23rd Parliament · 2nd Session
Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.
– I address my question to the Prime Minister. Will he inform the House what progress was made by the Premier of South Australia, who made a trip to Canberra recently, in seeking Commonwealth assistance in the standardization of the rail gauge between Port Pirie and Broken Hill?
– I had a very informative conversation with the Premier of South Australia, who advanced two or three aspects of the matter for my consideration. I told him that Cabinet was looking into it.
– My question is also directed to the Prime Minister. In view of the fact that, for a moderate capital cost, approximately £10,000 a week in running costs will be saved by the standardization of the rail gauge from Broken Hill to Port Pirie, will the right honorable gentleman give an assurance that this important matter will receive very early consideration?
– The matter to which the honorable member has referred is at present engaging the attention of Cabinet and will receive further consideration at our next meeting.
– In reply to a question which was asked of him last week by the honorable member for Melbourne Ports the Prime Minister expressed his concern at the future of the aircraft industry, and the apprehension felt by employees in the Commonwealth aircraft factory at Port Melbourne about their future employment. The Prime Minister said that he intended to make a statement this week about the Government’s plans for aircraft construction “m Australia.
– 1 said that I hoped to make a statement this week.
– 1 thought you said that you would.
– No, I did not say that.
– Relying on the Prime Minister’s hope that he would be able to make a statement this week, 1 ask him whether his hopes will be realized and whether he will make the statement either to-day or to-morrow?
– I cannot tie myself down to a day or two on a matter such as this, which is one of very great importance. The honorable member for Melbourne Ports very properly is concerned about it. As the Leader of the Opposition knows, it is not easy to make a lengthy examination of these matters while the House is sitting. At our last Cabinet meeting we had some discussion on the subject. 1 regard the matter as one of urgency. Whether it can be resolved in the next two days, I do not know, but it will be resolved at the earliest possible moment because there are many people concerned who ought to know the position at the earliest opportunity.
– I direct my question to the Minister for Health. Because of the cost and the nature of the drug cortisone, will the Minister consider including it on the pharmaceutical benefits list rn all cases in which a medical practitioner sees fit to prescribe it, without limiting the medical practitioner to specified disabilities?
– The question of the inclusion of drugs on the pharmaceutical benefits list is not determined purely on costs. Cortisone is one of a group of drugs which exert the most profound effects on physiology and which have to be used with the greatest caution. The Government is advised as to whether it should make such drugs available, and upon what conditions, by an expert committee of doctors and pharmacists, upon which the doctors predominate. It is guided by the advice of this committee. So far the committee has not considered it advisable to make cortisone generally available. I realize that some doctors consider that the restrictions are perhaps too narrow but, as this is a matter of opinion, no absolute verdict can ever be obtained upon it. In the meantime I am sure the honorable gentleman will agree that it is essential that such restrictions as are advised by the committee should be adhered to. The use of cortisone and of cortisone derivatives has been steadily increased by the committee from the time when cortisone, the original member of this series, was first placed on the list.
– Is the Treasurer aware that Mr. Warren D. McDonald, Chairman of the Commonwealth Banking Corporation, has criticized hire-purchase companies for charging high rates of interest? If the Treasurer is aware of this, will he direct the Commonwealth Bank to enter into the hirepurchase field at lower interest rates than those being charged by private companies?
– I know Mr. Warren McDonald. He is a very sensible man, and we very much value the job he does as Chairman of the Commonwealth Banking Corporation. I do not know, in detail, the contents of any recent speech he has made. I always read with interest reports of what he says, but I shall be glad to discuss with him more fully, when a convenient occasion arises, the views he holds on matters of the kind referred to by the honorable gentleman.
– My question is addressed to the Minister for Primary Industry. I direct his attention to the fact that there is considerable concern among the wheat-growers in the northern parts of New South Wales, which were hit by drought last year, as to the method of payment for wheat from the forthcoming harvest. Can the Minister inform the House of some of the reasons which caused the Government to determine the present basis of payment to the wheat farmers?
– I dealt with several aspects of this matter yesterday, in reply to a question. But rn the main, I point out to the honorable member that we start off this wheat year with a surplus of 62,000,000 bushels and an overdraft corresponding to that amount, approximating £30,000,000. Having regard to the record intake, which is estimated to be 225,000,000 bushels this season, it must be evident to everybody that it will be about March or April next year before we really start to sell this crop. The proposal to make an advance of lis. a bushel to growers, and to make it in two payments instead of one is brought about, in the main, by financial reasons, because of the overdraft that now exists on the No. 23 pool, as well as the fact that we will not commence to sell No. 24 pool wheat until about April next year. After all, the proposed total advance on the basis of 9s. a bushel, less freight, will in fact be £5,000,000 more than the advance payment of Us. last year, because of the increase in the size of the crop. That is the estimate given to me by the Australian Wheat Board. Growers must also remember that there is a provision in the Commonwealth Bank (Rural Credits) Act which requires that repayments must be made within a period of twelve months. Obviously it has not been possible to do this in respect of the No. 23 pool; nor will it be possible in the case of the No. 24 pool. There is also a possibility that at the end of next year we shall have a surplus of more than 100,000,000 bushels of wheat, even if we maintain the high rate of selling that we have achieved during recent months. We actually sold 181,000.000 bushels in the last wheat year, and even if we maintain that rate - and we hope even to better it - there still remains the possibility of our having an overdraft of £30,000,000 in March of 1962. Having regard to those facts, and bearing in mind that the Government has given protection to primary industries in every possible way, I suggest to the honorable member that it is not too much to expect the wheat-growers to wait ten or twelve weeks for a small proportion of the first advance, that proportion amounting to 2s. a bushel, especially when the Government has insisted on maintaining the total amount of the first payment at lis. a bushel.
– My question is addressed to the Prime Minister. Does the Government believe that it is vitally necessary to our progress and solvency to increase exports? As one of the greatest impediments in the way of increasing our exports is represented by the restrictions that are placed by foreign companies with factories in Australia on the export of their products manufactured here, will the Government institute an inquiry to ascertain the number of overseas companies carrying on manufacturing operations in Australia, either directly, through subsidiaries or by means of the granting of franchises, which will not permit the free export of their Australian production which would compete in overseas markets with goods produced by those companies in their home countries? When the Government is preparing legislation to deal with restrictive practices, will it make provision to cover this kind of procedure?
– The answer to the first part of the honorable member’s question is, of course, “ Yes “. We do attach great importance to the development of exports, and particularly, having regard to the prevailing circumstances, exports of manufactured or processed commodities, in addition to our great staple exports in the primary field. We are aware of some of the restrictions to which the honorable member refers. I know they are under the active consideration of my colleague, the Minister for Trade, in association with two or three of his colleagues in the Cabinet. The honorable member for Darling need not fear that that aspect of the matter will be overlooked.
– Has the Prime Minister’s attention been directed to the allegation that it was the intervention of the security service that prevented a university lecturer from Armidale from becoming a lecturer at the University of New South Wales? I refer, of course, to Dr. Russell Ward. If the right honorable gentleman has seen or heard of these allegations, has he any comment to make on them?
– Who asked you to put that question?
– I am a wide-awake member.
– 1 referred, at a somewhat unreasonable hour last night or this morning, to this case, but I am very happy to have the opportunity of re-stating the position, because 1 have observed a further reference to it in the newspapers this morning. As soon as I read about this allegation I, of course, got in touch with the Commonwealth security organization to find out what substance there was in it. The answer rs that it is not the business of the Commonwealth security organization to supply security information about applicants for appointment either to the Wagga Teachers’ Training College, which was one of the places mentioned, or to the University of New South Wales, or to any other State institution, which would include the State universities. In point of fact, the Commonwealth security organization did not supply 3ny information at all in relation to these matters.
I think that the confusion in some minds arises from this fact: The States, all of which conduct institutions of one kind or another, have their own police departments, which in every instance have a special branch dealing with matters of security from the State point of view. In these circumstances, it may well be that a State government would make some reference to its own special branch or to its own police authorities. That is the business of the State governments. But this bogy about the Commonwealth security organization, as if it were all-pervading, butting in where it was not wanted, ought to be destroyed. The fact is that there is no foundation in this case, or in another to which I referred yesterday in this House, for the allegation that the security organization of the Commonwealth had some part in what happened. I do urge honorable members, in the interests of this country, to seek to draw a proper distinction between the security activities of the Commonwealth and of the States. Let me remind honorable members that the Commonwealth organization is not a party organization; it began under the previous Government, very properly, and it has been continued under us. I reject the idea, and I hope that honorable members will resent it, that every time a report has been made about some one, it must have been made by the Australian Security Intelligence Organization.
Here are two cases that have been ventilated in this House. They have been given great headlines in the newspapers. But each contains an utterly false allegation about the Commonwealth security organization.
– I wish to direct a question to the Minister for Labour and National Service. As the Minister yesterday disclosed that he had prior knowledge that Pope Industries Limited intended to retrench employees irrespective of the adverse effects of the Government’s economic policy, will the Minister say whether he has advance information concerning retrenchments by any other employers? If he has, will he disclose such information to the House so that honorable Members may be better able to assess accurately the impact of Government policy and the possible further deterioration of employment and production?
– The honorable gentleman has slightly misrepresented what I said in the House yesterday. I did not say that I had advance information of retrenchments or lay-offs by Pope Industries Limited. What I said was that the decision had been made some time in October. T now add that after the decision had been made, it was communicated to my department. That is a totally different position from that represented by the honorable gentleman. It is not my business, as Minister for Labour and National Service and in charge of the Commonwealth Employment Service, to ask companies whether they will give us advance information. That is quite impracticable. But if the companies do give us notice of intention to lay off employees, we will do our best to see that the employees are quickly placed in employment.
– I desire to ask the Postmaster-General a question concerning the proposed extension of the television studios of the Australian Broadcasting Commission in Gordon-street, Elsternwick, in Victoria. Will the Postmaster-General tell the House whether he has come to any deci sion in response to the strong representations made to him by the Caulfield City Council and the residents in the area of Gordonstreet, Elsternwick, objecting to the extension of the Australian Broadcasting Commission’s television studies in the area. If he has not made any decision about the proposed project as a whole, can he say whether he has made any decision about the proposal concerning the Gordon-street frontage?
– This is a matter which the honorable member referred to me some considerable time ago, and which I have since discussed with the chairman of the Australian Broadcasting Commission and from time to time with the honorable member again. I am now in a position to inform him that the commission does not propose to proceed with the purchase of the Gordon-street frontage at the Ripponlea studios. The previous proposal has been abandoned, and the commission is now considering an alternative proposal, but as yet has made no decision on it. The new proposal will not in any way affect the statement I have just made about the Gordonstreet frontage.
– I ask the Treasurer a question. It is now three weeks since the right honorable gentleman stated that the matter of the rates of interest payable on savings banks deposits would be taken up at once by the Reserve Bank of Australia with the private savings banks, the State savings banks and the Commonwealth Banking Corporation. As this is one feature of the Treasurer’s plans which has not been further unfolded, I ask him: What is delaying an announcement of the new rates, and when will it be made?
– This matter was, of course, directly in the range of action by the Reserve Bank of Australia in its dealings with the savings banks. It is not a matter on which direction goes from the Commonwealth Government to the Reserve Bank Board. I shall see whether I can obtain information about developments in the matter, and I shall inform the honorable member and the House before it rises for the recess.
– My question, also, is directed to the Treasurer. As indecision is arising concerning the Government’s declared intention that 30 per cent of the invisible funds of assurance companies and superannuation schemes shall be invested in government securities, can the right honorable gentleman say on what basis this levy will be worked out? Apart from cash in hand, will it be calculated on the cost of the invisible securities held, market value, book value or face value, and at what date? If the right honorable gentleman is not in a position to give this information now, will he do so as soon as possible and thus permit the necessary action to be taken over a period in orderly fashion rather than at the time when the relevant legislation is introduced?
– I am not in a position to give a precise answer on points of detail raised in the question. The Government has recognized at all times that some of the life assurance companies would need a transitional period in order to satisfy the requirements which I indicated in general terms. Our intention is to provide such a transitional period in any legislation submitted to the House for its consideration. I have already told the House that the Government will bring the legislation forward in the next session, and I hope it will be introduced quite early in the session. I shall give thought to the points raised by the honorable gentleman’s question, and shall see whether any more precise indication can be given before the legislation is introduced.
– I address my question, also, to the Treasurer. When does he expect the committee appointed to examine our taxation laws to report to the Government? Does he expect to be in position to present the report to the House when it re-assembles early next year?
– I can assure the honorable member that the committee has been very actively engaged on the task which it has been set. It has applied itself to that task quite steadily, and I think I express the views of the members of the committee, whom I met when they held their series of meetings in Canberra recently, when I say that the task has proved to be rather heavier than they imagined when they set about it. I doubt whether a report will be available by the beginning of the next session of the Parliament, but I shall make inquiries and see whether the time at which it can expected can be estimated.
– Will a report be available before the double dissolution occurs?
– The honorable gentleman does not want a double dissolution.
New Car Registrations
– I ask the Minister for the Interior whether he has had an opportunity to check on the serious allegations recently made that in Canberra there was a rush to register new cars on the day before the Treasurer’s economic statement. Is it a fact that one of the people who made this allegation registered a new car himself less than a week before the Treasurer’s statement?
– I did check this allegation. I found that on the day before the Treasurer’s statement was made 34 new cars were registered in the Australian Capital Territory. I found also that during the previous week 60 new cars had been registered, and that the average weekly new car registrations during the month of October were 63. I do not think, therefore, that it can be said that there was any undue rush to register new cars, having regard to the fact that it was well known that the Government was contemplating some economic measures to restrain excessive spending.
It is quite true, too, that an article appeared in a Melbourne newspaper, the Canberra correspondent of which himself had registered a new car during the previous week. Whether that indicated that this gentleman had some prior knowledge, or whether it merely indicated that he was exercising the same sort of judgment as other people, I would not care to say.
– I ask the Minister for Primary Industry a question supplementary to that addressed to him by the honorable member for New England. In reaching its decision to divide advances to wheat growers into two instalments, one of 9s. in February and the other of 2s. in April of next year, did the Government consider the extra financial burdens certain to be borne by Victorian growers because of the bagging, temporary storage and transport costs resulting from the record crop? Did the Government consider the effect of its own credit squeeze which, despite assurances, is preventing farmers from obtaining necessary seasonal financial aid? Is the Minister aware of the hostile reaction of the Victorian Wheat and Woolgrowers Association and the Australian Wheat Growers Federation to this measure? Having regard to these matters, will the Government reconsider its decision with a view to giving special consideration to farmers who may encounter difficulty in financing preparations for next year’s operation?
– The honorable member asks whether consideration was given to the fact that certain Victorian growers will have to bag their wheat. I remind him that ever since the inception of the stabilization scheme 4d. a bushel extra has been paid to those growers who have to bag wheat. Therefore, ample provision is made for them.
– That is only when they deliver in bags. The honorable member for Bendigo is referring to those who have to store their wheat in bags.
– I remind the honorable member that in certain other States, South Australia and Queensland in particular, most of the wheat is delivered in bags. The honorable member for Bendigo asked whether finance would be available for wheat-growers to enable them to proceed with their normal work. He must be aware that special provision was made to ensure that primary producers will be able to obtain the finance necessary for the production of their crops and especially for the production of the extra quantity we hope to see produced for export.
The honorable member also mentioned a protest by the Victorian wheat-growers. There have been protests throughout the industry. If the honorable member is asking whether I am prepared to recommend that the Government reconsider its position, I refer him to the answer I gave to the honorable member for New England. All we are asking the wheat-growers to &<y is to wait for eight or ten weeks for part of the payment. We believe that this is necessary. The average production this year is three bushels per acre above the average on which payment was previously made. This will more than compensate for any extra costs that may have arisen in the industry during the past twelve months.
– In view of the statement of the Postmaster-General yesterday that thirteen television channels will be found in the very high-frequency band it seems certain that amateur radio frequency allocations in that band will now be taken for television. Will the Postmaster-General give an undertaking that equally extensive and useful alternative frequency reservations will be made for Australian radio amateurs?
– There is no justification for the assumption that, as a result of the allocation of very high frequency channels for television, the amateur radio operators will be in any way adversely affected. There may be some slight adjustment with respect to these operators just as there probably will be some slight adjustment to make in respect of thousands of other users of the spectrum. This matter is being dealt with by a high level committee under the chairmanship of Professor Huxley, and I am quite sure that when the full report is made it will be found that justice has been done to all users. Amateur radio operators, through their institute, have been given a special representative on the review committee, and I believe that he can be trusted to ensure that their interests are properly watched.
– Can the Minister for the Interior say who selected the site of the- new Tariff Board building in Nationalcircuit between Parliament House and the Hotel Kurrajong - the only road in Canberra which is not planned in a merrygoround fashion? Will the Minister say whether two previous Ministers for the Interior, the honorable member for Chisholm and the honorable member for Paterson, had anything to do with the selection of the site? Does the Minister not think that this site should be retained for parkland and playing centres for the future generations of Canberra? Is it too late to reconsider this blunder, whoever was responsible for it?
– The honorable member for West Sydney very bravely pits his opinion on the Tariff Board site against the very expert opinion of the National Capital Development Commission. The commission has given careful consideration to the requirements of this capital for parklands. In my view, and in the view of most people who have seen the detailed proposals which the commission has prepared in the last few years, it has made adequate provision for parklands. The site of the Tariff Board building is in the central administrative triangle area of Canberra, which has been set aside for administrative buildings to house Government departments.
– I ask the Minister for Labour and National Service whether a judge, Mr. Justice Richards of the New South Wales Industrial Commission, recently returned from an overseas journey which was devoted to investigation of the effects of mechanization and automation on the level of employment available in the -community. Has his report been made available by the judge? If so, what is the tenor of the report? Does it broadly coincide with the views held by the Minister himself?
– I have all too frequently heard the argument that large-scale mechanization or, as it is too often called, automation, must necessarily cause unemployment. The argument has always been specious and the conclusions improbable. Because of the decision of Mr. Justice Gallagher in the 35-hour week claim of the coal-mining industry, and also because of the statement by Mr. Justice Richards on his return from overseas that he could find no evidence that automation or large-scale mechanization did cause unemployment, I hope that this argument has now been exploded. I hope also that the claim for a change in hours of work will not be persisted with too much because I think it creates uncertainty in the minds of businessmen and, in the long run, works against the interests of the working man.
– I direct a question to the Prime Minister. In view of the right honorable gentleman’s action this afternoon - I think unprecedented and certainly highly unusual - in giving a detailed answer to a question affecting the operations of the Australian security service, is the House to take it that the rule that questions concerning the security service will not be answered is now at an end? In view also of the very valuable effect of the Prime Minister’s denial of the statements concerning the operations of the security service on this occasion, will the right honorable gentleman in future take the opportunity to deny unfounded assertions made against the operations of the security service? If the Prime Minister will only answer questions where a denial is involved, will he take account of the fact that this will mean that questions affecting the security service which are not answered will appear to the public to have been founded on fact?
– The Prime Minister will follow his usual practice of answering questions as they arise and dealing with them on their merits. I made the statement I made to-day because I have been driven to believe that there is a concerted campaign to deny any virtue to the Commonwealth security organization, a campaign to which four or five members of the Opposition chronically lend themselves.
– Can the Minister in charge of the Commonwealth Scientific and Industrial Research Organization inform the House when the report of the special committee of inquiry into tick control and eradication in northern New South Wales will be released? I ask this question because, when making our appropriation in the last Budget for the tick control and eradication fund in New South Wales, only sufficient was allocated for the first six months of this year pending the outcome of the inquiry. 1 ask the Minister: Is more finance being made available for the next six months?
– The report of the committee was a report to two governments the Commonwealth Government and the New South Wales Government. It is at present being studied by both governments, and I have no doubt that the answers to the rest of the honorable gentleman’s questions will be obvious within the immediate future.
– Is the Postmaster General aware that a number of my constituents in the Blakehurst and Ramsgate exchange area in Sydney have been informed that they cannot expect telephone facilities until 1962 and some even as late as 1963? Is this unfortunate situation peculiar to this area, or does it obtain in many other parts of Australia? Can the Minister hold out prospects that these people, many of them in business, may get urgently needed telephone installations much earlier than the department now expects?
– I do not know the particulars of the case referred to by the honorable member for Barton, but I will have a look at the matter and give him some reliable advice as to the prospect for the provision of services in that area. The Postal Department always tries to provide services as quickly and as early as possible.
– My question is addressed to the Minister representing the Minister for Civil Aviation. Is the Department of Civil Aviation using, or has it tested, a system known as “ R.A.E.”, which was developed by the Royal Aircraft Establishment and which has been adopted by the Civil Aeronautics Bureau of the United States of America? This is a system which simplifies day or night approaches for jet aircraft and provides a greater safety factor than other methods.
– I will convey the honorable gentleman’s question to my colleague in another place and obtain a full answer for him. My own knowledge of this landing aid is quite limited. I have read about it, but I have never used it or seen it used. I understand that the Americans have taken an interest in it, and that the Department of Civil Aviation in Australia is experimenting with it. I must point out, however, that a landing aid which brings aircraft in completely unassisted, relying on a pilot’s visual contact with the ground, is the sort of thing that must work every time. Therefore, there must be a lot of experimentation with it before it is finally adopted.
– I preface a question to the
Minister for Social Services by stating that recently when an age pensioner couple buried their dependent fourteenyearold son their application for funeral benefit of £10 was rejected. Is the Minister aware of this policy? If not, will he remedy the matter? If he is aware of it, will he tell me what the difference is between paying £10 towards the funeral expenses of a pensioner and paying £10 towards the funeral expenses of a pensioner’s dependent son?
– The complete explanation of the situation described by the honorable member is that the Social Services Act provides for the payment of funeral benefit for age and invalid pensioners and for nobody else. So long as this restriction remains in the Social Services Act it is beyond my power, and beyond the power of any other Minister, to extend the funeral benefit to cover the death of any other member of the community.
– Is the Postmaster General aware that foreign language broadcasts are still being included in a session named “ Victoria’s Labour Hour “? Does he know that these foreign language broadcasts are not helpful in promoting the assimilation of migrants into our community, nor are they appreciated by Australians? Has he any control over such broadcasts? If so, will he take the necessary, clearly apparent and appropriate action?
– The question of broadcasts in foreign languages has been dealt with on several occasions during the last two or three years by the Australian Broadcasting Control Board. The board has certain authority in matters such as this. It has held discussions from time to time with the Australian Federation of Commercial Broadcasting Stations and interested licensees, with the result that a certain procedure has been laid down. I have not all the details of that procedure in my mind at the moment, but it relates particularly to certain things like religious services and sometimes services which are designed for instructional purposes. However, I shall be glad to look into the matter and give the honorable member full particulars of the use which is permitted to be made of foreign languages in broadcasts.
– I direct a question to the Minister for Trade. Is the Minister aware that primary producers, plumbers, builders and others are again and I emphasize the word “ again “ experiencing serious difficulties in obtaining supplies of water tubing, water piping and so on? Is this scarcity due to inadequacy of plant for manufacturing tubing, or is it due to a lack of export control to prevent tubing going to other countries at the expense of local supplies?
– The shortage does not arise from indiscriminate export to the neglect of local demand, nor is it due to inadequate plant facilities for the production of what hitherto have been our normal needs. There has been a circumstance that I have mentioned before, and I think that it is worth repeating. A couple of years ago there was a very sharp decline in the internal demand for these steel products and the companies concerned very properly, in their own and the national interests, went after export markets. They engaged in commitments that were not terminable over a week-end. However, as soon as the internal demand revived, production was directed to meeting Australia’s needs, while honouring contractual commitments overseas. Where possible, the steel companies concerned Broken Hill Proprietary Company Limited and asso ciated producers terminated the arrangements that had been made overseas so that they would be in a position to supply the Australian market and the New Zealand market, which historically has been supplied by Australia. The phenomenon that we see at present and it is part of the explanation of the current economic policy of the Government is the extraordinary expansion of internal demand which has put an excess pressure on resources within Australia.
– I move -
That Government business shall take precedence over general business to-morrow.
In proposing this motion I have not been unmindful of the views which were put to me by honorable gentlemen opposite when it was felt necessary to propose a similar motion to the House a fortnight ago. It will be recalled that on the following Thursday the Government found time, despite the very heavy legislative programme which has been engaging the attention of the House, to maintain the period available for Grievance Day discussion. I think that all honorable gentlemen are aware that it is the Government’s intention not unsupported, I gather, by all sections of the House to conclude our sittings this week. We still have on the noticepaper some important items of Government business.
Only yesterday the Leader of the Opposition (Mr. Calwell) made the point quite vigorously that the Government should endeavour to provide some further time for discussion of the ministerial statement on foreign affairs. If, with the aid of honorable gentlemen, and by deferring consideration of general business in the way that I now propose, we are able to conclude the business on the noticepaper, other than the statement on foreign affairs and other matters which it is not proposed to take further during this sessional period, it is my intention, on behalf of the Government, to ensure that any time remaining to us is devoted to a further discussion of the statement on foreign affairs.
– I am not as easily caught as that. I am opposed to the Government’s proposition that we should abolish general business to-morrow. Many items on the notice-paper under the heading of general business are equally as important as the statement of the Prime Minister (Mr. Menzies) on foreign affairs. Again I direct attention to the fact that the honorable member for Barton (Mr. Reynolds) has on the notice-paper a motion relating to automatic pension entitlement for ex-servicemen and members of the armed forces who may be afflicted by cancer. There is a motion standing in my name to the effect that this House is of the opinion that the recommendations of the Joint Committee on Constitutional Review, which was established in 1956 and which reported to both Houses in 1958 and 1 959, should be submitted to the people for their approval. We cannot even get a discussion on that motion, let alone have the proposal submitted to the people by referendum.
– You recorded all this a fortnight ago.
– I know, and I am recording it again. I want to ask the Government two questions: First, when will it give the Parliament an opportunity to discuss the report of the Constitutional Review Committee, and secondly, when will it submit the report, which was agreed to by representatives of its own parties, to the people for their approval? The Government is ignoring the report, and it is ignoring the Parliament, too. If ever there was a Treasurer who should wish that he had additional powers at this time to deal with Australia’s economic crisis, it is the present Treasurer. If ever there was a Prime Minister who should wish for an alteration of the Constitution to resolve the problems that have arisen between the two Houses of Parliament, it surely is the present Prime Minister. The Constitutional Review Committee has shown the way by which all those problems can be solved. It is merely a matter of seeking the people’s approval by way of referendum. We want to talk about those matters to-morrow, if we can.
Then there is a long, interesting, informative and valuable proposition that has been advanced by the honorable member for New England (Mr. Drummond) which his own party treats with scant courtesy and which the Liberal Party treats with complete contempt.
– We do not want to hand over to socialization.
– The honorable member for Macarthur accuses the honorable member for New England of advocating something that is socialistic. The honorable member for New England does nothing of the kind. He has proposed a plan for the development of Australia as a whole, and has directed attention to the dangerous situation that exists with 55 per cent, of our population living in the six capital cities.
– Order! The Leader of the Opposition is getting away from the motion that is now before the House.
– I have got in all the propaganda on that question that I want to get in. I will not sell out for a debate on foreign affairs at 2 o’clock in the morning because this Government already has treated the Parliament in a way that no other parliament has ever been treated. This morning at half-past two the Government sneaked in a resolution relating to judges* salaries. The measure came in like a thief in the night. The Government brought in a resolution, after having told the Opposition that it would not do so, hoping that it could push the matter through. Then it expected an informed discussion upon the whole question in the last two days of the sessional period. We do not mind sitting right up until Christmas Eve, and we have no anxiety to have the Government finish up the session. The giggling Gerties on the Government side can laugh as long as they like.
.- I wish to add my still, small voice to support what has been said by the Leader of the Opposition (Mr. Calwell). A fortnight ago, the Treasurer (Mr. Harold Holt) came in here during the guillotine procedures on the Crimes Bill and moved a similar motion, which cut down our discussion on that measure. To-day he has moved a similar motion. We all want to discuss foreign affairs, but there is a pistol held at our heads and we are told that if we do not surrender general business day we cannot discuss foreign affairs. The presentation of the paper on foreign affairs by the Prime Minister (Mr. Menzies) in such a way that there cannot be adequate debate on it is a disgrace to this Parliament. I know it is customary for honorable members supporting the Government to say, “ You did this “, and “ You did that “; but I made a check and found that, in 1949, the last year in which Labour was in government, the Parliament met for 80 days, whereas to-day is the seventy-second sitting day this year.
The Treasurer, who took over from one of the most effective hatchet men in Parliament, started his career as Leader of the House in a very effective way in organizing the business of the House, but in the last eighteen months he has departed completely from the principles upon which he first started. For myself - and I speak for my colleagues also - while it is greatly inconvenient to be here, held up for two or three weeks after the originally proposed date for the adjournment of the Parliament for the Christmas recess, it is our duty to be here, because there are matters of great national moment to be discussed. There are on the notice-paper-
– We have heard all that before.
– lt would not have any effect upon you, and I hope that the people in your electorate understand that you are part of the machinery for cutting down OU] opportunities for debate. We will see whether your effective majority is not substantially reduced at the next election. There are, on the notice-paper, two motions of general business which we wish to debate. There is one, in particular, which has to do with the onus of proof provisions of the Repatration Act. The Minister for Health (Dr. Donald Cameron), on behalf of the Minister for Repatriation (Senator Sir Walter Cooper) made a lengthy speech on that matter in which he attacked the honorable member for Bass (Mr. Barnard) and the arguments he put forward. I was the next speaker - this was some months ago - but I was told, “You will have another chance to speak “; and I objected on that occasion. Now time has gone by. The year is nearly over, the Parliament is going into recess and still I have had no chance to discuss that matter.
