £104 earned in a year. Occasionally there arise cases of married couples in which the husband is over 65 years of age and the wife who is under 60 years of age, is either unable or unwilling to go out to work. Having been a housewife during the period while her husband was earning a normal full income, she is either unable or unwilling to take employment and the husband, finding that his pension is inadequate to meet his needs, goes out to work in order to earn a few pounds by way of additional income. So far as I am able to see, such a husband does not receive the benefit of the concession to which I am referring despite the fact that in many respects his economic circumstances are far worse than are those of the people to whom this provision applies. I am not quibbling at the fact that some people do enjoy this benefit; I am merely pointing out that one or two anomalies do exist and suggesting that it is time some consideration was given to the manner in which the pro vision operates. Often injustices are not noticed because very few people are affected by them, or because those who are affected are not in a position to submit their complaints to any one in authority. The anomaly to which I am referring is made worse each time the basic rate of pension is increased. Only recently we increased the base rate pension to £5 a week. It is therefore necessary that the provision under consideration be amended to cover the addition of £26 a year in the case of a single pensioner or £52 a year in the case of a pensioner couple. If no such adjustment is made, the gulf between .those who benefit under this provision and those who are now excluded will be widened still further because nobody seems to worry much about those who are excluded from benefit. I do ask the Treasurer at least to take the matter up with the officers of his department with a view to ascertaining whether an anomaly does exist and whether some provision can be incorporated in the Income Tax Act to extend this benefit to those people who are eligible for social service benefits other than the age pension.

Sitting suspended from 6 to 8 p.m.


– Before the suspension of the sitting, Mr. Speaker, I debated the provision of the bill which deals with the age allowance. I asked the Treasurer to give some consideration to the fact that certain anomalies exist under this provision. One person is eligible for the concession while another is not, and the provision does not cover cases where the pension is other than an age pension. Where the pension is a social service payment of another kind it is not covered under this legislation. I realize that there may be difficulties in drafting a provision to cover the full variety of cases which may be met, but I had hoped that that could be done.

I think it rather odd that in this House we devote so little time to considering the rates structure of what is basically the most important tax in the Commonwealth. I would like honorable members to contrast the time that is sometimes devoted to debating legislation dealing with sales tax with the time devoted to the consideration of other forms of taxation. Sales tax applies to a multiplicity of objects at varying rates and it seems to be easier to promote debate on that- impost than on the tax imposed on an individual or on a company. This form of taxation does not seem to arouse the same lively interest as some other taxes do. This is a pity, because the tax with which we are dealing is a significant social instrument as it affects both individuals and companies.

Earlier, in the Committee of Ways and Means, I pointed to one or two of the difficulties that we meet in this field. I referred to the fact that the honorable member for Sturt (Mr. Wilson) this afternoon queried something I said during another debate. I took the opportunity then to point out that in this measure the Government he supports is doing something that he criticized me for suggesting. In other words, the Government is increasing company tax from 7s. 6d. to 8s. in the £1. I pointed out that there were at least two rates of company tax - the tax on the first £5,000 and the tax on any subsequent income. It does not seem to me necessarily to follow that there ought only to be those two rates of company tax. We could have a series of rates.

I point out that in the United States of America the tax on companies rises as high as 52i per cent, of the profit, or 10s. 6d. in the £1. We are therefore still a considerable way from the level of company tax that is reached in the United States. I do not think any one suggests that, with that rate of tax operating on some of the bigger companies in America, that country is facing economic ruin. I believe that in this year, 1960, there is a case for a much more systematic approach to this problem. The large corporations or companies are far removed from organizations like the corner store or a small proprietary company. In spite of this they are all vaguely described, in this House, as examples of private enterprise. This covers a very wide variety of animal in the field and I think there is a case for treating the larger organizations much differently from the way in which we at present treat them. The basis could be what should be allowed in computing the taxable income.

Some consideration should also be given to evolving a different rates structure. I think that would be a much more just method of raising taxation. It would reach the seat of the trouble and would effect the kind of organization that the Governor of the Commonwealth Bank has cited in his last two annual reports as being in a position virtually to fix its own prices. If such organizations choose to fix their prices higher than, in justice, they should, a taxing measure is one way of taking away some of their ill-gotten gains.

I leave it to the House to contemplate the fact that the pattern which we have at the moment has grown more by accident than by any careful design. I think the time is now opportune, in view of the claim which the Government makes of grappling, day by day, with the problems which face this country, to consider this question more on a day-to-day basis than as something which is to be disposed of once a year when we blithely re-enact the tax rates which have been in existence for a considerable number of years.

Question resolved in the affirmative.

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

page 2399


Second Reading

Debate resumed from 11th October (vide page 1853), on motion by Mr. Townley -

That the bill be now read a second time.


.- I think this is a most important piece of legislation, and the Opposition is not opposing it. The measure proposes to increase the amount to be paid by aircraft operators in Australia for the use of Department of Civil Aviation facilities. It is expected that the increase in the rate, as proposed in the bill, will result in an increased charge on the industry and increased revenue for the Commonwealth of about £450,000 a year. This is the first increase of its kind since 1957, when about 10 per cent, was added to the then existing aggregate charges. The increase now proposed will add about 60 per cent, to the aggregate charges and will take the full amount contributed yearly by the industry to about £750,000.

The charge imposed by Australian airlines for the carriage of passengers and freight should be taken into consideration when we are discussing the important matter of what the air navigation rates should be. It is estimated that about £13,000,000 a year is spent on maintaining aerodromes and the civil aviation services in the Commonwealth as a whole. As the Minister pointed out in his second-reading speech, that includes about £4,000,000 for such invisible items as depreciation, interest, superannuation liability and so on. After this increase is imposed the operators will be paying about £750,000, or about 7* per cent, or 8 per cent, of the total annual operating cost.

The first impression that one gains from this is that this amount seems to be a small proportion of the whole. The people who actually use the facilities that have been provided contribute something less than one-tenth of the total operating cost. Of course, what this ratio should be is the key point in legislation of this kind. Civil aviation facilities are becoming increasingly complex as the speed of aircraft increases. I point out, too, that these facilities are maintained not only for civil use but also for use in case of any national emergency. The developmental factor in relation to our outback areas is also involved in this question.

All our transport systems have been subsidized. Travellers have not been charged anything like the amount that would have been necessary to meet the cost of current operations and to provide for capital investment because it has been recognized that these services are necessary for developmental purposes. In the air transport industry the cost of providing routes in the country and operating aircraft along these routes is far beyond the capacity of the users of those routes to pay. As the Minister stated in his second-reading speech -

It is axiomatic that a strong civil aviation industry is a vital instrument of national development.

About 2,500,000 passengers were carried last year on this vital instrument of national development.

The first point that emerges, therefore, is that the proportion of the total operating cost which is paid by the commercial operators is small. The second point that emerges is that air transport is characteristically different from rail and road transport. My impression is that civil aviation, serves much more directly what one might call business rather than private interests. Occasionally but not very often one meets on an aircraft a person who has paid his own fare. Most of the people I meet when travelling in aircraft have had their, fares paid either by the Government or by the company for which they work. That is a characteristic of air travel which is strikingly different from rail or road travel where the ordinary citizen uses the services much more extensively than do business people. In effect, we are subsidizing air travel, which in a way serves a smaller and less representative section of the Australian community than does any other form of travel, to a greater extent than any other industry. Even admitting, as we do, that the important aspect of national development is involved, I think that the point that I have made is still valid.

Another point emerges from an examination of this bill. The Minister has informed us that about one-half of the proposed increased charge will be paid by the operators of international airlines. However, international airlines use the services which have been provided less frequently and less extensively than do domestic airlines. This means that the proposed charges must be levied differentially against them. There is justification for this differentiation in the fact that, the internal airline operators contribute in other ways. For instance, they pay £1,200,000 in fuel tax. This bill serves to shift the emphasis more on to the international airline operators than previously has been the case.

The Minister informed us also that this bill represents the first of a series of annual reviews of the scale of charges. I am sure that honorable members and those concerned in the industry will be pleased: to learn that an annual review of these charges is proposed. This is a most important matter. It is difficult to satisfy oneself that the correct rates have been fixed, and an annual review of the scale of charges will keep the matter constantly under notice.

This whole problem of what amount should be contributed by the actual users of these facilities, and what should be paid from Commonwealth Government revenue as a direct subsidy to the operation of airlines, is most complex. The present position is- that about 90 per cent, of the total cost is met by subsidy and about 10 per cent, by the industry. The industry of course would not be operating unless a large volume of capital was being contributed by other sources.

This raises the question of the future ot passenger and cargo transport by air. It is generally agreed that in the last ten years there had been most remarkable development, not only in Australia but all over the world. The relevant statistics which have been issued by the United Nations show that in that period the number of passengers and the amount of cargo and mail that have been carried have increased .approximately fourfold. For instance, the number of passenger-kilometers was 21,000,000 in 1948 and 85,000,000 in 1958; the number of cargo ton-kilometers was 420,000 in 1948 and 1,660,000 in 1958, and mail tonkilometers rose from 170,000 in 1948 to 470,000 in 1958. Compared with any other section of the transport industry, the expansion in air transport over the last ten years has been far greater. It has been fantastic. Looking at the position, with that broad world picture in the background, let us see what has happened in Australia. When we turn to the same source for strictly comparable figures we find that the Australian rate of development has only about doubled. It is now two as against about four in the rest of the world. I am not going to quote the individual figures. They are here in this publication, which is available to honorable members in the library. Australian development is about two or a little less in each of these categories, compared to about four in the world as a whole. It might be said, “ Yes, but this indicates that Australia was at a higher level of development in 1948-49 than some other countries were”.

Mr Harold Holt:

– Is it not a fact that only one country has a higher per capita use, and that is the United States? That does not suggest a lagging rate of development in Australia.


– I am comparing rates of development.

Mr Harold Holt:

– That is only half the story.


– If the Treasurer could possibly stomach one word of criticism about what has happened in Australia over the .last ten years may I have a moment or -.two to voice a word or two of criticism to him? I know that he finds it most difficult to think that anybody could possibly criticize anything that has happened in Australia while he and his colleagues have been occupying the treasury bench.

Mr Harold Holt:

– But .this is criticism of the Australian aviation industry as a whole, irrespective of the responsibility of governments. ;


– I am not going to enter into an argument with the Treasurer as to responsibility on the part of governments. 1 am bringing to his notice a set of figures which I shall rather closely examine, because if we look at the countries which might have been in a comparable position to Australia ten years ago we find the following: That in the United Kingdom, the figures for which are recorded at page 355 of this publication, the increase in the number of passengers was more than four times, the increase in the volume of cargo carried was just about three and a half tunes and the increase in mail carried was just about two and a half times; that in the United States - the country which the right honorable gentleman suggests is the only one that might have figures comparable to the Australian figures - according to the figures recorded at page 351 of the publication, the passenger figure has increased by nearly four times, the cargo figure by just under four times and the mail figure by more than three and a half times. If you compare the figures for South Africa, Canada and France you will find that the same picture emerges. In other words, the rate of development in Australia, measured by those statistics, is not as great as the rate of development in the world at large, and not as great as the rate in four or five other countries to which I have referred, whose aircraft industries were in a similar position to that of Australia ten years ago.

Mr Chaney:

– What are the Australian figures?


– The Australian figures are roughly twice as high as they were about ten years ago. It may be quite true, as the Treasurer suggested, that measuring the industry per capita, Australia may still be on a very high level. The point I am making is that those statistics indicate that the rate of development in Australia is not as great as it is in other countries.

Mr Bandidt:

– But Australia may have been at a higher level in that industry ten years ago, and other countries catching up to us could account for their high rate of development.


– I pointed that out a few minutes ago. I do not think that this whole matter can be ignored when we are concerned about the problem of what the rates should be.

There is one other point that 1 want to put to the House for consideration - that is, the remarkable changes that are taking place in connexion with aviation development. It is not only a case of the Australian rate of development being less than that in some other countries, but also that the rate of growth in the leading Western country - the United States - is not increasing, and is probably declining. The publication “ Aviation Facts and Figures “, 1959 edition, published by American Aviation Publications, contains all the figures that we need. At page 116 we see that in the United States the passenger figure almost doubled between 1951 and 1956- from 22,000,000,000 to 41,500,000,000. But between 1956 and 1958 there was a slowing down. In 1957 the passenger figure was 48,500,000,000 and in 1958 it was 48,100,000,000. I will not weary the House with details, but there are many figures in this publication which show that the rate of increase in the United States has been declining. This seems to mean, as I will indicate in a few minutes, that the aircraft industry in the most advanced countries had reached a point of crisis in 1958-59. and that the transfer to the turbo-jet, which meant re-equipping, changed the rate of development in the industry as a whole.

One other point of very great significance, I think, relates to another quite remarkable change that has been taking place in the United States, which I am citing because figures for that country are available, and because probably America is in the forefront of these particular developments. The point 1 am making here is that aircraft production in the United States took on a very remarkable increase between 1949, at the commencement of this ten-year period that I am examining, and 1953. The total production rose from 6,137 aircraft to 14,760 aircraft - or more than doubled in that period. But between 1953 and 1958, the last year for which figures are available, there was a fall from 14,760 to 10,860. So, between the first and the fifth years of the ten-year period the total number of aircraft produced in the United States doubled, and in the second five years the total fell from 14,760 to 10,860.

What is the explanation of this quite remarkable situation? The explanation lies in the very significant fall in the production of military aircraft. The number of military aircraft produced rose from 2,592 in 1949 to 10,626 in 1953. But by 1958 the estimated production figure was 4,000 as against the actual production figure of 10,626 five years earlier. On the civil side the increase between 1949 and 1953 was not great. The figure in 1949 was 3,545 and the 1953 figure was 4.134. By 1958 the figure had risen to 6,860. So, in the United States the ratio of military to civil production in 1954 was two and a half military to one civil aircraft produced. In 1958 it was one military to one and three-quarters civil aircraft produced. This has had an effect on the cost of production of aircraft. If the production of aircraft for military purposes is going to decline so significantly, it will affect the cost of production of aircraft of all kinds, and whether this factor has been taken into account in the estimates of future development I am unaware.

We find this change is taking place at a time when overseas publications dealing with these matters are referring continuously to the fact that the airlines are at the crossroads. As an example, 1 refer to “ Aviation Week and Space Technology “, which is a Vickers Incorporated production. The editorial in the issue of 2nd May, 1960, is headed “ Airlines at the Crossroads “. This is quite a common proposition in overseas publications at present. The reference to crossroads means the switchover to turbojets. The article states -

The jets’ great potential capacity to earn airline profits depends upon considerably more precise operational capabilities, much greater traffic growth and much more efficient airline management than the piston era required. It also requires a new, and much more swiftly responsive, regulatory philosophy on the part of the Civil Aeronautics Board. It is rather ridiculous to have an industry that offers 600 mph services, and already can see a jump to 2,000 mph supersonic transports on its technical horizon, to be regulated by a federal agency that moves at the pace of a goose quill pen.

