House of Representatives
26 August 1965

25th Parliament · 1st Session

The Clerk. - I desire to inform the House of the unavoidable absence of the Speaker. In accordance with Standing Order No. 14, the Chairman of Committees will take the chair as Acting Speaker.

Mr. ACTING SPEAKER (Mr. Lucock) thereupon took the chair at 10.30 a.m., and read prayers.

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– I direct a question to the Prime Minister concerning part of his speech on Vietnam last week, when he said that Australians who had not been completely taken in by Communist propaganda would be convinced that talk about the Geneva Accords or the International Commission would be non-productive. How does the right honorable gentleman reconcile his statement with that of the Minister for External Affairs who, in the same debate, stated: “ It seems to me that what we should envisage is a return to the Geneva Agreement of 1954.”


– Order! I remind the honorable member that it is not his prerogative to ask the Prime Minister to reconcile one question or statement with another.


– I ask the right honorable gentleman: ls his thinking on this matter out of line with that of the Minister for External A/Fairs and the Department of External Affairs?

Prime Minister · KOOYONG, VICTORIA · LP

– If the honorable member will trouble himself to read my speech and to read the speech of the Minister for External Affairs he will find that they are both right in every particular.

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– In directing a question to the Treasurer I refer to the last quinquennial report of the Commonwealth Actuary in connection with the Commonwealth Superannuation Fund and, in particular, to the surplus disclosed by that report. I refer also to the Government’s undertaking to have the position fully investigated with a view to resolving the matter in the best interests of the members and beneficiaries. Is the Minister now in a position to say whether a decision on the subject may be expected soon?


– I regret that I am not in a position to say with any precision when a decision can be expected from the Government, because a great deal of work has yet to be done in the actuarial field. We are handicapped to some degree at present by a shortage of actuaries, although extensive advertising has gone ahead in order to fill this need. Some time ago I asked the Treasury to supply me with an account of how the matter to which the honorable member referred was proceeding. I have the answers here. However, as information on a matter of this sort should be stated with some precision, it may suit the convenience of the House if I were to supply this information after question time rather than take up the time of the House at this stage. I am in the hands of the House on that matter. I have the information if the House cares to have it.

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– I address a question to the Minister for Labour and National Service. Can the Minister tell us how far in a positive manner his Department has proceeded with any plans, particularly in the direction of retraining, to meet any difficulties or distress that may arise from the expected acceleration of the introduction of automation in a big way?

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

– Some weeks ago at a forum held in Melbourne the whole problem of the work force and automation was discussed at length. I think it was one of the best discussions that I have either heard or read since I became a member of this Parliament. If the honorable gentleman wishes it, I will try to get a precis of some of the speeches that were made - particularly Professor Galbraith’s speech, the Prime Minister’s speech and one or two other speeches - and send it to him. We pointed out that in a country such as Australia, which is committed to a policy of full employment and in which over-full employment has persisted during a large part of the time that the Menzies Government has been in office, demand must be kept high so that we can ensure that our working population is fully employed and that as the work force grows it will have confidence that the problems of unemployment need never become severe.

Mr Curtin:

– The Minister is hiding his head in the sand.


– The honorable member has had his head in the Coogee sand for long enough and has never been able to get it out. This matter has excited our interest for a considerable period. As I have said, I will obtain relevant extracts from the speeches that were made at the forum and let the honorable member for Darebin have them.

In reply to the last part of his question, which relates to retraining, I think that, as a former senior member of the trade union movement, he should know we are dealing with a sensitive area of trade union activities. The initiative in this matter, for the time being, resides with the trade union movement itself. I have no wish to make any statement on this matter until the trade union movement lets me know what its attitude to the problem is.

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– Can the Minister for Supply say whether an additional space tracking station is to be established in Australia. If so, will be make available details of its purpose?

Minister for Supply · PATERSON, NEW SOUTH WALES · LP

– The National Aeronautics and Space Administration of the United States of America for some time past has been planning the launching of a series of experimental satellites having to do with meteorology, communications and the international control, through communications, of trans-ocean aircraft. For that reason, the Administration was looking for a tracking, control and data acquisition facility somewhere broadly in the western Pacific area. Naturally, the Department of Supply, as the Australian agency cooperating with the Administration, was anxious to see that this station was established in Australia because of the financial, technical and other quite considerable advantages that will flow from it. There have been some difficulties in finding an area that is free from radio interference and in which there will not be any risk of interference with Australia’s postal services. That factor has brought us into close communication with my colleague, the Postmaster-General, and, with help from another of my colleagues, the Minister for Health, a site has been found close to Toowoomba in Queensland. We believe that that site will meet the exacting requirements of this facility. We have had a technical group from the United States in Australia for the last week. The members of that group have made an analysis of the site and of its surrounding conditions, and they will make an assessment of this matter before putting a firm proposal to the Australian Government.

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– Is the Minister for National Development aware of a report on page 17 of the August issue of the magazine “ Coalminer “ that substantial progress has been achieved at a coal research pilot plant in West Virginia, which has had government financial backing, in producing gasoline and crude oil at a cost of approximately Is. 2d. per gallon. In view of the political turbulence in the countries to our near north and the repeatedly expressed fears of members of the Government parties in respect of Australia’s security and, therefore, loss of petroleum imports, will the Minister consider the achievements in West Virginia with the object of having a coal research pilot plant set up on the northern coalfields of New South Wales?

Minister for National Development · FARRER, NEW SOUTH WALES · LP

– I have not seen the report to which the honorable gentleman has referred but I and the fuel branch of my Department have followed with considerable interest United States developments in the manufacture of oil from coal or shale. From all the figures we have been able to obtain so far it appears likely that in this country the cost of manufacturing oil from either of those two products would be considerably higher than the cost of importing it or producing it locally. My feeling is that we are much better off spending our money to step up the search for oil in Australia. I will ask the National Coal Research Advisory Committee, which the Government has recently set up. to give me accurate figures on this subject. I will pass these on to the honorable member when I receive them.

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– I desire to ask the Treasurer a question concerning bank finance for drought affected primary producers. In view of the Treasurer’s statement yesterday that the Commonwealth Development Bank is not the appropriate source of finance because the trading banks were in a position to meet the traditional needs of customers, will he say what is to happen to those farmers who do not possess equity and the ability to repay on normal banking terms? Can this need be met by the Government through the provision on an adequate scale of loan funds to State banks, such as the Rural Bank of New South Wales, with special terms governing repayment and interest?


– From the first part of his question, the honorable gentleman appears to read rather more into what I said about the Commonwealth Development Bank than I intended to convey. I do not reject the idea that the Development Bank can, in particular instances, help in relation to drought finance. There may be cases where it might well do so. The point I was making was that most farmers who would be affected by drought had a relationship with a trading bank and that we had made arrangements through the Reserve Bank for the trading banks not to be limited by any general requirement of restraint in bank lending from lending as they saw fit to clients affected by drought. That was the point I was trying to bring out. As for the rest of the question, it deals with some policy aspects. Later today, the Prime Minister will give an outline of the Government’s view of these drought problems. To the extent that the Prime Minister’s statement does not cover adequately what the honorable gentleman has raised, I will be glad to see whether I can provide him with a supplementary answer.

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– I ask the Minister for External Affairs a question. As Indonesia has now admitted that there has been trouble in West Irian, will the Minister give to the House any further details of this matter, particularly as to the extent of the unrest and the sources responsible for the uprisings? Did any of the insurgents attempt to enter Australian territory for protection?

Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– We are, of course, aware of reports that there has been some unrest in West Irian. We have no direct information about sources of the trouble or what may have influenced the trouble. This is something that has happened within the borders of Indonesian territory. So far as I am aware, no attempt has been made by persons involved in this unrest to cross the border into Australian territory. The honorable member will be aware that when West Irian passed from the administration of the United Nations to Indonesia the Indonesian Government undertook to safeguard the rights of the people of West Irian to free speech and opportunity to express opinions. We have always assumed that the Indonesian Government would respect its obligations in this regard.

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– The Prime Minister may recall that about a year ago, when I asked him whether he would consider appointing a Commonwealth ombudsman, he said that he regarded such an appointment as unnecessary, as in his opinion citizens had adequate opportunities to ventilate their grievances through members of Parliament and other avenues. Is he now more disposed to consider the idea following the statement made at the Commonwealth Law Conference yesterday by Professor Northey, Professor of Public Law at the University of Auckland, to the effect that for very modest expenditures the ombudsman in New Zealand had made a substantial contribution to better and fairer administration? Does this conclusion agree with the experience of other countries, notably the Scandinavian countries, which pioneered this type of appointment? Is it true that Queensland has appointed an ombudsman and that other States are considering like action? Finally, realising the vastly greater ramifications of Commonwealth legislation and administration, would it not seem that there would be even much greater scope than there is in a State for the operations of such an officer in this sphere?


– I confess that I have in no way reconsidered the view that 1 stated earlier.

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– My question is directed to the Prime Minister. Has he read the paper prepared by the Minister for Labour and National Service, delivered - at Adelaide yesterday, advocating, among other things, the use of compulsorily retired people to reduce the labour shortage? If he has read the paper, and agrees with the views of the Minister, will he give early consideration to the abolition or substantial easing of the restrictive means test provisions which deter retired people from accepting employment? If he has not read the paper, will he still consider the subject of it?


– I have not read the paper. Whether I ever do will depend upon how much work I have to do, and it is usually a good deal.

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– My question to the Minister for External Affairs is supplementary to the question asked by the honorable member for Bennelong. Can the Minister say whether there is any information to indicate that a liberation front has developed in the West Irian area of the Indonesian empire?


– So far as I am aware my Department has no direct information that such a front has developed.

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– I direct a question to the Fostmaster-General. Is it a fact that a Sd. stamp bearing a portrait of the late Sir Winston Churchill in honour of this great leader in World War II, is currently in use? As it is agreed by all Australians that the late John Curtin also displayed magnificent leadership in guiding Australia’s destiny in World War II, will the honorable gentleman consider striking a stamp bearing the portrait of the late John Curtin, in memory of this great son of Australia?

Postmaster-General · PETRIE, QUEENSLAND · LP

– lt is true that there is a stamp to commemorate the services of Sir

Winston Churchill to the British Commonwealth. During each year I consider many applications in relation to stamps recognising particular individuals, and certainly I will look at the prospect of having a stamp to commemorate Mr. John Curtin.