That is typical of the way in which we have all been treated by the Government. I will do everything 1 possibly can to prevent the removal of the privileges of ordinary members of Parliament. Such privileges are few enough, and the machinery does not give us more facilities for putting our points of view, whether from the back benches on the Opposition side or the Government side, than there ought to be. Any relaxation of those privileges would be against the best interests of the Parliament. I would expect members supporting the Government, who are so vocal in interjecting, to indulge their volubility in their party rooms and deal with the right honorable hatchet man opposite.
– I notice. Mr. Speaker, that my name has been brought into this debate by the Leader of the Opposition (Mr. Calwell), concerning the resolution which has stood in my name on the business-paper for some time past. I realize the reasons why the Leader of the House (Mr. Harold Holt) has moved that the Standing Orders be suspended in this instance. I want to say to the Leader of the Opposition, who so kindly indicated that he had said what he wanted to say for propaganda purposes, that I am satisfied with the motion that stands on the notice-paper in my name because it also conveys its own message of propaganda and solid truth. So long as it remains on the business-paper it will continue to convey its lesson whereas, I am sorry to say, it might not convey that lesson for very long once it has been debated. I look forward to seeing it debated, but I do not want it debated in the dying hours of the session at an hour when nobody is fit to discuss such an important matter. I hope that it will be possible in the New Year to discuss it at length and in detail. In the circumstances, Sir, and in view of the fact that I went to bed at 4 a.m. to-day, I am not heartbroken because I shall not be called upon to debate this subject forthwith.
.- I support the Leader of the Opposition (Mr. Calwell). The Treasurer (Mr. Harold Holt), the charitable father of this House, said that if we conformed to the Government’s wishes we could have a discussion on foreign affairs. Throughout this session he has tried to make us conform. That is the trouble with this Government; it wants the Opposition to conform to all its ways. On the important subject of international affairs, the Prime Minister (Mr. Menzies) made a statement but only the Leader of the Opposition has been permitted to speak to reply. The Government will not open the subject to a full discussion by all honorable members at this vital time in international events. The Treasurer says that we want to finish the session by tomorrow. Members of the Opposition are prepared, if necessary, to go on until Christmas and even into the New Year because we do not want to shirk our responsibilities even if honorable members opposite want to go on a holiday.
There are other issues that we have to face up to. The following vital motion appears in the name of the Leader of the Opposition: -
That this House is of opinion that the recommendations of the Joint Committee on Constitutional Review which was established in 1956 and reported to both Houses in 1958 and 1959, should be submitted to the people for their approval.
We know that dire economic conditions exist in this country-
– Order! The honorable member must not depart from the subjectmatter before the Chair.
– The matter I am speaking of appears on the notice-paper in the name of the Leader of the Opposition. Economic conditions in this country-
– Order! Economic conditions do not come into this debate.
– I say, with due respect, Sir, that this matter appears on the noticepaper in the name of the Leader of the Opposition. His motion appears under the heading of “ General Business “, and I think this is one matter which should come forward. Unless we can discuss it we cannot control the dire economic conditions that face us to-day.
– Order! The honorable member cannot debate that subject; he may make passing reference to it.
– I think I have made my point. The Treasurer knows that unless we face up to these conditions we will not be able to solve the present difficult situation.
We, on this side of the House, are prepared to stay here until Christmas and New Year to debate these matters. We have given a warning. We want to discuss international affairs, because we know that there are difficult circumstances throughout the world; and we want to discuss economic conditions in this country and deal with them in a positive way. But this Government is not prepared to face up to realities. I support the Leader of the Opposition. Government business should not take precedence over general business on Grievance Day. All honorable members on this side of the House want to fight on and do the right thing. Once again this Government is trying to make the Opposition conform to its wishes. In the early hours of this morning we passed vital bills which should have been discussed more fully.
Let us discuss these matters in the normal, sensible way. Let us discuss them at a respectable time, when members can express their views clearly. We should not be discussing them in the early hours of the morning, simply for the reason that some honorable members want to get away on holidays. This Government should face the issues squarely, and arrange for debates to take place at decent hours. We should not have to continue sitting after midnight on any occasion. This Parliament sat well into the early hours of this morning. In fact, dawn was breaking when honorable members were going home.
– Where were you?
– I was in my place, where I should have been. This charitable father of the House says that if we conform we can have a discussion on international affairs. Well, we challenge the Treasurer. We are prepared to stay here until Christmas, and we do not intend to conform, because we are the representatives of the people and we are going to express our views on their behalf.
.- Once again I feel obliged to direct attention to the insincerity of members of the Labour Party - and that is the most moderate word I can use. The Leader of the House (Mr. Harold Holt) has told the Leader of the Opposition (Mr. Calwell) that if Government business ends at a certain time, other matters may be discussed. Let me remind the House of an answer that was given in 1949 by Mr. Chifley to a question put to him regarding the order of business in this Parliament.
– On a point of order, Mr. Speaker, is there not a standing order that prevents laborious repetition?
– Order! There is no substance in the point of order.
– In October, 1949, the right honorable member for Cowper (Sir Earle Page) addressed the following question to the then Prime Minister: -
The atmosphere of the House strongly suggests that this is the last day of the session. Standing Order 119 provides-
– I raise a point of order, Mr. Speaker. Is the honorable member entitled to make the same speech practically every fortnight?
– Order! The honorable member is in order.
– The question continued -
Standing Order 119 provides that if motions have not been disposed of two hours after the time fixed for the meeting of the House, the debate thereon shall be interrupted.
– Order! I must ask the House to come to order. There is so much noise that it is very difficult to hear the honorable member for Mallee.
– Continuing the question -
As the list of Government business indicates that the period of two hours will be greatly exceeded, will the Prime Minister provide an opportunity for the House to discuss the motion standing in my name relative to a gift of food to the United Kingdom, when Government business has been concluded?
Mr. Chifley, the Prime Minister of the day, replied -
The answer to the right honorable gentleman’s question is “ No “. The House will adjourn to-day.
Speaking on the same subject, Mr. Chifley said -
I know that honorable members on this side of the House are anxious to be in their electorates. We have electorates to attend to and we do not want to be here all the time.
Those were the words of the great leader of the Labour Party. When he was asked whether he would afford an opportunity for a discussion on a gift of food to the United Kingdom, he said, “ No, the House will adjourn to-day “. He said that honorable members on his side wanted to get back to their electorates. The honorable member for Lalor (Mr. Pollard), who is now trying to interject, was in the House at that time, and he did not raise his voice in protest. This patent insincerity of members of the Opposition needs to be nailed down, and I will nail it.
– I raise a point of order, Mr. Speaker. I do not think the statements that the honorable member is making are authentic. He has refused to cite the dates on which these statements were made, and the pages of “ Hansard “ at which they appeared. I would like to have that information.
– Order! The honorable member is in order.
– The date of the question by the right honorable member for Cowper was 27th October. 1949. and the date of the second passage I quoted was 1st June, 1949. I shall not waste any more time on those quotations. They are in “ Hansard “ for anybody to see. The insubstantial points of order that have been raised clearly indicate that the Labour Party is frightened of these quotations and of its record in this matter. The honorable member for Lalor, the honorable member for Parkes (Mr. Haylen), the honorable member for Port Adelaide (Mr. Thompson) and other honorable members who were in the Parliament at that time are at present in their places, and they know that these things happened. Yet they are content to have the Leader of the Opposition make a speech condemning the Government for doing exactly what they condoned in 1949. This kind of insincerity is not in the best traditions of the Parliament, and surely a man like the Leader of the Opposition should aim rather higher.
.- I want to reply briefly to statements made by the honorable member for Mallee (Mr. Turnbull). It is interesting to note that in the divisions that took place on this question at the times to which he has referred, he was one of those who voted in the way that we are going to vote on the motion that is now before us. I have not the time to turn up the “ Hansard “ reference, but if honorable members care to do so they will be able to read the outraged speech made by the honorable member for Mallee, and his pleas for justice at that time.
– That is absolutely untrue.
– It is significant that the honorable member did not quote any passage from his own speech, nor did he direct attention to the division list. He always led the way, when he was a member of the Opposition, in advocating freedom of expression for members of the Opposition. But since he has been emancipated and joined the ranks of the Government, he has fallen into line. He has not taken the firm stand that has been displayed in recent days by two senators in the other place. I invite the honorable member to quote the division list which appears in “ Hansard “ after the speech of Mr. Chifley from which he has quoted. I would also like him to quote the speech that he himself made at that time. When in opposition he was one of those who spoke consistently against practices of the kind which he now supports, although he still contends at all times that he stands for justice, independence and the rights of the individual. I wonder what the honorable member would say if it were ,i measure relating to the dried fruits industry that we were seeking to have discussed, or if it were a matter concerning wire netting or rabbits or skeleton weed. He would agree to a discussion of any of those matters at any time of the night. But when we wish to discuss matters of great public importance, such as the statement by the Prime Minister (Mr. Menzies) on international affairs, the honorable member says that we must rush into recess, that we cannot have such a discussion because Christmas is approaching.
– I raise a point of order, Mr. Speaker. After the honorable member for Grayndler has finished his speech, shall I be in order in requesting permission to make a personal explanation?
– Order! I shall deal with that matter when it arises.
– It is interesting to note that the honorable member makes all kinds of outrageous statements concerning members of the Opposition, but that when we give a little in return he is the first to challenge our statements, and to request the withdrawal of remarks that are perfectly truthful.
I was interested to see the Treasurer move the same motion that he moved only a couple of weeks ago. He gave the same explanation for it as he gave on the previous occasion as to why Government business should take precedence over general business. It appears that the Government wishes to prevent the measures that are listed on the notice-paper under “ General Business “ from being discussed at this time. It appears from what the honorable member for New England (Mr. Drummond) has said in this debate that he is conscious of what has happened to the two rebels in another place, who we know have been ostracized.
– On a point of order, Mr. Speaker, I wish to make a personal explanation. I have been grossly misrepresented.
– Order! The honorable member may not make a personal explanation at this time.
– The honorable member for New England has seen other Government supporters pulled into line, and he has no desire to be a member of this Parliament with no one on the Government side speaking to him. That is why he has made his public confession to-day that he supports the Government, and why he is prepared to allow his proposed motion to remain on the notice-paper until the Parliament is prorogued, when it will disappear into the beyond and become forgotten. But we of the Opposition are different. We think that constitutional reform is important. We believe it is important to discuss measures of great public concern. The Treasurer (Mr. Harold Holt) cannot claim that he is not interested in constitutional reform, because it is obvious from the threats he has been making to two people in another place that he would reform the Senate overnight if he could, and that he would implement many recommendations of the Constitutional Review Committee. Why are we not allowed to discuss the items on our agenda paper? There are 28 to 30 items on the agenda to be disussed. As the leader of the Opposition has said, the Government does not hesitate to bring in all kinds of legislation in the middle of the night. In the early hours of this morning the Government introduced legislation to inrcease salaries of judges to a figure of about £10,000 a year. They seek to sneak these measures through the Parliament. It is true that if this were not Christmas time, Government supporters would not return to their electorates because they are frightened of the wrath of the public. However, at this time they intend to rush into recess1, go away on holidays and prevent members of the Parliament, who represent great majorities of electors, from expressing their opinions on Government business that is before the Parliament.
I was interested to hear the Treasurer in his earlier remarks say that we may get time to discuss the statement made yesterday by the Prime Minister. I wonder what time that will be. After we have been engaged here all night, even if we are allowed to debate the statement to-morrow afternoon, what state will we be in to do so? I suppose that we will deliberate all night on a nonunion basis, without any breaks whatever, and then be expected to discuss a matter of great international importance. What about the men at the table who take down the reports of this Parliament, the “ Hansard “ staff, and those associated with the running of the Parliament? What do they think about the hours the Parliament will sit? I will admit that they are not worried by the speeches of Government supporters, who are silent and dumb. Very few honorable members opposite ever say anything except what the Government wants them to say. It is significant that not one honorable member opposite, except the honorable member for Mallee (Mr. Turnbull) who repeated the gramophone record speech that he continually makes, has been game to support the Treasurer on this occasion. Why have not other members of the Australian Country Party spoken? Why have we not heard from other Government supporters? Why does not the honorable member who is now asleep, though it is the middle of the day, say something about this matter? The real facts are that Government supporters want to rush away from here. They sit silently here all through the night.
– You were in bed at ten o’clock last night.
– I was where I should have been. I remind honorable members on the Government side that I heard them; their snores are still ringing in my ears.
I object to this motion of the Treasurer. I object to the continual brushing aside of the general business of the Parliament. I disagree with the attitude of the Government which results in no business being before us in the early stages of a session - in a way, the Government asks the Opposition to carry the Parliament - and then in the last few days rushing through unlimited legislation, expecting there to be no discussion. We are told that this rush is because of the need to break up for Christmas.
I am a little disappointed that we have not raised several matters of urgent public importance. This would have given us an opportunity to discuss them, and the Government would not have entirely had its way. I can quite easily understand any government with the known character of this Government not wanting these matters to be ventilated in the Parliament. The Treasurer will be happy to get back to his palatial seaside home and hide from the public. Government supporters do not want any discussion of the dozen and one matters that could be raised in the Parliament. They do not want the statement on international affairs discussed, because if it were discussed members of the public would hear the criticism in this Parliament of the Prime Minister’s attitude in the United Nations and on other occasions. They do not want long discussions during the day or the early hours of the evening when people can listen and hear criticisms of, say, proposals on finance which have been introduced into the Parliament. Ministers, such as the Minister for Health (Dr. Donald Cameron), do not want their shortcomings in the administration of their portfolios ventilated, and the Government seeks to hide from the public by rushing into recess. It refuses to give the Opposition time to discuss these matters.
With all the force and power at my command, I object to the proposal of the Treasurer. I hope that honorable members on this side will always object to this method of rushing legislation through the Parliament without discussion and without giving elected representatives the right to speak for the people who sent them here and to protest against the injustices of this Government. I believe that the Government deserves to be condemned for this. Despite the half-baked support given to the Treasurer by the honorable member for Mallee, not one Government supporter has yet substantiated what has been said by the Treasurer. Consequently, the Government deserves to be condemned for its action.
– I wish to make a personal explanation. I have been misrepresented by the honorable member for Grayndler (Mr. Daly). The honorable member said that, on the occasion covered by passages from “ Hansard “ to which I referred, I made a fiery speech, as he put it, condemning the government of the day. All I can =ay is that I did not make a speech at all on the occasion in question, as “ Hansard “ will show. The quotations that I gave were f>o-i “ Hansard “. I have given the date and T can show the passages to any one “’‘-o wishes to see them. They were from “ Hansard “ and they can be substantiated bv “ Hansard “. They are absolutely true aid not merely flights of fancy such as the words we have heard from the honorable r»->her for Grayndler.
– I wish to make a personal explanation. I have been grossly misrepresented by the honorable member for Grayndler (Mr. Daly). He said that during my speech I said I did not care whether my resolution now on the businesspaper was discussed. What I did say was that I did not care to have it discussed in the dying hours of the session but that I preferred to have it discussed in the New Year when honorable members were fresh and able to set their minds to work on this important subject.
– in reply - I do not want to detain the House unnecessarily, but there are a few points on which I think some reply should be given. We have just listened to one of the windiest pieces of humbug from the honorable member for Grayndler (Mr. Daly) that I have ever heard in this place. To show the sincerity of honorable gentlemen opposite, let me give one illustration. The honorable member for Grayndler is a New South Wales member of the Australian Labour Party. Labour has been in office in New South Wales for many years. To hear the honorable member talk, one would imagine that if any business of public importance were before the Parliament of New South Wales, the Parliament would sit right through to Christmas. But where is that Parliament? It went into recess a fortnight ago. It went into recess to avoid any discussion on the transport strike which was to take place in the week following its rising. Major matters of Government business remained to be disposed of, but the New South Wales Government scuttled into recess in order to avoid the Opposition whacking it; it was not prepared to stand up to the transport strike. Let us attach our own judgment to the claims of sincerity by honorable gentlemen opposite.
– I rise to a point of order, Mr. Speaker. Is the Minister in order in reflecting on the conduct of another Parliament?
– Order! The Treasurer is in order. However, I ask him to confine his remarks to the motion before the Chair.
– I am glad to have the support of your ruling, Sir. I shall certainly direct myself to what has been said by honorable gentlemen opposite. I think I am entitled to show how hollow is their opposition to this motion, when tested not only by the standard of other years but also by the actions of their colleagues in another place.
I want to make only two points, because frankly I think what else has been said has been answered on so many occasions that to answer it again now would be tedious repetition. The Leader of the Opposition (Mr. Calwell) made the quite unwarranted slur that we brought in the bills concerning the judiciary, introduced early this morning, to coin his own picturesque but certainly quite unjustified phrase, “ like thieves in the night “. The clear implication of the honorable gentleman’s statement is that, without the Parliament or the people knowing what was happening, we introduced in some surprise and sudden way a measure which the Opposition would wish to oppose. Sir, let me just remind honorable gentlemen opposite that the Prime Minister (Mr. Menzies) announced publicly, I think in September, the details of the arrangements to be made about the salaries of judges. The details were publicly known, as they had been announced by him at that early time.
At some inconvenience to the AttorneyGeneral (Sir Garfield Barwick) and honorable members on this side of the House, the Judiciary Bill (No. 2) and the Judges’ Remuneration Bill were introduced when they were because the Opposition requests that the details of any legislation that it is asked to debate be clearly before it in advance of the normal Opposition caucus meeting on Wednesday morning. Out of courtesy to the Opposition, those measures were introduced at an early hour this morning. The honorable member for Reid (Mr. Uren) made an equally unwarranted charge when he said that we had gagged through two important loan bills.
– I did not say that at all.
– Despite the honorable member’s comparative youth and his reputation of having had some athletic vigour at an earlier time in his life, he apparently cannot stand up to the hours to which older members of this Parliament find that they can accommodate themselves. I can recall a government led by a late Labour Prime Minister keeping this House sitting from, two to three days consecutively, day a~d night, in order to wind up the business of the session. Those of us who were in opposition at that time did not scuttle away to bed as if we thought that that was the fittest place for us to discharge our public duties, as, apparently, did the honorable gentleman opposite.
As anybody who was present when the debate on the two loan bills was resumed will know, they were spoken to in earnest and conscientious terms by the honorable member for Melbourne Ports (Mr. Crean), who made a very thoughtful speech ranging over not merely the loan bills themselves but also the whole of the Government’s trade and economic policies. The honorable member for Lalor (Mr. Pollard) made a pointed speech and was supported by the Opposition Whip, the honorable member for Wilmot (Mr. Duthie). I told them that we were not gagging those measures through and I gave them an assurance that what they had sa:.. would be conveyed to my colleague, the Minister for Civil Aviation (Senator Paltridge). One of my first acts on coming to Parliament House this morning was to direct my colleague’s attention to the remarks made by those honorable members. 1 make this point, Sir, to demonstrate not only that this Government endeavours to deal fairly by all sections of the Parliament but also that the views put to us by members of the Parliament, whether they are from the Opposition side or our own side, are carefully taken into account and given the speediest consideration of which we can assure them.
– I wish to make a personal explanation, Mr. Speaker. I claim to have been misrepresented by the Treasurer. I protested against what I claimed to be the sneaking in of legislation in the middle of the night. It is the custom for the Government to distribute to the Leader and the Deputy Leader of the Opposition, as well as the Opposition Whip, a special business sheet indicating what measures will be introduced and debated. Two very important measures that were introduced after 2 o’clock this morning were not mentioned on that sheet, and the Opposition was taken completely by surprise. That was the justification for my remarks. The Leader of the House had no justification for then upbraiding me in the language which he used for my protest against the Government’s action, which was most unusual and to which we offer the strongest possible objection.
– I, also, wish to make a personal explanation, Mr. Speaker. The Teasurer implied that in the early hours of this morning I was in a place where I should not have been. I was in this chamber in the early hours of this morning at the time to which the Treasurer refers. I should like him to bring forward any proof that I was in any other place, if he has any proof. The right honorable gentleman implies that he is tough and that he likes to get into clinches. If he wishes to get into a clinch, I have no objection.
– Order! I think that the honorable member has now completed his personal explanation.
Question put -
That Government business shall take precedence over general business to-morrow.
The House divided. (Mr. Speaker - Hon. John McLeay.)
Question so resolved in the affirmative.
– I move -
That in accordance with the provisions of the Public Works Committee Act 1913-1960, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to this House: - Construction of aprons, roads, car parks and engineering services for the proposed new terminal building at Perth airport, Western Australia; also the extension of north-south runway, and widening, strengthening and extension of associated taxiways.
The proposals provide for apron development to accommodate the aircraft which will use the proposed new terminal building and for the roads, car parks, and engineering services required to service this building. They provide also for an extension to the north-south runway and the widening, strengthening and lengthening of its associated taxiways to make the airfield adequate to handle the types of aircraft now being used at Perth on domestic and international routes.
In its report to this House on 24th August, 1960, the Public Works Committee not only approved of the proposed extension to the north-south runway to 6,500 feet - this length being adequate for all domestic and international aircraft using the airport - but the committee went further, and recommended the expenditure of an additional £120,000 to increase the length of the northsouth runway to 7,450 feet, which it was felt would be sufficient to promote the airport to large jet standards. If, however, the airworthiness tests of the Boeing 707-1 38B revealed that the runway should be extended to 7,950 feet, the committee felt that the expenditure of a further £40,000 would be justified.
The Government is currently examining these additional recommendations. Honorable members will realize that they went somewhat beyond the proposed work submitted to the committee and they materially effect general policy with regard to airport development throughout Australia. I had delayed the submission of this resolution to the House in the hope that consideration of the major problem would be sufficiently advanced to announce some decision on the Perth airport aspect. But while I would hope that this will not be long delayed, work in relation to the new terminal building and the target date of the 1962 Empire and Commonwealth Games requires the approval of this House to the actual work proposed to the committee, and which it has recommended, before the end of this session.
I therefore commend the resolution to the House so that this work may proceed.
.- I appreciate the fact that this work is to proceed. I also appreciate what the Minister has said. At the same time, I submit that it is necessary to proceed speedily with the Public Works Committee’s recommendation that, if airworthiness tests of the Boeing 707- 138B reveal that the runway should be extended to 7,950 feet, a further £40,000 be expended on extending the runway to take these aeroplanes. The Minister also mentioned that the Empire Games are to be held in 1962. By that time, of course, we shall have a terminal building that will compare with anything in Australia, and it would be a great pity if we had a terminal building without suitable facilities for the aircraft that will be bringing the passengers who will use that airport terminal building.
Another factor to be considered is that at the moment there are two international services operating through Perth airport. One is part of the Qantas service via Singapore to link with the 707 service to London. That service is being operated now with Super Constellations which, I am afraid, in these days of modern overseas air travel, are very close to being obsolete. The other service is operated by Qantas, again using Super Constellations, to South Africa once a fortnight. On the alternate week of each fortnight South African Airways run DC7’s from Johannesburg to Perth. South African Airways have just announced that they intend to run a jet service from South Africa to London. From memory, I think they are using Douglas DC8’s. It is obvious that they could not extend their service to Australia, with those planes, unless the extra work outlined by the Minister were carried out at the Perth airport. Therefore, I think the Government should give further consideration to this matter with a view to ensuring that the slight extra expenditure required - it is much less than the original estimate, which I think ran into £1,000,000-
– It was £650,000.
– Upon reconsidering the project, the Department of Civil Aviation found that it could bring the runways and taxiways at Perth airport up to international standard for an expenditure of about only £40,000 or £50,000.
– For £120,000.
– Which is still much less than the original estimate. I think it is highly desirable that the Government give earnest consideration to setting aside this additional amount to bring the airport up to a standard which will allow it to cater for the jet aircraft used on any international service at the present time.
– I rise to thank the Minister for the Interior (Mr. Freeth) for having acceded to the request of the Public Works Committee that, in presenting a resolution that it is expedient to do work which is referred to the committee, he should make some rather extended explanation of the work actually to be done. In the past, when a resolution is submitted that it is expedient to do a work which has been referred to it and which has been reported upon by the committee. I think there has been a tendency for the House to assume that the work to be done is in accordance with the recommendation of the committee. This is not to say that the committee, or even the House, does not appreciate that there is no obligation on the Government to accept the recommendation of the Public Works Committee, but 1 think it would be an extraordinarily good thing if the House clearly understood that, in presenting these resolutions, the Government does not always feel itself obliged to accept the recommendations of the committee. In that way. there is likely to be some thoughtful and informed discussion of the projects, and in the long run I think the public purse will be safeguarded.
I think I detected some faint note of reproach in the Minister’s comments at the fact that the Public Works Committee had extended its inquiry into the proposal for the extension of runways. If he feels that way - I do not think he is very serious - I remind him that the reference to the Public Works Committee was to consider also the extension of the north-south runway, without any precise direction as to the type of aircraft service to be catered for. lt is certainly quite true that the Works Department’s proposal to extend the north-south runway only to 6,500 feet was contained in the details of the reference. Having some ministerial experience behind me, 1 have always made it my constant endeavour to see that the committee does not extend or intrude into the field of policy, but in a case of this kind, when something over £1,000,000 is to be spent on the provision of a modern airport at Perth, and having regard to the fr.ct that this is one of the great outlets for Australia for overseas air routes, and having regard also to the fact that Perth was once an international airport but. due to the development of big jets on international services, it has now been down-grade A and is no longer an international airport, the committee decided to bring forward this recommendation that the runway should be extended, not only to 6,503 feet, but to 7.450 feet, at an additional cost of £120.000. If. early in the new year, after the modified Boeing 707 has completed ils airworthiness trials, it is found that an additional 500 feet might be required for safe operations, the Government might be well advised to face up to the expenditure of an additional £40,000 to extend the runway up to 7,950 feet and so bring the Perth airport up to first-class world airport standard. The total cost of turning Perth from a rather localized form of airport into a fully fledged international airport would be. at the most. £160,000.
– How far short is the runway of what is required?
– It is suggested that it will be 6,500 feet in length. It needs at least 7,450 feet for the operation of the modified Boeings, and may conceivably need 7,950 feet. That will not be known until these new aircraft have airworthiness certificates issued early in the new year. But £160,000 would be the full cost involved in extending this runway sufficiently to make Perth a proper international airport. If this were done, Australia’s main international operator, Qantas, would be able to take its p,stoned-engined aircraft out of operation. The evidence given before the Public Works Committee by Qantas was that the annual saving which would be made by enabling jet aircraft to land at Perth would exceed in one year the amount by which the estimated cost would be exceeded if the runway were to be extended to 7,950 feet. Qantas is a statutory authority of the Commonwealth and it would seem like good business to spend £140,000 extra to turn Perth into an international airport and allow Australia’s statutory airline to save itself £200,000 a year.
.- I was interested in the statement of the Minister for the Interior and Minister for Works (Mr. Freeth) that he considered that the Public Works Committee had gone somewhat beyond its original commission. That brings me to another statement made by thi Minister in this House when speaking on another matter a few days ago. If, as suggested by the Minister, all that the Public Works Committee has to do is to ermine whether it is expedient to carry out a work, then the committee could hardly justify its existence. I have been a member of the committee for about eleven years and others who have been members for even longer than that have told me that <he committee has always made its reports in the form followed on this occasion, and that only recently has its right to do so been challenged.
I disagree very strongly with the Minister when he says that, in his opinion, all that the committee has to do is to report as to whether it is expedient to carry out a work. Down the years, the committee has been responsible for saving the Commonwealth considerable sums of money. In one instance, if my memory serves me rightly, the committee altered original proposals to such an extent that it saved over £1.000,000 on a project in Brisbane. The committee has always regarded itself as being at liberty to set out all the circumstances relating to its reference and also to state how the money can be spent to the best advantage. Furthermore, it has been an accepted principle of the committee when dealing with projects, that it is not unreasonable to plan not merely for the next five or ten years, but for development for periods of up to 25 years.
On the issue before the House, we have a somewhat ridiculous situation. The House has been asked to authorize expenditure of a large sum of money on preparing runways which will not take jet aircraft, lt is not possible to have an international airport without providing for the landing and take-off of jet aircraft. At the moment, the aircraft which use Perth airport have piston driven engines. South African aircraft are going through there, but this type of aircraft is gradually disappearing. It will only be a matter of two or three years before they are completely out of service. Qantas, a government instrumentality, is using the same type of aircraft for its service through Perth. It rs costing Qantas about £200,000 a year to keep these aircraft going through Perth so as to maintain an international service. The Public Works Committee has recommended to the Government the construction, at a cost of about £160,000, of runways which will cater for jet aircraft. So, if this expenditure is incurred, a Commonwealth statutory body will save more than that amount in one year.
If Perth airport is to develop into an international airport, it must have runways capable of taking jet aircraft. The trend in aviation to-day is for piston-engined aircraft to be replaced completely by jet aircraft. What is to be gained by having a runway which is incapable of taking jet aircraft as was proposed in the original submission to the committee? The extension of the runway to a stage at which it will still be incapable of taking jet aircraft is a sheer waste of money, because the airport will still not be an international airport.