There is no evidence to suggest that this situation is strictly paralleled in Australia, but the question raised in the theme of “ Airlines at the Crossroads “ must certainly be similar as the general factors and elements are alike in both countries, and they must affect the Australian situation. The emphasis is on the fact that the larger, faster aircraft require a greater rate of traffic growth than we have been able to achieve in the past, more efficient airlines management and a more swiftly responsive regulatory philosophy in the terms used by the writer of the article I have cited. At a time when the rate of increase in Australia has not been at world level, this may be a more serious problem for us. The general problem is discussed in what I think is a useful article in “The Three Banks Review “. The article to which I refer is entitled, “ Air Transport - The Next Decade “, by Peter Masefield, President of the Royal Aeronautical Society. In this article, Mr. Masefield states what everybody else is saying, in these words -

In the past ten years - from 1949 to 1959 - during which Civil Air Transport in the Western World can, fairly, be said to have settled down into peace-time conditions, air traffic has expanded nearly four times (from 1,700 million revenue load ton miles to 6,600 million load ton miles). At the same time the average specific passenger fare paid has been reduced by some 6 per cent, (from 5.35 to 5.05 pence per passenger mile) - although in terms of the relative values of money in 1949 and 1959, fares have, in fact, gone down by some 35 per cent. And, in this ten-year period block speeds have been increased by 20 per cent. - from a mean of 171 m.p.h. in 1949 to a mean of 205 m.p.h. in 1959, averaged over all aircraft employed.

I think the rate of technical development in Australia would be just as high, but the rate of development in terms of passengers carried or tons of cargo moved has not been nearly as high; and, of course, Australian fares have not fallen. On the contrary, they have risen very considerably, and I should think they have more than doubled in real terms. But this gentleman has pointed out that the industry as a whole in the world has been able to provide a reduction in fares of 6 per cent. I think this means that the problems in the Australian industry are not any less than they are anywhere else and are probably greater. When this writer raises the problem of the future, it is a question that should be considered in Australia in particular. The kind of future this writer envisages is one in which, ten years from now, at least on routes of appropriate length, we will be travelling at 2,000 miles an hour in the fastest supersonic commercial aircraft. The writer states in this article -

There can no longer be any doubt that the supersonic commercial transport aeroplane will be built, designed to fly at around three times the speed of sound . . .

The major issues which will confront the leaders of World Air Transport in the ‘ Supersonic Sixties ‘ seem to me to be these:

How can the airlines of the world earn a reasonable margin of profit on their investment . . . ?

How can Air Transport be brought within the reach of far more people than at present . . ?

How can the problems of short-haul air transport be solved . . . ?

What solution can be found to the tangle of international bilateral agreements, which create operational and economic barriers to the development of Commercial Aviation all over the world?

In relation to the first two issues - how can airlines operate at a reasonable margin of profit or successfully, and how can air transport be brought within the reach of more people - the author seems to think that the proposition breaks up into four specific problems - lower operation costs without reduction of standards, more traffic, increased efficiency and stability of equipment. The first means more efficient aeroplanes and the more efficient use of those aircraft on the ground. The writer seems to think that the second factor - more traffic - involves necessarily the reduction of fares. He points out that the problem of stability of equipment is a most significant and important factor.

Mr SPEAKER (Hon John McLeay:

Order! I do not want to interrupt the honorable member unnecessarily, but I remind him that the bill refers basically to air navigation charges. His remarks should be related to that subject


– We are involved,. Sir, in the problem of deciding what the- charges should be. The Minister’s speech, indicated that in trying to assess what proportion of the total cost to impose on the industry - which we are going to consider in annual reviews - we will have to take into account the factors of development of the industry, and the kind of services that will be provided. These technical developments to which I am referring now will, in fact, determine the kind of services that will have to be provided in aerodromes and in other ways. These matters must necessarily be taken into account if the problem is to be solved.


– Order! The honorable member may proceed so long as he does not overlook the charges.


– As I see it, the faster aeroplanes, large in size and covering long distances, will have a limited field of operation in Australia. Internationally, they will have an extensive field of use; but despite the fact that Australia is a large country, a considerable number of our services cover distances of less than SOO miles, and the use of aircraft of this sort will not be desirable technically. The author to whom I have referred has expressed the belief that for this kind of operation, the large transport helicopter able to cover a distance of 300 to 500 miles will be necessary; but he still believes that one of the most important elements in the future development of aircraft and, therefore, in the. solution of this problem of rates, is still transport from the aerodrome where the aircraft, lands to the centre of the city where most passengers have to go. This, even with the introduction of long-range helicopters, which may be able to land closer to the centre, of cities, will still remain a basic problem.

Better surface transport is, therefore, of great importance. It is worth noticing that, in travelling from Melbourne to Canberra, a passenger is in the air for about one and a quarter hours and on the ground for about one and a quarter hours. In travelling from Melbourne to Sydney he is in the air for about one and a half hours and on the ground for about one an’1 a quarter hours. The ratio of ground travel to air travel is particularly high in journays between the eastern capital cities of Australia. The attraction of air travel is speed and comfort. Unless this problem of cutting down the amount of time that is taken on that portion of the trip which is done on the ground can be solved there will be a definite limit to the attractiveness of air travel. These are matters which will be taken into account in the development of the industry in this country.

As I said at the beginning, this is an important bill because it concerns an industry which is of very great importance to Australia, lt is an industry which, to some extent, has been over-valued, in- Australia in relation to the- more basic industries of rail and road transport, but it is of great importance because of the service it provides and because of the contribution it can make to national development. This bill is of significance because it raises the very vital question of what proportion of the operating cost of the facilities provided by the Commonwealth shall be paid by those who use them for civil purposes. The bill proposes to raise that proportion to less than 10 per cent, of the total cost - a very small proportion. It has been stated that an annual review will be made of the situation. Consequently, I think that we can correctly assume that the situation is fluid and that we can expect changes in the future. Mr. Speaker, the Opposition does not intend to oppose this Bill, but we are not confident that the correct rates have been arrived at, and we believe that adjustments will have to be made in the future.


.- In the past, I have heard the: “honorable member for Yarra (Mr. Cairns) take 30 minutes to disagree with the Government. This is the first time that I have heard him take 45 minutes to agree with something that the Government has done. As the honorable member for Yarra said, the Opposition is not opposing this measure. It has already passed through another place. I wish to make only a few comments which I hope will be related strictly to the bill itself. The bill was foreshadowed in the speech of the Treasurer (Mr. Harold Holt) when he brought down the Budget in August. On that occasion he said that the Government bad given consideration to cutting down the difference between the annual expenditure on civil aviation in Australia, which this year was estimated at some £13,000,000, and the income from the users of civil aviation facilities, which had been only some £700,000 a year.

It seems to me that there are certain things that we have to accept. One of them is that we can never close the gap between this £700,000 and the £13,000,000 because, as was pointed out by the honorable member for Yarra, the cost of establishing and maintaining aerodromes and of providing navigational aids and other facilities will continue to rise. No one could imagine a situation in which we could close this gap. The estimates for the Department of Civil Aviation show that the contribution by operators is expected to rise from about £700,000 in the last financial year to a little over £1,000,000 in the current year, but this is only a drop in the ocean compared with expenditure on civil aviation.

In a measure such as this we have to be careful not to bring about a situation which could be dangerous to any airline company. I notice that, in reply to the second-reading debate in another place, the Minister for Civil Aviation (Senator Paltridge), expressed some sentiments on this matter. He said that one of the companies on which landing charges had been levied in the past had written to him expressing very great concern at what might happen in the future. Honorable members will realize that legislation of this kind was brought down for the first time in 1952, and that the first amendment only slightly increased charges due to the inability of the airline companies to meet higher fees. The increase now proposed is considered to be in line with the increased profits of companies in the last few years of operations. The company to which I have referred expressed concern that, in view of the Treasurer’s statement that the Government wished to close the gap between the annual revenue of £700,000 and the annual cost of £13,000,000, some government might some day impose such charges as would drive the private operators out of business so that the country would be left only with an airline completely subsidized by the Government. The Minister for Civil Aviation said -

  1. . one has written to me bringing to my notice, not so much an objection to this increase as indicating that a too heavy-handed use of this power could have quite serious effects in the future, particularly on the private enterprise operators. 1 acknowledge that. Indeed, in my second-reading speech I made particular reference to that factor.

That is one thing that has to be watched, but I do not suppose that any government has the power to limit any following administration. The remedy is in the hands of the people to see that that sort of thing does not happen. The Minister for Defence (Mr. Townley), in his second-reading speech in this House, referred to the further charges which the Government would impose and the formula to be used. He said -

Aircraft of less than 25,000 lb. all-up weight - and this category includes virtually all aircraft used in the private and small charter fields and may later include aircraft in outback feeder operations - will incur only a nominal increase in charges.

The civil aviation estimates show that the Commonwealth Government will give this year, and gave last year, £185,000 to aero clubs and gliding clubs to enable them te carry on. Under this bill, aero clubs ari liable for payment as are private operators. Aero clubs pay an annual registration fee on the same basis as any private operator, that is, 104 times the aircraft unit charge. The unit charge is calculated by multiplying the aircraft’s weight in thousands of pounds by 4.125d. under the present scale and by 4.5d. under the proposed scale. At present, a Chipmunk training aircraft incurs a payment of £5 7s. 3d. per annum. Under the new scale, £5 17s. will be paid, an increase of 9s. 9d. per annum or approximately 9 per cent. An aero club which operates, say,, twenty Chipmunk aircraft, will pay annual landing and air navigation charges of about £120. It seems to me quite inconsistent that while, in the estimates, provision is made for the payment of £185,000 in subsidies to aero clubs-, under this legislation an amount will be taken buck from them for the operation of their light aircraft. These are the only organizations that are training pilots for the civil aviation of the future.

I invite honorable members to consider where this estimated revenue of £1,022,000 will come from. It is interesting to look at the estimated amount of revenue from this source for the previous year - and presumably the actual amount received, because all operators met their commitments. The highest payment was £217,000, which was contributed by Ansett-A.N.A. The lowest was £158, which was paid by the airline company operating the shortest route of all, in the electorate of the honorable member for Fremantle (Mr. Beazley). That company is Woods Airways Proprietary Limited, which operates on a route only twelve miles long. For its operations throughout the year it was liable for only £158.

It is interesting to note that PanAmerican World Airways Incorporated, according to the latest figures available, expects to reduce its payments from £14,500, as they were last year, to £8,000 this year. This might cause some concern to many honorable members, when they realize that an overseas company is not subscribing as much as it previously did. On the other hand, it is pleasing to note that Qantas Empire Airways Limited, in respect of its overseas operations, will increase its contributions from £78,000 to £100,000. That is not because we have imposed a higher charge on Qantas and a lesser one on PanAmerican. It is because Qantas has extended its operations over the period to the point at which it is liable for the higher charge. The figures reflect great credit on the management of Qantas.

I believe that the increase in air navigation charges from £716,788 last year to an estimated £1,022,000 in the current year must be considered in conjunction with the total estimates for the Department of Civil Aviation. The honorable member for Yarra (Mr. Cairns) said that as all our other’ industries are subsidized we must similarly subsidize civil aviation. In the Treasurer’s Budget speech this vast sum of nearly £13,000,000, representing the estimated expenditure of the Department of Civil Aviation, is stated categorically to be the extent of our subsidy on civil aviation. A close examination of the estimates, however, shows that this figure can be reduced considerably. For instance, I have already mentioned the subsidy of £185,000 for aero clubs. It could not be suggested that that should be a direct charge on our air transport system or on the people who fly the air routes of Australia. Nor could it be contended that our contribution to the International Civil Aviation Organization should be a direct charge on our air transport system. Similar remarks apply to meteorological services, which, important as they are to civil aviation, are provided for the benefit of the people throughout the country. We all know the important part that is played in our everyday lives by the weather forecasting service.

Breaking up the total departmental estimate of expenditure, of something more than £12,000,000, we find that £3,500,000 will be spent on administration, which is a direct charge on this activity; maintenance and operation of civil aviation facilities will cost £6,500,000; development of civil aviation will account for £1,000,000; rent within the Territories will cost £1,000, and other rent, presumably within Australia, £81,500. Meteorology will cost about £847,000.

I do not want to delay the House any longer on this bill, which is not being opposed by honorable members opposite. I have some slight misgivings about it, because, considering the overall picture of civil aviation in Australia, I wonder whether this is the right way to attack the problem of recouping ourselves to a reasonable extent for the expenditure incurred. I support the measure, because we have accepted heavy expenditure in this field for many years, and I cannot see any way in which we can get back from the operators anything like the amount that we have to spend on the provision of facilities to enable our civil aviation industry to retain its position in the Australian community to-day, a position of which the Department of Civil Aviation and every Australian can feel proud.


.- Like the honorable member for Yarra (Mr. Cairns), I do not propose to oppose this bill. I would like, however, to make some comments on it and to offer some suggestions as to where we are heading in this matter of air navigation charges. Briefly, the position is that civil aviation facilities are costing the Commonwealth about £13,000,000 a year, and at present we can look forward to recouping ourselves for this expenditure to the extent of only about £700,000 from air navigation charges, and about £1,200,000 by way of the tax on fuel. This means that the Commonwealth is subsidizing air transport to the tune of about £11,000,000 a year. Consider the position of other forms of transport. This Government makes no money available for the subsidizing of rail transport, for instance, which plays a most important part in the decentralization of industry. We all know that industries cannot be successfully carried on in country districts unless rail freight charges are reasonable. We hear continual complaints from members of the Liberal and Country Parties about the fact that facilities available in the cities are not provided in country centres, yet the Government provides no subsidy for rail transport, although the subsidy on air transport involves an amount about five and one-half times as great as the revenue received from airline operators.

The Government also gives very little assistance to the road transport industry. It retains approximately half the revenue derived from petrol tax, sales tax and the other taxes that are imposed on operators in the road transport industry.

Mr Erwin:

– What has that to do with this bill?


– It has a lot to do with this bill. As I said, the Government retains about half of the amount raised by taxes imposed on road transport operators. In these circumstances I believe we should closely examine the position with regard to air transport and the charges to be imposed on airline operators, lt seems to me that the charges imposed on operators of heavier aircraft are by no means great enough, having regard to the tremendous outlay on runways, taxiways, stand-by areas and various airport facilities. I believe that the proposed unit charge for these heavy aircraft, 10 1/2d. for each 1,000 lb. weight of the aircraft, is not nearly sufficient.

It should be remembered that we are subsidizing not only our local air transport operators. I feel that those who are deriving most benefit from the subsidy are overseas companies operating aircraft into and out of Australia. So far as overseas operators are concerned, we know that they constitute merely one huge monopoly. We know that the various operators get together and fix the fares that will be charged for journeys to Australia from the various overseas centres. The people who fix those fares also determine the amounts of profits that they will make. We in this Parliament are the ones who have to find the money to foot the bill for the provision of the extra facili ties needed for these big aircraft, such as longer and stronger runways. Very heavy capital expenditure is necessary to provide for the requirements of such aircraft as the Boeing 707, and, to a lesser degree, the Electra and the Super-Constellation. It is this Government, this Parliament and the people of Australia who have to find the money to pay for additional facilities which will allow these aircraft to operate.

I remind the House also that the subsidy on air transport could operate to the detriment of the shipping lines. Many people who now travel on the subsidized airlines might decide to travel by sea if the subsidy were removed and air fares increased accordingly.