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– I address a question to the Minister for External Affairs. Is the confrontation of Malaysia by Indonesia detracting attention from the promised vote for self determination in West Irian? As this appears to be so, and as there is quite a silence on the subject, will the Minister for External Affairs, at every opportunity, in speeches and by other means, emphasise Indonesia’s obligation regarding this vote?


– Let me take the present opportunity of repeating the Australian view, which is that the Government of Indonesia has accepted internationally obligations to carry out an act of selfdetermination in West Irian, and we confidently expect that it will do so.

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– I address a question to the Treasurer. It is supplementary to the one asked of the right honorable gentleman earlier concerning proposed legislation relating to the Commonwealth Public Service. Can he indicate with any precision when we are likely to receive the Bill amending the Commonwealth Employees’ Furlough Act and the Bill containing the amendment that was proposed during the last sessional period with relation to the Commonwealth Employees’ Compensation Act? Finally, will he make every endeavour to bring any legislation affecting the Commonwealth Public Service into the Parliament at an early date in order to avoid our having to deal with it in the dying hours of the Parliament, and early in the morning, as is usually the case?


– 1 shall see how far I can meet the honorable gentleman’s inquiry. I have supplied the Deputy Leader of the Opposition - it should reach him in the course of the morning - with a list of what I can see clearly as legislation which is to be introduced in the course of this sessional period. There has been an orderly presentation of Bills so far during this sessional period and it is my desire that that shall continue throughout the whole of the period. But this is not easy at this particular point because so much has yet to be done by actuaries and others in the fields I mentioned earlier.

Mr E James Harrison:

– The Government has been two years dealing with the furlough.


– This Government has a very good record for speed in passing legislation over recent years. Lots of things are happening both inside and outside Australia. But the honorable member can be assured that a great number of people are working hard to produce the result he is wishing to see brought into operation.

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Mr Malcolm Fraser:

– I address a question to the Minister for Labour and National Service. So that the House may form some opinion of the claim of the General Secretary of the Waterside Workers Federation about the justice of claims made by the Federation, can the Minister tell the House what changes in waterfront wages have been made in recent years in comparison with those in other industries? Can the Minister tell the House what proportion of waterfront wage increases has occurred through the normal processes of arbitration as opposed to strike action? Can he also give the House any information concerning changes that have occurred in the rate of loading and unloading cargoes vital to Australian trading interests?


– The Federation has made a number of claims outside the arbitration system. They relate to the nationalisation of the stevedoring industry, mechanisation, port improvement, wage increases, a guaranteed weekly wage based upon no penalty on attendance money, and various other matters. I am hopeful that at least some of these claims will come before the Commonwealth Conciliation and Arbitration Commission and therefore I shall make no comment at all to the House on the justice of these claims. But I should like to put before honorable members certain facts which I think they should have in their minds. I shall deal first with average weekly earnings. In 1955-56, average weekly earnings on the Sydney waterfront were £15 18s.

Mr Calwell:

– This is a statement, lt is an abuse of question time.


– I think the facts should be made known.

Mr Beaton:

– I raise a point of order, Mr. Acting Speaker. As the question has obviously not been asked without notice I suggest that it is out of order.


– Order! There is no substance in the point of order.

Mr Calwell:

– If you rule that way, Sir, I shall move that your ruling be dissented from.


-Order! I say to the Leader of the Opposition that at question time it is impossible for the Speaker or Acting Speaker or anybody in the Chair to tell whether a question is asked with or without notice. It is the prerogative of a Minister to answer a question at question time. That is the Minister’s right. I think the House will realise that many of the questions that are asked are too long. I feel sometimes that if the Chair were to give the correct decision on every occasion there would be far fewer questions put to Ministers.

Mr Calwell:

– I move -

That Mr. Acting Speaker’s ruling be disagreed with.

I do so with some regret because of the difficulties in which you find yourself placed. The Standing Orders do not permit you, in effect, to determine whether a question is or is not-


-Order! May I point out to the Leader of the Opposition that if he desires to move that the ruling of the Chair be dissented from it might be better if he moved dissent from my ruling that there was no substance in the point of order raised by the honorable member for Bendigo, because I feel that that is the ruling that has been given and not a decision that the Chair cannot decide whether a question is without notice or otherwise. I think the Leader of the Opposition will achieve the purpose he desires if he adopts ray suggestion. As far as any decision from the Chair is concerned about whether a question is without notice or not, there can be no ruling.

Mr Calwell:

– Well, I have no particular desire to pursue the matter but I want to direct attention to the fact that the Minister is giving a prepared answer to a prepared question, and that this is an abuse of question time. If the Minister keeps going much longer I will move that he be no longer heard.


– The average wage on the Sydney waterfront was £15 18s. 3d. in 1955-56, whilst in industry generally it was £18 19s. In 1963-64, the average wage on the Sydney waterfront was £29 6s. and in industry it was £26. As to the third question asked by the honorable member I want to give some facts to the House and I am sure the Leader of the Opposition will want to know these facts. The general overseas loading decreased from 15 tons an hour to 13.27 tons an hour in Sydney. The general overseas discharging decreased from 19.93 tons to 16.54 tons. With regard to wool, a vital cargo for Australia, the overseas loading decreased from 15.33 tons to 12.16 tons. The overseas loading of meat in freezer decreased from 12.21 tons an hour to 10.30 tons an hour. All of these figures relate to Sydney. I believe the House is vitally interested in our exports and is conscious of the necessity for Australia to compete in overseas markets if we are to increase our growth and ensure the full development of our resources. I believe that these facts should be made known to the House.

As to the second question asked by the honorable gentleman-

Mr Calwell:

– It is obvious that the Minister arranged both.


– I did not ask for this at all; it is his own question.


– Order! I suggest that the House come to order and allow the Minister to finish answering the question.


– I said that this was the honorable member’s own question. As to the second question, most of the benefits have been obtained while the Waterside Workers Federation of Australia was prepared to go to arbitration. I cannot state the exact extent of the benefits, but I shall make inquiries for the honorable gentleman and give him an answer when I can do so.

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– My question is directed to the Minister for the Army. Will he state why a newspaper correspondent has been barred from the camp of the 1st Battalion, Royal Australian Regiment, in South Vietnam? Will he also state why the Army decided to place a security barrier around all troops wounded in action and to prevent them from being interviewed by the Press? Have these recent decisions been made as an order to the Press to print only the Government’s views, and is this a curtailment of the freedom of the Press?

Minister Assisting the Treasurer · BARKER, SOUTH AUSTRALIA · LP

– The correspondent referred to was banned from the lines of the 1st Battalion, Royal Australian Regiment, in South Vietnam because he had committed a breach of security. He was banned with my full authority in the interests of the safety of the troops in the area. I am not aware that any ban has been placed on interviews by the Press with individual servicemen, whether wounded or otherwise. If so, this has been done without my knowledge. I shall check on the position and let the honorable gentleman know what my investigations disclose.

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– I wish to direct to the Minister representing the Minister for Repatriation a question that is supplementary to one asked yesterday by the honorable member for Evans concerning the introduction of an intermediate rate of repatriation pension. Will the Minister consult with the Minister for Repatriation with a view to making sure that the intermediate classification will not apply to an ex-serviceman who would otherwise be paid the total and permanent incapacity rate?

Minister for Health · DARLING DOWNS, QUEENSLAND · LP

– I have already had discussions with my colleague on this very point, because it has been raised before. I can give an assurance on his behalf that the new intermediate rate will not be applied to prevent ex-servicemen from receiving the total and permanent incapacity or special rate. The reason for the introduction of the intermediate rate is obvious. As I said yesterday, the proposal is very welcome indeed. The purpose is to fill the gap between those who are on the general or 100 per cent, rate of £6 a week and those on the special or T.P.I, rate of £14 5s. a week. The intermediate rate will be about half way between the two at £10 2s. 6d. A person in receipt of it will be allowed to continue in part time work, whereas a person who had reached the stage of being totally and permanently incapacitated would, of course, be precluded from working. The Minister has given a very definite assurance that the rate for all individuals is considered on the basis of medical assessment.

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– My question is directed to the Prime Minister. Has his attention been directed to Press statements throughout Australia that the Government is angry at and embarrassed by the action of publicans in raising the prices of beer and spirits by more than the increase in excise announced by the Treasurer in his Budget speech, and that a spokesman for the Government had expressed the wish that the Commonwealth bad power to control prices so that it could prevent such practices? Are these statements in the Press correct? Finally, in view of these and other excessive price increases flowing from the Budget, will the Prime- Minister convene a meeting of State Premiers in an endeavour to obtain from the States approval for some form of Commonwealth prices control designed to prevent profit hungry business interests from further reducing the decreasing living standards of pensioners and the Australian work force?


– The honorable member has a great advantage over me. Obviously, he reads the one or two newspapers that we all know specialise in fantasy.

Mr Birrell:

– All the newspapers said this.


– Did they? Then I must start reading them. I have not read the report mentioned by the honorable member. I have not heard about it. I have not detected any of my colleagues going about gnashing their teeth with rage over the price of whisky. They may do it in private, for all I know. As to the part of the question that asks for a statement of policy, I inform the honorable member that one does not deal with policy at question time.

Mr Calwell:

– Who is the Government spokesman?


– I have not heard of the spokesman either.

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– I address my question to the Minister for National Development. Is he aware that the first horticultural irrigation scheme at a settlement near Renmark in South Australia was affected last week by the high salinity in those reaches of the River Murray? Is he aware that this problem appears to be worsening? Will he ask his Department and the River Murray Commission to study the whole effects of salinity, seepage and effluent disposal in the lower reaches of the River Murray as many responsible people are concerned in this matter that is so vital to the future of South Australia?


– I am aware that salinity has caused quite a problem in the middle and lower reaches of the River Murray. During my recent tour of the electorate of the honorable member for Mallee I was shown a number of areas in which problems have been caused by salinity. 1 am not quite sure where the constitutional responsibility lies. Obviously the State Ministers for Agriculture would be considerably concerned in this and the Commonwealth would be interested only when the salt came into the River Murray itself. The River Murray Commission is meeting at Renmark very shortly. I will see that this matter is brought to the attention of the Commission and. if anything can be done, I will see that action is taken.

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– My question, which is directed to the Minister for Health, refers to hearing aids manufactured by the Commonwealth Acoustics Laboratories. These are now available- to children and to recipients of repatriation benefits. In view of the high cost of hearing aids purchased from private manufacturers and the need of many age and invalid pensioners to have these accessories, will he confer with the Minister for Social Services and try to arrange for pensioners to obtain the cheaper hearing aids through the Commonwealth Acoustics Laboratories? Will be also consider allowing pensioners to trade in their old hearing aids when purchasing new ones?