In my opinion, the Government is not facing up to the situation. I believe that it is far preferable to complete one job so that it will be serviceable for ten or fifteen years rather than leave it at a stage at which it will serve its purpose only for a short time. J think that is the opinion of most people, not only in the Department of Civil Aviation, but in all departments which are responsible for planning. For some reason or other, if the Government decides, for example, to make £1,000,000 available for works, it uses that sum on projects throughout Australia with the result that further work is required on each project after two or three years.
A classical example of this practice is the air terminal at Adelaide, which is now completely inadequate to meet the demands made upon it. If the Government does not accept the submission of the Public Works Committee in relation to the runways then there is no chance of Perth developing into an international airport. All aircraft will have to be of the jet engine type. Unless the Government provides runways at Perth to take jet aircraft at this stage, whatever public money it now proposes to spend will be wasted.
.- 1 support the honorable member for Perth (Mr. Chaney). This matter is urgent. With the rapidly changing development in the types of aircraft that are coming into use, the DC6B and the Constellation, which are piston-engine aircraft, are already obsolescent for many types of service although they are in use in Australia. More DC6B’s are to be used in the next few months on the service to Perth, a proposal which I oppose. The Viscounts and the Electras have only a few years of life ahead of them is new aircraft are coming forward. We will soon reach a situation on the longer services within Australia and on the international services where we will have a greater use for the DC8’s and the Boeing 707. and the use of these aircraft will necessitate extensions at the Perth airport.
If by some chance the air space over the present routes from Europe to Australia should be closed because of international tension in one of the Asian countries, the international air services will have to use an alternative route. That will make Perth the first airport in Australia for aircraft from various overseas countries. On these counts alone, we should proceed with this project as quickly as possible. With the Empire Games ahead of us in 1962, we hope that the airport terminal buildings will be completed and that runway extensions will be undertaken to bring Perth international airport to world standards. This work will be appreciated by every member of this Parliament who uses the Perth airport and by every Western Australian.
Question resolved in the affirmative.
Consideration resumed from 27th October (vide page 2477), on motion by Mr. Cramer -
That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 2477).
Consideration resumed from 30th November (vide page 3398), on motion by Mr. Osborne -
That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 3397).
Consideration resumed from 30th November (vide page 3399), on motion by Mr. Osborne -
That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 3398).
Consideration resumed from 30th November (vide page 3400), on motion by Mr. Osborne -
That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 3399).
Consideration resumed from 27 th October (vide page 2478), on motion by Mr. Cramer -
That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1960, as proposed to be amended by Customs Tariff (New Zealand Preference) Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 2478).
Consideration resumed from 30th November (vide page 3400), on motion by Mr. Osborne -
That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1960, as proposed to be amended by Customs Tariff (New Zealand Preference) Proposals, be further amended as set out in the Schedule to these proposals . . . (vide page 3400).
Motions - by leave - taken together.
– With one exception, the proposals give effect to decisions made by the Government following its consideration of some five Tariff Board reports. The amendment not associated with a report of the Tariff Board concerns importations by a government of an overseas country pursuant to an agreement made with the Commonwealth. The action now proposed will provide a tariff item to cover such goods when they are imported for official use and not for purposes of trade. I commend the proposals to honorable members.
Questions resolved in the affirmative.
Standing Orders suspended; resolutions adopted.
That Mr. Osborne and Mr. Roberton do prepare and bring in bills to carry out the foregoing resolutions.
Bill presented by Mr. Osborne, and read a first time.
Mr. OSBORNE (Evans - Minister for
Air) [4.31].- I move-
That the bill be now read a second time.
As this bill merely gives legislative effect to proposals that have been passed through committee, it needs no further comment from me at this stage.
.-I take the opportunity at this stage to comment on the measures before the House and I wish to refer first to Customs Tariff Proposals Nos. 23 to 26. These became effective in October or November, and they relate to questions of tariff as a result of a Tariff Board reference that was made first of all on 2nd June, 1958. Subsequently, a recommendation was made by the Tariff Board. There are to be some changes in duties, but in the main the proposals provide for some review of descriptions of various goods covered under the heading of soft furnishings. These are fabrics generally used in upholstering of furnishings and for similar purposes. The Opposition has examined these proposals and I would not say that we are altogether happy about them. I understand that only the other day the Minister for Customs and Excise (Senator Henty) referred to some further consideration of a request by the Tariff Board at a later stage in this connexion.
The items covered by the heading of soft furnishings are dealt with in items 105(a)(3), 105(d)(1) and 105(e)(4). Then we have the ancillary bill the Customs Tariff (New Zealand Preference) Bill No. 6. Information supplied to us shows that the alteration to item 105 (a) (3) has been made on the recommendation of the Tariff Board. The item is to be restricted to fabrics of cotton, linen or fibre admixtures principally used for furnishings. It is proposed to exclude from the existing item all piecegoods containing wool. Previously up to 5 per cent by weight of wool was permissible. Also to be excluded are piecegoods containing 20 per cent or more by weight of man-made fibres. Previously 10 per cent or more by weight was permissible, but it will now be 20 per cent.
There will be an increase in duty on low cost heavier fabrics and reduced duties on the remainder as recommended by the Tariff Board. The goods now proposed to be excluded will be classifiable in the tariff according to composition. That indicates with reasonable clarity the changes that are to be made in item 105 of the existing schedule. We have the proposal in relation to item 105(d)(1)(a) to omit “(a)(3)”. The explanatory note says that this is a drafting change only, and reads -
Woven piece goods containing 20 per cent or more man-made fibres will not be classifiable under proposed new Item 105(a)(3) (furnishing fabrics) but will revert to this Item 105 (d)(1)(a).
Item 105(e)(4) deals with “ Moquettes of or containing wool, of types used for upholstery “. According to the explanatory note this item is proposed to be amended to cover only moquettes of the types used in upholstery when wholly of wool or containing wool and duties will be slightly increased as recommended by the Tariff Board. So people engaged in this industry in Australia are being given some increased protection.
Then we come to Customs Tariff (New Zealand Preference) Proposals No. 6, concerning textile piece goods of wool or containing wool. This is ancillary to the consequential amendment under the Customs Tariff (New Zealand Preference) Proposals. The explanatory note states that this item has been redrafted to exclude moquettes with uncut woollen pile of the type used for upholstery. The special rate of 221/2 per cent ad valorem which applied to such goods of New Zealand origin is proposed to be removed. The goods will now become entitled to British preferential tariff treatment.
Those, mainly, are the details of the proposals. I do not pose as an expert on the textile industry which manufactures these particular goods for furnishing and upholstery purposes, but it is quite obvious, from reading the Tariff Board’s report, that some difficulty has been experienced regarding the distribution of those goods and in ensuring that the provisions of the law are being observed. It is for that reason that these alterations are being made.
The actual changes in tariff are very important, because the manufacture of soft furnishings in Australia is a fairly extensive business in which a relatively large number of people is engaged. I notice in the Tariff Board’s report some complimentary references made to some types of Australian-made fabrics as being equal to some of the imported fabrics. Conversely, the board has not been complimentary about some other fabrics. In respect to the valuable and high-quality fabric moquette, in the manufacture of which virgin wool is used - and which is manufactured mainly at Seymour, in Victoria, in the electorate represented by the honorable member for Bendigo (Mr. Beaton) - the board states that the product made at Seymour is of a relatively superior type. The board also states that in its opinion the industry is in a reasonably prosperous condition. I understand that the people who are conducting this industry are not altogether satisfied with this assessment. I am not fully seised of the latest action taken by the Government, but I believe that some further steps are to be taken by the Tariff Board during the parliamentary recess to review the existing situation.
– That is so.
– Good. That is the position. These industries are too valuable to be allowed to languish. I notice in passing that according to the Tariff Board’s report on the section of the industry covering the main types of fabric classified under soft furnishings there has been a substantial change in the proportion of imports supplied by the main supplying countries. Whereas in 1957-58 Japan supplied only 3 per cent, of the imports, in 1958-59 she supplied 29 per cent, and in the six months ended December, 1959, she supplied 44 per cent. The drift has been away from the older supplying countries, like the United Kingdom, Belgium, Luxemburg and Italy, to Japan. I take it that one of the reasons for the proposed tariff increase is to ensure that some protection is given to the local industry against this rather rapid increase in the volume of supplies coming from Japan.
I leave the matter at that. The honorable member for St. George (Mr. Clay) has a wide and extensive experience of this industry, and I am sure that he has a valuable contribution to make to the con sideration of these proposals. I now turn to Customs Tariff Proposals No. 24, 25 and 26. I have had a look at the subjectmatters of these three items. Customs tariff proposal No. 24 deals with, among other things, voltage regulators for motor vehicles. 1 understand that a voltage regulator is a mechanism attached to the electrical apparatus of a motor car to regulate at a uniform rate the voltage fed from the battery to the electrical circuit. The Opposition has no objection to the action to be taken in this regard.
The Opposition also has no objection to the action to be taken in regard to travel goods including handbags, wallets, purses and various other containers under Customs Tariff Proposal No. 26. Some increased tariff protection is to be given to the manufacturers of handbags. I suppose that many of these articles are now being manufactured in Australia by newcomers to this country. I have noticed in shops containers made of wickerwork and similar materials. I think that the proposed action may help to encourage the manufacture in Australia of such goods.
Customs Tariff Proposal No. 24 also deals with chlorination controllers. I have had a look at the report on this item, and I find that it relates to a mechanism made, in the main, by two or three manufacturers in Australia for the equipment of swimming baths and all sorts of other water-handling facilities, such as town water supplies and public instrumentalities. The Australian industry is a fairly long-standing one, but it has had to face active competition from manufacturers overseas. As an outcome of the board’s report some satisfactory degree of protection is to be given to it. In those circumstances, the Opposition takes no exception to Customs Tariff Proposals Nos. 23, 24. 25 and 26. I am sure that the honorable member for St. George will throw some further light on the matter.
.- I wish to refer to Amendment No. 23. When the matter of furnishing fabrics was brought before the House on, I think, 27th October last, some honorable members asked what was moquette. Moquette is an old trade name which was applied to what we now call Axminster carpets. It is broadly applied to a variety of what are now known as warp pile fabrics with pile formed or raised by wires. Those wires are subsequently withdrawn and the loops cut and you have what is called the pile on top of the carpet. In some cases the wires are raised and as they are withdrawn the loops are cut automatically. To-day man-made or synthetic fibres are used to a great degree to replace or blend with the natural fibres that were used so much in the past. That is where one of our difficulties has arisen. We have secured protection, which appears to be adequate, for the manufacturers of furnishing fabrics until such times as the other fabrics are used.
It is pleasing to know that the Minister for Trade (Mr. McEwen) recommended an emergency hearing of the claims which were made by manufacturers of furnishing fabrics as they have become the victims of a set of circumstances entirely beyond their control and external to Australia in origin. The report that was recently submitted to Parliament appeared on the surface to be helpful, but in the light of the suddenly altered circumstances, due in no small measure to the lifting of import restrictions, a crisis developed in the industry with the most alarming rapidity. A large quantity of furnishing fabrics began to pour into this country at a price below the Australian price, and of a character and quality which, when allied to the lower price, wrought great harm in a few weeks to the Australian industry which was struggling to establish itself.
It is axiomatic in manufacturing that to succeed and to prosper plant must work at full capacity. Although any business must expect to have its ups and downs in a period like this when, by Government policy, credit is restricted, it has to be a wealthy concern to afford to store for very long unsold textiles costing in the vicinity of £1 a yard and more. The point is soon reached at which production must be cut back. When this happens, one of two things must be done, and each is equally distasteful to the humane employer. Either he will cut the working week from, say, 40 hours to 32 hours, as was done in a furnishing textiles plant in Melbourne where 160 trained employees were directly affected in the month of November, only a few weeks before Christmas; or he will dismiss a proportionate number of people from his employ in the hope that he will be able to get them back again if and when he can dispose of his unsold stock profitably or without too great a loss.
In the first resort, where he shortens the working week, he runs into trouble with his staff who, while they may be sympathetic with him in his predicament, cannot afford to remain at a job which yields only four days’ pay and has become uncertain and insecure, especially at this time of the year when Christmas is so close. In the second resort, if he dismisses a proportionate number of his staff and lays looms idle, the union has lost members, he has lost staff which he had trained at no small cost, but, worst and most damaging of all. because the plant no longer works at full capacity his unit cost has increased and he is in a worse position to compete with Australian or overseas manufacturers. Sometimes, when I contemplate the difficulf’=? which are faced by manufacturers, not only in the textile industry but also in other industries. I wonder whether it is courage or foolhardiness that leads them into the business of manufacturing.
I have perused the Tariff Board report dated 20th June, I960, which indicates that the Minister for Trade referred the matter of furnishing and upholstery piecegoods to the board in June, 1958, for inquiry and report. The Minister’s reference was of departmental origin and arose from a recommendation which was made by the board in its report of 7th December, 1955, to the effect that the question of assistance to furnishing and upholstery piecegoods manufacturers should be reviewed after two years of operation of the increased duties which were recommended in that report. Thus the board commenced a fresh public inquiry, after due notice had been given, in Sydney on 5th March, 1959. After several sittings, the inquiry concluded on 2nd April, 1959, four weeks later.
The report, which consists of twenty closely printed foolscap pages, is a revelation in itself of the exhaustive care and meticulous attention to detail which characterizes our Tariff Board. However, it was not submitted to the Parliament, although it was produced on 20th June, 1960, until 27th October - four months later. This, I think, is an indication that is plain for all to see that not only the Tariff Board but also the Minister for Trade are grossly overworked. The Minister received the report on 11th July this year - and, of course, its recommendations - but in the meantime things began to go haywire. Import restrictions had been lifted and importers looked for and found gaps through which the board’s recommendations could be by-passed. The industry was in a very serious position.
On a smaller scale, when a manufacturer in Australia embarks upon a selling campaign, there always arrives the point at which the market has been satisfied and he may have to retain a large amount of stock. He has to find a way in which to dispose of that stock. On the international scale, if a country has overproduced, at the end of the season it looks around for another country in which to deposit its unsold stock. I think that for too long Australia has been the happy hunting ground of other countries, especially in relation to textiles. I am convinced that a large amount of what is called end-of-range selling has been indulged in by the United States and by Belgium. If they were to sell their end-of-range materials in their own countries prices quite easily could become depressed. Rather than do that, they are prepared to dump their products in Australia and it is hard - in fact, impossible - for us to prove that those countries are selling their materials here at a price which would have represented a loss had the goods been sold on their home market.
It may be of interest to honorable members to know that one of our furnishing fabric manufacturers has a contract to supply the material for the new Ford Falcon motor car. If the Ford organization, faced with the difficult position which has arisen as a result of the increased sales tax. decided to cut costs by trying to buy cheaper fabric, it could turn to another country for its supplies, and very easily one of our furnishing fabric companies, relying on the Ford contract, could be in very serious trouble.
I hope that at its emergency hearing the Tariff Board considers that aspect and pays keen regard to the welfare of the motor trade as well as of the textile industry. The fabrics which have caused such great concern under the existing protection are expensive to manufacture and, although cheaper fabrics are protected adequately, the expensive ones are not. I believe that the only satisfactory solution to this problem is for the Tariff Board to add an ad valorem content to the duty on moquette. 1 think the House can easily understand the position of the manufacturers of furnishing fabrics, when you have fabrics costing £1 or more per yard and the same duty applies. Therefore it would be farcical to say that a duty of 2s. 8±d. per yard is adequate on all furnishing fabrics. Another point to which I wish to refer relates to the manufacture of moquettes. The Belgians have been turning out quite a satisfactorylooking moquette. but they use cotton or man-made fibres where we use wool. Until one examines the Belgian product closely one could imagine that one was looking at a wool moquette. In fact it is a cotton moquette, and the price is considerably less than that of the product made from wool. The Belgians have had access to cotton grown in the Congo, at a lower price than cotton is available to any one else in the world.
In conclusion I want to refer to a recent report of the deputy chairman of the Tariff Board which was tabled in the House yesterday bv the Minister for Trade (Mr. McEwen) and in which an emergency hearing was refused. I agree with the Minister. I do not think that in that case there was any need for an emergency hearing, although the possibility existed for a short period that there might have to be such a hearing. However, that need has passed and the Tariff Board, with its usual powers of perception, ruled, I think wisely, that no emergency hearing should be held. There is fierce competition between textile manufacturers in Australia. In this country there is no line-up or tie-up between manufacturers of textiles, and no inside agreements to control prices and keep them at a certain level. I repeat that there is fierce and genuine competition in this industry. The textile manufacturing industry in Australia is subject to competition not only in the matter of prices, but also in the variety of designs and patterns which can be submitted to the buyers for the retail stores.
It is easy to imagine that a country with perhaps 20 or 50 times the number of looms that can be found in another country will turn out a much larger variety of patterns. I saw the textile patterns produced by the Japanese manufacturers when I visited their trade ship on Monday last. They are fantastically beautiful and they cover a very wide range. Because the Japanese have a much larger number of looms than we have, and a much larger market, they are able to produce a variety of patterns that we cannot possibly hope to imitate in Australia. However, our textile industry still has the right to grow and fortunately, in Australia, this industry is decentralized, which is very important. Our textile industry has established itself not only in the great cities of Australia but also in many country towns, where it provides opportunities of employment for both men and women. It deserves all the help we can possibly give it. This industry is most valuable and it merits the approbation of this House.
– in reply - Mr. Deputy Speaker, reference has been made by the honorable members for Lalor (Mr. Pollard) and St. George (Mr. Clay) to some recent difficulties of the manufacturers in Australia of certain grades of furnishing fabrics. The manufacturers recently represented to the Government that there has been a recent trend towards the import of heavier man-made fibre fabrics and that in consequence the level of protection on their goods was now inadequate. My colleague, the Minister for Trade (Mr. McEwen), has referred again to a deputy chairman of the Tariff Board for advice as to whether emergency action or the imposition of a temporary duty under the new provisions recently enacted by Parliament would be justified.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Bill presented by Mr. Osborne, and passed through all stages without amendment or debate.
Debate resumed from 1st December (vide page 3503), on motion by Mr. Osborne -
That the bill be now read a second time.
.- This measure, which seeks to provide for a copper bounty on the production of our indigenous copper, is related to Customs Tariff Proposal No. 25, which we passed earlier in the day. The bounty proposal must therefore be read, to some extent, in conjunction with Customs Tariff Proposal No. 25. In 1958, the Government of the day decided that the Australian copper industry should enjoy some protection. That decision had some relationship to the fact that there were in Australia at that time, and for that matter still are, quite a number of small copper producers. However, in 1960, the Government decided that before the copper bounty provisions of 1958 expired the whole of the proposal and the position of the copper industry should be referred to the Tariff Board. The board made its inquiry, but did not deliver its report until 20th May, 1960. Limited time was available, and the Parliament decided to extend the application of the Copper Bounty Act to 31st December. 1960. The Government has now brought down a proposal with regard to the bounty. The tariff provisions were dealt with by the Parliament earlier in the day, and a change was made. The alteration means that the duty shall operate when the overseas price of copper falls below £290 a ton. This figure has been increased from £275 a ton and this represents a substantial change.
The Government has not accepted the recommendation of the Tariff Board that the bounty provisions should operate for five years. The Government has instead, using its own judgment, provided that the bounty shall apply for a period of three years only. I do not disagree with that proposition, although I think the honorable member for Braddon (Mr. Davies) may have some reservations on the point, because, after all, the great Mount Lyell mine is in his constituency, and he may fear that the reduction of the period of operation of the bounty may have some repercussions in respect of employment at the mine, because the company may not be able to see far enough ahead. However, if such difficulties do arise before the expiry of three years no doubt a further reference can be made to the Tariff Board, and perhaps a promise of a further extension of the bounty can be obtained.
As the Minister says,the changing position in Australia with respect to copper production is of substantial importance. The Mount Isa organization has established a refinery at Townsville to dealtodealwiththe huge quantities of copper mined at Mount Isa. While it may be quite proper at present to provide a bounty for copper producers, it may be relatively unjustifiable at the end of another three years, or even earlier. In these circumstances the Opposition does not disagree with this proposal.
I think the final paragraph of the Minister’s second-reading speech outlines the situation fairly accurately. The Minister said -
TheTariffBoardreamendedthatbounty beextendedforaperiodoffiveyears,butthat theratesbereviewedinthreeyears.However, inviewoftherapiddecliningsituationinthe industry, the Government has decided that the board should review both the form and level of assistance in three years. Before the expiry of the bounty, the Government will give careful consideration to its policyof protection to the industry, and will then direct the Tariff Board to make a further review of the industry.
I do not quarrel with that statement, but I say this: It seems strange that a great country like Australia should find itself in the rather unenviable position in which, notwithstanding the fact that it has substantial resources of copper, its cost structure makes it necessary for the people to protect the industry not only by way of a tariff, but also through the medium of a bounty. It is also rather unfortunate, perhaps, that some of the companies that will receive assistance by way of bounty will also receive, when copper prices fall below a certain figure, the benefits of a duty. In their overall operations some of these great companies are paying substantial dividends, because they also produce gold, silver and other minerals that serve to make them mighty prosperous. That is one aspect of this kind of protection that could well be examined thoroughly in the future. It is quite true that if you withdraw bounty or other assistance from the copper industry, which is often ancillary to gold, silver, lead or zinc production, companies may say, “ We are not going to take any further interest in processing copper “. That is one of the problems that the Tariff Board 2nd the people of Australia are confronted with.
I leave the matter there. I hope that before the period of three years has expired the industry will be in a sufficiently prosperous condition to need no further bounty or tariff protection. If this Government had had sufficient foresight to enable it to keep down costs of production in this country - andI refer to the mining industry in particular, although my remarks may not be quite as compelling as they would be if were referring to the agricultural and pastoral industries - the copper producers night not now be requiring such extensive assistance. Cost of power, costs of interest on money borrowed, costs of products used in extraction, costs of dealing with heavy wear and tear of plant and equipment, have a11 played a part in putting the industry in aposition in which it must have this assistance. I have no doubt that if the Minister replies in this debate he will also suggestthatwagescosts represent the major problem, but this is not by any means the case.
Having expressed my hope that the industry will improve its position in the next three years, I inform the House that the Opposition does not object to the passage of this measure.
.- We have before us a bill to amend the Copper Bounty Act of 1958. That act provided for a bounty to be paid on refined copper sold in the period from May, 1958 to 30th June. 1960. The Tariff Board was asked to reexamine the situation, and because the time available for its inquiry was limited the act was extended to 31st December, I960.
Under the provisions of the act as it stands at present the copper industry receives assistance through a combination of bounty and duty. The duty operates when the overseas price of copper falls below £275 a ton. The bounty is paid at a maximum rate of £45 per ton on refined copper produced and sold in Australia, subject to a profit limitation of 10 per cent.
This assistance, by way of bounty and duty, gives producers a return of about £335 a ton.
The Tariff Board has recognized the importance of copper production, both to the national economy and to the economies of the several isolated mining communities, and it has recommended continued assistance. The Government has acted on the Tariff Board’s report, and the members of the Opposition support the bill the provisions of which implement the recommendations of the board. The board has recommended that the duty should operate when the overseas price of copper falls below £290 a ton, and that a bounty rate of £35 a ton should apply when the overseas price of copper is £290 a ton or less. This bill will increase returns by £5 a ton for copper sold for use in Australia.
While supporting the principle of the duty and bounty, I must express disappointment at the amounts provided. I have in mind particularly the position of the Mount Lyell Company in Tasmania. This company had submitted a request to the board for a minimum return of £365 a ton on production for a period of five years - as and when sold - subject to the profit limitation of 10 per cent. This request was supported by very detailed evidence. However, it has been refused and the bounty will be paid on copper sold in Australia. It is highly probable that Mount Lyell will have to export some of its output, and perhaps even a considerable part of it. If the bounty is to be paid only on the remainder sold in Australia, it would appear that the company will be in serious difficulties.
This must surely be a matter of concern, especially when we realize that Queenstown, with a population of 5,000, Gormanston and the port of Strahan are almost entirely dependent for continued existence on the Mount Lyell mine. A considerable amount of private and public money has been invested in this area. As the Tariff Board reported, many houses, shops, service stations and so on have been renovated or rebuilt since its previous report in 1957. A modern hospital has been provided, and the State Labour Government, under the very progressive leadership of the Honorable Eric Reece has built a new high school at
Queenstown at a cost of more than £150,000. This has been very appropriately called the R. M. Murray High School in recognition of the grand work done by the father of the present mine manager.
The annual production of Mount Lyell is approximately 10,000 tons of copper. The largest producer in Australia, Mount Isa - this is apparently where our trouble will come from - has expanded its production and refining of copper to the point where it is estimated that this year it will produce about 40,000 tons of refined copper. By late 1961 or early 1962, Mount Isa will be refining at the rate of 60,000 tons annually and ultimately expects to be able to mine, smelt and refine 100,000 tons of copper a year. The present consumption of copper is between 50,000 and 55,000 tons a year, which means that Australia now has a very substantial quantity of copper available for export. There is no doubt that, with the great expansion occurring at Mount Isa, the exportable surplus of copper will increase considerably over the next five years. The Tariff Board reports that by 1965 it seems likely that almost half of the total Australian production of more than 130,000 tons will need to be exported. When we look at these figures, the Mount Lyell company’s request for a minimum return as and when sold, as against a return for copper sold in Australia, is very sound.
A few years ago, all the copper produced at Mount Lyell was sold in Australia, but now, with the increased production at Mount Isa, a quarter of it will have to be exported without the benefit of a bounty. This proportion of exported copper will later rise to half the total mine output, and may be even higher. So, it will be seen that this mine, on which the economies of the towns in the area depend, will suffer under the provisions of the legislation.
Costs are necessarily higher at Mount Lyell than they are at any other mine in Australia. T am certain that there is no mine anywhere in the world which works with a lower grade ore. The ore content at Mount Morgan is a little over 1 per cent., at Mount Tsa 4 per cent., at Ravensthorpe 2 per cent, and at Peko 6 per cent., but at Mount Lyell it is .7 per cent. The estimated average ratio of waste to ore is .83 to 1 at
Mount Lyell. This means that the company must remove over 1,000,000 tons of over-burden and almost 1,500,000 tons of ore each year to maintain its annual production of 10,000 tons of copper. It is recognized as the most efficient mine in the country. It must be, if it is to carry on with such low grade ore.
The management of the mine deserves only the highest praise for its efforts. The way the affairs of the unions are conducted is a tribute to the mine management and to the unions. They come together at intervals, sit down in a round table conference and work out an agreement that rs satisfactory to the mine management and to the unions. It is a mining field noted for the absence of industrial strife. The management has been more than generous in looking after the community and providing amenities not only for its employees but also for others who may have no direct connexion with the mine. The mine management has been active in assisting with the provision of health services, education and hospital facilities in this isolated area.
I believe that the company was justified in asking for a minimum return of £365 a ton. Production costs are rising all the time. This was referred to by the honorable member for Lalor (Mr. Pollard). Recent rises in the basic wage and margins have meant an increase of £150,000 in the wages bill of the company over the past eighteen months. The cost of stores, mine machinery and all other goods associated with the industry has increased in recent times. In view of this, I support the contention of the company that provision should be made in the legislation for an escalator clause to provide for basic wage and margins increases as awarded by the Commonwealth Conciliation and Arbitration Commission. The Tariff Board has refused to add to the cost structure of the mine the expenses involved in prospecting and exploration operations outside the company’s mining leases. There may be some justification for this attitude, but it should be pointed out that these isolated copper ore deposits are usually found on the edge of other mineral deposits. The Government should give every encouragement and assistance to any company that is prepared to prospect and explore adjacent territories, for metals along with wool and other primary products constitute our greatest export earners. The Mount Lyell Company has been actively exploring in the Morse Valley. Costs are considerable and must be debited against some section of normal mining operations.
– They are using helicopters.
– That is so, and I shall refer to that in a moment. Any one who knows the west coast of Tasmania, with its high degree of inaccessibility, its difficult terrain and its rigorous climatic conditions, will appreciate the fact that the search for metals and new ore bodies is a costly business. The Tariff Board might do well to consider allowing these expenses as a cost item. I should like to quote from the report of the company on this matter. It says -
In addition to drilling and geological work within its own leases-
I presume the Tariff Board takes expenses incurred within the mining leases into consideration as a cost item - the Company is engaged with the Electrolytic Zinc Company of Australasia Ltd. in the exploration of a large area in S.W. Tasmania. For that work an organization known as Lyell-E.Z. Explorations has been set up with headquarters in Queenstown. A Heliport has been constructed close to the Mount Lyell treatment works and almost all the transport for personnel and stores is provided by helicopter. The country south of Queenstown is extremely rugged, has no roads or tracks and is not inhabited.
Exploration is in progress on a modern pattern. Aerial photography over the whole area has provided the necessary maps and is being followed by airborne magnetometer, electro-magnetic and scintillometer surveys. The general geology of the area has been interpreted from the photographs and further examined by ground parties transported and supplied by helicopter. Contact is maintained between the parties, the Queenstown base and the advance bases by two-way radio.
These operations are necessarily very costly and this Government should give every encouragement to their continuance.