For these reasons I feel that the charges being imposed to-day on airline operators should be closely examined, with a view to increasing the charges imposed on overseas operators of heavy aircraft. With the assistance of the Department of Civil Aviation, I have taken out a few figures, and I find that a Boeing 707 aircraft arriving in Australia from overseas will be charged a landing fee of £173. Let us examine the expenditure that has been necessary at the various airports throughout the Commonwealth. In the period from July, 1958, to June, 1960, £800,000 was spent on one item at Sydney (Kingsford-Smith) airport, where expenditure all told amounted to £930,000. The present Melbourne airport at Essendon will not be big enough for the aircraft that will be landing at Melbourne in the years to come, and the department is considering the construction of a new airport, the estimated cost of which is something like £20,000,000. The landing charges being imposed will not pay even the interest on the money invested in such airports, let alone pay off any of the principal.

All this only substantiates what I have already said, Mr. Deputy Speaker. The Government and the Parliament are subsidizing the air fares of visitors to this country from overseas. As has been stated by the honorable member for Yarra, overseas visitors travel to Australia largely on charge accounts. We ourselves hear, as we travel between this Parliament and our electorates, the standing joke about making way for paying passengers. In practice, there is no question of making way for paying passengers, because in the main the fares of air travellers are debited to charge accounts, whether the passengers be members of this Parliament or employees travelling on behalf of the companies for which they work, and so on. So all that we are doing in actual fact is subsidizing cheaper air travel and benefiting those people who are best able to pay. We are not giving the mass of the people any general benefit.

While on the subject of these charges, 1 should like to mention the policy cif the Department of Civil Aviation, which, after all is the policy of the Government, with respeCt to the handing over of airports to local government authorities, and the conditions under which airports are handed over to these bodies. Here, I should like to mention the attitude Of the airlines towards payment for the facilities that they use. Their attitude is that the Government has the responsibility to provide airstrips and facilities for their use, and that all they have to do is to provide the aircraft and tolled the profits from operating them. Would not the railways of New South Wales, Victoria and the other States be in a happy position if the Commonwealth provided the rail tracks and maintained them and all that the State organizations !had to do was to run the trains backwards and forwards? Would not the road transport operators be happy if this ‘Government constructed and maintained -the roads and all that the operators had ito do was to run their trucks backwards arid forwards and pay no taxes? Would not every owner of a motor vehicle and every one else be happy if this were the situation? Would not the shipping companies love to be able ‘to bring their vessels into port without paying harbour dues or any other charges? We should not subsidize one form of transport and tell those who play their part in other kinds of transport that they have to stand on their -own .feet. The same considerations apply to all forms of transport. As I said earlier, air transport operators are -being favoured.

I have here a cutting from the “ Cowra Guardian “ of 21st October last which contains a report about the handing over of the airport at Cowra .to the Waugoola Shire Council. The council -did not really want to take it over, but the Department -of -Civil Aviation forced -it to do so. The .members of the -council -were -concerned about the cost of maintaining the airport. After all, it should not be a responsibility of the ratepayer to subsidize an airport, just as it should not be a responsibility of the taxpayer to subsidize air transport throughout the Commonwealth. Representatives of the council had a number of discussions with officers of the department, and asked some questions about financing the maintenance of the airport. The report in the “ Cowra Guardian “ about the handing over of the airport to the local council contains this passage^

It was argued that a rating on the Shire was hardly equitable inasmuch as that district ratepayers -would ‘be directly paying for a service which was ‘benefiting air travellers from as far afield as Young on one side and Grenfell on the other.

An answer to this was seen in the imposition of a landing fee of 2s. per passenger and, based on the existing and ‘forecast improvement In passenger traffic, this would have yielded the required revenue for ‘the improvement and maintenance of the aerodrome.

The obvious method of collection of this levy was by the airline operators adding it to the fare but this was resisted by the operators of the air services as -being a ‘direct increase to the fares which they aimed to keep down to the lowest possible minimum.

I do not mind them keeping fares down to the lowest possible minimum, but I suggest that the cost of maintaining the aerodrome and the facilities provided should be taken into consideration in the assessment of fares. Local government authorities are in a hopeless position because the policy of the Department of Civil Aviation is that it will not construct any more -airports and that the -local councils must construct them.

I propose to ask the Minister for the Interior (Mr. Freeth), who is now at the table, one question, and I shall be happy if he can give me the -answer. What contribution is made by the city -councils in Brisbane, Sydney, Melbourne, Hobart, Adelaide and Perth towards -meeting the cost of the airports provided at those -cities? I know the answer, just as he does. I recently received “from the Minister for Defence (Mr. Townley), who represents in this House ‘the Minister for Civil Aviation (Senator Paltridge), an answer to a question about Australian aerodromes that -I had asked on notice. That answer indicates that at 30th June, 1958, the value of assets at Sydney (Kingsford-Smith) airport was £11,044,937. At Melbourne, the value of assets was £4,196,848; at Brisbane, £3,218,664; at Adelaide, £3,183,539; at Perth, £948,301; and at Hobart, £1,530,540. None of the city councils in those capital cities was asked to make any contribution towards meeting the cost of constructing and maintaining those airports, but local councils in other -cities and towns throughout Australia where airports are wanted are told that they will ‘have to undertake the construction Themselves and that ‘the department will take over the aerodromes when they become economic propositions. I emphasize .that the department will take them .over when they become economic Mr.. -Deputy Speaker. There is mot «one airport in Australia to-day that 4s an economic proposition. Every .airport is running at a loss. So, when the Department of Civil Aviation, through the -Minister., states that it will take over airports when they become economic, it speaks with its tongue in its cheek, as it were, ‘because ‘it knows ‘that no airport ‘will ‘become an economic proposition and it will .never have to take -one over.

I -now want to refer ‘to the provision o’f an airport -for Newcastle, which is the second largest city in ‘New South Wales and the sixth largest in Australia. We have not an airport df our own. Some years ago, the Minister for Civil Aviation in ‘the Labour Government agreed to the purchase of land for an airport for the city and the department subsequently purchased it. Unfortunately, -Labour went out of office shortly after the ‘proposal was agreed to by the Minister of ‘the day. Since this Government took office, a number of deputations have approached successive Ministers and many letters have been written requesting action, but the present Government is content to let its £60,000 investment lie idle and to allow stock-owners to have grazing rights over the land for a few pounds a year. ‘It apparently proposes -to do nothing about the .provision of an airport for Newcastle, because it has told the city council that it can go ahead and construct an airport on the conditions that ‘I mentioned earlier and that when the airport becomes an economic .proposition the Department .of Civil Aviation will take it over.

Mr/Griffiths. - -The land was bought. from the honorable member for Mackellar.


– That is right. However, I do not hold that against him, because the land chosen was the obvious site for the construction of an airport. In 1957, I was chairman of a conference which was held with an officer of the Department of Civil Aviation in Newcastle. At that conference, the city council’s engineer presented estimates of -the cost of the proposed airport.


– Order! 1 think that the honorable member is getting a little wide of the bill, the purpose of which is to amend the Air Navigation (Charges) Act 1952-1957. -It has nothing to do with the policy of the Department of Civil Aviation with respect to the provision of aerodromes. The honorable member may illustrate a point in his argument, but he is not entitled to base a major part of his speech on an argument about the provision of an aerodrome for a ‘particular city, since such matters are not involved in the .consideration of this measure.


– 1 propose, if I may, to show that it is ‘hopeless for .any council to accept responsibility for the construction of an airport ;at a cost of £1,250,000, when the landing-fees -are so inadequate. For example, the landing-fee for a Fokker Friendship will be £1 2s. 2d., that for a DC3 will be 15s. -9d., that for a Viscount £2 10s. 5d., that for .a DC6B £4 7s. 6d., and that for an Electra £4 18s. 10 1/2d. I sincerely hope that the halfpenny is collected. With all respect to yourself, Mr. Deputy Speaker, I am pointing out how hopeless it is -for any council to finance the construction and maintenance of an airstrip with the charges proposed .in this legislation.


– Order! The honorable member may refer to the charges, but may not enter into a debate on the policy of the Department of Civil Aviation concerning the establishment of an airfield in this area.

Mc. JONES.- J shall try to confine my remarks to that point, but I do feel you are making the going a bit -tough. These completely inadequate and unreasonable charges apply to all airports in -the Commonwealth, whether ‘they are good or bad. If an airport -is locally controlled, as at Cowra, a fair burden is imposed .on the people. In that district, a charge of 2s. a head is imposed on passengers using the airport. However, the city councils in Sydney, Melbourne, Brisbane, Adelaide and other large centres are not required to contribute one penny towards the cost of construction or maintenance of the airstrip. That is why I wish to refer to these charges. It is difficult, without mentioning policy, to deal with the points that I want to bring out. On the estimates that have been taken out, an airport at Newcastle, sufficient to satisfy the requirements of the district, would cost £1,250,000. The cost of construction and maintenance of such an airport shows how completely unreal these charges are. The Minister should examine the whole question of air charges in a more realistic and practical way. Whether a landing fee is charged or a tax is imposed on the fuel consumed by aircraft, the department should accept full responsibility for building airstrips wherever they are required. In his second-reading speech of 1 1th October, the Minister said -

Furthermore, we certainly would not have opened up uneconomical outback routes if profit and loss rather than development of this country were the yardstick of their desirability. It is axiomatic that a strong civil aviation industry is a vital instrument of national development.

I agree with him. When one discusses this bill, one must discuss the points made by the Minister in his speech. Therefore, I come to the point that, with these charges, it is completely hopeless for a council in the Newcastle district or any other district to accept the responsibility of building an airport that would carry the normal traffic of the district. This is an important matter and the Minister should consider it.

I have made representations to the Minister time and time again about the inadequate time-table for Newcastle. Over 300,000 people within 20 miles of the airstrip would be served if an adequate time-table were provided. His only reply is that the number of people using the service already provided does not warrant any increase. Not a very good service is provided now - only one aircraft out in the morning and one back at night. This is not sufficient to encourage the people to become air-minded or to accustom them to travel by air. At the moment, a person wishing to travel interstate by an aeroplane leaving Sydney at night must travel from Newcastle to Sydney on the 1 o’clock train and catch a taxi to Mascot or the air terminal. This takes the best part of four hours. Therefore, I ask the Minister to examine the matter of air charges and reach a decision which will enable an airstrip to be built at Newcastle. I know that it will be a costly strip, but I again emphasize that the councils of capital cities are not required to contribute towards the cost of maintenance of airports in their cities. I cannot see one reason why there should be one policy for the cities and another for the country districts.

This Government talks about decentralization. Australian Country Party members talk about this subject and ask questions in the House about it, but they do not believe in it. The only time they talk decentralization is when they are moving around their electorates. When they come into the House they do nothing whatever about it.


– Order! The honorable member is again getting a little wide of the bill now before the House.


– I will not make any reference to the Australian Country Party then. If we had an aeroplane leaving Sydney on Friday morning about half-past ten, we could all get home some six hours earlier than we do now. I know that you, Mr. Deputy Speaker, would enjoy this relief just as much as other honorable members in the locality would. However, I appeal to the Minister to review the charges proposed in the bill and ask him to consider the points that I have made about two policies, one for the city and one for the country. The city dwellers have their air transport completely subsidized, with no cost to themselves; the country dwellers contribute, through the local councils, to the construction and maintenance of airports. Overseas aircraft do not make any contribution by way of fuel tax. They are exempted from it and the only charge levelled against them is a landing fee at the airport they are required to use. I believe that the time is long overdue for a review of these charges. The revenue of the Department of Civil Aviation should be distributed so that country people get a better deal than they are getting at the moment. The Government should also closely examine the policy of subsidizing air transport to the detriment of road, rail and water transport.


.- I thought that the debate on this bill was going along very nicely, until we had a jarring note or two from the honorable member for Newcastle (Mr. Jones). The honorable member for Perth (Mr. Chaney) drew attention to the remarks made in the Budget speech, in which it was said that the annual cost of maintaining and operating facilities used by the air transport industry exceeds £13,000,000 and has been rising year by year. I think it is worth keeping in mind that the cost has been rising year by year and no doubt will continue to rise. Against this outlay, the users of the facilities pay some £700,000 a year in air navigation charges. As the honorable member for Perth said, this bill was foreshadowed in the Budget speech, and the charges have been increased with a view to obtaining more money from the users.

The honorable member for Yarra (Mr. Cairns) mentioned a point with which I fully agree. It is that we should pay more attention to the development of helicopter services in this country. At the moment we have the very slow, very costly and painful growth of conventional airports throughout the country. We are constantly improving and working on our major airports. No sooner is a piece of major constructional work completed than we are faced with the development of heavier and faster aircraft and a requirement for further work to be done at the major airports to cater for those aircraft. Everywhere we see this continual constructional work, at very heavy cost, on major airports, and no doubt it imposes a great strain on the finances available to us.

The result is that it is very difficult indeed to do much about country aerodromes and aerodromes serving outlying areas. The honorable member for Newcastle (Mr. Jones) said that we on this side had no wish to decentralize industry or to develop country areas. That is complete and utter nonsense, and he knows it. The fact is that the Government has not the finance necessary to construct the type of aerodromes we would like to construct in order to give proper airline facilities to country areas. The difference between the cost of providing a country aerodrome, whether the work be done by the Commonwealth or in con junction with local authorities through the subsidy system, to cater for light aircraft and the cost of constructing an airfield suitable to meet the needs of modern propjet and jet aircraft is tremendous. At the present rate of progress, it will be very many years indeed before we shall be able to get away from the larger airports serving the capital cities - where we are continually endeavouring to provide proper facilities for modern aircraft - and make adequate airport facilities available for country people.

In those circumstances, I believe that consideration should be given to making greater use of helicopters. In this way we could spread the benefits of air travel over a much wider field than we are doing at the moment. In northern Australia in particular, ordinary airfields are put out of operation sometimes for months at a time during the wet season, when the people there are also denied the normal facilities of road travel. We are spending great sums of money - necessarily so - on maintaining and improving the larger airports. I admit that air travel is vitally necessary to good communications and business to-day, but the point is that we are concentrating on improving facilities at the larger airports and doing very little indeed for the residents of outback areas.

As I have said, on the present rate of progress, it does not seem as though we shall be able to do much for the country areas, especially when we have regard to the amount of money made available in the Budget. For instance, the vote for airport development is down by £200,000 in this year’s Budget, and that is by no means an encouraging sign. Helicopters have been developed greatly in recent years, and I think consideration should be given to their use in providing air services to country areas. I understand that the Minister for Civil Aviation (Senator Paltridge) has said that this matter is being investigated. I can only hope that a great deal more attention will be given to the use of helicopters than has been given to that matter in the past. The honorable member for Yarra (Mr. Cairns) referred to the movement of people from air terminals to airways offices in the cities. I understand that helicopters of the type currently in use overseas could pick up passengers at the Melbourne airways offices and land them in Canberra faster than if the passengers were taken by bus from the airways office to the airport in Melbourne and then from Melbourne to Canberra by a Viscount.

Mr Mackinnon:

– What about the vertical take-off aircraft?


– That is a development which will come, but we are not sure whether it is just around the corner, or how close it is. At the moment, helicopters are available to us and a helicopter service to country areas would be of tremendous benefit. I certainly hope that more attention will be given to this suggestion so that the benefits of air travel may be taken to the country and in this way spread the moneys collected for air charges over the community as a whole. I understand that all a helicopter needs is a hard-standing area about three times the width of the rotor blades. That being so, one can envisage that most of the country towns could afford landing areas for helicopters, which often could be used when conventional aircraft could not provide a service.