– The Commonwealth Acoustics Laboratories in all States provide hearing- aids to war pensioners and other repatriation beneficiaries and to children. They also provide hearing aids to approved persons who are undergoing rehabilitation through the Department of Social Services. Three groups are already being provided with hearing aids. We do not enter into competition with commercial trading interests. This has never been suggested in the past and I doubt whether we could conduct that type of operation in the future. The question of the cost of hearing aids generally on the market is a matter for the States to investigate, as the States have control over price problems. I will undertake to confer on this matter with my colleague and, after discussion, will refer the matter back to the honorable member.



– I address my question to the Minister for Shipping and Transport. Has the falling off in the number of passengers travelling by the “Empress of Australia” to and from Tasmania marked the operations of the vessel during the winter months? If so, was this slackening in trade contemplated when the vessel went into service? Is consideration being given by the Australian National Line to a reduction of fares and of freight on passengers’ cars during this off season to stimulate trade?

Minister for Shipping and Transport · FORREST, WESTERN AUSTRALIA · LP

– As 1 indicated to the honorable member for Franklin the other day, there has been some slackening in the passenger trade carried by the “ Empress of Australia” during the winter period. This was not unexpected. It was expected by the Australian National Line because passenger traffic is a seasonable business around the

Australian coast. Whether the Line expected it to fall off to the extent that it has I do not know, but it is true to say that for some time, or for some voyages at any rale, the vessel has been carrying less than half the number of passengers which it could carry. However, the Line is considering the question of concessional fares. In the meantime, I might suggest to honorable members that taking a sea voyage on the “ Empress of Australia “ is a very pleasant way of spending a quiet weekend.

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– I direct my question to the Minister for Territories. Why are Norfolk Island citizens without voting rights while the people of Lord Howe Island have the privilege of electing a parliamentarian of the calibre of the honorable member for West Sydney? Since a substantial number of Norfolk Island’s population of 800 is over 21 years of age and are British subjects, has the Minister thought of extending the area of the free world by giving those people the right to vote?

Minister for Territories · MCPHERSON, QUEENSLAND · CP

– Totally different circumstances relate to Lord Howe Island and to Norfolk Island. Lord Howe Island is within the territory of the State of New South Wales. Of course, Norfolk Island has a representative advisory council which is elective. There is no great agitation or desire on the part of Norfolk Islanders for representation in Australia, as far as I have heard.

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– My question is directed to the Treasurer. In view of his reply to my colleague, the honorable member for Cowper, I ask: Will the Government make available immediately to the Commonwealth Development Bank of Australia special funds for use by farmers in particularly needy circumstances?


– The honorable member has raised a question of policy. I have already assured him that the Government is giving close attention to this matter. There have been discussions again in recent times in the Cabinet regarding it and at the present time it is under close study by an inter-departmental committee.

He will appreciate from this and from the material to be supplied in a statement the Prime Minister will shortly be giving that the Government is paying close attention to the problems arising from the drought and when it is in a position to make a policy statement regarding aid we shall do so in the appropriate way.

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– I ask the Minister for -National Development whether the statement appearing in today’s Brisbane Press that the Government has arranged for the disposal of the whole of the Moonie Field oil output is correct. Has Australian Oil Refining Pty. Ltd. stated that it will no longer accept 28 per cent, of the field’s output and will cut its intake to 19 per cent.? Is it proposed to dispose of the unwanted 9 per cent, of output and will the Minister explain the use of the word “ disposal “ and what is involved?


– The original arrangement with the oil companies to purchase Moonie crude oil was made for a period of eighteen months. That period expired on 25th August and it became apparent that the Government would not have an opportunity of looking at the Tariff Board report before the agreement expired. Therefore I approached the oil companies and asked them if they would extend their agreement for a period not exceeding three months so as to enable the Government to have a look at the Tariff Board report and to decide what action should be taken. All the companies approached agreed, with an exception, because of a change in circumstances, in the case of Caltex Oil (Australia) Pty. Ltd. The Caltex company had been providing finished products for Ampol Refineries Ltd. when the agreement was made some eighteen months ago. Caltex said that now that Ampol had its own refinery and was purchasing crude oil overseas, it did not see why it should have to purchase the 9 per cent, which Ampol no longer required. The result of negotiations was that Union-Kern-A.O.G. at Moonie said that it was quite prepared to stockpile on its own account this 9 per cent., as otherwise a complete renegotiation of the agreement and the price between the companies would have to be undertaken. As this would be for only a matter of a few weeks the company was prepared and able to carry on and stockpile this oil. The result is that Moonie will continue to produce oil at the optimum rate and a small amount will be stockpiled until such time as the Government decides its policy as a result of the Tariff Board inquiry.

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Minister for Trade and Industry · MURRAY, VICTORIA · CP

– I desire to make a personal explanation regarding two newspaper reports which are not accurate and which attributed certain statements to me. The Melbourne “ Herald “ of last night carries a story under a heading “ Blunder by Govt. - McEwen” which states -

The Deputy Prime Minister, Mr. McEwen, is reported to have made a frank and unqualified confession of a blunder to an angry meeting of the Government parties today.

This report is inaccurate, and 80 or 90 honorable members who were present at the meeting know that the report is not correct.

Mr Curtin:

– What did the Minister say?


– If I were to ask the honorable member what he said in caucus, would he tell me? Let me say that in conformity with the freedom that exists within the two Government parties I would have indicated that if a person felt critical he could express his own views freely in the Parliament. This is our philosophy on this side of the House. But I would have appealed to him to exercise some discretion as to how he cast his vote.

In this morning’s Sydney “Daily Telegraph” there is a paragraph under the heading “ McEwen gives 3 pledges “ which speaks of the same joint party meeting yesterday. I make this explanation in the interests of the commercial enterprise concerned. The article attributed these words to me -

If Cabinet approved the I.P.E.C application-

This is in the contingency that the regulation which was disallowed yesterday in another place stood, and that the Minister for Civil Aviation (Senator Henty) would be the person with authority to make a decision - it would bring the decision back to a joint Government parties meeting “for your obvious applause “.

That, again, is inaccurate and I would not like it to be read by the I.P.E.C. people or anyone else so as to produce the wrong conclusion that I said, in effect: “ You have only to apply to get it.” This would be completely inaccurate, as all who were present at the party meeting would know.

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Ministerial Statement

KooyongPrime Minister · LP

– by leave - As honorable members will know, the Government has for some time been giving attention to the drought situation in central Australia and parts of eastern Australia. We have had representations from the Premiers of New South Wales and Queensland, including proposals that the Commonwealth provide special financial assistance towards certain schemes of drought relief being undertaken by the States. There have also been representations from various interested organisations and individuals. The Government has given consideration to these matters, and I should like to inform the House in general terms of the action that has already been taken in the Commonwealth sphere and to indicate some further steps the Government proposes to take.

In this statement I am referring primarily to the drought in New South Wales and Queensland, and not to the drought that has persisted for a number of years in central Australia. Although some of the measures to which I shall be referring are applicable equally to the two States and to the Northern Territory, the Commonwealth’s position with regard to drought in the Territory is a special one arising from its direct responsibility for Northern Territory matters. My colleague, the Minister for Territories (Mr. Barnes), will therefore be making a separate statement dealing with the question of the drought in the Northern Territory.

Naturally, in our approach to the whole matter we have had well in mind the consequences of the drought for the nation and, more particularly, the plight of those who are suffering from the drought in a direct and personal way. The drought has had serious and widespread effects, and some of these will continue. However, provided the drought does not extend into the coming season, the indications are that it should not have a seriously adverse effect on the overall economy in terms of loss of total rural production and export proceeds from primary products. Fortunately, the drought has already broken in certain areas, particularly the dairying areas along the COASt but even in those areas the aftermath of the drought will have severe consequences for individual farmers. A serious position remains in inland sheep and wheat and cattle areas of northern New South Wales and southern Queensland despite some partial relief rains. The position could further deteriorate in those areas if the drought continues during the coming spring and summer with further heavy losses for the individual primary producers concerned.

The provision of assistance for droughtaffected primary producers is, under the constitutional division of responsibilities, essentially a matter for the State Governments concerned. The State Governments of New South Wales and Queensland have introduced various special measures of assistance, such as the provision of special loans at concessional rates of interest and freight concessions on the carriage of fodder and livestock, and have asked the Commonwealth to participate in the financing of these measures. Proposals for Commonwealth participation in drought assistance schemes for the benefit of individual primary producers have also been put before us by a number of organisations.

The provision of assistance such as this is properly a State responsibility and the States have the administrative machinery to handle it. After careful consideration, we have decided that it would not be appropriate for the Commonwealth to participate directly in the financing of such measures, nor do we think it would be a proper function for the Commonwealth to participate in making loans to individuals or providing other forms of direct financial assistance to those who may be having difficulty, for reasons such as drought, in financing their business activities.

At the same time, we are very conscious of the strains that special drought measures might put on the finances of the two States. When the new financial assistance arrangements for the next five years were evolved at our meeting last June with the

Premiers, it was accepted that the arrangements would stand unless there was a major change in the financial position of a State through circumstances beyond its control. If, as a result of action related to the drought, the States of New South Wales and Queensland find it necessary to meet abnormally large calls on their budgets that are established to be beyond their financial capacities, we will be prepared to consider assisting them by means of general purpose assistance grants. I am advising the two Premiers in these terms.

There are two matters which do lie within the Commonwealth’s particular sphere of responsibility and which have a bearing on the position of those suffering from the drought. I refer to taxation and the question of access to trading bank finances. In our consideration of both these matters we have been concerned to do whatever we reasonably can to help primary producers affected by the drought, in relation to both their needs for carrying on until the drought breaks and the problems they will encounter in rehabilitating their properties, especially by way of re-stocking, to get them back into shape for the resumption of normal production operations after the drought breaks.

In the consideration of taxation measures, we have found that the present provisions of the income tax law, and the administration of that law by the Commissioner of Taxation, already go a long way towards meeting the taxation problems of those affected by the drought. It needs to be borne in mind that, by and large, taxation concessions are neither direct nor immediate in their effects on taxpayers’ incomes and that being related to income, their benefit is greatest to those primary producers with large incomes, paying high rates of tax, and least to producers with small incomes, paying low rates of tax. There is thus limited scope for taxation concessions as an appropriate means of helping drought affected primary producers.