In conclusion, I should like to say that I support the bill. I appeal to the Minister for Air (Mr. Osborne), who is now at the table, to urge the Goverment, through the Tariff Board, to make a regular review of the effect of increased production of copper in Australia on the various mines, and especially on the Mount Lyell mine, in the light of the provision for the payment of bounty only on copper sold in Australia. The economy of the Mount Lyell mine depended on the fact that it was practically the sole producer of copper in Australia, and it received bounty on almost every ton of copper that it produced. But with the increased production at Mount Isa, the Mount Lyell mine may be swamped out of the market and may have to depend more on exporting copper overseas, with the result that its share of the total bounty will steadily decline at a time when costs are increasing. This will make it more difficult for the mine to continue operations. We must bear in mind, too, that the various towns on the west coast of Tasmania which are directly associated with and dependent on this very great mine will be affected. I remind the House that the Mount Lyell mine has given sterling service not only to the economy of Tasmania but to the economy of Australia as a whole.
.- Mr. Deputy Speaker, as the honorable member for Lalor (Mr. Pollard) has stated, the Opposition supports this bill. As I see it, this measure focuses attention on an’ economic matter that is a great national issue in this country - the unrestricted sale of Australia’s basic metals without regard for the immediate needs of Australian industries. The trend in this respect and the errors in the Government’s policy are no more clearly seen than in the copper indus try. The text of this bill has been very properly outlined by the Minister for Air (Mr. Osborne), and we see nothing to cavil at in the general assertions that he has made. The principles applying to the payment of the copper bounty are not being varied basically. The Minister has told us that the proposed provisions with respect to the duty and the bounty rates have become necessary because of a change of circumstances in the copper industry since the Copper Bounty Act 1958 was passed. The effect of this measure will be to give producers an increase of £5 a ton in the return that they receive for copper sold for use in Australia. The Minister went on to say -
However, it is expected that bountiable producers will be exporting greater proportions of their output than in the past. Their overall returns on copper produced in Australia may, therefore, be somewhat less than at present.
I take issue with the statement that it is expected that bountiable producers will be exporting greater proportions of their output than in the past. That observation, as I see it, pinpoints the issue from the manufacturing stand-point, and this is highly important to the producers of copper.
There are great production problems in the mines. These have been outlined by the honorable member for Braddon (Mr. Davies), who discussed the position of the Mount Lyell mine, in Tasmania. But there is another side of the picture. The Peko mine, in the Northern Territory, produces some 30,000 tons of copper concentrates a year. The production of that mine has increased greatly since it began operations, and its entire output now leaves Australia’s shores. At the same time, the output of copper at Mount Isa has been increasing, and Mount Isa Mines Limited is treating increasing tonnages at its new smelter at Townsville, and is exporting large tonnages.
On a superficial examination, it may appear that we in Australia are in a very happy position with a bountiful production of copper. But there is another aspect of the matter. The big smelting plant of the Electrolytic Refining and Smelting Company of Australia Proprietary Limited, at Port Kembla, which has served Australia well in the past, is grinding to a halt because it cannot obtain supplies of copper. The position is serious, because, as a result, the operations of the establishment of Metal Manufactures Limited, which depends on the smelting plant for metal supplies, and which is in fact situated adjacent to it, are threatened by the drying up of its supplies of copper, despite the increasing output of copper ore in Australia. Metal Manufactures Limited employs some 1,200 workers and the Electrolytic Refining and Smelting Company some 700. Metal Manufactures Limited is now importing, at prices higher than those of the Australian product, copper in various forms in order to maintain its level of production.
We find in these circumstances an apparent contradiction on which this Parliament ought to focus its attention. Australia’s copper industry is subject to a two-way squeeze, which will cause a definite major disaster if it continues. This squeeze is the result of two forces - the flood of goods from cheap-labour countries such as
Japan, on the one hand, and the Government’s attitude as exemplified by its permitting copper producers to export, if they wish, every ton of copper that they produce, regardless of the country to which it is exported and of the needs of manufacturers and treatment plants in this country.
I have mentioned the smelting plant of the Electrolytic Refining and Smelting Company, at Port Kembla, which is an important establishment of considerable significance to manufacturing and development generally. Let me inform honorable members a little more fully on the situation at Port Kembla. During the past year, two new industrial plants have been completed there at a total cost of £1,250,000. One was a sintering plant, which was constructed by the Electrolytic Refining and Smelting Company for the preparation of copper concentrates for smelting. In this treatment process, considerable quantities of sulphur-bearing gases are produced, and the second plant, which was constructed by Australian Fertilizers Limited, was designed to treat these gases.
I am informed that other local construction work involving an expenditure of more than £2.000,000 is in progress and that it was undertaken on the understanding that the Electrolytic Refining and Smelting Company’s smelter would be able to supply the copper required by these new establishments. I am also informed that its ability to continue operating the sinter plant has so weakened its economic position that it is extremely likely that this plant will have to be closed down in the very near future. This means that a very valuable plant, which should be making its contribution to Australia’s export earnings by the exportation of copper bars and ingots, will not be turning a wheel. The main reason for that is that the Peko Company has withdrawn from its agreement to supply the Electrolytic Zinc Refining and Smelting Company, or E.R.S. as it is called, and is now selling its total output to Japanese interests at higher prices. This is placing important Australian copper industries in a difficult position, and is causing great concern to the people in my electorate. Indeed, it must have a detrimental effect upon Australia’s economy. After all, the Townsville smelting plant is only just beginning operations, and it would seem that the E.R.S. plant is faced with closure because of the Government’s failure to take positive action to ensure that a reasonable percentage of Australia’s copper production shall be retained for treatment in Australian plants. Another disastrous effect of such a policy could be the closing down of small plants such as those at Mount Lyell, Lake George, Cobar and others. They are faced with the possibility of closing down overnight because the big interests in north Queensland would not dream of treating copper produced at any place in southern Australia. Up to the present time, the Government has sought to maintain such isolated mining communities as Mount Lyell, but those smaller companies will disappear under this proposal because it would not be economic for the smelters of far northern Queensland to treat copper produced anywhere south of the Queensland border. Because of this, the Electrolytic Zinc plant at Port Kembla is of paramount importance as a source of raw material for southern industries.
I have mentioned this matter on many occasions to the Minister in this Parliament. In effect, he has said that the Government believes in free trade, that the person who produces any commodity should have the right to sell it wherever he wishes in order to gain the highest possible price. The fact is that this bounty fixes the price for copper in Australia, and what the Government would have us believe is a competitive field is not in fact a competitive field so far as the E.R.S. plant is concerned. The position is that the Australian producers of copper can sell their product wherever they like outside this country, and so denude Australian industries of vital supplies. The people of Australia cannot be expected to stand for a policy such as that. No government has the right to sell our heritage - irreplaceable base metals - to outside interests, especially at this time in our history. No government has the right to dissipate our base metal production to the extent that development of Australia’s smelting industries is not only retarded, but in some instances halted. Because Japanese interests have the support of their government, they are able to offer the Peko Company much higher prices for its products than obtain in Australia. It is obvious that the Australian Government must place an embargo upon the exportation of copper from this country if adequate supplies for our internal industries are to be ensured. So far, the Government has failed to do that, and this failure has led to the present acute shortage of copper. After all, it is absurd to expect the Australian taxpayers to submit to the payment of a bounty on copper if we are to get only the small end of the stick, as it were; if producers are to be enabled to sell the whole of their production to interests outside Australia and so deny our own people the opportunity of permanent employment.
Let me deal once again with Peko. A statement issued some time ago disclosed that the price which the Japanese interests are paying to Peko is based on the standard United States official export price, which, in May, 1960, was about £330 Australian a ton. and that Peko will receive 95 per cent, of the value of shipment on sailing date, and the remainder within two months. The directors of Peko say that this arrangement reduces the costs of production, smelting and realization of the copper much b<?’ow the Australian figure. The statement also disclosed that the company will now receive for its copper a world parity 5/1,11’U price, but will lose the advantage of any higher internal price, and of the copper bounty. On balance, a marked advantage lies in favour of the export arrangement, according to the directors of the company. That completely substantiates the Minister’s statement that there will be less copper on which the bounty will be payable. Of course, there will be less copper attracting the bounty because Australian copper is being sold overseas! Such a state of affairs should not obtain while great industrial plants in Australia are crying out for help.
In reply to a number of questions asked of him by me, the Minister for Trade (Mr. McEwen) stated in this House that copper concentrates were sold on the market, that the Australian user was as free to buy these as was any one else, and that copper concentrates were no different from any other commodities which Australia had surplus to its requirement. Those statements are all in direct conflict with facts. The position is that the world is short of copper concentrates due to intensified buying by Janan, Russia and the Soviet-dominated Polish refineries. These three countries are virtually establishing a corner in non-captive supplies of copper ore concentrates and blister copper. They have been able to outbid European and Asian refineries because of their controlled economics. In short, all three countries pay substantially above world prices for raw materials and inflate their domestic price for refined copper to subsidize the purchase of further raw materials. That is the sort of thing that the Australian copper smelting and prefabricating industries are facing, and the difficulty can be overcome only by this Government. It must take action to protect Autralia’s industries. While subsidizing the purchase of further raw materials, the three countries to which I have referred maintain control over domestic production. This is in direct contrast to the policy of this Government, which permits the free export of raw materials, irrespective of local needs.
In May, 1958, the Minister for Trade mct the Australian copper producers and told them that he was prepared to give effect to a Tariff Board recommendation that assistance be given to the copper mining industry. It was desired, however, as a condition of this assistance, that the price of refined copper be reduced to £285 a ton. With a bounty of £45 a ton, this would stabilize the price of copper at £330 a ton. In a statement to the House on 14th May, the Minister confirmed the acceptance, in part, of the Tariff Board’s recommendation. It also confirmed the agreement to peg the domestic price at £330 a ton.
I think I have clearly indicated that this matter has been consistently before the Minister concerned, and the Government’s attitude throughout has been as I have outlined it. The Minister has stated that the Australian smelter rs as free as any one else to buy raw material. The facts give the lie direct to that assertion. The situation is that the Australian purchaser is not free to buy Australian raw materials; he is forced on to the overseas market to get his copper. The limitation on the Australian price for refined copper and, therefore, on the price that can be paid for copper concentrates, has caused companies such as Peko Mines, N.L. to enter into agreements with Japan. The Government should have anticipated this possibility. Its policy on this issue is lopsided. I refer to its control of iron ore, on the one hand, compared with its attitude to copper, on the other. It should have insisted on producers and smelters reaching voluntary agreement to ensure that Australian industry was protected. That rs the milk in the coco-nut. The Government has stood idly by and permitted the law of the jungle on an international basis to prevail.
Australia, to-day, finds itself with inadequate supplies of copper concentrates which are needed to maintain a very large, important and productive smelting industry. That industry is the life blood of a great number of people on the south coast of New South Wales. It makes it possible for a number of large and important prefabricating plants to operate. The future of those plants is now being placed in jeopardy. In order to maintain themselves, they will have to purchase large quantities of copper from overseas. We are shipping copper out one door and paying through the nose to bring it in another. I would like the Minister for Trade (Mr. McEwen) to let us know something on this point.
Up to this month the metal manufacturers at Port Kembla have had to import £1,000,000 worth of copper in different states in order to keep their plants going. That shows the complete laxity on the part of the Government in fostering the important copper industry which is markedly important to this country’s economy and to its survival, both under peaceful industrial circumstances and under adverse circumstances. There is a difference in the Government’s policies with respect to different basic raw materials. I have already alluded to this. In order to assist the steel industry, the Government placed an embargo on the export of iron ore. That embargo is now in the course of some degree of amendment. There is a control over the export of steel scrap. So, while control has recently been tightened in respect of one item there are now suggestions that iron ore from certain areas should become a permissible export. Of course, that is a question on which our party joins issue with the Government parties.
There is complete freedom to export copper concentrates, irrespective of the requirements of local industries which are dependent on their output. At the same time, there is no control over the export of copper scrap. That pinpoints the argument that I am continually hammering in this matter, namely, that the Government is not doing the right thing by this country and placing Australia first if it allows our industries to be denuded of that proportion of our natural products which they require. Base metals are not replaceable. They cannot be regrown. Once we have gouged so many tons from the earth, they will never go back again for posterity. We, the legislators of this country at this day and hour, have the obligation of studying these matters from the point of view of the great developments that will occur in Australia in the progressive century that lies ahead. Australia will be a fantastic nation in that time. Our economy unquestionably will be based on wonderful manufacturing industries. The ingredients necessary will unquestionably be of a metallic nature. Consequently, I cannot emphasize too often the principle that is involved in the copper industry.
I trust that the Government will look further than its nose and will no longer regard itself as bound to permit certain sections of the community to make a swift quid at the expense of the future of this nation. The Government has been asked to help ensure that sufficent raw materials are retained in Australia to enable the Electrolytic Refining and Smelting Company of Australia Proprietary Limited plant to provide continuity of employment and meet the needs of customers. It has also been asked to regulate the export of scrap. The Government obviously sees difficulty in giving effect to these requests. I led a deputation to the Minister for Trade from two major trade unions in New South Wales a few weeks ago on this issue. They were the Australian Workers Union and the federated ironworkers union which are vitally concerned about the fate of their members.
I asked a question of the Minister for Labour and National Service (Mr. McMahon) with respect to the fact that more than seventeen employees had left the payroll of the E.R. and S. company and that further dismissals were pending. The Minister said that there was plenty of employment in the steel industry in the Port
Kembla area for these people to go to. Of course, he overlooked the important fact that not only the people who have left the pay-roll of E.R. and S., but also some of those who are still on it, are receiving from £5 to £15 a week less because they are not employed in their normal occupation such as that of furnace-man or labourer. The earning capacity of these men, who are highly skilled in the copper industry, has been reduced. The Government cannot find alternative employment for them equal to that which they left. The Government cannot rightly claim that suitable alternative employment is available just because it has 100 vacancies in the steel industry for 100 men who have left the copper industry. The workers in the copper-smelting industry are the ham in the ham sandwich. Economically speaking, they have been cut to pieces. The exporter of copper is all right. Peko is doing better than ever. The people who are suffering most directly are those least able to suffer - the workers in the industry.
The E.R. and S. company is not without fault in respect of its business alinements. I understand that the company did not have a firm agreement with Peko Mines for the supply of its production, but had something in the nature of a gentleman’s agreement - an understanding that it would continue to be supplied. Like all business understandings, when a quid can be made, this one went down the drain very fast. There was no legal document to hold Peko production to the E.R. and S. plant in Port Kembla. The sufferers are the E.R. and S. company, which had expended £1,000,000 on plant, and Australian Fertilizers Limited, which had had allied expenditure in producing the gases for sulphuric acid production. I think that something positive should be done along the lines that I suggest.
The Minister for Trade has stated that there will be a greater volume of exports in the future than in the past. It is a sorry day for this country that we should be exporting one iota of copper before the needs of our own industries have been met. The same trouble exists with respect to another aspect of our copper production. Ravensthorpe Copper Mines, N.L., will sell its concentrates to the Mitsui Mining and Smelting Company Limited of Tokyo. This was announced by Mr. M. R. Lodge, chairman of the Ravensthorpe company, only 24 hours ago. The Mitsui people are buying out the Ravensthorpe field, lock, stock and barrel by subscribing for £400,0&? worth of shares. Ravensthorpe will become a second Peko. Its copper production will disappear down the chute of international trade to Japan.
It is not inconceivable that Australia will have to import prefabricated copper articles from Japan before we are very much older because of the general tendency that is now occurring. That is no fancy. Another thing that is no fancy is that the E.R. and S. plant at Port Kembla could cease to function as a smelting plant. That is a reasonable proposition at this stage. The Australian Tariff Board report, at page 14, makes it clear that the existence of E.R. and S. is in dire jeopardy because of circumstances to some of which I have drawn honorable members’ attention. The Government should not permit this trend to proceed. It should take action to curtail or stop this rape of Australia’s basic materials and should give consideration to the needs of our own industry. The Opposition does not say that we should not export any copper at all. That is not the issue. The point is that we have first call on production. We should also build up a surplus to ensure that we have adequate reserves to meet any emergency. If we are in a position then to dispose of some of it, we can still share some with the rest of the world. The Tariff Board report of 20th May states at page 14 -
The importance of E.R. and S. lies in the fact that it provides an essential and specialized facility in the production of unwrought copper and its costs therefore affect the cost of production of a significant proportion of the Australian output of refined copper.
Are we going to see a situation develop where copper comes under that great monopoly in north Oueensland? Is that what is behind all this combination of circumstances and the hesitation to take positive action? There is a nigger in the woodpile, and we should be told the facts. The Tariff Board also reported -
Evidence was given that Peko whose production had previously constituted a major source of concentrates to E.R. and S. has entered into a seven year contract to export all its copper concentrates to Japan.
Why does not the Government put a smelting plant in the Northern Territory to handle the production of Peko? Why not do some of the work in Australia instead of sending our raw materials outside the country? It is obvious that the Tariff Board has given consideration to all aspects of the matter and has made firm and deliberate suggestions to the Government, lt has emphasized the need for the Government to do something positive, and I refer the report of the Tariff Board to the Minister in charge of this legislation.
.- 1 note from the r.?port of the Tariff Board that the Mount lsa company does not require any assistance. The position of that company has been explained by the honor.able member for Braddon (Mr. Davies) and the honorable member for Cunningham (Mr. Kearney); but there are in the Mount Isa-Cloncurry area small men who are producing up to 50 tons of copper and who would be eligible for the bounty provided in the bill if they could have their ore treated and sell their product on the Australian market. Unfortunately, the position is, as pointed out by the Tariff Board, that prior to 1957, 1,500 tons of copper cam- from customs ore treated at Mount lsa. The Tariff Board report also stated that in 1960 Mount Isa was taking only enough ore to produce 650 tons of copper. As a consequence, the amount of customs ore that was taken bv Mount Isa has dropped by more than 50 per cent. The men concerned have been forced bv their economic position to make overtures to Japanese buyers.
Sitting suspended from 6 to 8 p.m.
– At the suspension of the sitting I was dealing with the question of the small producer on the Mount IsaCloncurry field. The honorable member for Cunningham (Mr. Kearney) pointed out that it is a long way to take ore for treatment south to Townsville. I point out that it would be an even longer way to take it for treatment to Port Kembla, in New South Wales. The small man in such circumstances would find that he would be working a considerable part of his time to profit the railways and the shipowners.
The small man, who has a show that gives him perhaps 8 per cent, or 9 per cent., wants to remain in the industry. It is true that the small men have been negotiating with Japanese interests and, according to the Tariff Board’s report, the suggestion is that treatment plants may ultimately be established at certain places on the Cloncurry field. Because of their economic position those small producers, whom 1*1 is bill is supposed to assist - the small men who produce less than 50 tons of copper a year each - have to negotiate with buyers from another country in order to sell their product. The fact that they c’o deal with buyers from other countries means that they cannot avail themselves of the provisions of the bill. So I suggest to the Minister that if he and the Government really want to assist this industry - and the Tariff Board, according to its report, also wants to assist the industry - they should extend the provisions of the bill so that payment of the bounty will cover copper produced by mines yielding less than 50 tons of ore a year each, and also copper sold to overseas buyers.
It is true-, as the honorable member for Braddon (Mr. Davies) sard about the Mount Lyell mine, that the producers will have to export most of their copper in future be cause of the altered position. The Minister ought to give more consideration to the small producers if he wants to keep these men in the industry. The small producers are living and working in isolated parts of this Commonwealth in the most difficult conditions. If those men are prepared to so out and work under those conditions th, Government should adjust its economic policy to assist them. If there were no other reason for assisting these men and for extending the bounty to cover their sales to overseas buyers, the fact that such overseas sales would help to overcome this country’s balance of payments difficulties should surely be enough. The Government has been screaming for more production for years. Here is an opportunity to get more production and to earn overseas income at the same time. The small man should not be penalized under this measure.
This bounty has been operating since the 1958 legislation was brought down. I think that if the Government is sincere in wanting to develop the industry, and if it wants people to go into the north-west part of Queensland and develop that area, it should give every encouragement in those directions. That small copper producers are not getting that encouragement is evidenced by the fact that they have to seek buyers in Japan for their product. Nobody knows how long the Japanese market for that copper production will exist, but ft is interesting to note that the Peko interests have entered into a seven-years agreement with the Japanese for the sale of Peko’s copper concentrate. Tt is natural to assume from that that the copper market in Japan will be available for the next seven years, operating on the conditions laid down in these negotiations with the Japanese buyers. T do not know the details of these negotiations, but when I was up in that area it was suggested that a treatment plant was to be built in the vicinity of Cloncurry and that the ore treated there would ultimately find its way overseas.
Since the Mount Tsa plant has reduced the amount of customs ore that it takes, and since the small producers are being forced, in consequence of their economic position, to sell overseas, I think the Government should consider bringing the small producers within the ambit of the measure and not place them in the same position as the Mount Isa interests and other exporters. It is true that this point is not dealt with in the Tariff Board’s report, but I say that due regard should be given to the small producers, and that a review of the position of the industry should be made. The views of the Treasury and the Government generally should be sought regarding the best way for the bounty to operate. In particular, the small producer should be allowed to sell his product overseas, thus augmenting our overseas balances, without depriving himself of the right to receive the bounty.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from 1st December (vide page 3504), on motion by Mr. Osborne -
That the bill be now read a second time.
.- To my mind this measure is one of the most important that has been presented to this Parliament for its consideration during this sessional period. I do not suppose many Australians realize the importance of sulphuric acid to the Australian economy or, for that matter, to the economy of any country. It is of particular importance to Australia because we are a great primaryproducing country. It is nearly as important because of our great secondary industries. Sulphuric acid is vital to our primary industries because it is a major element in breaking down phosphatic rock obtained from Nauru, Ocean Island, and other places, into what the Australian primary producer knows as superphosphate. Without sulphuric acid we would be in real difficulties because we would have no means of stimulating our agricultural pursuits. But that is not enough. It is doubtful whether our textile industries could function satisfactorily without sulphuric acid. It is doubtful whether we could make tyres of the quality that we make in Australia without the use of sulphuric acid. In addition, we would be in real difficulties if we did not have sulphuric acid to use in the wide range of chemical products which are essential to every sector of the Australian economy.
Of course, a statement such as that immediately prompts one to ask how we obtain sulphuric acid. Very few people would be able to answer that question unless they needed to find the answer as we need to. The plain fact is that possibly the most efficient method of producing sulphuric acid is by the use of brimstone. Brimstone is the scientific name given to what the ordinary man calls sulphur - the good old sulphur that people of my generation had to take, mixed with treacle, to clear the blood. By the simple process of roasting or burning sulphur one produces sulphuric acid.
In the past Australia has been largely dependent for its supplies of brimstone - that is almost 100 per cent, pure sulphur - upon the southern States of America and upon Mexico where this most valuable material is produced by driving bores into the earth where the sulphur lies in the porous rock. Then, by virtue of the inventive genius of a great Frenchman, the material is brought to the surface in liquid form, is diverted into dams and eventually is gathered in a solidified state. I understand that this Frenchman discovered a process whereby, after putting a casing into the bowels of the earth, vast quantities of steam were released which, in turn, liquefied the solid sulphur in the pores of the rock. So brimstone or sulphur is imported into Australia.
I understand that brimstone is obtainable also from Korea, but I must confess that I am ignorant as to whether it is obtained from bores into the bowels of the earth or whether it is mined in a somewhat similar state from volcanic hills, as it has been for centuries in Sicily. Those are the elementary facts of the production of sulphur - the basic ingredient of sulphuric acid which is so important to our civilization.
We in Australia are in a difficult position. We have no brimstone or sulphur in its natural state and we are, therefore, dependent upon importation of the commodity or, alternatively, faced with the prospect of processing, by a somewhat expensive method, certain raw materials which occur in Australia in two forms. The first is a by-product of our great zinc, lead and silver mining industries, and the second is a form of sulphur found in the rather modified form of iron ore at Norseman in Western Australia and at Nairn in South Australia. This country always has to bear in mind its dependence on overseas supplies of the basic materials for primary and secondary industries and it was thought, particularly by the Chifley Labour Government, that because of our difficulties in obtaining sulphur during World War II., we ought to make some effort to process our indigenous materials, namely, pyrites and sinter gases, and the naturally occurring deposits of sulphur at Norseman and Nairn. Although World War II. had concluded only a couple of years previously, the Chifley Government took steps to con tact those people who were most likely to be interested in installing the expensive plants necessary to treat pyrites and the other indigenous materials. This Government came to office in 1950 and realized also the necessity for ensuring, at whatever the cost, that Australia was independent, at least to some extent, of overseas supplies of this all-important basic material for the manufacture of sulphuric acid. It set to work, and this Parliament agreed to a bounty which would compensate the owners, or alternatively the manufacturers who had been producing sulphuric acid from imported brimstone or sulphur, for installing the plant that was essential to deal with the indigenous products from which sulphuric acid could be obtained. The pyrites and sulphate of iron, as I think the engineers in Nairn and Norseman call it, are subjected to not dissimilar processes which produce pure sulphur or brimstone. These processes are expensive. Although in processing brimstone there is no residue, in processing pyrites and other natural products of Australian origin, there is a residue of 50 per cent. This residue is a produce which has close relationship to iron. It is being cast on the scrap-heap for the time being, but ultimately it may prove to be worthy of processing for the manufacture of pig iron and steel.
Added to the expense of these processes is the fact that it is necessary to transfer the material from places like Mount Morgan, where it is estimated the supply of pyrites will last perhaps for another 40 or 50 years. It is also expensive to transfer the raw material to the site of the acid-manufacturing plant. Sometimes it is sited on the coastline or. in other circumstances, not far from the coastline. Owing to the recognition by the Government of the day of the fact that something had to be done to provide us with a measure of independence and security in this regard, we have the Sulphuric Acid Bounty Payment Act. We find to-day that the present Government has discovered after a reference to the Tariff Board that whereas seven or eight years ago to import brimstone and process it for the manufacture of sulphuric acid was rather expensive and the bounty requirement was not extravagant, the importation of brimstone to-day is relatively cheap. Taking its cue from the report of the Tariff Board, if I do not misunderstand that report, there is now a weakening in the Government’s desire to assist the indigenous industry of the local acid manufacturers.
In his second-reading speech the Minister informed this House that the manufacture of sulphuric acid from indigenous sulphurbearing materials made a contribution in 1958-59. from the use of pyrites, of about 35 per cent, of the total production of about 1,000,000 tons of sulphuric acid in Australia. If we allow another 5 per cent, from the processing of sinter gas - that is my estimate - we can say without exaggeration, and even being a bit generous, that despite the number of years over which this bounty has operated in Australia we are not producing more than 50 per cent, of our sulphuric acid requirements to-day from indigenous materials. It is unfortunate that our goal has not been set at producing 100 per cent, of our requirements from our local material, whatever the cost. Whatever might be the payment to the local producers in Australian currency, per medium of a bounty, the fact remains that we would not be sending any dollars to the United States of America and thus further depleting our overseas balances by importing brimstone from America, and we are importing from America about 500,000 tons of brimstone a year at the present time. Perhaps some of it comes from Korea, a source from which I believe there have been some shipments. But as I understand the Koreans want payment either in dollars or sterling, our trade balance gets worse and worse every day.
We have in Australia all the raw materials to produce the whole of our sulphuric acid requirements, given sufficient energy and encouragement. For that reason, while the Opposition supports this measure, we are not convinced of the enthusiasm of the Government to rectify what is in reality a rather sad and sorry position.
– Are you considering the price of superphosphate to the user?
– Do not wave your finger at me. I do not like it.
– The big point is the price of superphosphate to the consumer.
– The honorable gentleman says that the big point is the price of superphosphate to the user. Does he really think that by purchasing 500,000 tons of brimstone from America for the manufacture of sulphuric acid we are doing anything practicable?
– But it is manufactured here.
– The honorable member asked a question and I am trying to answer it. Does he think that by importing 500,000 tons of sulphur or brimstone from the United States of America and Korea we are doing anything practicable to keep the price of superphosphate within a reasonable range? Work it out for yourself. The present landed price of brimstone is about £21 a ton. Multiply 500,000 tons by £21, which is the price a ton, and you will see what the wastage in our foreign currency is through importing brimstone. Let me return to the question of the price of superphosphate.
– The honorable member does not know what he is talking about.
– You are getting excited. What are you getting annoyed about? The honorable gentleman says that he wants cheaper superphospate. If I had my way I would gladly give the primary producers the superphosphate. That is perhaps something of an elaboration or an exaggeration; but if that were done the resultant increase in primary production would be so great that Commonwealth revenue in taxation, railway freights and other forms of revenue would more than recoup the outlay, and it would not cost one solitary dollar or £1 sterling. The honorable gentleman talks about the price of superphosphate. But has his Government done anything to alleviate the position of the primary producers in regard to the price of superphosphate, other than to pay a bounty on the production of sulphuric acid? The Government, which the honorable member’s party defeated, was the last to give a bounty to the primary producers of Australia in order to render the price of superphosphate to them more reasonable. Work that one out for yourself. The problem of the price of superphosphate is easily resolved.
– Not the way you are talking.
– Look at this Government’s economic policy, with an increase of £80 or £90 on the price of an ordinary motor car, and consider the purchase in Australia of some hundreds of thousands of cars annually and you arrive at a revenue of X million pounds. I am not quick enough, mathematically, to tell the House how many millions of pounds would be involved, but it would be entirely Australian currency which, in turn, could be used to subsidize the supply of superphosphate to Australian farmers. If you are going to get Senator Wright and Senator Wood to agree to the sales tax increase on motor cars, get busy with the Ministers in the Government to secure some bounty on the supply` of superphosphate to the primary producers of this country, and you will then he talking economic sense.
– This is a lot of rubbish.
– A statement like that is not argument or logic, but the ravings of a disordered mind.
– Get down to the economics of producing sulphuric acid; that is the point.