Mr Curtin:

– What about flying saucers?


– I am sure the honorable member for Kingsford-Smith would wish to see them developed also. A helicopter service to areas within a radius of 150- miles of principal airports would be. a great boon to country people. By the provision of such services we could avoid much of the enormous cost of developing and maintaining the present type of airports with which we are faced under our present plan of growth.


.- The measure before us is- apparently the first step in what the Treasurer (Mr. Harold Holt) foreshadowed when he spoke about air navigation charges in his Budget speech. During that speech, he said1 -

Air transportation has made remarkable headway in recent years and- can now be regarded- as a wellestablished industry. There is no essential, reason why it should not make a progressively greater contribution each year towards the cost of ground facilities provided at public expense. After reviewing the1 position, the Government has therefore decided to- adopt a policy of full recovery from the users of the- cost of facilities attributable to their operations. This aim- will be achieved over a period of years.

The policy of full recovery, therefore, is intended to be started by this measure. This is the first step.

The policy of the Labour Government was to make air transportation as cheap as possible. There were some aspects of good fortune that enabled us to do that, and there were some aspects of. deliberate policy. One of the aspects of the good fortune that the Labour Government had was that the cost of equipping airlines was comparatively low between 1945 and 1949. To begin with, large numbers of disposals aircraft were becoming available. At that time, it was possible to buy a DC3 for £5,000 or £10,000. To-day, it is difficult to buy an aeroplane for commercial air travel purposes on the trunk routes for less than £750,000. Even £1,000,000 is quite an ordinary price. I understand that a Viscount now costs £1,000,000. While I often feel critical about the way in which, under the present Government, the cost of air travel has risen:, common honesty causes me to recognize that the initial outlay on aircraft to-day, quite apart from the effects of inflation, is much greater than it was in 194-5, when there was the factor of disposals aircraft becoming available for many of the airlines of the world.

But the Government’s belief in the healthiness of the air travel industry - the belief that it will become healthier to the extent that it will be able to meet the full charge of £f3,000,00O- that is the present figure, but it will become greater with inflation and with more perfect air navigation facilities - is quite unfounded.

I direct the attention of the Government to the fact that in the United States of America to-day no airline pays - remember that we are speaking of private enterprise - unless it has an international aspect. All the airlines that Operate purely domestically there are losing money. We have the recent example of a very distinguished and progressive airline, Capital Airlines. That company equipped itself with- Viscounts, burning kerosene and not high octane petrol, but it almost went bankrupt and was unable to pay for the Viscounts. And that was in the United States of America, which has a population of 160, 000,000, and: which is a country natural for air travel because of its dimensions. It has a load factor which we must assume is good, because of the great number of large cities to provide air travellers. It also has a level of commercial activity which leads to a great deal of travel and movement by air. Notwithstanding all that, every private airline company in the United States of America which does not reap the benefit of the greater international airline charges is m the red. One of the companies which is paying is Pan-American; it is an international operator. Another is North West Airlines, which has international aspects. Apart from that, all the airline companies in America are in financial difficulties. What causes the Government to believe that if it loads another £13,000,000 onto existing air fares to meet all these costs - in this country, not of 160,000,000 but of 10,000,000 people, and with a much smaller number of potential air travellers - it will be able to call the airlines a healthy industry which can carry all these charges? 1 do not know whether there is any validity in the comparison between airlines and railways which was made by the honorable member for Newcastle (Mr. Jones). I do know that, from a narrow accounting point of view, railways have cost the Australian community millions of pounds every year, in what are called their losses. But I often wonder whether the accounting system is valid, because the railways have made possible the existence of all sorts of communities which could not exist without them. In those communities there are farmers and commercial interests carrying on their acitivites, all of them being taxpayers. The value of their land is to some extent created by the railways and they pay land tax on it. In the last resort, in the accounting of national wealth, if not in the accounting of the actual budgets of the railways, 1 think they probably pay the community handsomely.

However, I leave aside that argument. I do not say that the airlines have a developmental quality equal to that of the railways, but I make several other claims for them. Speaking as a West Australian, I say that air travel has made Australia real to a lot of people. This country is now much easier to govern, when Perth is five hours’ travel from Melbourne, than when it was a matter of two and a half days. It is impossible to imagine the modern government of the Aus tralian community or the private government of commercial enterprises in Australia without air travel. I believe it is taking a narrow point of view to say that air travel is a way in which the well-to-do travel in Australia, while the poor travel by some other means, and that therefore air travel should not be given, any particular consideration. The nature of the acitivities made possible by air travel is very important, from the point of view of the Commonwealth Government, and the commercial and governmental, life of this community benefits accordingly. There are, however, alarming possibilities if all these charges are to be loaded on to air fares.

There are some important reasons why air travel should be made cheap in Australia, and I have tried to indicate some of them. The Labour Government did not adopt a policy of full recovery of expenditure on civil aviation. It believed in the creation of a healthy airline system. I do not know where the present Government imagines it is. going, financially, in this matter. Suppose that Ansett-A.N.A., which has depended upon the Government to raise capital to the extent of £6,000,000 for it, has these full air travel charges loaded upon it. What will the Government, then have to do? It will, have to give that company another few million pounds to prop it up and enable it to pay the Government’s charges. That, is what will happen if the Government does adopt a. policy of imposing the full charges.

Every airline faced with competition must periodically re-equip itself. While the dividends paid by airline companies are such as they are- in Australia to-day - none of them makes a handsome profit - those companies will not attract the capital with which to purchase new aircraft. The Government admitted that Ansett-A.N.A. could not raise the capital with which to purchase new aircraft and it directed the Commonwealth Bank to give the company the capital necessary for that purpose so as- to enable it to continue in business; and a guarantee was given to the Commonwealth Bank by the Commonwealth Treasury. I am not quarelling with that policy, but I cannot see private investors rushing to invest* in airline companies in Australia to-day.

The Government, by its policy in relation to air navigation charges, is adopting the proposition that the airlines are now reaching a stage where they can stand on their own feet. However, the Government did not permit Trans-Australia Airlines to buy Caravelle aircraft, because that would have involved Ansett-A.N.A. in an expensive reequipment problem in order to compete with T.A.A. Ansett-A.N.A. could not have carried on with Electra aircraft if T.A.A. had had Caravelles. The Government therefore held back that action by T.A.A. to enable Ansett-A.N.A. to continue operations. Then there began the rationalization of airlines, in which T.A.A. had to give up some of its Viscounts, in exchange for DC6’s and so on. That was supposed to be of some advantage. It may have become so. I do not know. At all events the Government recognized that if Ansett-A.N.A. had had the problem of re-equipment the company could not have financed it from private sources in Australia and would have had to come again to the Commonwealth Government for assistance.

Where, then, is the logic of the Treasurer when he contends that our airlines are now a well-established industry and can make a progressively greater contribution yearly towards the cost of facilities which contribute to their operations? I cannot see it working out in logic. The efforts of the airlines to pay have in many respects been rather pathetic. The lollies which we used to be given at take-off were cut out; and the next thing was that the airlines no longer distributed newspapers free of charge. For a time there were what the airlines called austerity meals. Under that policy the touristclass travellers starved and the others were given an austerity meal. I wondered then whether we would get the same sort of air transport in Australia as New Zealand provided. I do not know whether any honorable member has had the horrible experience of travelling on the internal New Zealand airlines, but in that country austerity is taken to its logical conclusion. They do not provide air hostesses. Passengers can be very ill and travelling in a DC aircraft flying over the mountains in New Zealand is sometimes a lively experience. However, in those aircraft there was nobody to look after elderly people, mothers with children, expectant mothers, or any one who was ill. There you have the principle of austerity airlines carried to its logical extreme.

Apparently, on the side, competition did begin to work in Australian airlines. T.A.A. sneaked in some hors d’oeuvres and AnsettA.N.A. sneaked in some sherry. Eventually, on the trunk route between Melbourne and Perth, meals of two courses were restored, with hors d’oeuvres and cheese and greens and coffee to follow. From then on that aspect of attempted economy no longer existed. But the economies that airlines can make in these respects are relatively limited. The real problem facing the airlines to-day is the enormous expense of modern aircraft. Both the Government and the airlines are facing increased expenditure for increasingly complicated electronic equipment which works in conjunction with the electronic equipment on the ground stations. Aircraft will become increasingly expensive. The Government might as well face the fact, as certain State Governments have done in relation to their railway systems, that we should support our airline services for developmental reasons. I cannot see any advantage in the Government telling the airline operators that they must pay increased air navigation charges and then, when the increased charges have been imposed, especially on the private company whose existence the Government wishes to see continue, being forced to give the airline operators increased financial assistance to meet the additional charges.


.- Since the end of the Second World War we have seen a spectacular development in our airline services which has been accompanied by the high cost of providing modern navigational aids. We can be proud that our air safety standard is one of the best in the world. This is due to a marked degree to our modern navigational aids. Unlike the honorable member for Fremantle (Mr. Beazley), I associate the development of our airline services with the development of Australia. The position with regard to our airline services is similar to the position that obtained previously when our railway systems were expanding and developing. At that time, of course, we did not have the airline services that we have to-day.

One of the greatest problems that confront State governments is the large deficit on their railway systems. The Commonwealth Government is endeavouring to avoid a similar position arising with our airline services, it has followed the policy of placing our airline services on a sound footing and adopting sound business practices in relation to them. The Government is following that policy this financial year by proposing to subsidize our airline services to the extent of about £13,000,000.

Our air traffic control systems have expanded and developed in a most spectacular way. I had long experience in navigation systems when they were very primitive. In those days we used what we called the dead reckoning navigation system. That system is used to-day only in cases of emergency when something goes wrong with the electronic equipment in the aircraft. Fortunately, that does not happen very often.

The Government first took some action in relation to air navigation charges in 1957 when it increased the rates by 10 per cent. In this financial year the Government feels that the industry generally is on such a sound footing that it can afford to pay the proposed increase of 60 per cent. This is the proper approach to the problem. If we continue to subsidize this industry as we are doing at present we shall get away from sound business practices.

Honorable members opposite have criticized the proposal because they say that it will have some effect on our inland areas where second and third class routes are being opened up. This is not correct because the increase on those routes will be infinitesimal when compared with the increase on the major routes. For that reason I do not believe that the argument that this bill will in some way handicap the development of our inland areas is valid. Undoubtedly our airline services have developed our inland areas. To-day people can go into the far outback knowing that they will not be cut off from the rest of the world because with modern means of communication they can receive medical attention, if that is necessary, within a very short time or they can be transported to the more densely populated areas within a few hours.

I congratulate the people who have been responsible for the development of our navigational aids. We can be proud of our excellent air safety record. This bill warrants our support because it indicates that the Government is doing the right thing in relation to our airline services. We have only to consider the mess that the State governments have got themselves into, by subsidizing a public utility which has become increasingly inefficient, to realize that the Commonwealth Government is taking a step in the right direction. This bill will ensure that our airline services will be efficient. The industry can afford to absorb the proposed increased charges, and I am pleased to note that only the users of the airline services will be called upon to meet these charges. That is commendable. The people who do not use the airways should not have to assist them. I am proud to support the bill.


.- As the honorable member for Ballaarat (Mr. Erwin) has said, there has been no more thrilling development in Australia since the war than the development of our airline services. This remarkable development has taken place in the short period of fourteen years. It is interesting to note that the great forward movement of civil airlines was initiated by the Labour Government in the financial year 1945-46. To illustrate the fantastic development that has taken place, I remind the House that the first TransAustralia Airlines plane to fly in Australia was the DC3 “ Hawdon “, which made its first flight in September, 1946. Look at that one airline, which to-day has a fleet of Electras and Viscounts, and you will see the most phenomenal development of any airline anywhere in the world - from nothing in the middle of 1946 to a tremendous force in the country only fourteen years later. The other major airline was already established when T.A.A. came on the scene. Its development also has been excellent. I do not decry that airline, but between the two major airlines I am most impressed by the achievements of the government airline. 1 must also pay a tribute to the smaller airlines which have started to operate since the war and have all played their part in the phenomenal story of Australian aviation which, when it is written, will be one of the most thrilling in our history. Unfortunately, some of the smaller airlines have been gobbled up by Ansett-A.N.A. in recent years. East-West Airlines, the

MacRo’bertson-Miller airline in Western Australia, and Southern Airlines, which operated for a while in Victoria, are among these smaller airlines. There are other small airline companies in existence. One being started in Tasmania under “the name of Airfreight Services will conduct an intrastate freighting service, ‘using almost -every aerodrome on ‘the island. That service will “be of immense value to “us in Tasmania. All this is part of the wonderful story of civil aviation in Australia since “the war.

In his second-reading speech, the Minister for Defence (Mr. Townley.) made several points which I want to emphasize. He said -

Technological developments in aircraft have been remarkable over the past ten years -or so, and our facilities in the shape of airports, navigational aids and traffic control systems have had to -keep pace.

He continued -

In 1957 air navigation charges were increased by 10 per cent, for the first time since the Air Navigation (Charges) Act came into operation.

Later he said that about 2,500;000 passengers annually were now flying the -skies in Australia. -He also said that the airline industry was paying £700;000 a year in navigational charges. He was fair to the airlines in one respect that has not been mentioned, in that he said -

Without any doubt, this figure falls short of the attributable cost of facilities, even after ‘taking into account the fact that the industry also pays £1,200,000 in fuel tax. fuel tax is not an equitable method of recovering the cost of facilities because international operators, for whom some of the most expensive facilities are provided, are virtually exempt from any fuel tax payments in respect of fuel used :on international flights.

Later the Minister said -

Accordingly, where the present act sets out only two .categories of aircraft - that is, machines of up to 20,000 lb. all-up weight, and machines .of greater than 20,000 lb.- it is now proposed to employ four categories. Aircraft of less than 25,000 lb. all-up weight - and this category includes virtually all aircraft used in the private and small charter fields and may later include aircraft in outback feeder operations - ‘will incur only a nominal increase .in charges.

That grouping will not be greatly affected by -the increase. Then he said -

Aircraft used mainly on rural services will incur a .not very substantial increase.

That is all to the good, because if ever a wonderful service was rendered to Australian rural development it has been rendered by airline services serving our farflung empire of farmers and townspeople. The Minister continued -

Aircraft which might be described as secondline trunk route equipment will make a fairly large additional contribution, while the heavy aircraft in the front-line domestic category and the heavy international jets will make the greatest contribution.

Some of my colleagues “have said to-night that the charges relating to the big aircraft were not high enough. According to the Minister’s statement, it seems that the operators of big aircraft are going to be hit the hardest of all. I cannot say whether the increase is reasonable or whether these operators should pay more, but the fact remains that they will be paying the greatest increase.

Mr Bury:

– They operate much heavier and larger aircraft.


– Yes, -and it is only natural that they should pay more. The Minister -also said -

More than half the increase wil be borne by the :international airlines

The increase ‘that he mentioned was an increase Of more than £450,000 in recoveries which it is estimated the new charges will produce in a full year. This is a bit of .comfort to us anyway. Later I will deal with the subject of fares. The new charges will bring the total recovered each year to £1,150,000. The fantastic thing about this figure is that it is still only 9 per cent, of the total cost of maintaining our aerodromes, which is about £13,000,000 a year. So the total amount recovered from the airlines is still only a very small and almost negligible return for the outlay.