With regard to profits arising from forced sales of livestock because of the drought - a matter which has been the subject of numerous representations - the law already gives the primary producer the right to elect to have those profits spread over five years; that is, over the period during which in more normal circumstances they might be expected to arise. A producer who makes such an election will be liable to tax on only l/5th of his additional profits in the year in which such profits arise. Subsequently the profits so spread must be applied wholly or principally to purchase replacement livestock. Expenditures on replacements being themselves deductible, the amount of abnormal profits carried over into the second and succeeding years need not, depending on re-stocking rates, involve an addition to a primary producer’s tax liability in those years. In addition, of course, if a primary producer considers that the provisional tax notified in his assessment is too high, he may seek adjustment of that tax on the basis of his estimate of his current year’s taxable income.

The cost of purchasing fodder used to feed livestock, which has also been the subject of several requests, is already deductible in the year of acquisition; so that primary producers who are forced to buy in additional fodder to maintain their stock may deduct, as normal practice, the whole of the purchase price. Similarly, the cost of producing or purchasing a reasonable quantity of fodder for stockpiling against emergencies is deductible for income tax purposes.

Concern had been expressed in several quarters at the possible inability of some drought affected producers to meet their tax liabilities by the due date. The Commissioner of Taxation, who is responsible for the administration of the income tax law, has discretion under the law to grant extension of time for the payment of tax, and has assured the Government that he applies this discretion sympathetically when considering individual applications by primary producers in financial difficulties because of the drought.

A particular problem that has arisen concerns the position of primary producers who, because of the drought, have shorn their flocks twice within the 1964-65 income year. As the law now stands, woolgrowers so placed are required to account for the proceeds and expenses of two wool clips in their 1964-65 income tax returns. There is no provision in the law whereby proceeds of the second clip, net of direct expenses, can be transferred to the 1965-66 income year. To meet the situation, the Government has decided to introduce an amendment of the law so as to permit primary producers concerned to elect to reduce their 1964-65 income by the amount of the net proceeds of the second clip and to carry that amount forward into the 1965-66 income year.

I turn now to the question of access to trading bank finance. The Reserve Bank has kept itself closely informed of developments in the drought situation, particularly with regard to the demands of primary producers affected by the drought for finance from the banking system. Preferential treatment is extended to the rural industries under the traditional policies of both the Reserve Bank and the trading banks, and the trading banks have assured the Reserve Bank that the demands for bank finance arising from the present drought are being dealt with sympathetically. As the implications of the drought became clearer, the Reserve Bank informed banks that, in providing necessary finance for purposes arising from the drought, additional lending might be undertaken outside the general limitation on new lending commitments. The trading banks have been asked to continue to keep the Reserve Bank informed of the extent of demands for drought finance upon them. The Reserve Bank is closely watching the situation, including the trading banks’ continuing ability to provide additional loan finance to drought affected clients.

We recognise, of course, that the measures of drought relief which the States and ourselves have introduced or contemplate do not deal with the long term problem of drought mitigation measures. The unfortunate consequences of the present drought have served tq stimulate an awareness of the ravages that droughts in this country can cause, from the standpoint of both individual primary producers and the nation as a whole, and there is general acceptance of the need for further action to mitigate the effects of droughts that will, inevitably and unhappily, continue to occur from time to time in the future. Already, following discussions in the Australian Agricultural Council, the C.S.I.R.O., the Bureau of Meteorology and the Bureau of Agricultural Economics are undertaking investigations of drought mitigation. We further intend to put to study the question of the role that the Commonwealth and its agencies might play, within the sphere of Commonwealth responsibility, in the devising and execution of measures to mitigate the effects of future droughts.

I present the following paper -

Drought - Relief Measures - Ministerial Statement, 26th August 1965- and move -

That the House take note of the paper.

Debate (on motion by Mr. Pollard) adjourned.

page 486


Ministerial Statement

Minister for Territories · Mcpherson · CP

– by leave - Honorable members will be aware of the severe drought which has been ravaging pastoral properties in the Alice Springs district for some nine years or more. Over this period, the situation in the pastoral industry has progressively become more serious. With the development of the industry in central Australia and a long run of good seasons, cattle numbers had increased by 1958 to about 350,000. Since then, numbers have declined to about 130,000 at the present time. Although rains over the weekend of 14th and 15th August brought useful falls to the south, south-east and far north-east parts of the district, these falls could not be classed as drought breaking and large areas in the north and north-west received no significant falls.

In conjunction with its consideration of drought relief submissions made by the Premiers of New South Wales and Queensland, the Government has been giving careful consideration to drought relief measures in the Northern Territory in addition to those which have been in operation for some years. Bearing in mind the comparative isolation of the Alice Springs area and the fact that fodder supplies and cattle for sale and agistment usually have to be transported over extremely long distances, the Government has decided as a short term measure to increase the existing drought freight concessions on fodder and stock from 50 per cent, to 75 per cent.

Pastoralists throughout the whole of the Northern Territory are eligible for long term loans from the Government for water bores. As a special drought relief measure, the Government has decided that interest on such loans should be remitted and repayments deferred while properties are drought affected and for a period of eighteen months after the drought breaks.

In a few cases, the drought has affected individual pastoralists so severely that if an early break does not materialise they may have to abandon their properties, at least temporarily. To avoid this happening and to maintain the industry as far as possible in a condition which will enable a return to production immediately the drought breaks, the Government will make available special loans through the Primary Producers’ Board in the Northern Territory to pastoralists in necessitous circumstances who are unable to obtain further credit elsewhere. These loans will be limited to a maximum of £3,000, repayable over seven years and bearing interest at 4i per cent. The purpose of the loans will be to enable pastoralists to preserve their essential operations and meet necessary maintenance costs. In this connection, mention stroud be made of the very considerable assistance already advanced by pastoral firms operating in the central Australian region for carry-on finance. At the same time, it is the Government’s aim to provide an additional form of assistance. It is not intended that the granting of these loans should enable financial agencies who have been extending credit to the pastoralists to reduce their own liabilities.

The Government proposes to review in twelve months time the operation of these special short term relief measures which I have outlined. The cost of these measures will be additional to the figures contained in the Budget estimates and is estimated, on a preliminary basis, at approximately £115,000 in 1965-66. Longer term measures to mitigate the effects of drought in central Australia will be considered separately in the light of investigations being undertaken by the New South Wales Soil Conservation Service and by the Bureau of Agricultural Economics. I present the following paper -

Drought in the Northern Territory - Relief Measures - Ministerial Statement, 26th August 1965- and move -

That the House take note of the paper.


– With the concurrence of the House, I shall permit the statements by the Prime Minister and the Minister for Territories to be debated together.


.- I feel certain that the statements made by the Prime Minister (Sir Robert Menzies) and the Minister for Territories (Mr. Barnes) will bring disappointment and despair to those people, particularly in New South Wales, Queensland, central Australia and the Northern Territory, who have been so adversely affected by drought. It has been stated in the Press and by people who are competent to judge that this drought is the worst in living history in this country. I can remember many droughts. I can remember how bad the drought of 1901 was. But this drought is said to be the worst in our history. The Prime Minister said that the effects on the nation and on individuals are serious. Despite this the Commonwealth Government does not directly offer to these suffering people, on whom the welfare of the nation to a great extent depends, one penny in assistance.

In 1944 Australia suffered a severe drought. That drought is not considered to have been as severe as the one we are now suffering. In the droughts of 1944, 1945 and 1946-47 the Government presided over by the late John Curtin announced a form of drought relief on a £ for £ basis with the Government of New South Wales for the people who were suffering at that time. The hardest hit area at that time was New South Wales. For the first time in Australia’s history during a national disaster which a drought is, just as much as bush fires are, the Government, led by John Curtin, announced that it would make a grant involving expenditure in 1944- 45 of £980,000 on a £ for £ basis, without the application of a means test, so that producers in drought stricken areas could carry on with their production, sow their crops, buy fodder for their herds and produce for the following year. A unique feature of the relief provided was that it was not in the form of a loan. The late John Curtin took the view that when a man is in distress it is not right to hand him some money and intimate in blunt terms that for an ensuing period after he overcomes his trouble he will have a financial burden around his neck. So the relief was a gift.

In 1946-47 the wheatgrowers of New South Wales and elsewhere were in distress. The McGirr Labour Government was in office in New South Wales and the Chifley Labour Government was in office in Canberra. Again, without the application of a means test, an amount of £1,500,000 was provided on a £ for £ basis with the New South Wales Government, without any obligation to pay back even one penny.

I have here a Press release by Prime Minister Chifley and Premier McGirr. It reads -

It has been decided that funds to the extent of £1,500,000 will be provided by the Commonwealth and State Governments on a £ for £ basis to provide assistance to cereal growers by way of grant in respect of crop failures in the 1946-47 season. In 1944-45, when the total wheat yield of New South Wales was 17 million bushels a similar scheme was introduced, the cost being £948,000.

Perhaps the right honorable gentlemen will have the decency to apologise to the House for misleading it.

Mr Harold Holt:

– Why do you have to play politics?


– Why does the right honorable gentleman have to say that my figures are wrong? He pulls a figure out of his stupid head-


– Order! I suggest that the honorable member withdraw that remark.


– I withdraw it, and to save time I also apologise. These are the facts. The grants to which I have referred were free and were in marked contrast to the policies of State and Federal Governments before that time. I have some recollection of disasters striking primary producers in Victoria over the years. I recall because I occupied an administrative position in Victoria at the time, berry fruit growers in the Dandenongs being in trouble. Papers were brought to me by department officers asking rae to decide whether I was going to take legal action to recover loans made to berry growers many years previously. If the Government goes on with this sort of thing - giving relief to people per medium of loans - in due course it will find these people coming practically on their knees to the lending authority begging not to be prosecuted or pleading for more time to repay the loans. That is why the Labour Party stands for practical measures in this field.

The Commonwealth Government at the time of which I am speaking appreciated that the Rural Bank of New South Wales, with its branches all over the State, was well equipped lo see that the administration of the system was sound, and fraud was obviated. What is the context of the Prime Minister’s statement? He admits that the drought is a national disaster and he talks about the concessions that are available in respect of taxation. We all know that the farmer enjoys the five years averaging system, but he gets whacked badly when at some stage he earns a high income in one year. In the end, he does not really get any concession; he pays as much tax as anybody else. In any case, the taxation concession deals with the normal variations in income in situations which are not exceptional. This is an exceptional situation. While the ordinary taxation provisions will help they do not actually mean much in this context.