– 1 am telling you that in order to produce sulphuric acid in this coun try it is essential to pay a bounty substantial enough to allow the sulphuric acid producers of Australia to buy their pyrites and supply the superphosphate manufacturers with the acid they require to process the phosphatic rock. The Government is then beholden to determine whether the price to the primary producers is reasonable in view of all the circumstances which surround their activities. If the price is not reasonable, you can then subsidize the price of superphosphate, as the Labour Government did up until 1949. There is no answer to that argument.
Let us now get back to the practical politics of the measure now before the House. Prior to the introduction of this measure - I think it has operated from 1st December, so it is operative now - assistance to this industry came in the form of a bounty only on the production of sulphuric acid. The Government has now seen fit. following the recommendations of the Tariff Board, with which I do not disagree, to make the bounty payments. We have, first, this measure to provide for the payment of a bounty of so much a ton on sulphuric acid production. This bounty is paid to the acid manufacturers, who have installed equipment the cost of which runs into millions of pounds, having been encouraged by the Government to do so. These manufacturers now find, however, that the Government is cooling off. I say that because in the Minister’s secondreading speech there is a reference to a duty to the people who had installed this expensive plant. The tenor of the remarks, however, is, if one reads the speech carefully, that this duty is for the time being only. However, provision is made for the payment of this bounty to the producers of this acid.
Then, after this measure, there is another bounty bill to provide for the payment of a bounty to the producers of pyrites. 1 understand that the decision to split the payments so that, instead of a bounty on sulphuric acid only, there will be a bounty on the acid and also on pyrites, was taken because of the difficulties which confronted the Tariff Board when it considered the reference that the Government made to it, and when it became aware of the intention of the Government and what was required by it. The board said, in effect, that it was confronted with a most difficult task. Tn any case, this is the board’s decision, and I do not quarrel with it. I understand that the difficulties encountered have relation to the distances of the pyrites production plants, or of the pyrites dumps, from the acid producers, and also to the difficulty of ensuring that the bounty formerly paid only to acid producers was split so that some of it filtered back in a satisfactory manner to the pyrites producers.
We hope that the new measure will be effective, and the Opposition expresses the hope that whatever the cost of the protection, this measure will serve, not only to keep the production of sulphuric acid from indigenous materials at its present level, but also to increase it. I very much doubt, when I read the Minister’s second-reading speech and the Tariff Board’s report, that it will have this result but, I repeat, I hope that rt will, because it would result in increased employment and increased revenues from rail freights, without any loss whatsoever of currency to overseas countries.
– But it will mean dearer superphosphates. The honorable member for Lalor knows that very well.
– The honorable member for Corangamite has a bee in his bonnet. He is so blind to the facts of the situation that he does not realize that if the Government found that the cost of superphosphate was higher than formerly, it would pay the Government to offer a bounty to the superphosphate manufacturers on the production of superphosphate, as was done during the whole period of the war. The practice was discontinued by this Government only in 1950. There is a way out of these difficulties, and honorable members opposite, who appeared to be so concerned about our overseas reserves, should realize that the payment of a bounty to superphosphate manufacturers to keep the cost of their product down would involve the payment of not one single piece of overseas currency. It would obviate the necessity for us to import 500,000 tons of brimstone, almost all of which must be paid for in dollars.
I have said nearly all I wanted to say on this measure. I point to an example of the watchfulness of the Tariff Board. Formerly the bounty was paid on sulphuric acid produced from sinter gas - and I ask the Minister to define “ sinter “ and “ sinter gas “ for me - as well as on acid produced from pyrites. I understand that sinter gas is a product of the processes that are carried out at Port Pirie and other refining centres. The Tariff Board discovered that the production of sulphuric acid from sinter gas at Port Pirie and other such places had become so efficient that the acid could be produced by this method as cheaply as from imported brimstone. Of course this is all to the good. The recommendations of the Tariff Board in this connexion have been adopted by the Government, and bounty is no longer paid on acid produced from sinter gas. This shows watchful police work on the part of the Tariff Board, and its recommendation has been wisely adopted by the Government.
I do make a final plea. The Tariff Board, of course, is concerned purely with economics, but having read its report, and having heard the Minister’s second-reading speech, I trust that as long as it is necessary to save foreign currency and to render ourselves independent of the imported product, there will be no diminution of the assistance needed by the industry from time to time. It is of vital importance that we maintain local production of this material, which is of such inestimable value to our primary and secondary industries.
– I thank the honorable member for Lalor (Mr. Pollard) for leading us so carefully through a description of the processes of making and using sulphuric acid. I should like to think that the further steps in the argument will be as clear as those that the honorable member set out. As a matter of fact, however, it is rather a complicated story from now on, but, at the risk of oversimplification, I shall try to make it as easy as possible to follow.
First, I agree with the honorable member’s remarks concerning the origin of the problem. The history of this bounty started with the Government’s decision to encourage actively the manufacture of sulphuric acid from indigenous materials. The Government made a wise decision at the time. At least, it appeared to me to be wis?. I was very actively interested in the matter at the time, because I was farming and badly needed superphosphate. I knew that we could not obtain superphosphate without adequate supplies of sulphuric acid. I knew also that we could not maintain our supplies of acid unless we could import brimstone, but the price of brimstone was then very high, and in any case it was most difficult to obtain. The Government wisely decided that it had to encourage the manufacture of sulphuric acid locally from local materials. The companies interested in this local manufacture said: “ This is not going to be a quick and easy process. What guarantee have we that if we undertake this production, and the price of brimstone falls, we shall be protected? “ The Government said, as I understand it, “ We will protect you and make sure that you do not suffer if imported brimstone becomes cheap “.
That is the background to the establishment of a number of acid-producing plants.
One of these is in South Australia, and I know that many South Australian members take an active interest in this matter. In that State a plant was established by Nairne Pyrites Limited, and 95 per cent, of the sulphuric acid used in South Australia is now produced in South Australia from locally obtained indigenous materials. In some States the manufacturers did not undertake to produce according to the new processes, using indigenous materials. One such firm is Pivot Superphosphate Company of Geelong, which is a very worthy company and I am not criticizing it in any way. That company said: “We do not think this is good business. We will continue to import brimstone.”
That is the background. The position then changed considerably and brimstone became cheap and plentiful. That is the sort of thing that often happens. Any one making a judgment such as this runs the risk of being wrong, and in this instance the Government was wrong. When brimstone became cheap and plentiful, the manufacturers using locally produced material asked the Government to afford them some protection, because they had been asked to engage in this industry and it was now difficult for them to compete with those who used imported brimstone. The Government agreed to give some protection, but first had to decide whether this would be bv tariff or bounty. It was not hard to make a decision. Indeed, it would be foolish to impose a tariff because this would only make superphosphate dearer. The Government decided to grant a bounty and asked the Tariff Board to inquire as to the amount necessary to protect the locally produced material.
Now brimstone has become even cheaper and even more plentiful, and it is difficult for the companies making sulphuric acid from locally produced material to compete with those making acid from imported brimstone. The Government wisely decided to consider whether expansion of the industry should be encouraged. It agreed that it had an obligation to those already in the industry, but decided that the industry should not be further expanded. It asked the Tariff Board to inquire into the amount of bounty that would be required to discharge its obligation to the industry without encouraging uneconomical expansion.
I think that the position is made quite clear in the Tariff Board’s report and in the Minister’s second-reading speech.
The Tariff Board held its inquiry and the bill now before the House flows from that inquiry. The Tariff Board recommended that the bounty on 100 per cent, sulphuric acid made from locally produced materials should be a minimum of £3 a ton for the average-cost producer and £5 4s. a ton for the high-cost producer. It may seem strange for the Tariff Board to give a range of duties. Usually it does not make such recommendations, but says what it thinks. However, the difficulty of the Tariff Board in this instance arose from its difficulty in assessing the Government’s responsibility to those who were producing sulphuric acid from indigenous material. The Tariff Board met this difficulty by recommending a bounty ranging from £3 to £5 4s.
The Government took the figure of £3. It varies as the price of brimstone rises or falls. It is very difficult to argue against the decision to adopt £3 as the rate of bounty sufficient to meet the position of the average producer. If the bounty were fixed at too high a rate, there would be a waste of money, and even honorable members opposite would consider that an unwise procedure. A high bounty, of course, would be satisfactory for the high-cost producer but it would be too much for the low-cost producer, who would then do too well out of the bounty. The low-cost producer would then produce too much sulphuric acid from locally made material and the Government’s policy of discouraging the expansion of the industry would be defeated. The Government clearly would have these arguments in mind in deciding that the bounty should be £3 a ton, which is the amount found to be necessary to compensate the average-cost producer. Honorable members on this side of the House would undoubtedly hold the view that if a bounty is to be paid, it should be on a proper business basis.
But the position is not simple. South Australia entered into this business with a good deal of enthusiasm and with encouragement from the Government. Our Premier took an active interest in the establishment of the industry. Nairne Pyrites Limited in South Australia accordingly set to work to make sulphuric acid from locally produced pyrites. For some reason, which 1 am not technically capable of explaining, sulphuric acid made in this way is a good deal dearer than the acid made in other places from other materials. The Tariff Board makes this quite clear. It said in its report that there are several types of producers of sulphuric acid and the costs of some are higher than the costs of others. The board would not accept the suggestion that highcost producers were inefficient. Some producers were compelled to use material with a good deal lower sulphur content than the material available to other producers, and other factors influenced the production costs.
South Australia then accepted the challenge of the Commonwealth and, with a good deal of enthusiasm, started to produce sulphuric acid from local material. Because South Australia is a high-cost producer and because the bounty is said to be insufficient, the superphosphate made from the dearer acid accordingly tends to be dearer. But the industry cannot raise the price of superphosphate because of the fairly efficient price control system in South Australia. In addition, the Pivot Superphosphate Company is just over the border and would send from Victoria cheap superphosphate into South Australia if the price rose in that State. So the people who responded to the Government’s call to make sulphuric acid from locally produced material apparently are the people who suffer rf the bounty is not high enough.
The farmer who uses the superphosphate is not suffering as yet. I am sure that the Government’s policy would be designed to ensure that he did not suffer, and in fact this bounty is paid for that very purpose. The difficulty is that the South Australian producers of sulphuric acid, who responded to the Government’s challenge to manufacture from indigenous materials, are now placed in a more difficult position, or so the situation appears to be. I am certainly not capable of analysing the balance-sheet of the South Australian company, and I think that the crux of the matter rests on an analysis of what the Government’s obligation really is. Did the Government promise to protect the high-cost producer of sulphuric acid? If it does protect him, it over-protects the low-cost producer. I think that if the Government did give such an undertaking to the South Australian producers, it is in honour bound to protect them, and I am sure that it will honour its obligation.
All that I want to say in conclusion, Mr. Deputy Speaker, is that I hope that the Minister for Air (Mr. Osborne), who is in charge of the bill in this chamber, will recognize that there is a good case to be made for the South Australian company which did as the Government asked it to do in 1950. The Government ought to consider whether the bounty bears hardly on that company. I ask the Minister to have this matter inquired into with sympathy, because I think that the South Australian producers of sulphuric acid from indigenous materials have a case that is worthy of consideration.
.- Mi. Deputy Speaker, I rise to support the arguments that were so ably put by my friend, the honorable member for Wakefield (Mr. Kelly), about the position of the South Australian companies which manufacture sulphuric acid from indigenous materials. The honorable member for Lalor (Mr. Pollard) has stated that the Opposition supports this bill. Presumably, he spoke on behalf of the Opposition when he said that. I am not so sure in my own mind whether I or other honorable members on this side of the House should support the bill, but I shall support it. I shall do so for one reason only: If I and enough of my colleagues oppose the bill, the sulphuric acid manufacturers and the producers of the indigenous materials would not get any bounty at all. At the same time, I have doubts about the equity and the wisdom of this measure so far as it will affect some of the manufacturers who produce sulphuric acid from indigenous materials. I have genuine doubts about the situation.
The whole position turns on the Government’s obligations. What are the Commonwealth Government’s obligations to those manufacturers who, as my honorable friend from Wakefield said, at the exhortations and urgings of this Government gave up producing sulphuric acid from imported brimstone and established the expensive plants required to produce it from indigenous materials? My understanding of the Government’s obligations is quite clear. I have no doubt in my own mind where those obligations lie. The Government assured the manufacturers, before they embarked on the expensive process of establishing these plants, that they would not suffer vis-a-vis the companies which manufacture sulphuric acid from imported brimstone if they undertook this capital investment. That is the criterion by which we must judge the bounty provided for in this bill. In other words, if these manufacturers do in fact suffer vis-a-vis those who produce sulphuric acid from imported brimstone, the Government, in adopting the level of bounty provided for in this measure, has not lived up to its obligations.
Whether or not the manufacturers who use indigenous materials do suffer - whether or not the Government has lived up to its obligations - depends, as my friend from Wakefield has said, on certain circumstances. Those circumstances cannot be determined except by reference to the costs and trading positions of th: individual companies. The costs, trading positions and circumstances generally of these firms compared with the manufacturers who rely on imported brimstone are not revealed by the report of the Tariff Board on the Sulphuric Acid Bounty Act 1954-1959. because the recommendations of the board in this respect are based on an average cost of ^reduction and not on the cost of production of the highest-cost producer. There is no indication in the report where indi”;dual companies stand. But it is clear that the level of bounty provided for in this bill will not meet the situation of all the companies, because, as the honorable member for Wakefield has explained, an alternative level of bounty is recommended. In other words, the Tariff Board has said, in effect, “ The Government itself has to determine the position. If it feels that it is obliged to compensate the highest-cost producer for the disabilities he suffers compared to the manufacturer who uses imported brimstone, it will pay a bounty at a particular level. If it feels that the bounty should be based on an average of the cost-of-production figures of all the producers, it will adopt a somewhat lower figure. In this instance, the Government decided to adopt the lower figure.
If an investigation reveals that the manufacturers who rely on indigenous materials, and particularly the South Australian firms of Sulphuric Acid Limited and Nairne Pyrites Limited, suffer by comparison with the companies which use imported brimstone for themanufacture of sulphuric acid, in my view the Government has a moral obligation to redress the situation by paying a bounty or by some means other than that proposed ;:i this measure. I ask the Minister for Air (Mr. Osborne), who is at the table, to bring to the attention of the Government the position of the South Australian companies which has been outlined by the honorable men,Der for Wakefield and myself, and to Ask the Government specifically to investigate the costs and trading positions of those companies in order to determine whether, on that basis - and on that basis alone - Government has in fact honoured its original undertaking to those companies by introducing the bounty provided for in this measure
There is one other reason why I believe that the Government should examine the position very closely. It is that there is a possibility that this legislation will lead fo a rise in the price of superphosphate in South Australia. I am sure all honorable members appreciate the importance of superphosphate to the high rainfall areas of that State. There are huge areas in my electorate which could hardly grow one blade of grass suitable for stock feed witho’t the application of great quantities of superphosphate. Honorable members will appreciate also that at the moment primary producers are not in a position to meet an increase in the price of this big element in their cost of production. I submit that it U of vital importance that no action by this Government should place them in the position of being faced with a possible increase in the price of superphosphate.
For the two reasons I have given, I ask the Minister to convey my representations to the Government, and to request the Government to re-examine the position with a view to ensuring that the provisions of this measure do fulfil the Government’s obligation to the companies concerned in the production of this material.
– in reply - I appreciate the general support which the House has given to this bill, even though qualified in some cases. The honorable member for Lalor (Mr. Pollard) has suggested that the production of superphosphate generally should be subsidized by way of a bounty, but I point out to him that it has never been intended, under the sulphuric acid bounty scheme since its introduction in the early 1950’s, to subsidize superphosphate. The intention was more limited. It was to encourage the production of sulphuric acid from indigenous materials at a time when it was believed that imported brimstone would become very scarce throughout the world. That state of affairs did not, in fact, come about.
The two honorable members from South Australia, the honorable member for Wakefield (Mr. Kelly) and the honorable member for Barker (Mr. Forbes) have directed attention to the position of two particular South Australian producers of sulphuric acid from indigenous materials. The Government has stated quite clearly that it recognizes its obligation to those producers of sulphuric acid from indigenous materials who incurred liabilities in responding to the Government’s request to undertake the production of this material in Australia. I have listened carefully to the remarks of the two honorable members from South Australia, and I should mention here that the honorable member for Sturt (Mr. Wilson), another South Australian member of this Parliament who is interested in the problems of these two producers, is absent on dutv, but he has told me that he agrees with the views of both of his colleagues from that State, and that he identifies himself with them. I shall bring those remarks to the attention of my colleague, the Minister for Trade (Mr. McEwen), and I am ouite sure that if the twoproducers concerned will preDare a carefully documented case, the Minister will consider it.
Question resolved in the affirmative.
Bill read a second time, and passed throuah its remaining stages without amendment or debate.
Debate resumed from 1st December (vide page 3505), on motion by Mr. Osborne -
That the bill be now read a second time.
.- This bill is very intimately related to the measure with which we have just dealt. The Opposition approves of the measure, although I am somewhat perturbed about one part of it. The Government says that this bill refers to the Government’s obligation to the producers of sulphuric acid from sulphurbearing materials who had co-operated or planned to co-operate in the policy of producing sulphuric acid from indigenous sulphurbearing materials. Upon reading through the bill I find that after a specified date no new producers of this material may qualify for bounty. To-day, mention was made of a case in the Lithgow district of which the honorable member for Macquarie (Mr. Luchetti) would have some knowledge. It relates to a man who is treating certain ores in the recovery of certain metals and, in the course of treating those ores, he is producing pyrites. Because of the time limit contained in this bill, that man will not qualify for bounty when he has his plant in full production. If the Government is really serious in its desire that the production of sulphuric acid from indigenous material shall continue, my personal opinion is that nobody should be debarred from qualifying for bounty provided he can fulfil all required conditions. If somebody who is treating ores at Lithgow or anywhere in the Blue Mountains produces this useful byproduct, and can find a market for his pyrites with acid producers, he ought to be eligible for the bounty.
– He will not get the bounty.
– No. You have stated that. That makes my contention correct that the Government does not want to extend the production of sulphuric acid from our own local materials which exist almost in unlimited quantities.
– Not at an uneconomic rate.
– There can be a wide difference of ODinion on what is an eco nomic rate. I do not want to delay the measure. I ask the Minister to look at this matter further. I think that the honorable member for Macauarie will have a few words to say on the bill. We do not want to press the matters that I have raised, but we think there is a case to consider. If my contention is correct, the Government may be able to open the gate wide enough to allow this individual in. I do not know the full particulars, but it appears to be a bona fide case for investigation. The Opposition is disappointed that the whole tenor of this measure and the preceding one is to discourage the future production of sulphuric acid from indigenous material so long as we can, fortuitously perhaps, import brimstone and so make sulphuric acid at what is considered to be a more economic price than the price of production from local materials. I leave it at that.
.-1 did not intend to speak on this bill because in effect it is merely a re-enactment of the Sulphuric Acid Bounty Act. Therefore, I do not think it is necessary to comment very much. But as the honorable member for Lalor (Mr. Pollard) has misconstrued, to some extent, the reasons for the passing of the principal act I think I should put him on the right track as I represent rather a large pyrites industry. The honorable member for Lalor said that all industries producing pyrites should be eligible for the bounty. I suggest that he has overlooked the initial cause for the introduction of this bill and of the principal act.
The reason why a bounty was paid on the use of sulphuric acid manufactured from indigenous materials in the first place was that when imported brimstone was not available or was too expensive for the manufacture of superphosphate, the manufacturers went to a lot of expense and trouble to convert their plant to the production of sulphuric acid from indigenous materials. Subsequently the supply of imported brimstone became more plentiful and it was found that the manufacturers of sulphuric acid could more profitably use imported brimstone than indigenous materials. Therefore, the Government, in good faith, implemented the Sulphuric Acid Bounty Act. It is not the intention of the Government. I take it - I see no reason why it should be - to encourage the use of pyrites which, after all, has a very limited use and cannot compete now and will not be able to compete in the foreseeable future economically with brimstone which is in full supply throughout the world.
– Why do we not use our own product?
– We do.
– You do not want us to.
– Certainly I do. But while we are keeping open the present avenues for the exploitation of pyrites we are using our own product and we are making it profitable for the manufacturers of sulphuric acid to use our own product. That is the intention of the bill and of the principal act. But to encourage further exploration for and use of pyrites could get the country into economic difficulties by subsidizing a product which is not economically subsidizable.
It is necessary to look at this subsidy in a reasonably sensible way, otherwise the whole purpose of a subsidy will be lost. The purpose of this subsidy is being fulfilled in this bill. To extend the subsidy to encourage people to go looking for pyrites and to exploit pyrites deposits would be a departure from the entire principle of this bill. The purpose of keeping faith with the producers of pyrites is being fulfilled in this bill. I should like to congratulate the Government once again on keeping faith with the people who helped out in a period when imported brimstone was hard to get and was expensive, thus enabling the manufacture of superphosphate to continue. I support the bill wholeheartedly.
– This bill is related to the measure which was passed a few moments ago. I am indebted to the honorable member for Lalor (Mr. Pollard) for his constructive remarks and the plea that he made to the Government that the scope of this bill be widened to include other producers who find themselves able to help the nation in this respect. The honorable member for Kalgoorlie (Mr. Browne) was at pains to point out that this industry might become uneconomic and, therefore, was not worthly of being subsidized. I am astonished that the honorable member who represents such a vast metalliferous area in Western Australia, including Norseman, should speak in this fashion. I am quite certain that those whom he represents in Western Australia - producers in Kalgoorlie and potential producers in his State - will be asking him some questions about his conduct in this place.
The remarks of the honorable member - the young pretender from Kalgoorlie - seem to be far removed from those which we heard through the years from his predecessor, Mr. Victor Johnson, who understood this problem. He came into this House with an intimate knowledge of this industry and was able, on innumerable occasions, to give useful suggestions and support to the Government whenever it was prepared to go ahead with a measure that was likely to assist our nation. Instead of chiding the honorable member for Lalor and talking about putting him right, the honorable member for Kalgoorlie should settle down in this place, doing some quiet study, going around his electorate, and seeing some of these mining industries. If he were to talk to some of the old miners in his electorate they would put this callow young member on the right track in regard to this important industry. Of course, the young member appreciates the fact that he is serving his first and last term in the Parliament. Consequently, be does not think it necessary to inform his mind on the subject.
This Government is supposed to be a government of free enterprise. If that is so, it should not close its doors to the development of the industry in any fashion at all. Again I ask the House: What is the reason for the restriction? Why should this be contained in any way? If one reads the Tariff Board report - and it would take far too much time to go through it in detail - one finds that almost every reference in it deals with the importance of this industry and the need, for a variety of reasons, to develop it. The report states, at page 6 -
The art of roasting pyrites concentrates in Australia has been developed over 20 years. There is a danger that it may be lost if not practised over an extended period.
It would be advantageous to maintain pyrites mining and roasting operations to enable industries’ needs for sulphuric acid to be met in a national emergency.
This matter is related to sulphuric acid, and it is extremely difficult to separate them. As the honorable member for Wilmot (Mr. Duthie) has said, there is a great need for this commodity in war-time. It is a tragedy that when a crisis arises in Australia, we rush hither and thither trying to do those
F.9129/60.- R.-U 391
things that we should be engaged in constantly. It is easy enough to forget these things and proceed to import the things we need. The Tariff Board report went on to discuss this matter when dealing with requests for the bounty. I have not complained about those who want to make this an important industry. I have the greatest sympathy with them, and no remark of mine can be construed to discourage in any respect the development of the industry by those who are engaged in it. The Tariff Board states -
These requests contained such references as the need for a bounty sufficient to establish conditions conducive to the sale of pyrites and that it was important that governmental policy should encourage sulphuric acid producers to use indigenous pyrites rather than imported brimstone.
Of course, that is logical. If it is logical and correct to take it from established producers, it is also sound and reasonable to extend the scope and take it from other places that are capable of providing this necessary ingredient of national development. If new areas can produce pyrites, why restrict production? Is this taxing law of ours to be construed as a sectional one? Is it to be supposed that taxation paid by the people shall be paid in bounty to selected groups? If the people of Australia pay their taxes for the development of the country, it is only reasonable, right and proper to expect that the benefits will be spread over the widest possible field. In its conclusions, the Tariff Board, when referring to the encouragement of the use of indigenous material for the manufacture of sulphuric acid, stated -
This policy has applied in particular since 1950 because of a world shortage of brimstone existing at the time and the possibility of inadequate supplies for the production of sulphuric acid and consequently for the production of superphosphate, by far the largest single use for the acid.
Witnesses at the inquiry showed that the Government had actively encouraged and, in fact, had urged them to convert plants to achieve as rapidly as possible an urgently required increase in the use of local materials to reduce Australia’s dependence on imported brimstone.
That surely indicates without any doubt the great importance of this industry and the urgent need to get on with the job. We applaud the attitude of the Government in bringing this forward. The honorable member for Lalor (Mr. Pollard) asked the Minister to consider the war-time application of this bill. In a minute or so, I intend to tell the Minister how this matter can be of substantial interest to a part of my electorate in ensuring employment and the development of a country centre, ls this the type of development that is to be resented by honorable members on the Government side? I can only hope that the Minister himself will have a look at this matter and see what can be done. The Tariff Board report states -
It is of particular note in this industry that the highest costs and newness of plant are closely correlated. In other words, high cost is not necessarily indicative of inefficient manufacture.
That brings me to the point I wish to make in relation to my own home town of Lithgow in the Macquarie electorate. A group of persons have been working for some time with the object of establishing an industry there. They have already spent considerable sums of money in trying to get this industry established, but if the law stands as is proposed by the Minister, it will be faced with a difficulty. In his second-reading speech, the Minister for Air (Mr. Osborne) stated -
Bounty will be restricted to those producers to whom the Government recognises an obligation. Accordingly, the only recipients will be those producers of iron pyrites who have been in operation before the introduction of this bill.
I ask the Minister to review that proposition. I think it is far too restrictive. I ask him to consider further that this is a time in our history when increasing attention must be given to the development of our Australian industry. It is vital for many reasons. The Opposition supports the broad principles of the bill because it seeks to preserve an important industry and will help to support declining plants and reduce our dependence on imports of brimstone. Surely that is necessary when there is great anxiety about our declining overseas balances. All our attention should be given to stopping this gap in the outflow of money and trying to preserve our overseas balances. It might be said that this will not produce a great amount of money; that it will only provide a few hundred thousand pounds. But whatever it saves Australia in our balances abroad should be preserved. If the Government would show a little more realism regarding unnecessary imports, our balance of payments problems could be solved quickly.
This bill is too restrictive. It provides for existing industries, but excludes new industries. I have a special interest in this matter and I make a plea for the extension of the time for the registration of premises. The industry is growing up in my area and this is an important matter. A group of people have been engaged for some time in trying to establish this industry. Their idea is to produce lead, zinc, copper and iron pyrites. They have set out to employ 25 to 30 workers immediately and later to increase the number to 100. This is a consideration when you think of the general picture in our district where employment in the mines has fallen by more than half. Statistics show that at the end of 1959, there were 1,075 employed compared with 2,422 in 1952. In that period, 1,347 had lost their jobs.
Lithgow and district need new industries. The mayor of the town, the chamber of commerce, other public bodies and everybody concerned with the development of the area have applied themselves to this problem. Therefore, I ask the Minister to review this matter sympathetically. Let him consider the provision in the Sulphuric Acid Bounty Bill which deals with the situation under that measure adequately. That provision is that the bounty is payable provided that - the person making the application had, on or before that date,-
The date of application - incurred, or agreed to incur, substantial expenditure for the purpose of the installation at those premises of plant intended to be used for the production of sulphuric acid from materials of Australian origin.
There, Mr. Deputy Speaker, is an indication that a group is prepared to engage in this production and provide employment. I ask that people who are prepared to spend their money in extending this industry should be encouraged to do so, and I ask the Minister to consider sympathetically the proposals I have made.
– I desire to make a personal explanation, Mr. Deputy Speaker.
– Does the honorable member claim to have been misrepresented?
– Yes, grossly and maliciously. The honorable member for Macquarie stated that I had said that subsidizing the pyrites industry was uneconomic. I said nothing of the sort. The industry is already subsidized. Every producer of pyrites in Australia is receiving the subsidy, and I distinctly congratulated the Government on renewing the subsidy. What I did say - and everybody in this chamber, including the honorable member for Macquarie who. in extenuation, I must say is not noted for being a great thinker, and perhaps misheard me - was that it could be uneconomic to subsidize further production from, at present, unexplored deposits.
.- -I have listened closely to the debate and to the remarks of the honorable member for Macquarie (Mr. Luchetti) about the production of pyrites. I think that the honorable member could not have looked closely at clause 10, which deals with registration of premises. Clause 10(1.) reads -
A person who was, on the first day of December, One Thousand Nine Hundred and Sixty-
Not so long ago - carrying on the production of pyrites at premises may, on or before the first day of June, One Thousand Nine Hundred and Sixtyone, apply to the Minister for the registration of those premises.
– But he must have been producing on 1st December.
– I have read out that fact. That means that registration is necessary. Sub-clause (2.) reads -
The Minister may require an applicant under this section to furnish such information as the Minister considers necessary for the purposes of this Act, and may refuse to register the premises until the information is furnished to his satisfaction.