The next point I wish to deal with relates to the types of navigational aids that have been added to the system in the past twelve months. In order to discover what these were, 1 consulted T.A.A.’s latest annual report, which was issued about a month ago. At page 29 the report states, under the heading “ Air Safety Aids and Services “, as follows -

There was considerable development in air navigational aids during 1959-60 over routes with which T.A.A. is concerned. The Department of Civil’ Aviation, which is .responsible for these develop, ments and their installation and operation, is to be congratulated on the advances made, principal features of which were: -

Full instrument Landing systems at Darwin,. Launceston and Avalon. 1 pause here to say that we are very grateful indeed that Launceston has been included in this full instrument landing system. Although we do not experience many fogs at Western Junction it is still a great comfort to know that we have available when required this- most modern technique for getting aircraft down in pretty serious and murky conditions. The other principal features to which the report refers are listed as -

Localisers at Brisbane and Port Moresby; V.A.R. at Devonport (Tas.);

Distance Measuring Equipment beacons at Wyndham (W.A.) and Mantis Island (New Guinea);

High Intensity approach and runway lighting systems were installed at Sydney, Adelaide and Darwin, and low intensity systems at Mr Isa and Coolangatta. High intensity approach lighting was also installed at Hobart, and is in course of installation at Canberra.

The report added -

These aids will help to provide higher standards of safety and increased freedom from, the vagaries of the weather.

Meteorological services provided by the Bureau of Meteorology of the Department of the Interior continued to play their very important part in flight planning and operations generally.

So T.A.A. pinpoints, in its report,, trieimprovements in aids that have occurred in. the last twelve months, and shows that it appreciates what has been done..

The next point I wish to mention concerns the Western Junction airport at Launceston. Naturally, some of the money to come from these increased charges will be ploughed back into improvement of airports. What a colossal cost the country now faces in keeping our airports- up to modern standards!

Western Junction must surely be the Cinderella of civil airports in Australia. It is a war-time conglomeration of monstrosities. Old war-time buildings are dumped together in nightmare fashion. This, is the airport we are battling to have improved. It has to be seen to be believed. Those who have not seen it cannot comprehend the overcrowding and the lack of space for the modern aircraft which lead to interference with the work of the men operating the aircraft as they arrive and depart. It is an important airport as 30,000 passengers go through it each year and it is shocking to see it in such a backward state..

Following representations by myself and the Minister for Customs and Excise (Sena tor Henty) to the Minister for. Civil Aviation (Senator Paltridge) last month, I received a reply from the Minister in which he told us what the department intended to do with the antediluvian, antiquated, overcrowded airport at Western Junction which is a disgrace to the Department of Civil Aviation in this modern age. The Minister said in his letter dated 23rd September -

I have to acknowledge the receipt of your letter of the 16th September about the condition of buildings at the Western Junction airport.

I made certain suggestions for the improvement of the airport. The Minister stated -

In this regard, I have to advise that a Master Plan has been designed which- provides for a completely new terminal area and taxiway system. As a first step, provision has been made this year for the removal and re-erection of the Aero Club hangar to a new site and this will open the way for further works next year.

This hangar is right in the way of aircraft taxiing in, as the Ansett-A.N.A. and. TransAustralia Airlines terminals are cheek by jowl. If an Ansett-A.N.A. Viscount is on the tarmac when a T.A.A. aircraft arrives, the incoming aircraft misses the stationary Viscount by only a few feet as it turns and. swings to a stop. That illustrates how crowded the airport is. The hangar actually juts out into the tarmac area. It is a big war-time hangar - a monstrosity of a thing in sheet iron. It will be moved to a space nearby where there is plenty of room for it. That is the first step proposed by the department. The Minister also stated in his letter -

I would, hope to include in the 1961-62 programme, a parallel taxiway, roads and engineering services, and a new maintenance centre and fire station. These works are necessary before a new terminal area can be developed.

It is good to know that such work is planned for the next financial year. The Minister continued in his letter -

Following this, it is proposed to provide for a new terminal area building and apron, but this is unlikely to proceed before the beginning of 1963 at the earliest.

You will appreciate that the work at Launceston must take its place of priority in the overall Australian programme and, with the limited funds available, I do not consider that the work could be justified at an earlier date.

We are grateful for that master plan for Western Junction airport which is situated 10 miles south of Launceston. The Minister has. admitted that the work will mean a new terminal building: or buildings and a new apron. The terminal is so crowded and dilapidated that only a complete new airport building with roads, entrances, exits and lounges can make the airport up to date. At present, no refreshments can be obtained at either the Ansett-A.N.A. or the T.A.A. terminals at Western Junction. There are no facilities for people who are waiting for fogbound aircraft or for relatives. It is possible to buy a newspaper but no books or lollies or refreshments or anything of that sort can be obtained at the terminal buildings. I hope the Government will carry out the master plan that has been outlined by the Minister in his letter to me and to Senator Henty. We will certainly keep him up to it.

I wish to refer now to the question of air fares to which the honorable member for Fremantle (Mr. Beazley) referred. The Minister for Civil Aviation seems to think that air fares will not be increased at this stage. In his second-reading speech the Minister said -

It will also be ensured that any such increases do not result in fares being raised to an extent which would unduly retard the growth and development of our air transport system.

That is the hope that is expressed by the Minister, but he cannot control increases in air fares completely. I am desperately afraid that if another increase in charges is made next year - because there is to be an annual review of charges - and if there is another increase the following year to cope with the ever-increasing provision of navigational aids for modern aircraft coming into the aviation system, we may reach a stage where fares will be so high that only a select group will be. able financially to travel by air. It will be disastrous for the civil aviation system if it is depressed by increased fares charged by the companies so that they can recover the extra cost of navigational aids. In his Budget speech which was also quoted by the honorable member for Fremantle, the Treasurer (Mr. Harold Holt) said when dealing with air navigation charges -

After reviewing the position, the Government has therefore decided to adopt a policy of full recovery from the users of the cost of facilities attributable to their operations. This aim will be achieved over a period of years.

Right! Nine per cent, of our total cost is being recovered at present. Just think for a moment how an increase in charges of another 91 per cent, will affect the cost factor in running airlines. The Government has stated that it aims at a full recovery of the cost of providing navigational aids. I believe that such a policy will have a disastrous effect on air fares. If we force air fares up, we will force people away from air travel. There will be a snowball effect on the companies concerned. Therefore, I condemn the proposal of this Government to recover fully the cost of navigational aids. To impose such a policy would be certain to bring the profit and loss accounts of the airlines to a critical point.

I wish to refer now to possible future developments in airways as this will affect somewhat the planning of the Government for the provision of navigational and other aids. I am quite sure that within the next three or four years we will have hovercraft operating in Australia. They have been proved successful over water and over land. There are vast areas of Australia in which these fantastic aircraft could be successful and could operate economically. So that is one possible development of the next three or four years. Another is the vertical take-off aircraft for which runways will be scarcely necessary. There is a company in the United Kingdom which has already developed a vertical take-off passenger aircraft in prototype. I saw a picture illustrating this in a magazine only last week. The honorable member for Perth (Mr. Chaney) said that he had not heard of any successful development of this idea yet, but it has definitely gone beyond the blueprint stage. A prototype has been built by an English aircraft company.


– Order! There has been a lot of blind flying to-night. I think that the honorable member is flying a little wide of the bill.


– I am coming in to land now, Mr. Deputy Speaker. I mention these things in passing because they could affect navigational aids. Vertical take-off aircraft will need fewer navigational aids than we have to-day.

Other questions are these: Are we to charge operators for using heliports? Will the Government build heliports or will they be built by the companies? Those questions illustrate another important angle of this bill. If heliports are built by the Department of Civil Aviation as they conceivably will be in the next five years, will the provisions of this legislation be extended to include charges for the use of heliports? I assume that they will be extended because helicopters will play a more and more vital part in the development of Australia. In the last few years the story of the helicopter has been a thrilling one, particularly in my State where helicopters have been used for mineral exploration, for surveys, for our hydroelectric schemes and in rescue work.

The pure jets are now in service. The development of vertical take-off and the further development of the pure jet aircraft involve completely opposite conceptions. The jet needs a long runway and the vertical take-off aircraft needs hardly any runway at all. The Department of Civil Aviation will have to keep abreast, week by week and month by month, with overseas development in aircraft, all of which affect navigational aids. These are part of a developing industry. Even in the last year, four new navigational aids have been added to airports in different parts of Australia. This year will see further development in this wonderful scientific equipment which before long will be able to bring aircraft into land almost without the help of the pilot.

The Opposition does not oppose the bill but we point out the weaknesses of it and the trends that are coming. I would particularly condemn a government that would try to recover from airline operators the full cost of providing navigational aids. The effect on fares and freight costs in the industry would be absolutely disastrous if such a scheme were brought to fruition, even over four or five years. I suggest that the Government should announce that it will eventually recover 50 per cent, of navigational costs, but no more. That would be fair enough. The Government proposes to recover only 9 per cent, of costs now. As costs grow, so could the charges, but they should never exceed 50 per cent, of the total cost. If it were known that this would be the maximum amount to be recovered, airline companies would know where they stood and could budget accordingly. But if the Government intends to raise charges until the full amount of costs is recovered, even over a number of years, the airline companies will not know where they stand. TransAustralia Airlines had to pay £210,000 last year in navigational charges. If the Government could fix an ultimate percentage, Trans-Australia Airlines and other companies could budget accordingly, thus saving themselves a lot of worry and, perhaps, a lot of unnecessary loss. Mr. Cash. - A percentage of what?


– A percentage of the total cost of navigational aids. I feel that that cost will increase, year by year, with the introduction of new devices. Let us increase the charges but never to more than 50 per cent, of the total cost. This suggestion I leave with the House and with the Government.

I apologize for speaking for so long but I have kept going as long as I could so that we would not have to move on to another bill at this late hour.

Question resolved in the affirmative.

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

Bill - by leave - read a third time.

page 2419


Newspaper Report - Bank Advances for Primary Production - Trade with Communist Countries - Hospital and Medical Benefits Funds - Business of the Parliament - Pensioner Mental PatientsHovercraft - Civil Aviation - Unemployment.

Motion (by Mr. Cramer) proposed -

That the House do now adjourn.

East Sydney

.- There are one or two matters to which I want to direct attention. Members will recollect that, a few weeks ago, I sought action on the part of the Government to investigate certain allegations ;that were made against a member of the Australian diplomatic service. I received no assurance that this would be done. As a matter of fact, the Prime Minister (Mr. Menzies) appeared to want to close the incident and not have any investigation at all. I have been trying to avoid! mentioning the name of the person concerned or reading any of the allegations contained in the document which I now have in my hand. I shall not do either of those things to-night. I have exercised a great deal of patience on this matter, hoping that the Government would take action to have it thoroughly investigated. I think it is important enough to receive the attention of the Government.

I now say that if no investigation is made or no report on the result of an investigation is given by the time that we come back after next week’s adjournment, I shall take the first opportunity in the following week to read the document to which I have referred. If the Government takes no action after I have read it, I propose to reveal the name of the individual concerned. I do not want to do this because all that I wanted was to see the matter investigated. I do not wish to set myself up to try this person on the basis of the allegations made against him. I merely say that they have been made by a gentleman who is a newspaper columnist and a radio commentator and, I would imagine, a man of some substance. If he circulates this kind of information it should be investigated. If he has wrongly maligned the man, some action should be taken by the Government, just as it took action on another occasion on which members of this Parliament were maligned. On the other hand, if the allegations are shown to have some basis, then in my opinion the Government is also obliged to take some action. If this kind of information is allowed to circulate freely, not only in Australia but also in some of the nearer Asian countries in which this diplomat was and is still functioning, it will not do Australia’s reputation very much good.

Now let me turn to another matter. The Minister for Trade (Mr. McEwen), during the absence of the Treasurer (Mr. Harold Holt), undertook to have an investigation made of certain transactions involving the Development Bank and a particular primary producer. I have waited in patience to see what action the Minister would take following the promise that he made, but so far I have received no advice whatsoever. The unfortunate man concerned had some of his agricultural equipment re-possessed by the bank, and I do not know whether the equipment has been .sold and cannot now be returned to him. However, I want to give the House again a brief history of the case to show that it is a matter of great seriousness, particularly to the person immediately involved. Even if this is an isolated case in the area concerned, I believe it is important enough to warrant some action on the part of the Government. This Parliament can reasonably expect to be given some explanation of the attitude adopted by the bank in this particular case.

The man concerned is a Mr. Lance Davis. He is the proprietor of a property known as “ Airlie “ at Bendemeer in New South Wales. He is a married man with three dependent children, and he is an exserviceman. Evidently he is a pretty good farmer, because he took up 4,000 acres about six years ago, and whereas there were no improved pastures at all when he started, he now has 1,600 acres sown. In his first year his wool clip comprised 32 bales, while last year it amounted to 143 bales. He has, however, received a severe set-back because of drought. As frequently happens with men on the land when they are adversely affected by circumstances over which they have no control, this man had to seek aid. He had bought a seeder with the assistance of the Development Bank. It cost him £376. He had made all the payments on this piece of equipment until last February. He had actually paid £246 and owed a little more than £130. The machinery has now been re-possessed.

All that Mr. Davis had asked the bank to do was to carry the debt of £1 30-odd for a period of twelve months, so that he could get over his difficulties. This would surely not have put a great strain on the resources of the Development Bank, and it would have allowed the farmer concerned to continue his operations. As a result of the re-possession of his seeder, his winter sowing of crops and pastures for stock has been seriously delayed, and this unfortunate ex-serviceman, who is trying to carry on and maintain his family, is now sowing his crops by hand, using only a bucket. I think it is a scandalous and a shocking thing that an ex-servicemen with a wife and three children dependent on him, who has carried on the property for six years and shown by increased production that he is by no means without ability as a farmer, should be refused this assistance by the Development Bank. After all, we were told that the purpose of the bank was to increase production, and certainly not to force farmers out of production. I hope that the Minister for Trade, who undertook to have the matter investigated, will speed up the inquiries, so that he may take some action to help this unfortunate man if it is found that the circumstances are as I have stated them to the House.

I wish to turn briefly to another subject. I sought some information recently from the Prime Minister (Mr. Menzies) regarding the increase of exports of wool to iron curtain countries. We have often heard members on the other side of this Parliament, in the course of their red-baiting campaign, giving the impression that they are so strong in their anti-Communist beliefs that they would not permit the development of trade with iron curtain countries. I want to cite a few of the figures given to me by the Prime Minister, which cover the period from 1955-56 to 1959-60. Exports of Australian wool to mainland China have increased by 656 per cent., to Czechoslovakia by 195 per cent., and to Yugoslavia by 279 per cent. The Russians recommenced purchasing Australian wool only about two years ago, but in that time their imports have increased from 100,000 lb. in 1957-58 to 39,300,000 lb. in 1959-60. If you care to work out the proportionate increase over that period you will find that Russia’s imports have risen by 39,300 per cent.