Then the Government had a brainwave and it was announced that if a farmer shore his sheep twice in the year the second clip would be free of tax. That will not be of much help to farmers, especially ‘with low prices for wool. How generous of the Government. Is the Treasurer able to make a statement showing how many people in New South Wales and Queensland shear their sheep twice. I suggest you could count the numbers on your fingers.

Mr Brimblecombe:

– They cut the sheep’s throats when they are shorn.


– As the honorable member for Maranoa implies, the second shearing is at a time of the year when severe weather changes frequently cause the sheep being shorn to topple over and die. It is an insult to talk of a concession of this type being of any material assistance to the people stricken by this national disaster.

Then we get the story about loan funds. We are told that the Commonwealth has consulted the Reserve Bank and that loans will be available at 4i per cent, for these people. Available through what? Through the local trading bank? Through the Rural Bank? Through what agencies? The Treasurer is silent. Or through the local stockbroking firms? Can these questions be answered? Where will the drought stricken farmer apply?

Mr Jeff Bate:

– In the last couple of weeks this matter has been dealt with.


– The honorable member seems to know. Does the Treasurer know?

Mr Harold Holt:

– Does the honorable member want me to interrupt him right through his speech? If I took advantage of every distortion he has made he would not be able to make his speech at all.


– Did I make any mistake in regard to figures? Does the Treasurer challenge Prime Minister Chifley’s figures or Premier McGirr’s figures? Let him have a look at the Auditor-General’s report. Look at what is now dangled as a measure of relief, namely loans at 4i per cent, interest. The Reserve Bank has been consulted. Does this mean that the Reserve Bank, at the request of the trading banks - with whom many of these people deal - will make money available to the trading banks which will in turn make it available to these people at the normal overdraft rate? I do not know. I should like some explanation of that situation. I should like to know whether that 4i per cent, is to be net to the primary producer who borrows.

Then we have another situation, which arises in respect of the so-called easy access to loans by farmers. I would assume that normally - and figures that are available from the Commonwealth Statistician show this - the great majority of primary producers, particularly in the areas concerned, are at present up to the maximum limit of their overdraft. All the Prime Minister tells us is that an appeal has been made to the trading banks. He says that they have been pretty decent. Trading banks are institutions which must have ample security. So where do we go? This help is not worth very much.

I want to point out that we have in Australia a Commonwealth Development Bank, but it is not the answer to the drought relief problem. If nothing else but loans is to be made available to farmers it is essential to ensure that the people concerned have clearly in their minds whether they can get access to the Development Bank and obtain funds for particular purposes. If honorable members look at the report of the Development Bank for 1964 they will find under the heading “Functions and Lending Policy” the following statement -

The Development Bank is a supplementary source of finance for development.

Note those words - it goes on -

It does not compete with conventional and traditional lenders, but provides financial help where, in the opinion of the Bank, such help is desirable and the finance would not otherwise be available on reasonable and suitable terms and conditions.

I do not think anybody will deny that in this particular crisis the people who are heavily encumbered will not be able to get from the trading banks the facilities they need. Will they be able, under the terms of the Development Bank’s charter, to go to that bank, or to its agency in some country district, and say: “ I am in trouble. I know I am up to my limit of overdraft.” We know that the Commonwealth has said that it is urging the banks to play the game. A man may say to a bank: “ I know I am up to my limit, or may be am over it. Can you give me any more? “ If the bank says that it cannot, the farmer may then say: “ What about a loan under the terms of the Development Bank Act which lays down that finance will be available on reasonable and suitable terms and conditions? “ The catch is whether the relief that would help a farmer to recover from a disaster such as fire or drought is for developmental purposes. Is a developmental loan available for re-establishment after drought or fire or flood?

If the Treasurer will listen I will make a request to him that he make inquiries from the Development Bank, study the charter of the bank and the legislation setting it up, ascertain, and perhaps be able to let these drought stricken people know, whether in these circumstances the Development Bank will be able to regard as within its charter of operations loans which normally the trading banks do not make. The loans are necessary for rehabilitation work on properties affected by drought. They will be especially necessary, should the drought continue, for the purchase oi fodder, fertilisers, seed and so on. Can the Development Bank make loans for those purposes to people already over their overdraft limits with a trading bank? If the charter of the Development Bank prohibits a man in those circumstances from obtaining a loan will the Treasurer introduce legislation to clear the matter up? That is my criticism of the Government’s proposal as outlined in the statement made by the Prime Minister. It means virtually nothing. In effect, he said to the Premiers of the States: “ If your Budgetary position is bad later on I will consider giving you some Commonwealth money”. But it will be considerably “ later on “ before the budgetary position will be known in the States. How could that Commonwealth money - if the States ever get it - help the primary producer who is stuck in the financial morass today? That is another myth exploded.

Let me refer to something that happened during another disaster, the disastrous fires in Victoria in 1944. On that occasion, the Commonwealth contributed £ for £ with the State Government and no requirement was ever imposed on the people who received the assistance they sorely needed. The type of assistance proposed is outmoded and out of date. It should not be depended upon in a situation such as this.

Let us now examine the statement made by the Minister for Territories. It is not much better. He has offered the people of central Australia a concession of from 50 per cent, to 75 per cent, on freight for the carriage of stock and fodder. That is helpful. He also said: “The banking institutions will probably be able to give some help”. The banks will follow their natural bent. They will be confronted with clients in need. Why, the Minister has admitted that some farmers will probably be faced with the possibility of having to walk off their properties.

Mr Barnes:

– We have made provisions for that.


-That is so. What sort of help will trading concerns give to the man who is faced with the prospect of abandoning his property? They are not philanthropists. They have to work on sound business lines. What help will the farmer get if he asks for enough finance to restock his property? The Minister has told us that the Government proposes to review the operation of the special short term relief measures in 12 months time.

The relief measures will not give the man to whom I refer much assistance. The Minister also said that where individual pastoralists are severely affected and look like having to abandon their properties, at least temporarily, to avoid this happening and to maintain the industry as far as possible in a condition which will enable a return to production immediately the drought breaks, the Government will make available special loans through the Primary Producers Board in the Northern Territory. That is better than what is being done for New South Wales and Queensland - the Minister for Territories must have some influence. These special loans will be made to pastoralists in necessitous circumstances who are unable to obtain further credit elsewhere. He also said -

These loans will be limited to a maximum of £3,000.

That will not buy many cattle. He went on to say that the purpose of the loans will be to enable the pastoralists to preserve-

Mr Barnes:

– The purpose of that loan is not to buy cattle; it is only temporary relief.


– But the Minister knows very well the need of the pastoralists in the vicinity of Alice Springs today. When I was up there last year I travelled the country within a radius of about 70 miles of the town and I did not see one living animal.

Mr Barnes:

– But this deals with interim relief. The Prime Minister said that the long-term situation will be considered.


– It is true that the Minister’s statement relates to interim relief limited to a maximum amount of £3,000. What does he mean by “ long-term “? Does he mean 6 months, 12 months, 6 weeks or 12 weeks?

Mr Barnes:

– When the drought breaks.


– I think I have illustrated quite clearly that what is being done is entirely inadequate. I regret that I was offensive to the Treasurer, but I think I had ample justification for it when a man with the knowledge and financial skill which the Treasurer assumes comes in here and endeavours to mislead the House by quoting grossly inaccurate figures regarding relief in past droughts.

Motion (by Mr. Kelly) proposed -

That the debate be now adjourned.

Mr Robinson:

– Could the House be told when this debate is likely to be resumed?

Treasurer · Higgins · LP

– Since the matter has been raised and since both sides of the House will be interested, let me say that the general intention is to proceed with the debate on the Budget uninterruptedly until a vote is taken next Thursday night. I would suggest that on a matter of this kind the House would not wish to see any honorable member inhibited from making such references to drought matters as he wishes during the course of his speech on the Budget. As to specific debate on this particular matter, I think it would be the general desire of the House to proceed with the programme of continuing the Budget debate until the vote is taken tonight week. Thereafter, I shall be looking for a suitable opportunity to enable the debate on these statements to be resumed.

Question resolved in the affirmative.

page 491



Ministerial Statement

Treasurer · Higgins · LP

– by leave - At queston time the honorable member for Maribyrnong (Mr. Stokes) raised with me the question of the distribution of the amount by which the Commonwealth Superannuation Fund is in credit. I pointed out at the time that I had secured some information on this matter but did not wish to take up time during the question period in giving details. I know that there is keen interest on both sides of the House and certainly very keen interest by the Public Service in this matter and I should like to give the details that have been made available to me. I have a short statement. Indeed, it is in the form of a reply to me from one of the senior Treasury officers to whom I directed my queries. The House may be glad to have the information. The document states -

The Treasurer,

You asked for a note setting out the work which remains to be done before the actual dis tribution to individual contributors and pensioners of their share of the surplus in the Superannuation Fund can be made.

  1. New rates of contribution, based on the higher assumed earning rate of the Fund, are now being calculated by the Commonwealth Actuary. This work had commenced prior to your statement in the House of the 25th March 1965, and is being treated by the Actuary as a matter of top priority.
  2. The new rates of contribution will then be applied, by the Superannuation Board, to reconstruct the records of all contributors as at 30th June 1962, This operation will be carried out by computer and the planning is well advanced but it will involve many hundreds of thousands of adjustments.
  3. Having adjusted all the records of contributors as at 30th June 1962, to the new contribution basis, the Superannuation Board will then produce revised statistical tables and information to form the basis for the Actuary’s reassessment of rhe state of the Fund as at 30th June 1962, as indicated in your statement of 25th March 1965.
  4. The Actuary will then make his revised valuation of the Fund as at 30th June 1962, to determine the amount of surplus available for distribution and the proportions of the surplus attributable -

    1. to contributors, as a group, and
    2. to pensioners, as a group.

The time required will depend largely upon the availability of trained actuarial staff to assist the Commonwealth Actuary who is at present shouldering the full burden of actuarial work personally.

  1. The Superannuation Board will then calculate the individual entitlements by computer operation and make the necessary payments.