Stocktaking, inspection of accounts and so on, have to be gone through, of course, in relation to registration. Those things are very necessary when the payment of a bounty from public money is involved. I cannot see how the honorable member for Macquarie can take exception to the registration of premises in this case, because it is so necessary. He made a plea for the extension of the subsidy beyond the date provided for in the clause. I say that the date provided in the measure is such that an opportunity has been given to people to bring themselves under the bounty provisions.
We all approve of the payment of the bounty on the production of pyrites for the manufacture of sulphuric acid, and are anxious to see it continued. We do so because we realize the great value to our primary industries of superphosphate. We have to get superphosphate as cheaply as possible. Primary producers such as wheatgrowers and fat lamb raisers find this fertilizer of great benefit to them and to Australia.
This does not concern me, but I was rather surprised that the honorable member for Macquarie should attack the honorable member for Kalgoorlie (Mr. Browne). It seems to me that this was the first shot fired in the campaign for the next general election. It seemed as though the honorable member for Macquarie was trying to make out that the honorable member for Kalgoorlie knew nothing about this subject, but that the former member for Kalgoorlie, whom we all respected, knew all about these things. But the former honorable member for Kalgoorlie was the very man who was robbed of his pre-selection and endorsement by the Labour Party. Now the honorable member for Macquarie comes in here and tries to make out what a great man that former honorable member was.
– Why don’t you grow up?
– Of course, the honorable member for Lalor passes some insulting remark, and his attitude would no doubt be supported by other honorable members opposite when I speak on such a subject as this. Every one in this House knows what happened to the former honorable member for Kalgoorlie, so I was rather surprised that the honorable member for Macquarie and the honorable member for Lalor should praise him. The former honorable member for Kalgoorlie was the man whom the Labour Party, in a disgraceful way, denied pre-selection and endorsement and so banned him from this House. So, how the honorable member for Macquarie could make an attack on the present member for Kalgoorlie in the face of these facts is beyond comprehension.
.- The honorable member for Mallee (Mr. Turnbull) said that he was not concerned with this matter.
– I did not say that.
– I wrote down what the honorable member said, and I think that what he said was correct. The honorable member knows, if he has listened to the debate, that my friend, the honorable member for Macquarie (Mr. Luchetti) was concerned, and rightly so, about this matter. The Minister knows only too well of the case of a constituent of that honorable member who was anxious to set up an industry in his electorate. The present provision is that that man must be producing by the end of this year in order to qualify for the bounty. Of course, the honorable member’s constituent is at present building the premises he requires. This bill was presented to us only last week, so how this gentleman, who is anxious to establish an industry in the Macquarie electorate, can be producing by the end of this year, when he is only building at present, beggars comprehension. I wish that the honorable member for Mallee had more comprehension of what occurs in this particular field, but of course he has not read the bill, and I know that it is likely that he has no mining industries in his electorate.
The Tariff Board has made certain proposals regarding the Government’s obligation to people engaged in the production of sulphuric acid from indigenous, sulphurbearing materials. This bill contains the Government’s proposals regarding iron pyrites. The Government has adopted the rate, proposed by the board, of £3 a ton of sulphur contained in the pyrites. This basic rate is to be increased or decreased by the same amount as the landed duty of sulphur - or brimstone, as it is popularly called - falls below or rises above the price of £16 a ton. I was interested to-night to hear from the honorable member for Lalor that the present price is £21 a ton. As the Minister stated when introducing the bill, the disabilities of iron pyrites producers vary with the cost of imported sulphur. The adjustment of the basic rate will relate the bounty to the cost of brimstone. As I said this afternoon, I am interested in the position at Mount Lyell, on the west coast of Tasmania. We ship 70,000 tons of iron pyrites each year, at a freight cost of some £4 a ton, to Melbourne, and at a price approaching the cost price of the pyrites. We ship to Commonwealth Fertilizers in Victoria - the acid manufacturers - who then share the existing bounty which is paid under the old provisions with the Mount Lyell company. As the Tariff Board stated in its report, this is the exception rather than the rule in Australia. The Tariff Board had this to say -
Under the present Act, the payment of bounty is made to producers of acid, although in the Board’s assessment of the level of bounty, the cost disabilities of producers of indigenous materials are an important element. Assistance to the producers of pyrites is designed under the present single bounty to be given to them indirectly through the acid manufacturers.
This is the relevant part -
Only one acid manufacturer, Commonwealth Fertilizers, makes a direct payment of part of its bounty to its pyrites supplier. The company stated in evidence that arrangements are such between it and Mount Lyell that pyrites are supplied by the latter at a nominal price and that on receipt of bounty by Commonwealth Fertilizers a share is remitted to Mount Lyell.
This arrangement has worked very well in the past.
– And they were not compelled to enter into that arrangement.
– That is correct. It is a working arrangement between the company that supplies the pyrites on the west coast of Tasmania and the company in Victoria that makes the acid, Commonwealth Fertilizers. We supply the pyrites to that company at practically cost price and, under the existing arrangement, a share of the bounty which is paid to manufacturers of the acid is remitted to the Mount Lyell company.
Under the proposal now before us, the Tasmanian mining company is to receive the bounty direct. We need some form of bounty because the sulphur content of the pyrites is only 50 per cent. This means that of the 70.000 tons that we export each year to Victoria only 35,000 tons is sulphur. The remainder is of no economic use. Under the arrangement, we qualify for the bounty in respect of only 35,000 tons, provided, of course, that the present export arrangements continue.
In view of this arrangement, I strongly support the principle of bounty payments for pyrites produced and sold in Australia, but I regret that the companies concerned, such as the Mount Lyell company, were not given sufficient time to examine the proposed measures and to study their possible effects on the arrangements with Commonwealth Fertilizers. This is yet another example of legislation being rushed through the House at the end of the sessional period. The companies concerned should have been given the opportunity to study the effects of the proposals. We in Tasmania regard Mount Lyell as being very important to the economy not only of that State but also of Australia. As I pointed out this afternoon, several towns such as Queenstown, which has 5,000 people, Gormanston and Strahan depend almost entirely for their existence on the Mount Lyell mine and if, as we fear, the production of copper at Mount Isa increases to such an extent that we shall have to export a great proportion of our copper and so not qualify for the bounty, we shall have to look to other bounties that we can obtain for by-products, such as pyrites, to assist us to keep the mine going. I stress to the Government that the Mount Lyell mine is of the utmost importance.
As the honorable member for Lalor has said, various balance-sheets are published and, on paper, the company seems to be in a very healthy position, but the Mount Lyell mine is barely paying its way although its subsidiaries are in a fairly healthy position. Sooner or later we fear that the shareholders will want the cream and not the milk and they will insist that the subsidiaries shall continue but that the mine shall go out of existence. If that should happen, the people of Queenstown, Gormanston and Strahan who depend on the mine will be in a sorry plight. The Government must consider this aspect very closely. 1 commend that part of the bill which provides for a bounty for iron pyrites according to the sulphur content. I sincerely hope that with the assistance of the bounty we shall be able to improve the financial status of the mine.
I do not agree with any honorable member who claims that we should concentrate on brimstone and do away with pyrites, not only for the reason that I have given already, but also because our brimstone supplies come mainly from South America. Should any world upheaval occur, that source of supply would be cut off overnight. If we are to maintain our production of sulphuric acid for various industries, and of superphosphate for our primary industries, it is essential that the raw materials should be at hand.
I congratulate the Tariff Board and pay tribute to its members for the fine report that has been presented. It is excellent. The board members are to be commended for the work that they perform, the trouble that they go to. and the vast amount of information that they collate for the benefit, not only of the Government, but also of the Opposition. It is to their credit that they have looked closely into this question of the manufacture of sulphuric acid from lead sinter gases. That is indicative of their interest in the welfare of this country and of the fact that they are keeping an eye on the economic aspect. I congratulate them.
I commend to the House the provision in the bill to which I have referred in the hope that it will prove beneficial not only to the Mount Lyell mine, which would be of the utmost importance if we were in trouble in relation to copper production, but also to the manufacturers of pyrites in Australia.
– Mr. Deputy Speaker, I desire to make a persona] explanation.
– Does the honorable members claim to have been misrepresented?
– Yes, I claim to have been misrepresented by the honorable member for Braddon. He stated -
When the honorable member for Mallee started to speak on this bill he said that he was not interested in it.
You will remember, Mr. Deputy Speaker, and T am sure that it is recorded in “ Hansard “ that I said that I had listened with interest to the debate on this bill. The honorable member for Braddon is only a comparative newcomer to this place, but he is catching on very quickly -
– Order! The honorable member will confine his remarks to his personal explanation.
– That is all I have to say.
. I am not going to speak for long on this matter, Mr. Deputy Speaker, but I do not want the opportunity to pass without saying something about this question, because pyrites has been the means of the establishment of a big sulphuric acid plant in my district, costing, I believe, about £2,000,000. The pyrites come from the Nairn district, which I think is in the electorate of the honorable member for Barker (Mr. Forbes). Many years ago I was employed at a superphosphate works at Port Adelaide. The manufacture of the sulphuric acid for the production of superphosphate depended upon brimstone or sulphur imported from overseas.
I think I can claim a little knowledge of the manufacture of superphosphate and of the necessity for adequate supplies of sulphuric acid. It has been explained in this House that because of the fear that brimstone might not be able to be imported from overseas, the subsidy on the production of sulphuric acid was brought into being, as was the bounty in the pyrites industry. This is a big matter for my own district, because adjacent to it we have the Ford works where men are being put off owing to the recent action of the Government. In that vicinity, also, is the big Holden works. It will be realized that this measure will mean much to the workers in my district if it ensures keeping that big sulphuric acid plant going.
I know the great value of superphosphate to our lighter soils. In my young days I went on to very light scrub country where superphosphate was a most important item for the farmer. Anything we can do by way of bounty - whether a straight-out bounty on superphosphate as the honorable member for Lalor (Mr. Pollard) suggested earlier in the debate on these three measures, or in connexion with the procuring of sulphuric acid at a cost which will enable the price of superphosphate to be kept down - will be a big thing for the farmer, particularly the man on the lighter land who has to use a lot of superphosphate for a return comparatively small in comparison with that gained on richer types of soil in the various States. I am pleased to support the measure and the two previous measures, because they all tend to assist, in my own district, the industry of manufacturing sul phuric acid from pyrites which is mined at Nairn, where a large number of men is employed. I have no wish to talk about other matters. This is a practical measure to assist the farming community generally and to utilize the big resources of pyrites which are available. Thus it will provide employment in industries which mean much to South Australia.
– in reply - I thank the honorable member for Port Adelaide (Mr. Thompson) and other honorable members on both sides of the House who have given support to the bill.
– At least members on this side of the House know something about the bill.
– Order! The honorable members will behave himself or he will be put out of the chamber.
– I wish to say three things only: First, the honorable member for Lalor (Mr. Pollard) really did not represent the Government’s position correctly when he said it was our intention to restrict the production of sulphuric acid from our own raw materials. That is not the case at all. The bounty was introduced originally at a time when it was believed, for good reason, that imported brimstone would definitely be in short supply. That proved not to be the case and the Government decided, in May last, that in view of the extra costs involved in using pyrites and other Australian materials, economic reasons no longer justified the continuation of past policy. But the Government clearly recognized that it had obligations to the producers of sulphuric acid from Australian materials, because they had incurred liabilities in responding to the Government’s policy, and it decided that these obligations should be honoured. So payment of the bounty is being continued to those producers. We are not restricting production.
Similarly, the suggestion made by the honorable member for Lalor and another member of the Opposition that the payment of the bounty should be widened to cover future producers clearly mistakes the Government’s policy. It would be contrary to the Government’s policy. The only other thing I want to do is to deny the suggestion made by the honorable member for Braddon (Mr. Davies) that the bill is being forced through the House hi the dying hours of the session. That cannot be sustained. I introduced these bills into the House last week. The Tariff Board reports were tabled and this debate, as we have good reason to know, has been quite unrestricted. The honorable member said that the Mount Lyell company should be given opportunity to consider all these matters. That complaint overlooks the fact that that company was represented at the Tariff Board hearing and knew the Government’s policy under which the board was conducting the hearing. The company had every opportunity to state its views there.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
– Mr. Deputy Speaker. I wish to make a personal explanation. 1 ask leave of the House to correct a statement that I made to-day with reference to the honorable member for Mallee (Mr. Turnbull) and the honorable member for New England (Mr. Drummond). The honorable member for New England mentioned in the course of a debate earlier to-day that I had misinterpreted what he said. I think that may have been the case and, if I have done him an injustice. I make the correction forthwith in accordance with what he suggested. The more important matter, possibly, is my reference to the honorable member for Mallee. The House will agree that I seldom ask for leave to correct anything I say about the honorable member, and in that respect this is perhaps an historic occasion.
In the course of my speech I stated that on 27th October, 1949, the honorable member was reported as speaking during a debate on, and subsequently voting against, the motion, “That Government business shall take precedence over general business to-morrow “. On checking what the honorable member said, I find that on that date he did not take that course. What I had in mind took place on 1st June, 1949, when, as is reported in “ Hansard “ at page 361, the question, “ That Government business shall take precedence over general business to-morow “ was put and a division was taken and was carried by 32 votes to 26. Among those who voted against the resolution were 26 members who included the present honorable member for Mallee. The point I wish to correct is that the honorable member recorded his vote as I have stated not on 27th October. 1949, but on 1st June. 1949. The honorable member did not speak, however, in that debate. I am sorry I did the honorable member an injustice in giving a wrong date, and I correct the mistake accordingly.
Debate resumed from 6th December (vide page 3584), on motion by Mr. Harold Holt-
That the bill be now read a second time.
– The bill before the House introduces an amendment to the Income Tax and Social Services Contribution Assessment Act. As the Treasurer (Mr. Harold Holt) said last night, this amendment varies a long-standing taxation practice. The Treasurer circulated an explanatory memorandum, which set out the main purposes of the bill as follows: -
As the Treasurer stated, this varies a longstanding practice in taxation, under which the cost of any moneys received by a company by borrowing - that is, any moneys received other than the company’s own share capital - is deducted before computing the taxable income.
I think at this point it is necessary to look at the reasons why the Treasurer has made these changes. In his second-reading speech he refers to the growth in the community of what he calls fringe institutions through which funds are channelled for consumer credit and real estate promotions and, he goes on to say, “the less useful types of financing operations generally”. The measure is a recognition of a fundamental change in the economic system with regard to the raising of money to promote the expansion of individual companies. Basically, the radical change that has taken place has been conditioned by the existence of the tax laws that have operated in Australia.
In order to see the picture in proper perspective it is necessary to go back some years, to show where the significant change has taken place. Perhaps I can allay any doubts that the House may have by indicating at the outset that the Opposition intends to support this measure. The criticism we make of it is that it is a measure that has been taken very much too late. As has been the case with many other trends in the economy, the trend in this instance has been evident for a long time, and action with regard to it should have been taken by a responsible government long ago. The nature of this significant change is very clearly shown by the figures given in a pamphlet published fortnightly entitled “Current Affairs Bulletin’*. The volume I have before me is dated 31st October, 1960, and the title of the feature article is, “Australia’s Changing Financial Structure”. On page 199 of this document is given a tabulation of new capital raisings by Australian companies, expressed in millions of pounds, from 1948-49 to 1957- 58. I have added the figures for the years 1958-59 and 1959-60 as T have obtained them from the October, 1960, issue of the statistical bulletin of the Reserve Bank of Australia.
The table divides the new capital raisings into two categories; the first is shares - that is. direct subscription by individuals who have the status of owners in a company, and the second category is debentures, notes, &c, which again represent capital subscribed by members of the public, but who, in this case, have no proprietary right within the entity. For the year 1948-49. new capital in the form of shares was worth £30.100.000, while the second category, debentures, notes. &c, accounted for £300,000. In other words, debentures and notes were almost non-existent; of a total capital raising of £30,400,000, no less than £30,100,000 represented direct subscriptions to shares in companies.
– When was that?
– That was in 1948-49, roughly thirteen years ago. I now come to 1950-51. I do not want to quote the figures for all the years, and I take 1950-51 next, because that was more or less the time when this Government had become, let us say, established in office. In that year, of a total new capital raising of £75,100,000, £67,400,000 was raised by shares and £7,700,000 by debentures. This, again, showed the typical form of money raising by shares directly, which represented £67,400.000 out of a total of £75,100,000.
I now take 1953-54, three years later, when total new capital raisings had fallen to £58,100,000, with shares accounting for £42,600,000 and debentures £15,500,000. There had been a significant increase in the value of debentures and notes, but the typical form of raising new money was still by way of shares.
In 1955-56 the total raisings amounted to £115,000,000, of which £59,200,000 was provided directly by shares, and £55,800,000 by debentures, notes, &c. In other words, the debenture method was becoming more and more popular as a way of getting new money for the various companies. In 1956-57, of total new money of £100.100,000, shares accounted for only £43,700,000. and the value of debentures, notes. &c. had increased to £56,400,000.
– That was the first time the debentures were significantly in the lead.
– Yes. In 1957-58 the total raisings amounted to £117,300,000, of which shares provided only £35,300,000, and the value of debentures, notes, &c, had increased to £82,000,000. In other words, of every £5 raised, shares accounted for less than £2 and debentures for more than £3. In 1958-59 the total new capital had increased substantially to £188,200,000. Only £48,700,000 came from shares, but debentures had risen to £139,500,000. In other words, the ratio of shares to debentures was approximately 1 to 3; out of every £4 raised, £1 came from shares and £3 from debentures. In 1959-60, the last year for which complete figures are available, the total had increased to £241,800,000, of which £48,200,000 or £1 in £5 came from shares and £193,600,000 from debentures, notes, &c.
This shows the significant change that has taken place over a period of twelve or thirteen years. I repeat that in 1948-49, of total raisings of £30,400,000, £30,100,000 came from shares, and debentures, notes, &c, scarcely existed. In 1959-60, at the other end of the chain, the total had increased eight times from £30,000,000 to £240,000,000. Although previously the amount had been raised almost entirely by shares, now shares provided only one-fifth of the total of £48,200,000, as against £193,600,000 from debentures, notes, &c.
The point that I wish to make is that really this new type of financing arose purely because of the taxation law in respect of companies. It should be observed that both kinds of finance are provided by the public. Whether it be shares or debentures and notes, it is money subscribed by the public, handed to these institutions to be invested and to be put to work by managers and entrepreneurs. But traditionally there has been a significantly different treatment of them as regards both taxation and what is sometimes vaguely called the laws of the capitalist system. The person who invested in shares was regarded as bold, venturesome and risk-taking. The person who invested in debentures, preference shares or the new notes was a more cautious person looking for a lower rate of interest but regarding his investment as somewhat more secure than ordinary shares. Of course, in an inflationary situation, shares are in fact no less safe than are debentures, and a shareholder, as such, has virtually no more say in the management of the large concerns in which his money is invested than has the non-proprietary form of subscriber, the debenture or note holder. At least, in the law as it is now to be written, there is a recognition of this fundamental change.
Why has this change taken place? It has taken place because, apart from the first £5,000 of profit made by the public companies, tax is at the flat rate of 7s. 6d. in the £1. Previously, the tax laws had treated shares and debentures differently.
Under the old rule, before computing profit, any interest charged in respect of debentures or the new notes was deducted as a cost of conducting the undertaking, and tax was levied only on the residue. The effect was that those who managed a concern for the owners could carefully calculate the interest that they had to pay, the tax effects and the likely earning position. As far as future transactions were concerned, they would know just how much they could offer for this outside money. As the Treasurer pointed out, when tax at 7s. 6d. in the £1, recently increased to 8s., was taken into account, money that purported to cost these people 8 per cent, in effect cost only 5 per cent. That, I submit, is the reason why this fundamental change has taken place in the method by which new money has been raised by companies.
There are really three ways in which companies can obtain money. They can obtain it by seeking a new issue of shares; by this new form of getting people outside the company, who do not want to keep their money in the company for all time, to pledge it in return for a given rate of interest; or by charging so much for goods and services that after allowing for all expenses, including interest, taxes and dividends on share capital, an amount called undistributed profits still remains. This last method has become a fairly significant form of raising new capital in Australia. It is not dealt with in the statistics, but it also is a factor that has contributed to the inflationary situation as we find it now.
The measure with which we are now dealing and other measures recently taken by the Government, including increased sales tax on motor cars, the projected legislation concerning insurance companies and changes in interest rates payable on overdrafts and fixed deposits in. the banking system, are all part of the plan which the Government has adopted to combat inflation. These measures could be commended if it were not for the fact that the inflationary situation is not new. The inflationary situation has long continued in the Australian economy, and the very device adopted by company promoters, who took cognisance of the tax laws, must have been or should have been noted bv the Government years ago. 1 should just like to quote from the annual report of the Stock Exchange of Melbourne, which has just recently been published. It is dated November, 1960. At page 5, attention is directed to some of the tables that are contained in this very informative and very well-produced document. The report lists several features of the tables which require definition and then directs attention to other features of the tables. The fourth of these features is -
The increased use of debenture loans by public companies, particularly during the 1950’s.
The figures that I quoted earlier show that that trend was evident at least from the financial year 1951-52, although we have had to wait until 1 959-60 for overt action to be taken. The fifth feature was stated in these terms -
The introduction of the unsecured note in 1950 and the very rapid acceptance of this class of issue.
I maintain that the reason for the rapid acceptance of this class of issue, as the report puts it, was that this was a very shrewd device in terms of the existing tax law. I emphasize that that began in the 1950’s. The sixth feature of the tables listed in this report is -
The introduction of options associated with unsecured note issues.
This procedure of options is a procedure under which a person puts money into a company at one stage without acquiring any proprietary right, on the understanding that after a period he will acquire an option to take out a proprietary right in the organization. That option in itself has a cash value which is known rather generally as a capital gain element.
The seventh feature of the tables is -
The comparative movement during the 1950’s away from preference share capital.
That, also, is a point of some significance. Prior to this movement, when companies wanted to acquire new capital, but felt that they were earning a fairly good rate of return on their investment, they resorted, rather than take others in at a full equity, to the device of the preference share, which had a limited return by way of dividend. Prior to the 1950’s, that was quite a common way of getting additional capital. That capital was share capital and was treated for tax purposes in the same way as the profits of companies are treated to-day so far as the shareholders are concerned. But because the rate of company tax was progressively increased, the preference share was suspended as an economic proposition by the managerial elements of our community, and in its place there came the new device of the debenture, note, or unsecured note, in its various forms.
I think that this historical excursus is necessary, because this is a trend that has been evident in the Australian economy for nearly ten years. It is a trend that has continued only because the existing tax treatment was maintained. As a consequence of it, there has been an attempt by companies to outbid others in offering high rates of interest on investments over short terms. The effect on the economy at large has been a spectacular rise in the flow of new money from £30,000,000 in 1948-49 to £240,000,000 in 1959-60. We have seen a change in emphasis. Where, previously, the new money had all been basically share capital, about four-fifths of it is now in this new form of securities rather than in the old-established form of share equity. As a result, as companies have raised their interest rates relative to those offered by other companies, taking into account, I suppose, the cupidity of individuals and their desire to get as much as they can for their various investments, and taking into account, also, the inflationary situation, in which money has not held its value anyway, the tendency has been for people to seek for their investments the greatest possible yield without necessarily paying very much attention to the social consequences.
In order to show the stage that had been reached prior to the introduction of this bill, I refer to a monthly circular distributed by a particular firm of stock and share brokers, which I shall not name. This Sydney firm, in its circular for December, 1960. under the heading “ Higher Rates for Fixed Interest Money “, lists the rates of interest offered by a number of companies and the terms which those companies are offering for the sort of investments that I have been talking about. For money at call - that is, money merely lodged for from 30 to 60 days - I merely cite the first company listed - the Alliance Acceptance Company Limited offers 4i per cent, for 60 days. It offers 6i per cent, for eighteen months and 8 per cent, for terms of five years and longer.
I think that at this point we ought to ask: What is a fair return for people to expect on their investments? I regard interest at the rate of 8 per cent, over a five-year term for money merely put to work by somebody else as immoral in the light of its effect on the community at large.
– It is usurious.
– It is a usurious rate. Yet rates have been rising incessantly over the last few years towards this level. Just contrast the present rate of 4i per cent, for money lodged for 60 days with the rate of 3i per cent, on money invested in giltedged securities over a ten-year term which prevailed when this Government came into office. I do not regard the 3i per cent, as unreasonable for a gilt-edged investment, but I do regard 4i per cent, for 60 days as an immoral rate in the light of its significance for the community at large.
These immoral interest rates have provoked organizations which are sometimes called institutional investors to seek the same sort of rates themselves in order to provide what is called a hedge against inflation. If you subject the picturesque term “ a hedge against inflation “ to serious analysis, it means simply an attempt by one section of the community to protect itself, at the expense of the rest of the community, against an inflationary situation. I submit that the Government’s purpose should be to look after the community as a whole and to protect it against that section which profits by inflation. In this measure, at any rate, we have one of the first moves made by the Government to deal with this highly immoral situation which exists in the community at present. I hope that some one will try to explain why an interest rate of 4i per cent, on an investment made over a term of 60 days ought to be considered a tenable rate and why 8 per cent, over five years on what are reasonably safe investments should be regarded as justified.
The Australian Labour Party, of which on this occasion I am the spokesman, believes that the community as a whole should progressively reduce the rates of interest current in the community. Because one section is shrewd enough to see that loop-holes in the law enable it to attract money at higher rates of interest, others should not find themselves unable to get any money. Money should not be used for the production of more mouse traps when it ought to be used for the construction of more schools. We suggest that the logical and rational thing to do is to ask why this money is going into this sometimes - I do not say “ always “ - frivolous sort of activity when government bonds, semigovernment bonds and other essential forms of investment are lacking. In my opinion, an attempt should be made to bring down these usurious rates in preference to increasing the rate on gilt-edged government securities.
– Tell us how you would reduce the rates.
– This measure ought to have some effect in that direction.
– But tell us how you would do it.
– First, let me say that I would have taken this step five or six years ago when the rate was not 8 per cent., but only 5 per cent, or 6 per cent. Even then it was too high. I would not have let it get to the stage at which the lid blows off, then become apprehensive about it and take the kind of step that is proposed now. I submit that this is just another case of too little action being taken too late, and I believe that within a short time the Government’s epitaph will be, “Too little too late”. I commend the Government for having moved in the right direction, even though it has moved much later than it should have done.
I have very little sympathy with those who shed crocodile tears about the hirepurchase companies. To hear some of these supporters of the hire-purchase companies would almost lead one to feel that they were public benefactors. If they are public benefactors, they are also most certainly private benefactors to those who control them. I look at this question of hire purchase from the public benefaction side. A critical analysis of the bill reveals that, in effect, all that the Treasurer is doing is freezing the activities of these concerns at the level they had attained by 15th November, 1960. That level is not being prejudiced, although I believe that it was too high in certain instances. It would seem that the real thought at the back of the Treasurer’s mind is that too much money has gone into the hire-purchase companies and too little into more desirable channels. My only criticism of that is that the Treasurer has awakened to the position too late. I do not propose to say what the relative ratio between public and private investment should be, but there are times when the community has to decide whether it is better to have more television sets or better schools, hospitals, and so on. One way of ensuring that we have the better schools and hospitals is to have a properly adjusted tax system.
Let me quote now from a booklet which “was circulated to honorable members recently. It is “ The Philosophy of Hire Purchase”, written by one Vernon H. Stanley Low, chairman of the Victorian Division of the Australian Hire Purchase Conference. On page 13 of that document, we find this justification for the hirepurchase industry -
The ready public acceptance of the industry is shown by the fact that between 1951 and 1956 public borrowing jumped just over £11,000,000 to nearly £59,000,000. By the end of the last financial year-
Looking at the tables, I think he is referring to the year 1958-59- the issued capital of finance companies listed on the leading Australian exchanges approached £50,000,000.
He is referring there to issued capital as distinct from this new variety of capital to which I referred earlier, and which is being accepted by the tax laws in their present form. The article continues -
Borrowings by these companies would approximate a further £150,000,000. This represents a total investment of £200,000,000 apart from the retained profits used to swell income earning funds.
The huge demand for money by the hire purchase companies in recent years has resulted in the public being offered sound fixed interest rates.
They are very sound, and they have been relatively fixed up till now, which leads me to the belief that this protest by the companies is more in the nature of shedding crocodile tears than the voicing of a real complaint. The passage goes on -
But the bulk of finance for new business-
I emphasize that this is a publication issued by the hire-purchase companies, not by me - comes from repayments on previous hire purchase contracts. In 1957-58 the amount provided by hire purchase companies was £234,000,000.
– Why are you opposing the measure?
– We support it, as the Minister would have heard had he been here earlier. All I am asking is why it was not done years ago, before you got into the Ministry. You are a comparative junior, but you could have pointed out the need for it from the back bench.
– I bow to your years of experience.
– They may not be years of experience, but I hope they are certainly years of discretion. The statement continues -
Of this £177,000,000 (76 per cent.) was financed by repayments.
That represents £3 out of every £4 -
The sum of £57,000,000, or 24 per cent., was new money, made up of capital issues, public debentures and new issues and deposit moneys lodged by the public. None of this new money was provided by trading bank advances.
If that is the true picture I fail to see why this legislation should have evoked the opposition that it has from these companies. It still allows them to continue with the same level of borrowings that they had reached at 15th November, I960, provided that they can retain their investors. I suppose the rub is that when they begin to want new money they will have to offer less favorable terms because of the tax concession. But bearing in mind that there is no restriction on the level of borrowings already reached, and that it has been stated that £3 out of every £4 that the companies lend represents a recirculation of repayments, I fail to see why the measure should be met with the great display of weeping that we have seen.