I am not against the sale of wool to these countries. As a matter of fact, I think that a primary producing country such as Australia, which is so dependent on export income and which is constantly promoting export drives, should encourage this kind of trade. When we have surplus products we should sell them wherever the markets are available. I am merely directing attention to the hypocritical attitude of the Government in these matters. On occasion after occasion in this Parliament its supporters have attacked the Labour Party and the trade unions, accusing them of .pro-Communist sympathies. At the same time the Government, which prides itself on its anti-Communist attitude, sets out deliberately to develop this trade with the iron curtain countries. I hope the supporters of the Government will cease their campaign, both in this House and outside it, against the Labour Party, and that they will cease to make these accusations that we harbour Communist sympathies. In my opinion, trade does not necessarily mean that you accept or endorse the forms of government in operation in the various countries with which you trade. Trade presents advantages not only to the country that sells, but also to the purchasing country. For this reason I believe that the expansion of world trade will help in the development of the peace movement throughout the world, in which every member of this Parliament has professed to believe. I hope we will hear no more of these accusations.

Mr SPEAKER (Hon John McLeay:

Order! The honorable member’s time has expired.

Dr Donald Cameron:

– I want to refer to a matter which was raised in this House a few days ago by the honorable member for Moreton (Mr. Killen). The honorable member referred to a particular case. I am not in a position, of course, to discuss the particular case that he mentioned. I merely want to explain the general principles behind the procedures to which, as I understood him, he takes some exception.

The honorable member put forward two objections. He was referring to payments of hospital benefits, as I understood his remarks - and he can correct me if I am wrong. His first objection was to the fact that the fund itself should decide whether a particular medical condition was preexisting - rand let me just say what that term means. A condition may be considered as pre-existing if there were symptoms in evidence at the time when the contributor joined the fund which could be interpreted as symptoms of the condition which .later necessitated the contributor’s admittance to hospital.

The other thing to which the honorable gentleman objected was the transferring of the patient to the special account. He said that when he discussed this question with the fund assessor, the assessor said that what the fund was interested in was not diagnosis but symptoms. That may have sounded a rather strange thing to say, but it relates directly to the question of the symptoms which were in evidence. May I say, Sir, that many symptoms are not restricted to a particular disease. One gets a false picture if one imagines that all diseases can be put into compartments, each with its own symptoms. The situation is not really like that. A lot of symptoms belong to a great many of the compartments.

Let me now deal with the first of these two objections - that the fund makes the assessment as to whether it should pay fund benefit. It is, of course, fund benefit and not Commonwealth benefit that is in dispute. Commonwealth benefit is paid in all instances, and there is no argument about that. The question is whether fund benefit should be paid. If we look at the historical sequence of events which have given rise to the present situation, I think, we shall find it quite easy to understand this. And it is important to understand it in its historical context, because this is a question of fact, and the honorable gentleman was objecting to the facts. The historical sequence is that the funds existed before the national health service was put into operation. In those days, of course, the funds could pay nothing but fund benefit. There was no other type of benefit. The system was a system of voluntary insurance - a self-help system - and if the funds refused to pay a benefit they were, of course, refusing to pay their own benefit. And they did refuse to pay in respect of a pre-existing ailment, and quite naturally they themselves determined whether or not they would pay the benefit.

When the Government came into the field, it came in to supplement the system which the funds were already operating, and it added to the existing benefit another series of benefits-the Commonwealth benefits. Those funds which wished to be registered were registered under the National Health Act, subject to certain conditions. Briefly, the conditions were designed to ensure the solvency of the funds and to improve the benefits that they paid. The Government interfered as little as possible with the rules of the funds. So they were still able, if they wished, to refuse to pay fund benefit in respect of pre-existing conditions. They continued to refuse to pay fund benefit where there was a pre-existing ailment - and, of course, to assess for themselves whether there was a pre-existing ailment. They did this for a very good reason: They had to maintain their solvency and continue to meet the large demands that were made on them.

The point is that the funds were refusing to pay only their own benefit. They paid without question the Commonwealth benefit. It was in order to close the gap where the funds could refuse to pay fund benefit that, by amendments to the National Health Act, the Government introduced the special account procedure. Under that procedure, the funds now have an option. They may retain the contributor in their ordinary account, if they wish, and pay full benefits for the period of hospitalization, or, if they feel that they are unable to do that, they may transfer the contributor to a special account. In both cases, of course, they pay the Commonwealth benefit. If the contributor is transferred to the special account, they pay the fund benefit, which is the special account benefit, and, if I may use a rather Irish expression, it is a fund benefit paid by the Commonwealth Government. So the contributor is covered by being transferred to the special account if he has a pre-existing ailment.

There are some conditions attaching to the transference of a contributor to the special account and to the payments which may be made from the special account. The main condition is that payment from the special account, since it is met by the Government - in other words by the taxpayer - may not exceed the hospital charge.

Mr Thompson:

– Only the additional amount - not all of it. The Government does not pay all of it.

Dr Donald Cameron:

– Yes, it does. It pays all the special account fund benefit. The Government pays the lot.

Mr Thompson:

– It guarantees it.

Dr Donald Cameron:

– The

Government actually pays it all. It refunds it to the benefit fund. The main condition is that payments from the special account may not exceed the amount of the hospital charge. And for a very good reason: Because it is paid by the Government - in other words, by the taxpayer. But up to the level of the hospital charge, the contributor may be paid and is paid whatever rate he is insured for. So that, in fact, the contributor is not really put at a disadvantage by being transferred to the special account, and in some instances he gains an additional advantage. If he had exhausted his maximum benefit period - which would require quite a considerable time in hospital - and if he were in the ordinary account, he would from that time on during the current twelve months be paid no fund benefit at all, but if he had been transferred to the special account he would be paid fund benefit at special account rates indefinitely for as long as he was in hospital.

There are some other conditions, Sir, but I want to make this point plain: There is no incentive for the fund to transfer the contributor to the special account, because, having done so, it must leave him in the special account for two years, and it must transfer his contributions with him. So there is no incentive for the fund either to make a wrong assessment or to transfer any one, except when it is financially compelled to do so.

Mr Killen:

– If the Commonwealth pays the special account benefit, does not that in itself provide an incentive?

Dr Donald Cameron:

– No, it does not, because the insurance fund collects and keeps the contributions from the contributor, but when it transfers him to the special account it has to collect his contributions and pay them into the special account. So the benefits are paid from what is in the special account, if anything, and the deficit is reimbursed by the Commonwealth Government. Therefore, there is no incentive for a fund to transfer a patient except when it feels that the drain on its funds will be so great that it must transfer him to the special account.

I think it is fairly obvious in these circumstances not only that the assessment must be made by the fund - which is quite right and proper - but also that in many instances there is no disadvantage to the contributor in being transferred.


– Order! The Minister’s time has expired.


.- Mr. Speaker, I propose to address myself to the revision of the Standing Orders which I understand is presently under consideration by the Standing Orders Committee. I address myself to this subject now because proposals have not been settled, and if it is possible to influence events at all, this is the time to address myself to this matter. I had thought that the matter might be one for the party forum, but later I felt that it was after all a matter for the Parliament - for private members, whether they sit on this side of the House, on the other side, or on the cross-benches. Therefore, I raise the matter, appropriately, during the debate on the motion for the adjournment of the House.

I have been a member of one Parliament or another for the past 23 years. In the New South Wales Parliament, I sat at first in support of a government which had been in office for a number of years and which was complacent and, indeed, almost arrogant at the time when I entered that Parliament. The Leader of the Opposition there at that time was perhaps the most distinguished exponent in this country of the cold war in Parliament. I refer to Mr. J. T. Lang. Later, Sir, I was a member of the United Australia Party Opposition in that Parliament. Subsequently, I came to the Commonwealth Parliament to sit on the Government side of this House. I have been impressed by the fairness with which proceedings in this chamber are conducted, and also by the long hours of sitting and the shortness of the sessional periods. It is these two latter factors that may bring about the desire for a change of the present Standing Orders about which I rose to speak.

In the course of my experience of the New South Wales Parliament, I saw the erosion and whittling down of the rights of private members and of the Opposition to such an extent that I fear the same kind of thing may begin to happen here if some of the proposals that have been discussed to streamline procedure, as it has been termed, are adopted by this Parliament. In New South Wales, the position had been reached where, for example, if a general strike were to occur in that State, the Government could keep the House to its business in a debate, say, of the Dog and Goat Act. I am particularly concerned with the adjournment debate. Automatically under the New South Wales standing orders, whatever debate was in progress at a quarter past ten in the evening came to an end. The debate on the adjournment then proceeded until half-past ten, when automatically under standing orders that debate came to an end also. The U.A.P. Speaker at the time laid down that members could discuss on the adjournment only matters that were specific, urgent and related to the member’s electorate. Of course, we were all tired of sitting late at night, as honorable members are becoming here, and, I was amongst the foolish people who cheered when the Speaker introduced these new rules.

I am referring here to the various opportunities that private members or the Opposition have for initiating business or discussion on their own account - not business that is controlled or initiated by the Government. The then Leader, of the Opposition in New South Wales was. in the habit of bringing down a no confidence motion every few weeks, but the time came when the Premier of New South Wales, Mr. Stevens, as he then was, invited the Leader of the Opposition to put his no confidence motions on the business-paper to take their turn with other private members’ motions. That meant, as honorable members will understand, that the no confidence motions never came on. I was amongst the foolish people at that time on the Government side of the House who cheered at this curtailment. I thought, “Why should the time of the House be wasted? “

When it came to debates involving the suspension of the standing orders to discuss urgent matters, this had to be determined by vote of the House. Under an oppressive Labour government subsequently, it was never voted that any matter was urgent. The result of all this was that the opportunities for private members to initiate matters that were important to them, either because they wanted to ventilate some grievance on behalf of their constituents or because they believed that some matter was of national importance, were gradually whittled down until they disappeared.

Above all, I believe that the adjournment debate in this House should be unrestricted. I believe this for two reasons. First, flexi bility is needed.. There will be occasions, as all honorable members know, when it is felt by the House and. by the Leader of the. House, who is able to feel the. pulse of the. assembly, that an adjournment debate has; gone long enough and the gag is applied. That is fair enough. But there will be other occasions when members feel that a debate, may well go on even into the small hours of the morning because it is so important. I am reminded of that mythical gentleman Procrustes who had an iron bedstead. If those who became his. guests and wished to sleep there were too tall for the bed, he cutoff their legs at the appropriate length. We do not want a Procrustean debate on the adjournment of the House and I believe that flexibility should be retained. The second reason why the adjournment debate is so important is because of timing. There is a tide in the affairs of men and parliaments when matters ought to be discussed.. To be told that a matter may be discussed next week or next month or next session may mean that by the time the debate commences the subject is stone cold or if members wish to influence a decision upon a matter, they may find that the decision has already been made. So I say that the d’ebate on the. adjournment should remain flexible and should not become a Procrustean debate. The adjournment debate is important because of flexibility and because, qf timing. I can hear the plausible accents of those who will refer to all the other opportunities that members have to speak but none of them has those two peculiar qualities that apply to the debate on the adjournment of the House.

It will be said that we are proposing only some small alteration to streamline the procedure; that this is a reform and desirable; and that these are little things that are proposed. Some one remarked a little while ago that the descent to Avernus is easy. It is easy to go downhill, but it is a great labour and a great effort to retrace the steps. I do not want to see this Parliament begin on that downward path. It is true that Standing Orders can never preserve the liberty of members if members are not themselves vigilant in preserving that liberty. Of course, an oppressive government could always apply the gag, but there are means that the Opposition has to be so unpleasant that a government may be unwilling to apply the gag. Members must remember that this is- not a personal, right that we can give away as- individuals; this is not a matter of our own personal inclination. We are trustees; this is a trust we hold for our constituents and a heritage that has been handed to us down the years. It is not a matter of our own personal convenience. It has- been said that the price of liberty is eternal vigilance, and those words are precisely right. Vigilance means keeping awake and if members prefer to go to bed. and to sleep, they may throw away this priceless heritage.

I have seen the Trojan horse produced in the Parliament in New South Wales. It was said to be just a little reform that would enable members to go to bed and would stop all this nonsense. I have seen the Trojan horse introduced and I have seen the load of mischief that has come out of iti and I have detailed that to the House. I hope that the curse of Cassandra is not upon me and that honorable members will take note of these things’ which in the course of 23 years in- two Parliaments and on both sides of the House, have been borne in upon me. True, I have always been a back-bench member. True, I have always been a failure in Parliament. But even a fool cannot be 23 Years in Parliament, on both sides of it seeing these things without learning some lessons of value. So I have felt it my duty to put these points before honorable members.


.- I would like to take advantage of the presence of the Minister for Health (Dr. Donald Cameron) to pose a few questions about the special account. When I begin to think that I have mastered all the complexities of the national health scheme, I have misgivings; because further elaborations of it are made. I can only guess at what members of the public must feel as they try to comprehend such a complex scheme as this. I say this without any undue criticism; I know the whole matter is difficult; but I hope the Minister will try to simplify the scheme so that members of the public may understand it. The complexities are absolutely baffling even to an educated person. Many elderly people in the community do not know which way to turn, whether they are obliged to insure under this table or at that level or whether they are obliged to insure at all. The Minister would earnthe gratitude of. many people if some, simplifications were made.

As I understood it, all persons over the age of 65 years were automatically transferred to the special account. Until recently when I asked the Hospital Benefits Fund of- New South Wales, I also understood that a member of the special account was automatically restricted to a total benefit of £12 12s. a week. I have now been told that is not so, and that just because a person is 65 years- of age, he is not automatically restricted to benefits of £12 12s. a week. The Minister’s statement a short time ago seems, to confirm this view. I was given to understand that if a person were being treated in hospital for what was described to me as a normal sickness - a relatively short-term sickness - he would be entitled to receive the full hospital benefit allowed under the table to which he subscribed, provided he did- not receive more than the actual cost of treatment, even though he wasover the age of 65 years. The Minister has, confirmed that view. I am just wondering in what circumstances the restriction to twelve guineas a week, applies. I can well imagine that it would apply in the case of a person who had been in hospital for more than 84 days in any one year. My understanding of the position is that when a person has been in hospital for more than 84 days in a year, payment to him is restricted to the special fund benefit of £1 a day from the Commonwealth and, I think, 16s. a day from the hospital benefit fund, or a total of £12 12s. a week.

I have been given to understand - I should like it confirmed, as I am sure others would, if I am correct, or corrected if I am wrong - that the limit of £12 12s. a week applies in cases in which a, person has been in hospital foi 84 days in- any one year and will remain in hospital;. I understand that it applies also to people who had pre-existing illnesses at the time of joining the fund. I understand it applies further to chronically ill people. I have already covered this category. Those people would come within the group who would be in hospital for more than 84 days in a year. Was I informedcorrectly when I was given to understand that persons who, because they are 65 years of age or over are transferred to the special account, are not limited to the £12 12s. a. week if they are suffering from other than, chronic or pre-existing illnesses?