It is difficult to estimate at the moment a date when it will be possible to commence payments to individuals both because of the complexity of the operations involved and the difficulty in securing trained actuarial staff. Extensive advertising in Australia and the United Kingdom has so far failed to produce any suitable candidates for two vacant positions for qualified actuaries. However, everything possible is being done, within the limit of our powers, to get the job completed and no one could be more anxious to bring the matter to finality than all the officers involved.

I present the following paper -

Superannuation Fund - Distribution of Surplus - Ministerial Statement, 26th August 1965 - and move -

That the House take note of the Paper.

Debate (on motion by Mr. Webb) adjourned.

page 492


Treasurer · Higgins · LP

– I move -

That Order of the Day No. 1, Government Business, bc postponed until a later hour this day.

It has been the consistent practice of the House during Budget periods to accept a motion of this sort.


.- I give a brief and formal reminder of what occurred at the end of the last sessional period as a result of continued interference with the procedures of the Parliament by the Treasurer (Mr. Harold Holt) and other members of the Ministry who evidently presume that this is their own private Parliament.

Mr Harold Holt:

– This was discussed with your Deputy Leader.


– I do not care whom it was discussed with. This is a parliamentary question. I discussed it with him earlier and he said that there was no particular agreement on this occasion. But it is not that question that I am raising today. I am taking two or three minutes to raise several questions. First, at the end of the last sessional period the Parliament, the people employed by the Parliament and every ancillary service assisting the Parliament, such as the airlines, were treated with gross discourtesy and caused great inconvenience. We have just heard a matter of drought relief raised in this Parliament, with the Country Party being silenced by the Treasurer.


– Order!I suggest that the honorable member for Wills keep in mind that the matter before the House is the postponement of Government Business, and in discussing this matter the honorable member may not make wide and general comments.


– With respect to your ruling, Sir, I simply point out that the adoption of this procedure is removing from members of the House one of the opportunities that they have to raise topical questions. I ask the members of the Parliament to remember what happened at the end of the last sessional period and take all possible steps to prevent a recurrence of what happened then. This is not the

Treasurer’s private Parliament and it is up to all of us to resist to the utmost the treatment that has been meted out to us during at least the nine or ten years that I have been in the Parliament.

Question resolved in the affirmative.

page 492


Second Reading. (Budget Debate.)

Debate resumed from 25th August, (vide page 459), on motion by Mr. Harold Holt-

That the Bill be now read a second time.

Upon which Mr. Calwell had moved by way of amendment -

That all words after “ That “ be omitted wilh a view to inserting the following words in place thereof - “ this House condemns the Budget because -

Such taxation increases as it contains add further burdens to wage and salary earners whose living standards have already been eroded by price rises and the Government’s active intervention against wage increases;

Such meagre social service benefits as it proposes are inadequate, belated and partial in their application; and

The Budget fails entirely to deal with such problems as increases in imports and Australia’s dependence on foreign capital.

This House further declares that only by proper economic planning can Australia rapidly expand the resources required to meet its urgent needs in the fields of defence, development, education and social welfare”.


– The Treasurer (Mr. Harold Holt), the officers of his Department and all people associated with him are to be congratulated on the presentation of this 1965-66 Budget in the framework of our complex and expanding economy. It is a realistic Budget. The increase in taxation has been applied with wisdom, fairness, and equity. People on lower incomes will be required to pay an extra 6d. in the £1 in income tax, and this will mean a very small increase in individual cases. The burden of taxation will be alleviated in the case of people with large families, who constitute a section of the community deserving of every consideration that the Government can give. I think most reasonable people have agreed that the increases in taxation, both direct and indirect, have been well proportioned. I think also that most people have found the increases to be less than they expected them to be and have accepted the fact that the increases that have been made are both reasonable and necessary.

The Treasurer’s job was made more difficult by the restricted loan market. Overseas loan money is not as plentiful as it previously was, and what money is available commands a higher interest rate, in excess of 7 per cent., and is available for a reduced period, in most cases not more than five years. The Treasurer had to choose between budgeting for a deficit, with all the difficulties attendant upon such a procedure, and raising the necessary money by taxation. Budgeting for a deficit would have caused an inflationary trend. This is at times desirable, but experience has taught us that it is akin to fire, a good friend when it can be controlled but, having got out of control, devastating and a respecter of no-one. Inflation has a more severe effect on people in the lower and middle income brackets than on those enjoying higher incomes. An inflationary trend at present would be undesirable and, I believe, detrimental to our standard of living.’

Rising imports pose a problem, especially when our exports are meeting strong competition and our primary production has declined in the drought affected areas of New South Wales and Queensland. The Treasurer’s job was to consolidate, and in using the method that he has adopted he has sufficiently reduced the previous excessive level of demand to steady down the inflationary trend that was evident in 1964 and the early months of this year. I am convinced that no one finds satisfaction in the boom and bust fluctuations to which the Australian economy is prone because of our dependence on prices in world markets. Some criticism has been levelled at the Treasurer for not allotting some of the proceeds of the petrol tax to improvement of roads, expecially strategic roads. It is obvious that our roads need improvement, but again a balanced view is necessary. I understand that petrol will still be cheaper in Australia than it is in most other parts of the world. I believe that petrol costs twice as much in the United Kingdom as it does in Australia.

It is fair to say that all of our people were prepared to pay more in taxation to provide for defence; but the Treasurer has again taken a balanced view. Weapons and equipment are costly items, with changes and improvements being constantly made. It would have been imprudent and unwise to purchase large stocks of equipment in advance and have them stored until our Services have sufficiently increased in numbers to use that equipment. This demonstrates how necessary it is to have true and valued friends as allies so that, in case of need, these expensive requirements will be immediately available to Australia. Record defence expenditure of £385,921,000 has been budgeted for this financial year. This is an increase of £81,430,600. The care to be exercised and the prudent way in which this money is to be shared between the Services and spent deserve the commendation of all Australians. The Treasurer has explained in detail how these funds for defence are to be spent, and I shall refrain from unnecessary repetition.

I would have been pleased to see a general rise of 10s. a week in age and invalid pensions. But I applaud the increase of 10s. a week to single pensioners paying rent. For them, I would have welcomed an increase of £1 a week, because I have noticed with concern how such people have to live in order to eke out their pensions. The increase of up to £1 10s. a week to rent paying pensioner married couples is desirable and necessary. I know that there is an anomaly here that works against married couples who have striven and saved to own their own home. However, over the years, the Government has gradually eased the means test, and it is to be hoped that next year married pensioners will be brought into line with single pensioners.

I believe that all honorable members will welcome the abolition of the means test with respect to the pensioner medical service. Pensioners in receipt of part pensions, especially those who have required constant medical attention, have had a difficult time over the years. Many of them would have been better off had they not had some of the assets that reduced their rate of pension. I think all churches and organisations that attract the government subsidy for the construction of homes to house indigent age and invalid pensioners should be encouraged and assisted. I wholeheartedly agree with all schemes to house aged people, but I should particularly like to see an upsurge in the construction of units for the housing of pensioners who cannot contribute to meet part of the cost. The Government should consider abolishing the means test and I trust that this will be done in the near future. Abolition of the means test would compensate those people who have been prudent and made sacrifices, and would assist them greatly in their years of retirement. I am advised by people who are competent to advise that the means test can be abolished, but that the first year, and possibly the first two years, after abolition would be difficult, though, thereafter, no great problem would be encountered.

The next matter that I want to stress, Mr. Deputy Speaker, is the inducement to young people to save. The granting of savings bank licences to the free, private enterprise banks was a masterly innovation, particularly in a country that has encountered persistent problems in trying to develop savings. The homes savings grants will encourage young people to save, and the Government is to be commended on this original and unique scheme.

The provision made for the PostmasterGeneral’s Department in this Budget will, I am sure, delight all of us and do much to ease the tension of which we constantly see evidence in the correspondence that we receive concerning the need of hundreds of people in all parts of New South Wales - I refer to that State particularly - who want and need telephones but cannot have them installed. The sum of £82.4 million is provided for technical equipment. I am afraid, however, that the Department will not be able to spend all this money, because of the slow rate of delivery of technical equipment that, unfortunately, has to be imported from overseas. I suggest that a delegation be sent overseas to expedite the delivery of such equipment.

Mr Cope:

– I am prepared to volunteer.


– Very well. I think all honorable members will appreciate that a telephone is an absolute necessity for many people in a prosperous and expanding economy. Even if the Postmaster-General’s Department succeeds in obtaining reasonably early delivery of the equipment required, further delays in installations are experienced because skilled technicians are lacking. Therefore, I hoped that inducements could be offered to people with the necessary technical ability to meet the demand for technicians required to install telephones more quickly once the necessary equipment had arrived in Australia.

I am sure that all Australians will be pleased at the introduction of the new intermediate rate of war pension, which will alleviate a great deal of distress suffered by partly incapacitated ex-servicemen who frequently lose time from work because of their war injuries. I believe that the Government is to be congratulated on this new proposal. Such ex-servicemen have had a very difficult time. I know that sustenance allowance is provided while they are away from work, but this allowance is not really adequate and many of these men are able to return to work for only a short time before they are stricken down again. In conclusion, Mr. Deputy Speaker, I say that this Budget represents a notable contribution to the stabilisation of our economy. Full employment is again assured and prosperity is guaranteed.


.- I rise to support the amendment that was so ably moved by the Leader of the Opposition (Mr. Calwell). During his speech, the Treasurer (Mr. Harold Holt) said that the Budget provided for greatly enlarged expenditure on defence. The Leader of the Opposition effectively answered this assertion by pointing out that, as a percentage of the gross national product, expenditure on defence in 1965 is similar to the expenditure on defence in 1953, 1954, 1955 and 1956. All this Budget did was to restore the real value of defence expenditure to the level of 12 years ago.

Increased defence expenditure was used by the Treasurer as an excuse to slug the poorer sections of the community in various ways. We all expected that defence expenditure would be increased, but we did not expect that the less favoured section of the community would be made to bear the bulk of the burden. Those people with the richest assets and with the most to lose have been let off very lightly and will pay least. One would have thought that the big companies with their colossal profits would have been required to pay their share of the increased defence expenditure, but they have not been. Why did the Treasurer not increase company taxes? He increased income tax; why not company tax? Big companies, such as Broken Hill Pty. Co. Ltd. and General Motors-Holden’s Pty. Ltd., which are making colossal profits, have not been called on to subscribe additional funds to the defence of this country. This year, Broken Hill Pty. Co. Ltd. made a profit of more than £19 million and General Motors-Holden’s Pty. Ltd. made a profit of more than £18 million, but they have been left untouched. I mention those two companies only because they are typical of Australian companies generally. But the Treasurer has left them untouched and has directed his Budget at the poorer sections of the community.