Finally, whilst I do not wish to appear to be an echo of the Treasurer on this matter, I would like to repeat a statement that he made. He said that he regarded this as an interim measure. However, his remarks did not carry the implication that it would be removed very shortly but rather that it would be re-imposed in different forms after he had had time to contemplate it. I hope that he will not let the lid off once he has made an endeavour to put it on. The right honorable gentleman further said -
Perhaps I may re-emphasize here two points: One is that it should not be assumed that the continuing scheme-
That is after he has had time to look at it closely - will bear any close similarity to the interim scheme now being introduced. The second is that our broad aim will be to reduce as far as possible the advantages which deductibility of interest provides for companies which seek to borrow excessive amount of money at excessive rates of interest–
I suggest that it is not so much the money as the command which this will give over physical resources that is important. The Treasurer’s statement represented a belated recognition that sometimes excessive amounts of money may go where they are not necessarily socially desirable. Another implication is that more desirable avenues suffer in consequence.
The second point that is noted is that there can be excessive rates of interest. I have described some of them - and I stick to the term - as immoral rates because I can see no warrant, when very little risk is attached to a transaction, for charging usurious interest. I hope that this measure will have the effect which I think it will have over a long period. It may at least lead to lower rates being offered in this field which will make existing rates in other fields more attractive than they have been. In this way, we shall clip the wings of the unofficial banking system about which the Government will not take any constitutional or legal action although it is not sure that it cannot do this. We shall restrict the undesirable activities of that part of the economy.
– Order! The honorable member’s time has expired.
.- As the members of his party have done so often, the honorable member for Melbourne Ports (Mr. Crean) has deplored the rates of interest charged by hire-purchase companies. He has left the impression that hire-purchase companies are all great wealthy institutions which operate at high rates of interest; that they extort quite un reasonable rates from their customers and make exorbitant profits. The fact is that competition has severely reduced their profits in the last few years, particularly last year. Far from being loan sharks, the big majority of them who do most of the business are highly responsible financial institutions which do a job which can only be financed at fairly high rates of interest. The facilities that they provide are still nothing like as broad as those enjoyed by American families. The hire-purchase companies, although important in relation to this measure, are only, in the long term, a fringe consideration.
The honorable member for Melbourne Ports pointed out very rightly and properly the trend for companies as a whole to raise more money by means of notes and debentures rather than by share capital. Of course, one of the main ways in which companies raise capital is by ploughing back profits. It is true, for instance, that in 1955, Australian companies listed on the stock exchanges raised nearly £60,000,000 in share capital and only £27,500,000 by debentures, registered notes or deposits. By 1959 this proportion had very much changed. Share capital raisings by listed companies then amounted to £48,700,000 whereas the amount raised in debentures, registered notes and deposits had risen to £140.000.000. That, no doubt, is an increasing tendency. However, I am quite sure that the honorable member for Melbourne Ports will agree that, in examining totals, it is necessary to look at the changed nature of the companies raising money.
One of the big reasons for the big relative change from share capital to notes or borrowings is not a change in the habits of old established companies, but the increasing relative importance of retail companies and hire-purchase companies in relation to the total amounts raised. I have not been able to put my hands quickly on the figures for the whole of Australia, but on examining the companies listed on the Sydney Stock Exchange, I find that of £123,000,000 of debentures and secured notes issued by the middle of September, 75 per cent, was accounted for by hire-purchase companies and retailers, and 4 per cent, by gas companies, the remaining companies holding only about 20 per cent.
This is a completely new picture. At this time, unsecured non-convertible notes totalled £59,000,000 of which hire-purchase companies had issued 40 per cent., manufacturing companies 39 per cent, and remaining companies only 21 per cent. So in considering the change from share capital to borrowed capital it must be remembered that hire-purchase companies and retail traders have recently begun to raise very great sums of capital and this has tilted the total very much in favour of borrowed capital as against share capital.
Now - I am speaking of the Sydney Stock Exchange - the convertible notes were only one-fifth of the total at £47,700,000. The serious part about this measure really is that what it does introduce - a very fundamental type of change in the tax structure - is brought in as a temporary measure and one to deal with the current situation. On the whole, in a free enterprise economy, the basic thing to look after is the money supply. If the money supply is properly regulated and looked after and not allowed to grow excessive, and also if flexibility of interest rates is allowed, a great deal of the distortion and a great deal of the kind of things that have been happening lately would not occur. So far as the honorable member for Melbourne Ports (Mr. Crean) is concerned, it is fair enough from his philosophical viewpoint to deplore rates of interest above a certain notional amount which he thinks is moral and equitable. The rest of his philosophy is controls. He believes in controlling the whole economy; and if you are in a position to apply direct controls, it is logical to say that the rate of interest will be so and so and if m fact that gives rise to excessive demands for capital - which it certainly would - by direct prohibitive measures, you cut off the supply. On that basis, it could be done.
But what, unfortunately, we have been endeavouring to do is to make the bond rate and the bank overdraft and deposit rates fixtures in the economy. Then we have tried, one way or another, to swing the whole economy round to gear in with those particular rates. In a free-enterprise economy, there is nothing holy about a particular rate of interest. If you have a bigger money supply and more inflation and thus better opportunities to make profits, the demand for capital will send the rate up high. If you are not prepared to ration it indirectly by allowing interest rates to rise. you have to ration it by a series of direct measures. That is the basic situation we are in, and so we are led into this kind of measure of a fiscal nature to adjust what ought to be done slowly over a period by good monetary policy and changes in the interest rate.
The danger - and there are several dangers - in a measure of this kind is that it is like walking into a bog in the dark. It is not easy to see what you are doing when you start to play about with the normal way of operating quite a large part of a free-enterprise economy - that is, raising a certain amount of capital and borrowing the balance. It is no good looking at some of the people who have got out of hand in the last few months and pointing to them as though they were typical of the whole economy. This provision to cease to allow the many kinds of borrowings, or the interest payment on them, as an income tax deduction does, in fact, cut across a large part of normal business methods.
It is not only the public utilities that are accepted by this bill - things like building large factories, the bulk ships that are being built at Whyalla which are all financed by notes over a period, as well as pipe lines and all sorts of projects. The characteristic of many of these enterprises is that they have to be planned over a period of years. If you have to put up a large new factory, it may take five years to do the necessary planning, and you have to plan it stage by stage. A company putting up a very large plant cannot suddenly change its methods. It certainly would not in most cases wish to borrow money ahead. It relies on being able to borrow over a period of time. It has no guarantee ahead of time that it can borrow at a particular rate of interest; but when it is thinking in terms of borrowing with a range of 6 to 8 per cent, and suddenly overnight the cost of raising money at 8 per cent, becomes more like 13 per cent., its operations can be severely hampered and thrown out.
It is true, as the Treasurer (Mr. Harold Holt) has indicated, that this is a temporary measure designed to slow down this process in the immediate future. Undoubtedly, for large numbers of companies, that will be something to which they can adjust themselves. The adjustments and scaling down of activities will have a very healthy effect on the economy in present circumstances. On the other hand, there are those whose plans are in full flight, and in the case of some of these it may be very difficult. Another weakness of this bill is related to its likely effect on the inflow of capital from overseas. The general measures taken by the Government to tighten up the economy and constrain intiation are, of course, bull points so far as attracting foreign investment goes. No foreign investor wants to put money into a country which is mismanaged and where affairs are likely to get out of hand. The other measures such as sales tax on cars and tightening of credits are things which, although unpleasant, increase outside confidence in the country rather than the reverse. But when you show that you have suddenly introduced a change in the fiscal system at short notice such as we are doing now, it must raise in some quarters a good deal of hesitation and doubt at a time when it is most important to keep up with the capita! inflow. No doubt, the more sophisticated ones realize that over a period of time whatever temporary set-backs we face, the money will be well placed and things will recover, and the capital will be soundly invested. But rn the minds of some people, a measure which suddenly changes the fiscal system is not one which can be regarded very happily.
I hope, indeed, that this measure does prove temporary, because apart from anything else it confers a tremendous advantage on existing companies and companies which have borrowed quite a lot in the recent past relative to new companies that are just beginning to start operations or plan to start in the near future. So I hope that this will in fact prove to be a temporary measure. As to the permanent measure indicated by the Treasurer - the taxation on convertible notes - I do not think on the whole that any reasonable person anywhere would challenge a measure of this character, because this operation of convertible notes has clearly been closely tied up with measures to dodge taxation which in other spheres is not nearly as much as some people would suppose. I have no hesitation whatever in supporting the measure to tax interest paid on convertible notes which are held by de facto shareholders or people taking appropriate interest in the company.
Before 1 sit down I should like to make one other point. That is, that the Treasurer has gone some way to meet the case of companies which, although they had not borrowed amounts up to 15th November, were caught in full flight, having entered into obligations which otherwise would be extremely embarrassing to them. But other concerns had entered into contracts to do various things, such as erecting buildings or constructing ships, and although they had not already arranged a contract to borrow money they were clearly conducting their operations on the basis that they would be able to raise money of a loan character from other than the banks, which are barred to them in a matter such as this. I hope at a later stage to propose an amendment, which I hope will be acceptable, to meet the position of those businesses. 1 believe that this measure is the product of past failures of taxation policy and policy on interest rates and monetary affairs generally. It certainly will have a considerable effect in slowing down the current plans of many businesses. Whether it will, in fact, be too restrictive - because, after all, the economy has only to move a short distance from a condition of over-supply of money and acute shortage of labour to the opposite - I do not know. However, I trust that this measure, which I hope will be temporary, with limited effect, will have the effect that the Government intends it to have, and will not produce greater dislocation than the Government foresees.
.- The honorable member for Wentworth (Mr. Bury) made a very embarrassed speech. He is very uncomfortable about the bill because he is torn between two loyalties - his loyalty to the political party to which he belongs and his loyalty to the business interests that he represents. That is why he has an uncomfortable feeling about the amendment that he foreshadowed.
When the Treasurer (Mr. Harold Holt) made his economic statement to the House on 15th November it was thought that his proposals were going to be of a revolutionary character. As a matter of fact, many of my colleagues were surprised and they said that they had not thought the Government would go so far. Now that we see the legislation we find that proposals do not go very far at all.
Although the Opposition is supporting the Government’s measures we believe that they will not solve the problem because of the difficult circumstances existing in this country. We think that the Government is not getting anywhere because of the way it is fiddling around trying this and trying that and saying, “ We don’t want to go too far because we don’t want to embarrass our friends. It is to be only a temporary measure.” We can remember other temporary measures that the Government has taken up to date. For instance, in a series of temporary measures during its term of office it has increased sales tax by 400 per cent, altogether. I am afraid that this temporary measure now before us will be another of the Government’s permanent temporary measures, but this one at least does not go very far.
I want to turn now to what has been happening in relation to the share capital of companies. Statistics issued by the Commonwealth Bureau of Census and Statistics regarding new money raised by Australian companies from 1st July, 1954 to 30th June, 1960, show quite plainly how companies listed on the stock exchange allocate their share capital. In his secondreading speech announcing the bill the Treasurer said -
To allow the deduction of interest as business expenses has, of course, been a long-standing practice in taxation.
We know that. We know also that the capitalist interests to-day also realize where the loopholes are in the taxation system. So we find that in the year ended June, 1955 the share capital of companies listed on the stock exchange was £59,700,000. In the same year debentures, registered notes and deposits amounted to £27,500,000. By the end of June, 1956, share capital was £59,200,000 but debentures, registered notes and deposits had risen to £50,000,000. By the end of June, 1957 share capital was down to £43,700,000 but the debentures and so on had taken the lead and were up to £51.000,000. By the end of June. 1958. share capital was down to £35,200,000 and the other figure was up to £78.300.000. By the end of June, 1959, share capital was £48,700,000 but registered notes, deposits ?nd debentures had risen to £139.500.000. By the end of last June share capital was £48,200,000 and debentures &c. had risen to £193,600,000. Was not that sufficient warning that even though it was traditional to allow the capitalist system, which controls the big monopoly concerns which in turn control the finances of this country, to have the benefit of the tax-free provision, this benefit was being abused? Surely the Treasurer had enough warning over the last few years from the members on this side about this trend.
On the morning of 15th November last - that is, the very day on which the Treasurer made his economic statement - I asked the Treasurer the following question: - 1 preface a question to the Treasurer by directing the right honorable gentleman’s attention to the increase of 6d. in the £1 made in company taxation last year, bringing the maximum rate of company tax to 8s. in the £1. This has given great assistance to companies which raise money by the issue of debentures, in order to evade company tax, because, as the Treasurer knows, such companies pay interest on the debentures before paying company tax. Does the Government intend to take action against this type of capital raising?
The companies were in a better position because, as a result of the deduction allowed in respect of interest, the capital which they raised and on which they were offering 8 per cent, was costing them only 5 per cent. Every £1 that they raised was costing them only 12s. 6d. because^ interest was being paid before taxation. When the company tax was increased to 8s. in the £1 it cost the companies only 4.8 per cent, to raise their capital. On 20th October, speaking in this chamber, I made the following statement, which is reported in “ Hansard “ at page 2240:-
It is common knowledge that companies pay interest on debentures before taxation is assessed. In effect, this means that although a company may be advertising that it pays 8 per cent, on money paid for debentures the actual cost to the company is only 5 per cent.
One of the Treasurer’s colleagues, the Minister for Supply (Mr. Hulme) interjected -
That is not right.
That is how informed the Cabinet was. I replied -
If the Minister will keep quiet for a moment longer ! shall explain the position to him.
Again the Minister for Supply interjected. He said -
It will be interesting to listen to your logic.
I then said -
Most of these companies pay taxation at the rate of 7s. 6d. in the £1. This leaves them with 12s. 6d. or five-eights of £1. They therefore pay 8 per cent, interest on only five-eighths of £1, so that in effect they pay only 5 per cent, on 20s. in the £1.
That is the warning that I issued to the Government.
– That was last year, was it not?
– Yes. Of course, I first warned the Government twelve months ago, and one has only to read “ Hansard “ to see how many warnings the Government has had by Opposition members who have repeatedly brought these anomalies to the Government’s attention. In his statement of 15th November last the Treasurer also said -
The position so created has been a matter of concern to the Government for a good while past. It figured prominently in our Budget discussions in July.
So the Government discussed this matter in July but the Minister for Supply (Mr. Hulme) was not aware of what had happened. The Treasurer also stated -
The value of this to such borrowers is very substantial indeed. With the general rate of company tax at 8s. in the £1, the net cost to a company of a S per cent, loan is only 3 per cent., and an 8 per cent, loan only 4.8 per cent.
Have I not brought this matter to the Government’s attention on numerous occasions? Are not the figures that I have quoted issued by the Bureau of Census and Statistics which comes under the control of the Treasurer? If he studied these figures a little more closely he would be aware of the trends in Australia.
We know that the activities of hirepurchase companies have increased enormously. According to the Bureau of Census and Statistics, in 1953 Australians owed hirepurchase organizations £88,000,000. As at 3 1st August last that debt had reached the enormous amount of £427,000,000. Just to remind the Treasurer of the position in the last year of the Chifley Government’s term of office, the Commonwealth Bank was owed £16,000,000 for hire-purchase transactions and the private hire-purchase companies were owed £70,000,000. To-day the Commonwealth Bank has maintained its loans at £16.000.000, but the debt to the private hire-purchase companies has increased to £427.000,000. The Government has never allowed the Commonwealth Bank to compete with the private hirepurchase giants in this field.
We have warned the Government time and time again of the serious problems that confront Australia. Lend Lease Corporation, a great building organization that operates mostly in the Sydney metropolitan area - I am sure the honorable member for Wentworth knows this firm - only recently sought a public loan of £1,000,000. The loan was over-subscribed by £900,000. Not long before that, Hookers wanted to borrow £500,000, and the loan was oversubscribed by £2,000,000. At about that time a Commonwealth loan was undersubscribed by £3,500,000. These giant institutions prefer to spend their money on luxury hotels, modern insurance offices and luxurious bank chambers. We need hospitals, schools and homes for the people, but the Government has been channelling its funds into avenues where they are used to erect luxury hotels before hospitals, insurance offices before schools and banks before homes for the people. One could go further and say that the Government prefers to see bigger and better bumper bars on bigger and better motor cars than to see better roads. Our economy is in a sorry plight.
We have directed the Government’s attention to the anomalies that exist in our taxing laws which enable these great institutions to evade taxes, and one would have thought that the Government would have taken some drastic action to meet the position. In his second-reading speech on the Income Tax and Social Services Contribution Assessment Bill (No. 3) the Treasurer stated -
In my statement I outlined why the Government had decided upon these measures. I pointed out how the bidding of higher and higher rates of interest for borrowed money had been working to the disadvantage of governments and other public authorities and, through them, to the disadvantage of the general taxpayer. This was because the less governments could borrow on reasonable terms the more they had to obtain in taxation to finance basic developmental works and the provision of community services.
The Government’s proposals do not go far enough. Within a few months it will have to take further measures to stem the economic tide. As at 30th June, 1960, companies listed on the stock exchange had borrowed £193,000,000. By November this year the amount had increased, so that these organizations are evading company taxes because they are still being granted the concession. This so-called temporary measure does not go far enough.
We know that institutions which issue debentures or registered notes or accept deposits, and organizations which borrow in excess of £200,000,000 a year now will have to pay interest on those debentures and notes on the same basis as income tax is paid on dividends. But bank overdraft interest is still excluded.
Yesterday I asked the Treasurer what measures the Government proposed to take to prevent banks from channelling to their respective hire-purchase subsidiaries a good deal of the funds that are at present made available on overdraft. To give the honorable members some idea of the actual position I shall read from a book titled “ Philosophy of Hire Purchase “ which was written by V. H. Stanley Low. All honorable members received a copy of this publication and the honorable member for Melbourne Ports quoted from it. The Bank of New South Wales controls 40 per cent, of Australian Guarantee Corporation, which is a hire purchase company. The Commercial Bank of Sydney controls 40 per cent, of the Commercial General Acceptance Company. The National Bank of Australasia controls 40 per cent, of Customs Credit Corporation. The English Scottish and Australian Bank controls 100 per cent, of Esanda, another hire purchase company. The Bank of Adelaide controls 40 per cent, of the Finance Corporation of Australia and the Commercial Bank of Australia controls 45 per cent, of General Credits.
As honorable members can see, the banking institutions are well tied up with the hire-purchase field. For a long time, if one went to a bank for a legitimate loan, which is normal banking business, the answer would be, “ I am sorry, the money is not available at bank rates “. One would then be directed to the end of the counter, to the bank’s hire-purchase subsidiary. What is to stop these companies, which are borrowing up to £200,000,000 a year, and the banks, under the present legislation, from diverting some of the money obtained from these channels to their subsidiaries by means of overdraft so that they can still evade company taxation? The interest on bank overdrafts is not covered by the provisions of this legislation.
Yesterday morning I asked the Minister a question at question time. He did not take that opportunity of replying, but said he would answer me during his secondreading speech later in the day. I have read his second-reading speech carefully and I find that the Minister did not give a reply to my question. There is ample opportunity under this legislation for the banking institutions to divert money to the hire-purchase companies by means of overdrafts. This applies not only to the banking institutions. What about undertakings like L. J. Hooker’s and Lend Lease and others which are borrowing money? One has only to look at the daily newspapers to see what is going on with reference to the banking institutions. In this morning’s issue of the “ Sydney Morning Herald “ Esanda is advertising for money at 7 ner cent, for from six to ten years. H. G. Palmer’s is seeking to borrow money at 8i per cent, for five years and at 9 per cent, for ten years. Marcus Clark, a retail store in Sydney, is borrowing money at 8i per cent. Lend Lease is quoting notes for Si per cent, for five or six years. Bradford Cotton Mills is offering 7i per cent.; and Reid Murray are offering 9 per cent, for eight to ten years. These are just a few of the companies which are still advertising - even in the “ Sydney Morning Herald “ this morning - for finance.
I do not think this legislation will control this great social evil which is not being curbed by this Government. When the Treasurer made his statement On 15th November, we thought we were going to get some definite policy and that the Governmen would bring forward legislation to control the destiny of this country. We now find that it is still lukewarm on this issue and that the legislation does not go far enough. This Government should have faced up to the issues raised by the Constitutional Review Committee. Many proposals were brought forward by that allparty committee in relation to the powers necessary to curb the inflationary economic trend in this country. That was a committee with even party representation, and its decisions were unanimous; yet the Government will not act.
A warning has been given by members of the Opposition. We have warned the Government that the measures now being taken are insufficient to overcome the economic problems of this country. . In this mornings issue of the Melbourne “ Age “ Mr. Warren D. McDonald, Chairman of the
Commonwealth Banking Corporation, is reported as having said that he was really shocked by the amount paid in Australia to hire-purchase companies. Mr. McDonald, of course, was formerly general manager of Trans-Australia Airlines. He is a man who has had a great deal of business training, and he strongly criticizes the amount of money still being diverted to hire-purchase in Australia. In this article in the Melbourne “ Age “ he is reported as saying -
The Australian worker to-day could not meet his commitments under hire-purchase unless he worked six days a week. The Federal Government had had a lot of encouragement to make it difficult for hire-purchase companies under the new economic measures announced last month. Hire-purchase was one factor contributing to the high costs of Australian manufactured goods.
We have made the position clear. We support this legislation but say that these proposals do not go far enough. The economic position is becoming so bad that the Government is not facing up to it. It must gain the courage to face up to the real issues and ask the people of Australia to empower this Parliament to control effectively the economy of the country. Many other issues which obtain under the existing law must be stressed. Some of these matters have been mentioned by the honorable member for Melbourne Ports (Mr. Crean). In particular, I refer to undistributed profits. Under the Chifley Government there was a tax on undistributed profits. In the last year of the Chifley Administration, undistributed profits amounted to only £81,000,000, but to-day the figure is £205,000,000. Depreciation of plant has risen from £96,000,000 in the last year of the Chifley Administration to £512,000,000 to-day.
It is interesting to note that in the last year of that administration depreciation of plant amounted to only 4.2 per cent, of the gross national product whereas last year the figure was 7.7 per cent. This is another anomaly which makes the wealthy wealthier. We should examine the position regarding depreciation of plant more closely and should tighten up on it in non-essential industries.
Mfr. Wight. - Name a non-essential industry.
– If the honorable member does not know what is in the best interests of the nation, I see no reason why I should tell him. We know that he is not concerned about the real problems which exist in our country. Depreciation allowance in respect of plant should be withdrawn in non-essential industries and we should ensure that money flowing to that section of the community is diverted to the Treasury.
There is another important taxation concession that should be reviewed by the Government. I refer to the deductible allowance in respect of expenditure on packaging and advertising. The Government is virtually subsidizing commercial undertakings to the extent of £100,000,000 a year by way of this taxation concession.
We know that the Government stands for indirect taxation, and it raises greater and greater proportions of its revenues by indirect means. I suggest that, besides reviewing the various taxation provisions to which I have referred, the Government should endeavour to reduce the incidence of indirect taxation and to raise a greater proportion of its revenue directly. The Government could take a major antiinflationary step if it followed this suggestion.
The honorable member for Wentworth (Mr. Bury) spoke about foreign capital. Many misleading statements have been made about the inflow of foreign capital, which is really coming into this country in no more than dribs and drabs.
– Nonsense! The Premier of New South Wales does not agree with that statement.
– In reply to the interjection of the honorable member for Lilley, let me cite some figures from the “ Bulletin of Oversea Investment”. New capital inflow from the United States of America last year amounted to £11,600,000. Capital outflow was £16,300,000. Because of the double taxation agreement with the United States of America in 1953, American investors effected a saving of £4,000,000, so that actually the new capital inflow was not £11,600,000, but only £7,600,000, because £4,000,000 of it was our own money.
-Order! The honorable member’s time has expired.
Sitting suspended from 11.32 p.m. to 12.2 a.m.
Thursday, 8 December 1960
– Before the suspension of the sitting, we suffered by listening to the radical views of socialism as expressed by the honorable member for Reid (Mr. Uren). He quoted a great many figures to show the increase of capital growth and he deplored the very fact that there had been such an increase. But I ask the House to consider whether that increase is not an indication that new capital has come to us from those who have faith in the country as a place in which to invest their funds, thus creating new industries and adding additional capital to old industries. Surely that is a recognition of our growing strength and of the confidence that investors have in Australia.
The honorable member for Reid posed as the warning light of the Australian Labour Party - the real economic blinker of the Opposition. I want to say to the honorable member for Reid that there is no occasion to be so miserable, even at this late hour. We will survive and much to the consternation of the honorable member we will be prosperous, despite the prophecies of this dismal Tommy from Reid. What did he say? 1 do not think it was one of his best speeches. It appears that he hates the capitalist system and if we could only use the “ Laws of Disaster by Uren “, we would be in a happier position.
But it is not as easy as that. I am sorry that the honorable member for Reid was so depressed and that he found refuge in so many figures. I do hope that he understood them. They did not do anything to prove his argument. He is so miserable about the whole situation, but I want to refer to the comments of critics of the Government who have been vocal about the state of our economy. Some of them have tried to create panic and a scare that can only do harm, but their charges are without foundation. Anybody who tries to create a depression, a panic or a lack of confidence in the economic stability of our country is doing a great disservice to Australia itself. I have faith in Australia and in its destiny. I consider that there are vast possibilities and potentialities here and an opportunity for investment.
One of the greatest attractions of investment is the security offered by a stable government. The eleven years of continued prosperity which this Government has given to Australia is something that has never been given by any previous government. The only disadvantage of our economy is that it is geared to the wool cheque. Our national income having fallen, it would be folly not to recognize in the general economic sense that our expenditure and our development must be attuned to our lower incomes. That should not be related solely to the private sector, but should be applied also to governmental expenditure, and moves to curb governmental extravagances should not be delayed until the effect on the private sector of the measures now adopted has been noted. To travel fast is to travel dangerously, and Australia has certainly been progressing at a fast rate in the last decade. It is to be expected, therefore, that there will sometimes be trouble at tricky points of the road. We are at such a point now and it is therefore prudent that the Government should take some action in monetary matters.
The Government has been criticized for its intervention at this time in the overall financial programme. It has been charged against the Government that its actions now are inconsistent with the recent Budget proposals. In answer to such critics, I say that it is no doubt very fine to be consistent, but it is even more important to be right at a given time. Frequently, being consistent means only doing something this year because it was right to do it last year in entirely different circumstances. This is a time of rapidly changing events and unfortunately government financial policy is often too slow to meet the changing pattern. It must be remembered - I ask our critics to bear this in mind - that to change the policy of governmental action is not as easy as is the normal conduct of business activities. Quite frequently, when a government does act, the corrective process is rough and arbitrary and can be unjust. In some instances, government action destroys the regulating mechanism itself.
The Treasurer (Mr. Harold Holt) has stated outside the Parliament that the bill now under discussion is unusual and unorthodox. With this I agree. But it also carries with it the likelihood of the disadvantage that is referred to socially as not being understood. In his statement on the national economy, the Treasurer intimated that such a measure would be introduced. Since then, naturally enough, business and commerce likely to be affected has been at a standstill and has been held in a state of suspense, not knowing what the precise details of the measure would be. It is unfortunate ate that in this matter the Government faces a dilemma to which it has contributed itself in no small degree by consistently ignoring two important factors operating in the money market. The first is that the ordinary banking structure was hamstrung by restrictions and the second is the failure to recognize the need for a rise in interest rates.
For some time past, the Government has been encouraging expenditure, but at the same time it has approved of directives being issued to the banks to restrict credit. Normal funds for industry would have come from the trading banks, but when supply from this source was cut off, industry was obliged to raise money by issuing fresh capital. Any fresh capital, naturally, would have been subject to a high rate of income tax, and the dividends payable to shareholders would also be taxed in the shareholders’ hands. As a consequence, some companies sought to find other means of borrowing and raised by notes and debenture issues the money that was denied them through the normal banking structure. In the process, the banking system lost its purpose as a regulating lending system and with it went the authority the banks would have exercised at that time.
In addition to losing this valuable restraint, the Government was forced into the position of being a competitor in the fixed interest market with company debentures and note issues which offered a more attractive rate to the investor than did government bonds. Experience has shown that in a period of rapid expansion, interest rates must go up, and attempts to evade this law usually result in runaway inflation.
I know it is a socialist concept that we can have cheap money all the time, and this cheap money policy was something that we inherited from a prevous administration, our predecessors in office.
For many years now, cheap money has been a fetish with the tycoons of the Treasury. Interest rates must be kept low in all circumstances so that loans for the Treasury’s schemes will not cost too much. But the truth is that in a period of rapid development loan money becomes scarce and consequently becomes dear. The matter is simply one of supply and demand. For probably 30 years or so, the Treasury has been trying to ignore this obvious fact. It has been too pre-occupied with its own immediate problem of keeping down its interest bill and it just lets the rest of the world go by with its problems. The Treasury has now admitted its error in a grudging and half-hearted way by adopting the new policy of allowing some flexibility in bank interest rates and an increase in the rates of interest on fixed deposits. However, the Treasury still clings desperately to the dogma of artificially low interest on government bonds. An announcement has yet to be made concerning a higher rate of savings bank interest.