The second matter to which I wish to refer relates to what I think are termed nonapproved private hospitals. I understood that a substantial benefit was to be conferred upon patients in non-approved hospitals when the act was last amended. I understood that patients in non-approved hospitals were to receive both Commonwealth and fund benefits, subject to two conditions. The first of those conditions was that they had; to. be receiving treatment equivalent to. what they would have received if they were in a public hospital, and the second was that they were being treated for an illness for which they would normally have received treatment in a public hospital. If those are the two qualifications for benefit under the last amendment to the health scheme, I should like some enlightenment as to the position in connexion with heart cases. I have had several such cases brought under my notice. Patients suffering from heart complaints go into non-approved private hospitals because they cannot get into public hospitals.. The public hospitals, being overcrowded, will not take long-term patients. I appealed to the hospital benefit fund authorities on ‘ behalf of one person, and suggested that he qualified for benefit under the recent amendment to the scheme. The reply given to me was that heart cases would not be accepted in public hospitals and, as they would not be among the kind of cases that would be treated in public hospitals, they did not qualify. To me, that seems to be about the last resort in logic. These people are forced to’ go into private hospitals simply because public hospital accommodation is so inadequate that long-term patients cannot be admitted for treatment. In the non-approved private hospitals, the patients are faced’ with substantial cost but at the same time they are denied the very benefit which I understood was to be conferred upon them by the recent amendment to the scheme.

Many people are involved in this. They include elderly people suffering from heart complaints and other chronic illnesses. They are being visited regularly by their doctors while in these hospitals and have full-time attention from trained nursing, staff, yet, for. some’ reason; or other,, the .hospitals which are looking after them are notapproved hospitals under this scheme and’ the patients do not receive the relief that I expected they would receive under the latest amendment to the act.

Let me occupy the few minutes remaining to me by- referring to a matter which perhaps might appropriately be submitted to the Minister for Social Services. It is not something new; it has been mentioned here many times. I refer to pensioners’ suffering from senility or some mental’ disease that requires their entering a mental hospital for treatment. 1 hope that the Government appreciates the dreadful anxiety and worry suffered by these people and the burden that has to be borne by the partner of the patient in the mental hospital.. Great hardship is inflicted upon the partner because once a pensioner enters a mentalhospital, the pension is automatically withdrawn. This means that the partner who is left at home has to face alone the task, of ‘maintaining the home and the servicesnormally enjoyed by the couple. Rates, and so on have to be paid.

The Government might argue that thesingle pensioner, or the widow or widower, has to meet all. these costs out of one pension, but there is a difference. When a married pensioner enters a mental hospital, his wife or her husband, is faced with, the need to travel to the hospital to visit him or. her. As mental hospitals are not situated on’ every suburban corner, thismeans that the partner is faced with the, expense of ‘travelling long distances. Again the pensioner :in the mental hospital looksforward to having brought to him or her am’enities other than those already pro,vided in the hospital. I think the Minister’ knows, ; too, that sometimes patients are released from mental hospitals for short, periods, perhaps for a week-end. Some, are- released every week-end, but pensioners, are denied even a’ part of their pension for those periods because they have not- beenreleased’ ‘from” the hospital for 28 consecutive days ‘ This casts a great burden, upon these unfortunate people and I plead’ with, the Government to think seriously about , the matter.; . It would not cost a ; great deal/tb relieve these sufferers qf at; least’ some , of their burden. ‘ . . -.

Then there is another side to the story, which was emphasized in a series of articles published by the “ Sydney Morning Herald “ last week. It relates to the financial burden borne by the State mental hospitals. I admit thatthe Commonwealth makes a contribution, on the basis of £1 for every £2 found by the State, towards the capital cost of these hospitals, up to a maximum of £10,000,000, but I point out that if the patients were paid their pensions, the hospitals would be entitled to claim twothirds of the pension. In that waythe State governments would be relieved of much of the financial burden they have to bear in keeping up these institutions, which treat elderly people, many of whom are psychological cases. .


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


.- On 1st September, I addressed a question, without notice, to the Prime Minister (Mr. Menzies) relating to asubject that was mentioned this afternoon. I refer to the hovercraft. In the course of that question, I asked for the appointment of a joint parliamentary committee to inquire into the development of the hovercraft and similartypes of craft with a view to making periodicalreportsto the Parliament on the probable effect of the use of such craftupon Australia’s economic, financial, industrial and transport structure. On the 13th October, I received a reply from the Acting Prime Minister (Mr. McEwen) stating that, from advice received by him, this type of craft was in such an early stage of development that the likelihood of its being put into economical use was somewhat remote, that it was a matter for the distant future, and, because of that, it was hot considered necessary at this stage to give serious consideration to my proposal for the setting up of a joint committee.

With all due deference, I beg to disagree with the advice tendered to the Acting Prime Minister on this subject. For many years now, I have been a very keen studentof scientific and technological development.During those studies I learned as far back as early in 1955 that the hovercraft was being developed, and since that time I have made it my business to keep in close touch with all developments in that field. I should like to point out that a boat builder in Suffolk, in England, named Christopher Cockerell was investigating the drag, resistance and loss of energy resulting from the passage of the skin of a boat through water.In 1953 he arrived at the decision that to overcome that it would be necessary to lift the boat out of the water and make it travel on the surf ace. As the result of that investigation he developed the well-known principle now called the “ hovercraft “ principle, which is the creation of a cushion of air for the vehicle to ride over. Early in 1958 the Hovercraft Company was formed as the result of the British National Research Development Corporation and through it Saunders-Roe of England was granted a contract to develop the first hovercraft.

In June last year the SRNI as it was then known, was put into operation, and in the next month it made its first crossing of the English Channel an historic event. In the early stages of that craft, the makers used a 450horse-power Alvis, Leonides aircraft motor which used two-thirds of its power to lift the craft andone-third of itspower to drive the craft in still air atapproximately 20 knots.So fast has been the development ofthis craftthat in April of this year Saunders-Roe and the Hovercraft Company conjointly developed a special jet. engine 4 ft. long and 18 in. square and developing a thrust of some 900lb. which enabled the craft to cruise at some 60 knots.

This type of craft is developing at such a pace that I directtheattention of the House to some unarguable facts, despite any evidence that may have been submitted to the ActingPrime Minister on this question. At the present time William Denny and Brothers Limited; a Scottish ship-building company, is developing a special rivercrafttype of hovercraft which has sides going down into the water. It will be a very long craft able to go around bends and so forth. The Folland Aircraft Company, which is a subsidiary of the Hawker-Siddeley group, hopes to. have in operation next year a 5 ton payload hover-truckcapable of being used on water, land; ice and snow and over bogs, marshes: and so forth. The VickersArmstrong Company has two. projects in mind. One of them is the very fast , 4-5 ton hovercraft launch which it hopes to have in operation at the end of next year.

By the middle of 1962 Vickers-Armstrong contemplates having in operation and available for commercial use either a 15 ton or a 25 ton craft to be used as a passenger or ferry vehicle. The Saunders-Roe division of the Westland Aircraft Company anticipates that by the middle of next year it will launch the first commercial version of the hovercraft, capable of carrying 68 passengers, or 10 tons of payload at some 70 knots. It will be capable of going over reasonably calm water, land, marshes, ice, snow, &c.

The original SRNI - and no doubt many honorable members saw .the film that was shown within the parliamentary buildings - was only a 5 ton craft. In spite of that, at the Farnborough aircraft exhibition last year it demonstrated to the whole world that here was a new and revolutionary craft which must, in a very short space of time, have a terrific impact on the economic and other structures of any society in which it operates. It showed that even in the early stage - a 4-5 ton craft in September last year - it was capable, with a crew of two, of carrying from 20 to 25 uniformed and fully-equipped service personnel. When carrying that load it dropped only 4 inches, from 13 inches to roughly 9 inches above the ground.

In Australia also, certain developments are taking place. In Brisbane a man will be demonstrating at a Christmas party this year, for the use of crippled children, a form of hover-scooter tethered on a rope and which will go round like a merrygoround and carry an 8-stone child. He hopes, by Christmas of next year - or least by 1962 - to have in operation on the Broadwater at Southport a 20 to 35 passenger craft. In addition to this, there is, in Great Britain, another craft called a cushioncraft, which is a slight variation of the hovercraft. This was developed by two young men called Britten and Norman. They formed a company called Britten and Norman Proprietary Limited and developed a 1-ton payload model which at present is being tested on a plantation in the Cameroons in West Africa, by the great international company, Elders and Fyfe. So confident is that firm of the possibilities of this craft that it is satisfied that within two years it will have operating, on all its plantations throughout the world, a 15-ton payload cushioncraft. It is anticipated that by 1565-66 1,000-ton craft will be operating on the English Channel carrying 1,500 passengers and 200 cars, cruising at 100 knots and conducting a 30-minute service across the English Channel.

All this adds up to the single fact that this type of craft is making such rapid progress and is developing at such a fantastic rate that it is incorrect to say that it is only in the experimental stages and at present is not worthy of consideration. I believe that what I have said clearly indicates that we should take steps to have appointed the joint parliamentary committee, which I have suggested, to inquire into this craft and its impact upon the Australian economy within the next four or five years.


.- I wish to bring to the attention of honorable members this evening an incident that occurred shortly before my coming into this House. It had reference to a request made by members of the Wallsend Bowling Club for permission for a charter aircraft to take off from Williamtown aerodrome. The first words I spoke in this House were to ask the Minister for Air (Mr. Osborne) if he could let me know whether it was a fact that a charter aircraft was refused permission to take off from Williamtown aerodrome on Friday evening, 22nd April, this year and, if so, what were the reasons. The Minister for Air, with the agility and body swerve of an international Rugby League scrum half, passed the ball to a Minister in another place and I never got the answer from him. Afterwards I put on the notice-paper a question to the appropriate Minister in another place. The long-winded reply that I received concluded with these words -

Accordingly my department has now issued instructions that except for medical or other urgent matters civil operations into Williamtown will be restricted to regular airline operations.

The position was that very reputable citizens in my electorate, members of the flying Wallsend Bowling Club, agreed last October that they would engage a charter aircraft to fly from Williamtown to Broken Hill for two purposes. The first was to play bowls, and the second was to lay a wreath on the cenotaph at Broken Hill on Anzac Day in memory of those who had -made the supreme sacrifice for their country. After -the bowlers had overcome the obstacles of obtaining an aircraft and a crew they sought permission to have the aircraft land at Williamtown. Permission was refused. I was with the honorable member for Shortland (Mr. Griffiths) when he telephoned Group Captain Chapman, a senior officer of the Royal Australian Air Force, who was in charge of air operations at Williamtown.

Mr. -Killen. - He is a very .good bloke.


– Wait until I finish my story and then you may not think that he :is such a very good bloke. Group Captain Chapman told the honorable member for Shortland that he could not permit the aircraft to land at Williamtown, first because it would interfere with night flying operations, and secondly, because -personnel would have had to be brought on duty specially to supervise the landing and the take-off of a civil aircraft. I have done some ‘fact-finding in my “time, and “I have some friends in the Air Force. I have ^ascertained .that both the reasons given by Group Captain Chapman for Te using permission for the aircraft to land were false, and I say that he knew them to be false. I have learned that there were ‘no night (flying operations on the night in .question, and that none was contemplated. The Air Force compiles a roster a week ‘or a fortnight in .advance when night flying operations tare ito be carried -out. In .addition, the statement that personnel would .’have to be ‘brought on duty specially was untrue. Three persons accept the responsibility for bringing in .civil aircraft, :namely, a duty officer, a signals officer and a fire tender officer. At Williamtown, three men are kept on rotating shifts, seven days a week, in case a civil aircraft travelling along our coast has to make a forced ‘landing there. So, the information .that I obtained proved Group Captain -Chapman’s .statement .to .be untrue.

Because -permission’ was refused the members df .the flying bowling club - quite a number of whom were, but are no longer, supporters of ‘the Government - had to engage a bus to convey them ‘to Mascot, 130 miles -away, to board the charter plane to travel to Broken Hill. That -bus left Wallsend1 at 5 p.m. on -Friday, 22nd April. They arrived -back -at Mascot about midnight -on Monday, Anzac Day, :25th April, and then had to -take -the bus :back to Wallsend. As a result of the bungling by the Air Force, they arrived ‘home at 5 a.m. on Tuesday and -so were unable to ‘go to work that day.

The members of the flying bowling club have good reason to be very concerned about the treatment that they received. They know that Williamtown aerodrome was built with the taxpayers’ money; they know that we are not .at war; they know .that on the occasion in question there were no night flying operations, and -they -know that the permission which they sought could have been granted to them. If a similar request had been ,made by big business in Newcastle - Broken Hill Proprietary Company Limited, for example - permission would have been granted without hesitation. If such a request is made by B.H.P. in the near future! am sure that it will ‘be granted.

Honorable members come into this Parliament in the .hope that they can have grievances such as this rectified, but their appeals fall on deaf ears. On one occasion, the honorable member for Moreton (Mr. Killen) when criticizing the Government said that ‘he might as well be back chasing sheep. If what I am saying now is falling on deaf ears, I might .as -well .be back chasing crooks because I am taking money under ‘false fretences by being in :this ;place yet not being able .to rectify a .grievance.

In :the few -minutes remaining at my disposal, I want to refer to “the AuditorGeneral’s report ion the .Joint ‘Coal Board for the year -ended 30th June, 1960. -When referring to the -coal industry fund the AuditorGeneral stated -

A further £75,000 was paid from the amount of £150,000 approved by the Federal Cabinet as a grant towards the relief of unemployment in the Cessnock area, ‘leaving £25,000 undistributed at 30th June, ‘I960.

Mr Curtin:

– I thought the Minister said that there were no unemployed?


– That is what the Minister has told -us. My electorate has been hit :har.der by unemployment than has any other electorate in the Commonwealth. Since 1952 about 7,000 miners have been re trenched and have had to find alternative employment. Unfortunately, most of them have hadto travel 70 miles from their homes to obtain this employment. The local councils in the areas where there are still a good many unemployed miners have exhausted their finances in providing work. But according to the Auditor-General’s report, £25,000 is being kept in kitty while men in my electorate are unemployed!


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

Question resolved in the affirmative.

House adjourned at 11.17 p.m..

page 2430


The following answers to questions were circulated: -

Special United Nations Fund for Economic Development

Mr Cairns:

s askedthe Minister for External Affairs, upon notice: -

  1. Was the Australian Government asked to provide a comment on the report of the Committee of Nine, submitted in accordance with General Assembly Resolution 724b (viii), 1953 (Special United Nations Fund for Economic Development)? 2., If this comment was not submitted, why not?
  2. Did Australia become a member of the ad hoccommittee on the question of the establish ment of the fund; if not, whynot?
  3. Was the fundestablished?
  4. Did Australia make any contribution?
  5. How many governments have pledgedcon tributions to the fund?
Mr Menzies:

-The answers to the honor able member’s questions are as follows: - 1 and 2. The Australian Government’ with all other members of the United Nations was invited by the Secretary-General on 23rd September, 1953, to comment on the report of the Committee of Nine submitted in accordance with General Assembly Resolution No. 724b (viii), 1953 (Special United Nations Fund for Economic Development). The Australian comments were sent to the SecretaryGeneral on 8th June, 1954. A copy is attached (see Annex A).