It is true that pensioners are to receive some fringe benefits, and these are very acceptable. But when we remember that the basic rate of pension is not being increased, the fringe benefits appear to be paltry. It is true that the pension was increased by a small amount in the last Budget, but this increase has been more than swallowed up by increased costs in the ensuing 12 months. The pension has less value today than it had 12 months ago. Pensioners, with their meagre incomes, cannot be accused of creating inflationary tendencies, because they spend their meagre pensions on bread and butter items. This spending cannot affect the economy in any way. Except for the fringe benefits, the Government has turned a deaf ear to the plight of the pensioners. Scientific and medical research has lengthened the life span of people and we should now be concentrating on ensuring that they live in reasonable circumstances in the later years of their lives.

The Treasurer boasted about the increased expenditure on social services. But two factors are responsible for this increased expenditure. One is inflation and the other is the growth of the population.The population has jumped from 7.8 million in 1949 to more than 11 million at present. This has called for increased expenditure on social services. During the same period the consumer price index has risen from 61 to 132.1. So the value of money has been reduced and consequently more has to be expended to provide about the same standard for the recipients of social service benefits. The total bill for social services does not reveal the value of the benefits to the recipients. To establish this, we need only ask one or two very simple questions: Are mothers getting the same value in child endowment today as they did in, say, 1949 or 1950? The answer is a very definite “ No “. This is also the situation with the maternity allowance, funeral benefit, pensions and other social service benefits. The purchasing power of all these benefits has been clipped since this Government took office.

I will give another example of the way in which the Treasurer has slugged the little people. This can be found in the way that increased indirect taxes have been imposed. Beer is the working man’s drink. The increased duty on beer brought the total duty to lis. 44 d. a gallon. Let us look at the level of excise duty on beer in the United Kingdom and the United States of America. In Australian currency, the tax in the United Kingdom is 7s. 4d. a gallon and in the United States it is 3s. Hd. a gallon. Both those countries prefer to place a higher tax on the drink preferred by the more well to do sections of the community. In the United Kingdom, the tax on whisky, in Australian currency, is £18 6s. 5d. a gallon and in the United States it is £6 9s. 7d. a gallon. In Australia, it is £5 lis. a gallon. We can see from these figures that the Government is making the poorer and less well to do sections of the community bear the burden of the increased expenditure on defence.

The Treasurer has now started a chain reaction. The publicans, breweries and wine and spirit merchants are all getting in for their cut; they all want something extra for themselves. The secretary of the Wine and Spirit Merchants Association of New South Wales said -

The new increases had been determined by mutual agreement between wholesalers and retailers.

It is nice to know that they decided unanimously to accept higher profits. The Treasurer announced in his Budget speech that the price of beer would increase by Id. for a 10oz. glass. But in fact the increase was 2d. So the distributors are making a profit of 100 per cent, on the increased tax on beer. Whisky did not go up by the Hd. a nip announced by the Treasurer; it went up by 4d. a nip. The extra money goes into the pockets of the people who have shares in breweries and other interested parties.

Increased taxes on these drinks have resulted in increased profits for these people, and these profits are made because of our defence effort.

The honorable member for Indi (Mr. Holten) last night said that the average tradesman would be only £6. 7s. 6d. a year worse off as a result of the higher taxes and other increases announced in the Budget. But what he did not say is that in addition to being £6. 7s. 6d. a year worse off, the tradesman has also lost the increased margin that was recently granted to him. But what about the basic wage earner who was not given any increase? He still has to pay the increased costs and the increased taxes. He has been placed in a very bad position. The wage earner is actually poorer since he received the li per cent, margins increase. This is the direct result of the increased charges imposed by the Budget. The increase of 6s. in the tradesman’s margin amounted to an increase of £15. 12s. a year. Since the increase was granted, the cost of living has increased by 4s. a week. This has reduced the tradesman’s increase of £15 12s. a year by £10 8s., leaving a yearly increase of £5 4s. But because of the increase in wages the tradesman went into a higher income tax group and this cost him £2 10s. a year more in taxation. In addition the 2i per cent, increase in taxation has meant that he has to pay an additional £1 14s. So we find that the rise in prices, plus the additional taxation, amounts to £14 12s. a year, leaving him £1 of the £15 12s. a year which he received as the result of the increase of li per cent, in the margin.

But then, of course, we come to the indirect taxation. If that man smokes, has a drink of beer and drives a car he is up for expenditure which would swallow up considerably more than the £1 a year he still has to his credit. That indicates that he is much worse off now than he was before the increase applied. It is estimated that the average tradesman is £6 7s. 6d. a year poorer since the margins increase and as a result of this Budget. I emphasise again that the basic wage earner is in an even worse position.

I want to deal briefly with the basic wage decision which was handed down recently. The Australian Council of Trade Unions based its claim for an increased basic wage on the principles of wage fixation laid down by the Conciliation and Arbitration Commission in 1961. These principles provided that if the economy produced more goods and services the worker who produced them should get more in his pay packet. Both the 1961 and the 1964 decisions by the Commission provided that real wages should be increased from time to time to allow the worker to purchase the increased productivity that could be shown to have occurred. Those decisions also expressed the view that correctly to make a calculation of what the basic wage should be, the wage must first be adjusted in accordance with price changes since the last fixation and that productivity gains should then be added to the result.

Although 12s. should have been added to give the same purchasing power as in 1964, the majority of judges decided that the real value of the basic wage should be reduced by keeping it frozen at £15 8s. The majority of judges ignored the union’s application for an increase in the basic wage as such. They decided, instead, to increase margins although there was no application for increased margins before the Court. The Court had not heard any argument for increased margins. No evidence had been called and, consequently, there could be no examination or crossexamination. To base the increase in margins on li per cent, of the combined basic wage and margin meant an increase of 6s. for the tradesman, 5s. for the semiskilled worker and nothing for the basic wage earner. The semi-skilled worker might have been on a margin of only 2s., 3s., or 5s. a week but he got an increase of 5s., equal to an increase of 100 per cent, or more.

But the poor chap on the basic wage got nothing as a result of this decision. Consequently he gets less purchasing power in his pay packet at the moment than he did in 1964. Surely a man on the basic wage in 1965 is entitled to be able to purchase as much as he did in 1964, and even in 1961. Workers of Australia want, not only a basic wage that is just, but one that will remain just from time to time.

It is no wonder that workers are becoming fed up with the Commonwealth Conciliation and Arbitration Commission and are divided on whether arbitration should be jettisoned and collective bargaining resorted to. It is no wonder when one reads behind the lines of the recent decision. There is no doubt that the majority decision of the Court was made without trying to reconcile the views of the President of the Arbitration Commission and Mr. Justice Moore because the President, on the 4th August, when delivering his judgment on the application of the unions for a review of the basic wage, used these words inter alia -

  1. . judgment of the majority which 1 have been able to read since the date of the delivery.

If those words mean anything they mean that he had not been able to read the majority decision until after judgment had been delivered. The Minister for Labour and National Service (Mr. McMahon) agreed with that in an answer to a question I asked him the other day.

That is a radical departure from precedent when three members decide on a judgment without trying to reconcile the views of the other judges. It is a pretty shocking situation and such methods can only weaken further the workers’ already weakened faith in arbitration. That weakening of faith, was revealed, I suggest, in the vote on the interstate executive of the A.C.T.U. when a move was made for a national strike over the refusal by the Commission to review the basic wage decision.

This Government stands condemned for its part in this inquiry. There is no. doubt that it approved of the pegged basic wage but the Government was dishonest in regard to this matter. The Government’s statements to the Commission were entirely dishonest. On the opening day the Government’s representative stated at the inquiry -

In this particular matter, it is not the desire nor intention of the Commonwealth to make submissions about what the Commission should do. It is the intention of the Commonwealth to make submissions about the state of the economy and to make submissions about the proper approach to wage fixing and what are the principles to be applied. It is not the intention to make submissions on any aspect that arises for decision.

But consider the change of front when it came time for the Commonwealth representative to make actual submissions when it was stated -

An increase in the basic wage at this juncture would be fraught wilh great danger for the economy and …. there are at present such special factors in the economy and in the circumstances impinging on the economy which . . . make it inadvisable to allow the price increases indicated in the Consumer Price Index to be reflected in the basic wage.

That shows how the Commonwealth Government was dishonest in its approach. The unions’ advocate drew attention to this and accused the Commonwealth of being guilty of flagrant and blatant dishonesty before the Commission. The Government could have erased this stigma of dishonesty if it had said during the course of the hearing that it neither supported nor opposed the unions’ application. If it did not want to do so after the case was heard it could have partly retrieved the position by intervening before Commissioner Winter in support of a review of this infamous decision. Sir Richard Kirby used words which indicated that it could have had some influence on the matter. He said that as the Government had not intervened -

I therefore have reached my decision without consideration one way or the other of the Government’s possible attitude.

He was referring of course to the unions’ application for a review of the basic wage. But the attitude of the Government was clear. In fact, this Government supported the employers by submitting to the Commission that it should reduce the real value of the basic wage because any wage increase would have an inflationary effect. Mr. Patterson, who appeared for the Australian Council of Salaried and Professional Associations, attacked the Government for its lack of spine in trying to use the Commission to do its dirty work. He asserted that rather than appearing in the public interest, as the Government claimed it had appeared, it was acting, in fact, in its own political interest by trying to shift the responsibility for economic control and unpopular measures away from itself to the Commission.

The function of controlling the economy is the duty of the Government and not of the Conciliation and Arbitration Commission. The primary role of the Commission is to settle industrial disputes, not to manage the economy. The Government has shirked its responsibility of controlling the economy. The Joint Committee on Constitutional Review in 1959 advocated a widening of the economic powers of the Commonwealth. Here again the Government failed to act and consequently it still lacks the essential powers in the economic sphere. Mr. Patterson, on behalf of A.C.S.P.A., also pointed out that the growing deterioration in the salaries of the white collar employees was leading to a strong current of opinion in favour of direct action. These bodies of workers are usually conservative, yet they are talking about direct action. In regard to this the Minister says that agitation against the basic wage decision is the work of Communists. Is he going to suggest that these responsible white collar workers are Communists? I think his statement was absolutely stupid and was a reflection upon the decent trade union movement.