In a period of expansion we need the savings of the people and they must be sustained at a high rate, Mr. Speaker. They are the only real counter to inflation in the long run. But as a corrective of inflation, the Government is now using the tax weapon to curb the activities of what are termed fringe institutions - more precisely, in this case, the activities of hire-purchase companies, land and building companies and other financial concerns. But there is posed the question: Will the matter rest there? I very much doubt whether it will. What will happen will be typical of what always happens when the regulators and controllers try to override the well-proved principles of finance. Each new attempt produces more problems. Then more stringent rules are introduced and more problems follow. The only logical end is a fully regimented economy with, inevitably, a fully regimented population. The present measure may conform with the textbook theories of Canberra, but will it work out in practice? That will be the test of this bill.
After examining the bill as well as I have been able to in the limited time at my disposal, I find that it is negative in its approach and that its objective is the restriction of activity. The action now proposed involves all companies operating with capital raised by convertible notes, whether or not those companies are engaged in speculative practices. It seems to me that it would have been far more equitable if the speculator, were he in fact endangering the loan market, were taxed at a higher rate instead of other businesses which were not engaged in speculative practices being involved. As the bill stands, all companies using this form of finance in which capital is raised by convertible notes will suffer because of the practices of a few.
– What is wrong with that?
– I should hate the whole of the community to suffer just because the honorable member did not believe in certain things. Why should the whole of the people suffer just because of one individual who transgresses against what is accepted for the community as a whole?
All sorts of provisos and exceptions are incorporated in this bill, and I predict that these will be an open invitation to the devising of ways and means to circumvent its provisions. No doubt the Treasury, the Commissioner of Taxation and the Parliamentary Draftsman have devoted much care to making the bill as water-tight as possible. But on my first examination of it, I incline to the view that it shows all the signs of hurried preparation. As I read it, the bill is aimed at companies. It does not deal with sole traders, partnerships or groups which may not be formed into companies to conduct business on the same basis as that on which business is conducted by the companies which are the target of the bill’s provisions.
Proposed new section 51aa of the principal act, which appears in clause 4 of the bill, exempts certain companies such as banks, pastoral companies, building societies and co-operative societies. This is all to the good, but to my knowledge there are certain finance companies which specialize in providing finance for home-building. Obviously, these are to be caught in the net along with the rest although they serve a useful purpose in the community and devote a certain percentage of their funds to homebuilding. Admittedly, they charge a rate of interest higher than that charged by building societies, but they conduct bona fide the business of lending for homebuilding. I ask why these companies should not be placed in the same category as, say, pastoral companies.
In proposed new section 51aa, the term “ excepted interest “ is used. I should like to know whether this term covers dividends or interest payable on a preference share issue.
In sub-sections (5.) and (6.) of proposed new section 51aa of the principal act, we set out some of the powers of the Commissioner of Taxation. Sub-section (5.) begins -
Where the Commissioner is satisfied . . .
The same phrase is repeated in sub-section (6.). The Commissioner was present earlier this evening in that part of the chamber where the Government’s advisers sit. Although he is a benign character, I doubt whether he has ever been satisfied, particularly with the collection of income tax. I should like to know whether a company itself has any rights. Has it a right of appeal against a judgment of the Commissioner of Taxation? I hope that the Treasurer will re-assure me by stating that there is a right of appeal in these matters and that, even if such a right is not stated in the bill, it is given by the substantive act which this measure will amend. I should like an assurance that there will in fact be a right of appeal against the judgment of the Commissioner, particularly in the light of the phrase -
Where the Commissioner is satisfied . . .
Although the Government announced its broad intentions on 15th November last, final details of this bill were disclosed only yesterday, barely 24 hours ago. It may be proper that there should not be any further delay in passing this measure, so that the companies concerned may know where they stand. I feel that a mere 24 hours is hardly sufficient time for the electorate to express its opinion of this legislation. It is obvious that criticism will be readily forthcoming from those who will be affected by it, but there are others with no vested interest in the proposal who may wish to contribute some objective comment on it. It is to be regretted that sufficient time has not been given to allow considered, nonpartisan opinion to express itself.
The House sat until very early this morning, and it is now twenty minutes past midnight and I have not had either the time or the opportunity to study the bill closely. Therefore, if I vote for it I am called upon to accept the theory of exposition, the real theory of the exercise. As I have already tried to indicate, theory and practice do not always go hand in hand in financial matters. Accordingly, I am constrained to say that, in the absence of practical evidence needed to enable me to make up my mind on the matter, I am sure the Government will not be disturbed if I indicate now that I will refrain from voting on the bill.
.- We have yet another retreat. The honorable member for Mitchell (Mr. Wheeler) proposes to retreat and hide away in the corridors as an expression of his disapproval of this very naughty Treasurer who has offended so much against the principles of free and private enterprise. The honorable member has delivered a very interesting speech. It may not have been his best, but he is obviously not feeling too well. I am sure that if he were talking with confidence he could have done very much better. We understand his problem and excuse his relatively poor performance. He has our sympathy, and we promise not to be too hard on him.
He has told us that he is an advocate - one of the comparatively few lily-white advocates - of the well-proved principles of finance which gave us a depression with 500,000 unemployed in the 1930’s and which is largely responsible for giving us an inflation of 100 per cent, in ten years during the 1950’s. Like the honorable member for Mitchell, these well-proved principles of finance, will be obscure in the corridors when the vote is taken. Because these well-proved principles of finance have once again proved quite incapable of solving the problems that this country faces, the Government has been forced to take this action. That the monetary and interest rate policies have proved incapable of keeping full employment and capitalism properly regulated, is borne out by the Treasurer himself who said this in his second-reading speech -
I pointed out how the bidding of higher and higher rates of interest for borrowed money had been working to the disadvantage of governments and other public authorities and, through them, to the disadvantage of the general taxpayer. This was because the less governments could borrow on reasonable terms the more they had to obtain in taxation to finance developmental works and the provision of community services.
This distortion of the economy which the Treasurer has now been forced to recognize is the result of the well-proved principles of finance which are supported by the honorable member for Mitchell. When we have such an admission as that from the Treasurer about the policy of his own Government, little more need be said from this side of the chamber.
The second point made by the honorable member for Mitchell was that business and commerce had been at a standstill.
– I was referring to the companies affected by the legislation.
– In other words, the honorable member for Mitchell is saying that the companies which lent £433,000,000 last year have been at a standstill because they are affected by this legislation. Any honorable member who says that companies which lent nearly £500,000,000 worth of money last year are at a standstill is certainly suggesting a fairly substantial form of depression. I do not think these companies are at a standstill because any one who has read the newspapers during the last two or three days will have noticed more and more advertisements offering high rates of interest for money. It is interesting to note just how interest rates have gone up since this legislation was introduced. For instance, Ansett-A.N.A. are offering 1 per cent, more for four-year money. One of the gentlemen who only last week lamented the terrible circumstances which had befallen those engaged in his line of business is offering 1 per cent, more for one-year money. Again, I believe Hookers are offering 12 per cent, for four-year money. Does this indicate that business is at a standstill? Or does it indicate that some of these companies have been put in a difficult position by this Government’s legislation? The honorable member for Mitchell did not tell us which it was.
The honorable member for Mitchell made a third point. He said that he hoped that measures to curb Government extravagance would not be long delayed. But he forgot to tell us the directions in which he expected to see cuts in Government expenditure. Does he expect a cut in expenditure on education, on roads, on power, on water conservation, on housing, on hospitals, or on health and social services? Some time when he feels a little better and able to speak out his time, he might tell us the directions in which cuts in Government expenditure might be made. The basic proposition that the Treasurer put forward in an attempt to justify this legislation is that the Government cannot get enough money for its essential expenditure, yet the honorable member for Mitchell wants it to have less in the future. Perhaps he will tell us on a future occasion just where he thinks this Government expenditure should be cut.
Let me refer now to one point made by the honorable member for Wentworth (Mr. Bury) who was a little more dismal than usual to-night. I thought that he was marching in the procession behind the funeral of some of his favourite hire-purchase companies when I noticed the way in which he delivered his speech. He said that the companies were not making large profits. The honorable member for Mitchell criticized the honorable member for Reid (Mr. Uren) for quoting figures to illustrate the tremendous growth that had taken place in the capital of some of these hire-purchase companies in recent years.
But, leaving aside the question whether these hire-purchase companies are making excess profits - as if any one other than those who defend such companies in this House could ever put forward such a proposition - the real fault with the hire-purchase companies is not so much that they are making excess profits and embarking upon vast programmes of capital accumulation and expansion as that they are high-interest lenders lending money at from 10 to 15 per cent. They are inefficient in the ordinary sense of the word. If a factory is able to turn out goods at a cost of 5s. while another cannot turn out similar goods for less than 10s. or 15s., we argue that the factory with the higher cost is inefficient. In the same way, the hire-purchase companies are inefficient in that they are charging from 10 per cent, to 15 per cent, interest as compared with the Commonwealth Bank of Australia which can turn out money at from 5 per cent, to 6 per cent. I repeat that the hire-purchase companies are inefficient in that they connot turn out their money for less than from 10 per cent, to 15 per cent, whereas the Commonwealth Bank - and no doubt some other banks - are efficient in that they can turn out the same money at from 5 per cent, to 6 per cent.
What is being done in this legislation? There is nothing revolutionary about it. It will not revolutionize the financial system. Certain companies which borrow money by issuing debentures or secured notes will not, as from the end of 1959-60, be able to charge the cost of unlimited borrowing against their income before tax is worked out. For companies which pay tax at the rate of 8s. in the £1, the cost of borrowing has been reduced in the past by the operation of the tax concession, from 8 per cent, to 4.8 per cent, or from 10 per cent, to 6 per cent. In other words their borrowing cost has been reduced by 40 per cent. In future these companies will not have that advantage.
There are two things to be said about this: First, there are a great number of concerns that are excluded from this limitation. They include banks, pastoral finance companies, dealers in the short-term money market, building societies and public utility companies. The second thing is that this measure applies only to future borrowings. Without being affected by this measure, companies can borrow up to the level of borrowing in 1959-60, which must represent a total of between £400,000,000 and £500,000,000 for all companies concerned. They can still borrow that amount and treat the interest as a tax deduction. That is, the companies paying tax at the rate of 8s. in the £1 can still reduce the cost of that borrowing by 40 per cent.
On the face of it, this does not seem to be a very serious handicap. It does not seem to justify the long faces of representatives of the hire-purchase companies in this House; nor does it seem to justify the criticism by hire purchase chief, Mr. Bisset. No one has yet told us who is the member for Bisset in this House but we will find that out in due course. As I have said, the probable results of the measure do not appear to justify these depressing statements about the reduction in the activity of these high-interest, high-profit, capital accumulation, hire-purchase companies. The measure may not be a serious handicap to them, because they will be able to operate at 1959-60 levels and better. But this may not allow some of them much for expansion and some contraction may occur in the case of a company which has geared itself high - that is to say where the ratio between capital and borrowed funds is extremely high. I believe that the ratio in some cases is eight or nine to one.
The measure may cause a contraction in those companies which have lent long in order to get high returns. But how it will affect those companies and the people who have borrowed from them is still completely a matter for conjecture. We do not know. It is pretty fair to say that the campaign started on their behalf here and elsewhere over-states the effect that the measure will have. But suppose that there is a vacuum in the situation: Suppose that some of these hire-purchase companies have to pull back. As the Prime Minister (Mr. Menzies) would say, that is the object of the exercise.
There is some evidence that the object of the exercise may, to some extent, be achieved. Large headlines have appeared in the Sydney newspapers during the last week or so telling us that companies which have financed perhaps 400 or 500 homes have had to withdraw finance from the purchasers. There were no such headlines in the press in Melbourne. Does this mean that no similar companies have lent money to home-builders in Melbourne, or does it mean that, because of the Higinbotham by-election next Saturday, the newspapers in Melbourne will not report these matters? We have had evidence from the honorable member from Calare (Mr. England) and elsewhere that finance has been withdrawn from those who have been purchasing farm equipment with money borrowed from these companies. If that is true and there has been some contraction, then it is the object of the exercise to cause that contraction.
Anyway, why hire purchase? The reason is that the ordinary working man whose income is between £16 and £20 a week cannot maintain the standard of living that the mass advertising system tells him that he should maintain, unless he turns to hire purchase. The increase from £80,000,000 to between £400,000,000 and £500,000,000 in hire-purchase money in the last seven years is the result of that trend. Workers have not enough to pay from their current earnings for what they are being persuaded to buy unless they turn to hire purchase. Wage income cannot meet the cost of output at the rate at which consumers are being encouraged to buy so they have to turn to hire purchase.
One of the purposes of the Government’s economic measures, I suggest, is to create unfavorable conditions for a wage increase in 1961. Just before a general election, the Government cannot again go into the Commonwealth Conciliation and Arbitration Commission to oppose an increase in the basic wage or in margins. So it is turning to measures of this kind to put on the screws to create unfavorable conditions when the unions go to the court next year. That is one of the reasons for its legislation.
If a gap is being created in the amount of money being lent to consumers and home-builders and those who are purchasing farm equipment, there are two alternative courses of action. The honorable member for Mitchell (Mr. Wheeler) has put one of them very clearly. He has stated, in effect, that this problem can be solved by the Government’s allowing interest rates to increase still further. That is what he has put to the House for its consideration as the representative of those people who have money to lend. It suits them to get the highest possible price for their money. So we have an advocacy from the representative of those people for a higher interest rate policy. The proposal is, first of all, to increase the interest rate on Commonwealth bonds. This will raise the floor under the whole interest rate structure and so other interest rates will go up. It will then be easier for the hire-purchase companies, which will now have some difficulty, so it is stated, because of the removal of this tax concession, in paying the interest rates which they think that they have to pay, to get money. They will then be able to raise their rates, not by 1 per cent, or i per cent, as they have during the past week, but by 2 or 3 per cent. Thus they will get back the advantage. They will be able to pass on to the consumer the amount that they have lost by the removal of the tax concession. That is the alternative presented by the representatives of the hire-purchase companies - an increase in the cost of borrowing.
There is yet another alternative: That is that it should be the object of the exercise here to turn the operations of the hirepurchase companies back again. As they withdraw from the lending field - these high-interest, inefficient lenders - something else can be put in their place. We can put lower-interest lenders in their place. First of all, we can put the Commonwealth Trading Bank in their place. We could put the trading banks in their place too if a private enterprise government wanted to do that. But the honorable member for Mitchell, who has been an advocate of the trading banks before, left them out of his calculations to-night. He does not want to allow them to come into the field at lower-interest rates. He does not want the Commonwealth Trading Bank or the private trading banks to come into the field because this would destroy his case for a higher-interest rate economy which he made out this evening.
In examining this matter, let us go back to 1953. Before then and after, the trading banks were subject to some measure of control because, as the Treasurer has admitted, they have escaped from that control quite significantly from time to time. In 1952-53, the advances by the major trading banks in Australia totalled £697,000,000. At that stage, advances by hire-purchase companies totalled £88,800,000. Since 1953, the advances by the major trading banks have risen in 1959-60 to £952,000,000, an increase of £254,000,000 on a basis of £697,000,000. But what has happened to the hire-purchase companies - these poor, low profit concerns to whose miserable requiem we have listened from the honorable member for Mitchell and the honorable member for Wentworth (Mr. Bury)? What has happened to these poor downtrodden low-profit hire-purchase companies? Their loans in 1953 totalled £88,800,000. To-day, the official record given by the Bureau of Census and Statistics shows that their loans total £433,400,000, an increase of £344,000,000, as against an increase in lending of the trading banks of £254,000,000. In addition to the lending by the hire-purchase companies, probably another £100,000,000 or so has been lent by other companies which are not completely or fully hire-purchase companies. So to-day there is well over £500,000,000 on loan by these people.
Do not forget what is happening here. There has been an increase of lending by banks of £254,000,000 at an average interest rate of between 5 per cent, and 6 per cent, as against an increase in lending by hire-purchase companies of probably £344,000,000 and more at an average of probably 9 per cent or 10 per cent., because these hire-purchase concerns are getting probably twice what the trading banks would be getting. So the important thing is that this trend of development, which underlies the whole inflation of the past ten years in Australia, must be turned back. Time and time again, the Australian Labour Party has advocated and demonstrated to any one whose mind was not blinded by political prejudice that the inflation of the past seven or eight years is profit inflation which has resulted from this money-creating process that the Government has allowed to come into operation. These figures have proved that that is so.
The action that has now been forced upon the Government by its own ineptitude and failure to recognize these circumstances over the years has proved that to be so. Now that this stage has been reached and the Government has been forced to recognize that its own creation - the hire-purchase companies - has caused inflation and distorted the economy, as the Treasurer admitted in the first proposition contained in his second-reading speech, we say that the Government should not be allowed to step one pace backward. We will not agree to any backward step as has been advocated by the financial representatives on the Government side who suggest an attempt to deal with this situation by increasing the interest rate structure all round. This shall not occur, and the Australian people must come to see what is involved.
Instead of increasing the interest rate structure, the screws must be tightened further on the hire-purchase companies than is being done in this minor measure. They must be taken, not suddenly but gradually, out of the field into which they have wrongly entered. The Government permitted them to enter that field by allowing them to escape registration under the Commonwealth banking legislation in 1953. The Government allowed it and now the Government is wrestling with the Frankenstein it created. The Prime Minister (Mr. Menzies) and the Treasurer have been worried by the battle with this monster they created since 1953. As the battle proceeds, we see the dismal faces of the honorable member for Mitchell and the honorable member for Wentworth and their friends who are appalled at the temerity of the Government in attacking this monster which the Government created.
Of course, the Australian Country Party looks on in silence. Not one member of the Country Party in this House has chosen to make a speech in this debate or express an opinion since the honorable member for Calare (Mr. England), in asking his maiden question, enthusiastically revealed the fundamental fault in what the Government has done. Not one member of the Country Party has spoken since then. Does the Australian Country Party support the criticism of the honorable members for Mitchell and Wentworth? Are honorable members in the Country Party corner in favour of meeting this situation by raising interest rates still further? Are they in favour of the tried and true financial principles that the honorable member for Wheeler has espoused? Are they in favour of this, or will they remain silent? Are they game to go further than interject? They are masters of interjection, but they are incapable of making a speech in this House on any issue which has any controversy in it. Now and again there is a rebel in the Liberal Party - a Wright or a Wheeler in the corridors; but there is never a rebel in the Country Party. Whenever was there a rebel in the Country Party against a decision of this Government?
– Who are the rebels in the Labour Party?
– You will have plenty of time to answer my questions later.
– Your hands are tied.
– It is not long since I did not vote on a measure in this House when the Labour Party voted on it. It was the Richardson report.
– But you took your salary increase.
– My clever friend at the back should check up on that and find out.
– Do you deny that you took your salary increase?
– Yes, I do. I want to sum up in the time I have left the situation we have reached in the economic history of Australia in 1960. The proposal now before the House is completely supported by the Australian Labour Party. If it is a socialist policy, then I would say to the Country Party that it is a socialist policy coming from a very unsocialist Treasurer. Any element of socialism he had in his make-up he left in the University of
Melbourne in the 1930’s. He made up for his loss of socialism by sociability. He has become a social lion instead of a socialist. That is sufficient to show whether this measure is socialist or not.
This proposal confirms the analysis of the economy that the Labour Party has been making for the past seven years. It confirms that inflation in Australia is profit inflation, that the dynamics of inflation in this system have come from the financial institutions and the hirepurchase companies which were permitted by this Government to escape controls and to lend between £400,000,000 and £550,000,000 of new money in the past seven years at the highest possible rate of interest that they cound extract from the Australian community. This proposal has proved Labour’s analysis that there has been a distortion in the economy. The proof is demonstrated by the fact that this is the first time for seven years that anybody on the Government side has admitted that there is a basic distortion in the economy as the result of these financial circumstances.
In his second-reading speech, the Treasurer said -
I pointed out how the bidding of higher and higher rates of interest for borrowed money had been working to the disadvantages of governments and other public authorities and, through them, to the disadvantage of the general taxpayer.
You do not need to be a Labour man or a socialist to support this legislation. You need only to be some one who is concerned with the best interests of the community in order to support it. I do not know whether it is the Treasurer or somebody in the Treasury who has been reading books by J. K. Galbraith or Dr. Coombe’s lectures, but somebody has picked it up somewhere, because there are not many socialists in the Treasury. What they might have been when they finished their university courses they are not any longer, and I think that no one needs to have any fear about that.
The Labour Party says that this proposal, while it is a step in the right direction, does not go very far. It leaves the hirepurchase concerns with something between £400,000,000 and £550,000,000 at the same rate at which they obtained it and with the same taxation concessions as in the past, and it is not likely to cut their activities greatly. The Labour Party believes that their activities ought to be cut back further. It believes that they should not be permitted to operate on the usurious rates of interest that they charge. It believes that their activities should be cut further back, to the 1953 level.
Mr. SPEAKER (Hon. John McLeay).Order! The honorable member’s time has expired.
– in reply - I do not propose to reply at great length at this hour. The House will be relieved to learn that it is not proposed to take this bill into committee to-night, but I hope that at a later hour this morning honorable members will be sufficiently refreshed to examine some of the details of the measure more closely. I think it would be more appropriate to deal with the queries raised by honorable members, particularly the honorable member for Wentworth (Mr. Bury) and the honorable member for Mitchell (Mr. Wheeler).
This debate has revealed a wide range of viewpoints as between the two members on the Government side whom I have mentioned and some of the dedicated socialists on the Opposition benches. Whilst it would be engaging and not without interest in other circumstances to debate at greater length some of the propositions put forward on the other side, I shall content myself with directing attention to one aspect which was prominently featured by the honorable member for Melbourne Ports (Mr. Crean), who led the debate for the Opposition, the honorable member for Reid (Mr. Uren), who followed him, and the honorable member for Yarra (Mr. Cairns), who proudly carries at all times the banner of extreme radicalism for the more advanced socialists on his side of the chamber.
We heard from the honorable member for Melbourne Ports what is really the cardinal point of the attack levelled by the Opposition over the economic situation in
Australia to-day. Lest there be any continuing attempt to misrepresent my own point of view may I say that this measure is not brought forward as a broad attack upon hire-purchase companies or the hirepurchase system. We as a government recognize, of course, the value of hirepurchase companies in the Australian economy, and the necessity for a hire-purchase system in order to promote the purchase of durable consumer goods and so improve the living standards of the people. What we have said, as a government - and I believe this view is supported by the honorable gentleman on our side of the House - is that a situation of strain has become evident and that excesses have developed, particularly in the hire-purchase fields and in areas of speculative activity. Not all speculative activity is by any means evil in itself. Certainly hire-purchase activity is not an evil thing in itself, but there are problems of degree which, in point of time in the history of our economy, require certain measures to be taken. The Government has acknowledged quite frankly that there is a situation of strain in certain areas of the economy - a strain which our measures are designed to reduce.
Having said that, by way of general comment, I come to the particular aspect of which the honorable gentlemen opposite have made so much. The honorable member for Melbourne Ports put it that we, as a government, had permitted an interest rate structure to be created which enabled unmoral - he repeated this word several times - rates of interest to be charged.
– He used the word “ unmoral “.
– No, “ immoral “. We do not say that you have no morals, but only that you do not take any notice of them.
– I accept the correction. The honorable member for Melbourne Ports used the word “ immoral “ several times. The honorable member for Yarra spoke of usurious rates of interest, and the same theme ran right through the speeches of the three spokesmen for the
Opposition. In my statement to the House I spoke of the permanent measure that we had in mind being directed against excessive borrowings at excessive rates of interest, and it is apparent from what I have said that the Government does recognize that excessive rates of interest at a particular time could have harmful effects on the community and the economy generally. If we wish to test the standard which honorable gentlemen opposite would apply we have not a great deal of evidence to go on, because they have not been in the position of responsibility for several years now. There is, however, some evidence that can be quoted, and in closing the debate I should like to put it before the House by way of reply to what has come so freely from honorable gentlemen opposite. That evidence is supplied by an interesting document. My memory stirred when I heard honorable gentlemen opposite make their attack, and I sent for this document in order to refresh my recollection of the times with which it deals and the conclusions that were then reached. On 24th February, 1941, a board of inquiry comprising as chairman, Harold William Chancellor, and having as members Joseph Benedict Chifley, George Stanley Colman and Marshal James McMahon, was appointed to inquire into hire-purchase and the cash order system. The board was appointed for the purpose of inquiring into and reporting on the following matters: -
The first point that I ask honorable gentlemen to note is that Mr. Chifley, who shortly afterwards became Treasurer of the Commonwealth, was a member of this board of inquiry. The second thing I ask them to note is that the Curtin Ministry took office on 7th October, 1941, and that this report, according to the imprint, was ordered to be printed on 12th November, 1941. In other words, it is a document that was ordered to be printed by the Curtin Ministry at a time when Mr.
Chifley was Treasurer, and it embodies views to which Mr. Chifley had subscribed, first, as a member of the board of inquiry itself, and secondly - a reasonable inference - as Treasurer of the Commonwealth at the time the report was to be printed.
– What are you trying to prove?
– I am coming to that. I think this the real point, and it is not without interest to honorable members: In the concluding pages of this report, under the heading “ Finance Charges “, appears the following finding -
The finance charges as set out in paragraph 77 are not unreasonable and there appears to be sufficient free competition among the finance companies to act as a brake on excessive charges. There was some evidence of occasional higher charges.
I shall not weary the House to-night by reading all of paragraph 77 which sets out the flat rates of interest which were to apply to certain classes of hire-purchase transactions because succeeding paragraphs state the position more clearly for our purpose. Paragraph 134 is in these terms -
Any fixation of rates could not conveniently be made on the basis of flat rates for each year as these vary considerably in practice according to the intervals of the instalments, as mentioned in the footnote to paragraph 77.
Paragraph 135 reads -
To meet this it could be laid down that the added charges expressed as a true rate of interest per annum on the unpaid balance shall not exceed the rates as may be specified. Suggested rates for this purpose would be -
Those are the rates that were recommended by this committee of which Mr. Chifley was a member. That was the Labour Government’s idea of reasonable rates of interest for hire-purchase companies to charge at that time. I should be very surprised if we did not find that the rates being charged to-day are somewhat lower than those. It must be borne in mind also that the long-term bond rate at that time was 31 per cent, whereas the rate to-day is 5 per cent. So if, in the eyes of the Labour government of the day, the rates of interest that I have mentioned were considered reasonable when the long-term bond rate was 3i per cent., I invite honorable gentlemen opposite to tell us their idea of reasonable hire-purchase interest rates now when the long-term bond rate is 5 per cent. I think that gives us a rather more realistic picture of what Labour in government regards as reasonable in contrast to some of the poppycock that we have heard from the Opposition to-night.
Question resolved in the affirmative.
Bill read a second time, and committed pro forma; progress reported.
The following bills were returned from the Senate: -
Without amendment -
Sales Tax (Exemptions and Classifications)
Bill (No. 2) 1960. Crimes Bill 1960.
Without request -
Sales Tax Bills (Nos. 1 to 9) 1960.
House adjourned at 1.4 a.m. (Thursday).
The following answers to questions were circulated: -
d asked the Treasurer, upon notice -
– The Commonwealth
Banking Corporation has furnished the following information: -
A fee of £10 is required to accompany any firm request to the Development Bank for finance.
This fee is designed to meet, at least in part, the bank’s cost of investigation and, where necessary, inspection of the property. In those cases where it is necessary to refuse an application without detailed examination, it is the bank’s practice to refund the application fee.
d asked the Treasurer, upon notice -
– The following information has been made available by the Commonwealth Banking Corporation. In providing it, the corporation has pointed out that the figures for applications received and declined should be treated with reserve, if only because the distinction between an application and an inquiry is not always clear cut and because, particularly in the early days of the Development Bank’s existence, there was some misconception on the part of prospective borrowers of the functions of the bank and many applications were clearly not only outside the stated lending policy of the bank, but also beyond the limits of its statutory authority. Except as referred to in answer 3 below, the information given does not include assistance provided by way of hire purchase. Subject to the foregoing reservations, the corporation has furnished the following information in respect of the period from 14th January, 1960 (the date of the Development Bank’s establishment), to 16th November, 1960.
y asked the Minister for Territories, upon notice -
– The answers to the honorable member’s questions are as follows: - 1 and 2. I am able to answer in respect of the Northern Territory only. Survey work undertaken in this field included -
General examinations of aboriginal schoolchildren including the state of nutrition, eyesight, hearing, teeth and skin condition are made at regular intervals by school medical officers in the case of children who attend schools in town areas, and by medical officers engaged in native survey duties in the case of children attending schools at missions and settlements. A programme of preventative dentistry is carried out continuously by visits by mobile dental clinics to missions and welfare settlements. No specific comparisons of the results of these examinations with comparable examinations of European children have been made.
t asked the Minister for Defence, upon notice -
– The answers to the honorable member’s questions are as follows: - 1 and 2. Under the provisions of the Services’ regulations and orders no member of the Permanent Forces is permitted to take any active part in the affairs of any political organization or party by speaking in public, publishing or distributing literature in furtherance of the political party or in any other manner. The political activities of members of the Citizen Forces are not restricted except to the extent that a member may not use his military rank in the course of his participation in such activities unless he is a member of any Parliament or municipal or local government council or is a candidate for such membership.
Navy. - Regulations and Instructions of the R.A.N.- Article 2501, and Naval Forces Regulation 123.
Army. - Australian Military Regulations 210 and 210a and paragraph 293 (1) of Australian Military Regulations and Orders -
Air Force. - Air Force Orders 12/ A/’ 16 and 12/ A/26.
Cite as: Australia, House of Representatives, Debates, 7 December 1960, viewed 22 October 2017, <http://historichansard.net/hofreps/1960/19601207_reps_23_hor29/>.