  1. Australia did not become a member of the ad - hoc committee which . was established as a result of General Assembly Resolution No. 23(X) of9th December, 1955. In this resolution the General Assemblyrequestedthe Secretary-General to invite member States and members ofthe specialized agencies to transmit to him their views on the establishment, role, structure and opera- tions of a Special United Nations Fund for Economic Development. The ad hoc committee established under the resolution was given the task of analysing the comments provided by governments in response to this invitation. The sixteen members of the ad hoc committee were designated by the President of the Assembly and approved by the Assembly at its 553rd Plenary Sessionon 19th December, 1955. These members were Canada, Chile, Colombia, Cuba, Egypt, France, India, Indonesia, The Netherlands , Norway, Pakistan, Poland, the Union of Soviet Socialist Republics, the United Kingdom, the United States of America and Yugoslavia. In 1957, the Assembly decided to add three members to the committee to take account of increases in membership of the United Nations. The three new members were Italy, Japan and Tunisia. 4,. 5and 6. The fund has not been established. The findings of the ad hoc committee were that, while the re was some support for the establishment of the fund,there was insufficient agreement on theform the fund should takeand the amount of finance which should be made available to it. While some countries, including countries of the Communist bloc, have specifically stated their willingness to contribute to such a fund, the majority of other countries have taken the position that there are already in existence many international aid. institutions and that consideration of the establishment of a Special United Nations Fund for Economic Development should be deferred until further progress is made in achievingsome measure of disarmament.

The Australian Government . is sympathetic towards the aim of the proposed special fund of accelerating the development of the less developed countries. Australia’s interest in furthering - this objective has already been expressed in various practical ways, particularly through her contribution to the ColomboPlan.

At theEighth Session of the United Nations General Assembly, Australia gave its support to Resolution No. 724a, under which governments undertook to ask their peoples, when sufficient progress had been made in internationally supervised world-wide disarmament, to devote a portion ofthe savings thus achieved to an international fund for development. Establishment of a Special United Nations Fund for Economic Development, irrespective of the conditions envisaged in that resolution, would,however, bedependent, in the first place, upon the attitudeof the capital exporting countries, since only by their support can the flow of international . capital be significantly increased. .

Australia is herself engaged in a process of economic development, both within her own borders and in her territories, including trusteeship areas. The greater part of this development is being financed from Australian savings, but these domestic savings are not large enough to maintain an adequate rate of expansion. They are being supplemented by overseas capital, privately invested, or borrowed by theAustralian Government. Australia is thus a net importer of capital and the resources available to her for assisting the development of other countries are limited:

In view of Australia’s own developmental needs and her existing obligations to assist international development and relief, and also because the time and circumstances in which the proposed special fund may be established cannot yet be foreseen, the Australian Government is unable to indicate what degree of material support for the special fund, or any similar project, might be expected from. Australia.

It will be appreciated, therefore, that any comments made at this stage on the detailed organization of the proposed fund cannot be taken as a commitment of any kind that Australia will contribute to the fund if and when it is established. Nor’ should they be taken as final or complete. With these provisos, the following comments are offered on the report of the committee of nine.

Comments on Expert Report.

Contributions (Conclusion 1). - The system proposed for financing the special fund by government contributions, or pledges to contribute, renewable from year to year seems to present considerable ‘difficulties as a. method of financing economic development. Development is a long-term process and’ countries would be reluctant to undertake developmental work unless they were sure they would have access to sufficient funds to carry the work through to completion. The fund administrators would be unable to give assurances beyond the total of short-term pledges in hand and this might prove a considerable limitation to the fund’s operations.

For contributing countries, the annual contribution system may have some attractions, particularly by providing frequent opportunities for reviewing progress. However, in practice the contributing countries would be under strong pressure to renew their pledges on the grounds that if they failed to do so, developmental work which had been begun would be brought to a standstill. In effect, therefore, the contributing countries would be led into financial commitments of uncertain amounts for’ years to come, a prospect which it would be difficult for many governments ‘to face .

It is appreciated that the committee reached its. conclusion after balancing various advantages and disadvantages of this and other systems. It is suggested, however, that further consideration needs to be given to the method of financing which has beenproposed.

Use of Contributions (Conclusions 9 and 10). - The Australian Government would attach importance to the limitations proposed by the committee on the conversion of contributions into other currencies and into goods and services. This is not merely a short-term consideration arising out of exceptional post-war conditions, but is derived from the wide fluctuations in international reserves experienced by Australia from time to time and from the shortages of particular commodities, which can emerge fairly quickly in an expanding economy.

Principles and Policies of Operation (Conclusions 12 to 34). - No detailed comments are offered on the committee’s conclusions on principles and policies of operation, but; in general, they emphasize the problem which exists of drafting criteria for; employing funds which will satisfy the understandable requirements of, contributing countries andyetnot impose unduly restrictive conditions onreceiving , countries; The Australian practice under the Colombo Planis to apply the minimum of broad criteria, but the special fund wouldin all probability need more formal tests for determining the eligibility of countries and their developmental proposals.

It is assumed that the fund’s resources would not only be used for assisting individual projects, but might ‘also be allocated for general developmental programmes. In some countries individual projects may not. be sufficiently under the control of the centralgovernment for that government to give guarantees or assurances about their progress,

Distribution among Governments (Conclusions 35 to 37). - In the event of applications for assistance exceeding the availability of funds, the considerations set out by the committee might not be sufficient to determine priorities in allocations between countries. However, it is difficult to see how the committee could do much more at this stage to draw up a scale of priorities.

Grants and Loans (Conclusion 38). - The proposal to allocate part of the special fund’s resources in the form of long-term, low-interest loans raises considerable difficulties. It is difficult to see a workable basis on which the fund administration could assess rates of interest for different countries.

Control and Management (Conclusions 58 to 86). - No detailed comments are offered at this stage on the proposals for the control and management of the special fund, but in general the cost of administration should be kept down and, as far as. practicable, existing United Nations resources made use of.

Workers’ Compensation Acts

Mr Whitlam:

m asked the Prime Minister, upon notice -

Did he take any steps to discuss with the Premiers the co-ordinationof Australia’s score of workers’ compensation acts; State, territorial and federal, aboutwhich I asked a question without notice on 3 1st May last?

Mr Menzies:

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

The co-ordination of workers’ compensation acts was not discussed at the Premiers’ Conference in June, 1960. The provision of compensation for the large majority of employees in Australia is governed by State legislation and the question of co-ordination is primarily a matter for the States.

Superior Courts in Australian Territories.

Mr Whitlam:

m asked the Minister for Territories, upon notice -

  1. Under what acts, ordinances or regulations have supreme or other superior courts been established in or for the Territories? ,
  2. Who are the judges of these courts?
Mr Hasluck:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– The answers to the honorable , member’s questionsare as follows: - l.The supreme or other superior courts in or for the Australian Territories together with the legislation under which they have been establishedare as follows:- (i). Supreme Court of the Northern Territory - Supreme Court Ordinance;191 1-1954;

  1. Supreme Court of Norfolk Island - Norfolk

Island Act 1957;

  1. Supreme Court of Papua and New Guinea - Papua, and New Guinea Act 1949- 1960:
  2. Central Court, and Court of Appeal of

Nauru - Judiciary Ordinance 1957;

  1. ’ Supreme Court of Cocos (Keeling) Islands - Supreme Court Ordinance 1955.

    1. Supreme Court of Christmas Island -

Christmas Island Act 1958-1959.

The practice and procedure of the Supreme Courts of the Territories of Papua and New Guinea, Norfolk Island and Christmas Island respectively are regulated by the following ordinances: -

Supreme Court Ordinance (No. 2) 1949 of the

Territory of Papua and New Guinea;

Supreme Court Ordinance 1960 of the.

Territory of Norfolk Island;

Supreme Court Ordinance 1958 of the Territory of Christmas Island.

  1. The following are judges of territorial courts: -

    1. . Northern Territory - His Honour Mr.

Justice L. E. Clarke (Acting);

  1. Papua and New Guinea - Chief Justice His

Honour Mr. Justice Alan H. Mann, His Honour Mr. Justice K. T. Gore, His Honour Mr. Justice E. B. Bignold, and His Honour Mr. Justice Brennan (Acting);

  1. Norfolk Island - Appointment of Mr.

Justice R. M. Eggleston pending;

  1. Nauru - His Honour Judge F. R. Nelson (Central Court), His Honour Mr. Justice Alan H. Mann (Court of Appeal);
  2. Cocos (Keeling) Islands - Vacant;-
  3. Christmas Island - Vacant.

The vacancies at Cocos and Christmas Islands arose from the death of the Judge of the Supreme Court, of the Northern Territory and will be filled when a permanent appointment is made to that position.

Papua and New Guinea

Mr Clyde Cameron:

on asked the Minister for Territories, upon notice -

Why did the Administration in the Territory of Papua- and. New Guinea, call public tenders for the sale of one of its tractors with dozer attachment at Lae when on the same day it invited tenders for the supply on hire of a tractor and dozer at (a) Lae, (b) Madang, (c). Wewak and (3) Kavieng?

Mr Hasluck:

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

The. question was referred to the Administrator, of Papua and New Guinea, who was unable to identify- any of’ the transactions- to- which- it’ purported to refer. If the honorable member canmake his* question more specific further inquiries, will be made. The general practice is that- tractorsare only declared for disposal’ when- they are. unfit for further use.

Royal Australian Navy

Mr Beazley:

y asked the Minister representing the Minister for- the Navy, upon notice -

  1. Did an Admiralty committee under Admiral Wodehouse in 1939 condemn as inadequate a lifesaving, system, in the Royal Navy based primarily, on Carley- floats?
  2. Did another Admiralty committee’ in 1946 find’ that in the Second World War only 10 per cent, of Carley floats became waterborne and’ that as a consequence two-thirds of naval deaths were due to drowning and exposure?
  3. If so, why were Carley floats used as the means of safety in H.M.A.S. “Woomera”?
  4. Why was the modern R.F.D. equipment, demonstrated to parliamentarians, giving the impression that the Navy had been: modernized in this- respect, when- a dangerous ship like an ammunition ship was not fitted with this- equipment?
  5. Is it accepted by the Royal Australian Navy that, in most cases of loss of ships in action, boats cannot, be lowered?
  6. When is the automatically inflatable raft with tent protection, distillation and short-term survival pack to become standard equipment in the Royal Australian Navy?
Mr Freeth:
Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

– The Minister for the Navy has supplied the following answers: -

  1. Yes.
  2. Yes, although the figures quoted obviously varied with- operational areas.
  3. The floats fitted on H.M:A.S. “Woomera” were not Carley floats, but pattern 23 cork cellular life floats. In addition to these floats “ Woomera “ carried eight cork life belts and an inflatable type life jacket for each man.
  4. If modern inflatable life rafts, similar to R.F.D. (i.e., an inflatable raft, tent- protection, sHort-term survival pack) was demonstrated to parliamentarians, it was- so demonstrated because’ it is- standard equipment in all R’.A.N. combatant ships except the Battle class destroyers: TheBattle Class destroyers are to be provided with this equipment at their next refit. “ Woomera “ was not provided with such equipment because she was invariably employed in close vicinity of Melbourne and Sydney when dumping, and was close to search and rescue facilities.
  5. Yes. Boats are not considered in the allowance of life-saving equipment for ships lost in action.
  6. The automatically inflatable- raft with tentprotection, and short-term survival pack is now provided’ for all combatant ships except the Battles; The- latest type of- distillation- equipment to bc supplied: is the- subject of experiments at present in’ progress’ in the Royal Navy and’ when suitable- equipment’ has been’ proved it will beprovided in the R.A.N.


Mr Malcolm Fraser:

r asked the Treasurer, upon notice -

  1. Of the 539 advances made by the Development Bank between the 14th January and the 30th June, 1960, how many were classified as (a) rural and (b) industrial?
  2. What was the average advance made in the (a) rural and (b) industrial sector during this period?
  3. What is the average time for which advances have been made -in the (a) rural and (b) industrial sector?
  4. At what annual rate were advances being made in June, .1960?
  5. If this rate were continued, when would the bank’s funds become exhausted?
Mr Harold Holt:

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

Information on parts 1 to 4 of the honorable member’s question has been supplied by the Commonwealth Banking Corporation as follows: -

Loans approved by the Commonwealth Development Bank between 14th January and 30th June, I960, were classified as follows: - Rural, 457; industrial, 82; total, 539.

In the same period, the average amount of loans approved was - Rural, £4,000; industrial, £24,000.

The average term of these loans was - Rural, ten years; industrial, 6 years.

Lending during June, 1960, was at the annual rate of £12,000,000.

With regard to pan 5 of the honorable member’s question, the Commonwealth Banking Corporation stated in its recent report to Parliament that as at 30th June, 1960, .”it seemed probable that the bank would need additional resources during the financial year J960-61 to .enable it to continue meeting -the calls for developmental assistance within .the .terms of .its charter. It :is mot ‘to be inferred from ‘this, of course, .that the Development Bank .will be without the funds to carry on its important work during the current financial year. The Development ‘Bank’s funds position will .be /kept under close .review by the Commonwealth Banking Corporation Board .and also by the Government, from the viewpoint of ensuring the adequacy of the funds at the bank’s disposal.

Industrial Arbitration

Mr Daly:

9;Daly asked the Minister for Labour and National Service, upon notice -

  1. Of the cases where financial assistance to union members has been approved but no claim for payment has been made by the applicant, which were referred to in his reply to my question placed on ‘the notice-paper on 23rd August, what, in each of these cases, was the (a) name of the applicant, (b) union involved, (c) amount of assistance approved and (d) solicitor or barrister engaged?
  2. What are the (a) names and (b) business addresses of the barristers and Queen’s counsel who were engaged in the cases listed in his reply to my question?
Mr McMahon:

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


When financial assistance is aproved by the Indus- whether the applicant is awarded costs against trial Registrar, the amount of assistance payable the other party. Until such assistance is claimed depends on the costs of the action and on no specific amount is determined.

2 -


Mr Cairns:

s asked the Minister for Labour and National Service, upon notice -

  1. Can he say whether Communists in trade unions serve the interests of their overseas principals?
  2. Has it. been claimed by the Prime Minister that in so doing these persons represent a danger to Australian security?
  3. Did the Government seek to prevent this danger by its secret ballot legislation?
  4. Has this secret ballot legislation been sabotaged by the Government’s political opponents by the use ofunity tickets?
  5. If so, is it the intentionof the Government to prevent, by law, the use of unity tickets, or does it propose only to continue to speak against them?
Mr McMahon:

– The answers to the honorable member’s questions are as follows: - 1 and 2. The honorable member has by implication answered his own question as he recognizes that Communists in trade unions serve the interests of their overseas principals. Presumably the honorable member is referring to the Prime Minister’s speech at the Olympic Pool, Melbourne, on 23rd September, in which case I invite his attention to the text of the whole speech.

  1. The secret ballots legislation of this and the previous Labour Government had as a principal objective the elimination of the ballot rigging, which was one means by which the Communist Party was endeavouring to gain control of trade unions. 4 and5. Undoubtedly the use of unity tickets and the ambiguous attitude of the Australian Labour Party to them confuses union members when considering how they will cast their votes. That unity tickets are in use at all is a reflection of the failure of the A.L.P. to recognize the Communist threat to the trade unions. The Government will not cease in its efforts to draw to the attention of trade unionists the Communist purpose behind these unity tickets.

Cite as: Australia, House of Representatives, Debates, 26 October 1960, viewed 22 October 2017, <>.