Sitting suspended from 12.45 to 2.15 p.m.


– Prior to the suspension of the si’tting I was dealing with the recent judgment of the Commonwealth Conciliation and Arbitration Commission which was handed down in respect of the basic wage. I was pointing out how the Government, through its intervention in the basic wage case, had assisted in having the basic wage pegged at its 1961 level, despite the fact that in accordance with the cost of living increases since then it should have increased by approximately 12s. But the judgment of the Arbitration Commission went further than that. In its infamous majority judgment, the Commission adopted the employers’ proposal that it should announce that no further general margins case should be heard this year and that next year a general case should consider an application to increase the basic wage and margins on the basis of economic capacity. So we find now that margins are tied to this li per cent, formula - despite the unions’ claims that have already been lodged for hearing this year - and tied to this formula without any evidence being taken or argument heard in respect of it.

But the judgment went even further than that. It asked that an amendment to the Commonwealth Conciliation and Arbitration Act be made to tie the hands of the President of the Commission in future cases by forcing him to appoint a presidential bench rather than a bench containing a conciliation commissioner plus presidential members as was done in 1964 when Commissioner Whiter was appointed. Because the procedures laid down for future cases bring margins into the issue, it is open for the

President at the moment to replace one of the judges with a commissioner as he did in the 1964 total wage case. It is worth noting that the President has asked for an amendment which will have the opposite effect of that which has been requested in the majority judgment. In his judgment President Kirby said that he would like to have a commissioner sitting as a member of the bench in future cases. If the Government amends the Act to suit the majority of the judges ft will clearly indicate that the law of the jungle has taken over and, in that situation, the Government can hardly complain if the same law is followed by the workers throughout the Commonwealth.

The minority judgment followed the principle laid down in 1961. It endorsed the principle of prices plus productivity, but said that due to the condition of the economy at present it was not practicable to restore fully the 1964 basic wage and favoured an increase of 8s. rather than 12s. The unions did not quarrel with that judgment, other than as to the amount, because it left them with a ray of hope. It still supported the 1961 principle which I have already explained to the House. Mr. Justice Kirby trenchantly criticised the type of departure represented by the majority judgment and said -

I have already made it clear that although 1 am not against changes merely because they are changes, I am firm that to change now from what this Commission has decided and confirmed in the last four years would be wrong and capable of interpretation as indicating lack of stability on the part of this Commission.

A little later he said -

  1. . in my thinking one should proceed slowly and cautiously in adopting against reasoned opposition fundamental or radical changes in long established features of the Commission’s award structures, policies and approaches. Sudden and violent changes which naturally tend to destroy on the part of participants in the system their faith and confidence in it should not only be avoided in regard to the well established features but also in regard to recent changes deliberately, unanimously and thoughtfully adopted as were those of 1961 in a decision which went to great lengths to explain the reasons for the changes.

That was what Mr. Justice Kirby said about the majority decision. The Government adopts a one-sidedness in the methods used to control wages. It believes that the price of labour should always be controlled, and all the forces of the legal machinery are used for that purpose. The workers, of course, are expected to abide, and in most cases do abide by decisions. But the employers get round such decisions by increasing prices at their own whim and without reference to anyone to cover increases in wages. Decisions are arrived at in private without any evidence being taken and without a case in opposition to the increases being heard. We have had examples of that just recently with the increases in the price of beer and whisky. I mention that only as an example. Honorable members know that firms often combine with others selling similar products and that collectively they fix the price of the articles they sell.

In its 1964 judgment the Arbitration Commission emphasised that it had no control over incomes, other than those of employees whose employment was covered by awards, and it said that it had no overall authoritative control of prices although it had a tight control of wages. At page 16 of his reasons for judgment, Mr. Justice Moore pointed out that the previous statement of the Commission that increases in prices are determined by those who fix prices was a truth that could not be emphasised enough. Evidence in the 1965 basic wage case showed that the average earnings of Australian workers in the period from 1959 to 1963 increased by only 12 per cent, but that company income had increased from £595 million in 1957-58 to £771. million in 1962-63, an increase of 29.5 per cent. So wages had increased by 12 per cent, and company income had increased by 29.5 per cent. Colossal profits continue to be made and they all come from the same source - the national income.

Although wage and salary earners have to prove their claims, other people take huge sums in profit and interest charges from the national income without having to justify their actions to anyone. In its majority decision the Commission stated as a reason that the present adverse features of the economy limit a wage increase. But no charge is ever made that companies are taking too much from the national income and so are endangering the economy and causing production and living costs to rise. The three judges who inflicted the wage policy on the workers said, in effect, that irrespective of how much prices rose, the basic wage would remain the same, even if it were proved that prices and productivity had increased. That is what their decision amounted to. Is it any wonder that the workers are disgruntled and threaten to strike?

I direct attention to a matter that I referred to previously in respect of a statement by the industrial officer for A.C.S.P.A. Another point is that the time lag in arriving at decisions is responsible for reducing the purchasing power of the worker’s wage for the benefit of employers and business interests. For example, in 1961 the Commission increased the basic wage by 12s. to restore the June 1960 purchasing power to the basic wage. Until June 1964 the basic wage had been pegged at its June 1960 level, despite increases in the cost of living. It was then increased by £1 which restored its previous value. But since then the time lag has operated again and it will continue to operate until the Arbitration Commission makes the necessary adjustment. On its recent decision an adjustment cannot be made until 1966, if it is made then.

The Federal Conference of the Australian Labour Party has decided to support the restoration of quarterly cost of living adjustments which were destroyed by the Arbitration Court in 1953, despite the fact that the workers had supported the principle of such adjustments over a period of 30 years as a means of ensuring the maintenance of a standard wage based on needs. What the unions want is a wage which is not only just but which will remain just. At present the basic wage of £15 8s. is 17s. less than it would be if it were based on the purchasing power of the 1953 basic wage. If the basic wage had been adjusted according to the consumer price index, it would now be £16 3s. So the workers are losing 15s. a week at present. This Government stands condemned for its attitude to the poorer sections of the community. It has set out on a deliberate campaign of reducing the standard of living of the workers, the pensioners and other less favoured sections of the community.


– Before lunch the honorable member for Stirling (Mr. Webb) dealt in detail with how, as he claimed, the Government was “ slugging the poorer sections of the community “. I intend, later in my speech, to deal with some of the points that he raised. This is the first Budget debate in which I have participated. It has taught me a lot. The experience has been invaluable. Last week I listened with great interest to the Treasurer (Mr. Harold Holt) as he delivered his Budget speech. I heard him announce an increase in expenditure of £275 million. To me, that is a large amount of money. He went on to say -

Budgetary policy must necessarily form part of overall economic policy, be consistent with it and serve identical aims. We have often stated the broad aims of our economic policy - the steady growth of Australian population and output, a high standard of living, full employment, stability of prices and a strong external balance of payments. To these must be added the increased emphasis now given to national security by a much enlarged defence programme.

When we look at the itemised increases in expenditure we see that defence expenditure has been increased by £81 million; payments to or for the States have been increased by £61 million; the payment to the National Welfare Fund and expenditure on repatriation services have been increased by £39 million; other special appropriations have been increased by £40 million; expenditure on business undertakings has been increased by £11 million; and some other smaller items make up the total increase of £275 million.

When I was listening to the Treasurer, irreverent though the thought may have been, it struck me that there was some similarity between the problems of Australia and those of my own family, although the former are on a larger scale, of course. Recently I moved into my electorate. I had to buy a house and make some renovations to it. If a man’s house is his castle, then I have increased defence expenditure. I had some problems with my bank manager. Like the country, I had difficulty in raising a loan and because I have outlaid capital, my reserves have gone down. Those are similar to the problems that are facing this country.

In discussing matters at home we have a funny little arrangement. We have a family council. It is not really a council of war; it is like a parliament. My wife and I form the government and my children form the opposition. -I hasten to add that my wife is not only the Prime Minister and the Treasurer but the full Cabinet. I am just a humble back bencher. However, I did boast to a friend of mine the other day that I was very thrilled that she had made me acting government whip. My children, who are aged seven and five years, are leader and deputy leader of the opposition respectively.

Mr James:

– They are Labourites, are they?


– The honorable member, who is my neighbour, is right. I was about to explain that the leader and deputy leader of the opposition are always fighting among themselves. I never know who is the actual leader. My son, who is a bright young fellow with some ambition, is trying to become the leader. The other day there was a bit of a conference over ice creams. My daughter, who is the elder, wanted one that is called a Neapolitan. It is coloured from red to black. On the other hand, my son, being a purist, wanted a vanilla ice cream - a pure white one. My daughter solved the problem by clocking my son with her left hand. At the moment my son is walking around the house in not quite as jaunty a manner as he has in the past.

After hearing me talk about what has happened at home honorable members will realise why my daughter asked me to listen with great interest to the Leader of the Opposition (Mr. Calwell). She wanted to find out how she could retain her position as leader of the opposition in our family parliament. I waited with great interest to hear the speech made by the Leader of the Opposition last Tuesday night. I heard him move his amendment and I heard him speak against the Treasurer in fairly strong terms. I have some sympathy for the Treasurer because I have tried to wade through the mass of papers that he presented to us. I said to myself: “ The poor fellow did all this work and then all he seems to get ils abuse “.

The Leader of the Opposition said that the Treasurer called this Budget a defence Budget. On the other hand, the Leader of the Opposition claimed that it was not a defence Budget; it was a record civil Budget. In order to prove that statement, he produced a table which showed that, as a percentage of gross national product, this year’s defence expenditure is .6 per cent greater than last year’s defence expenditure. That is just one item of increase in the table that was produced by the Leader of the Opposition. I must apologise to him for smiling and being rather irreverent when he took so long to justify the fact that this table had been prepared for him by someone else. I want to express to him my appreciation for the table. It is invaluable. He went on to say that this was a record civil Budget and that non-defence expenditure showed an increase of £185 million. Of course, that is right because, as the Treasurer said in his Budget speech, the Government is endeavouring to continue the growth of Australia, to maintain our standard of living, to provide national welfare and to give aid to our external Territories and other nations.

The Leader of the Opposition and the honorable member for Stirling said that the Government is “ slugging the poorer sections of the community “. The honorable member for Stirling used that phrase. The Leader of the Opposition went to great pains to say that we should go back to 1953-54 in making comparisons. That year is his choice, not mine, and the table that he presented to the House is his table, not mine, although I am very grateful for it. The table shows that between 1953-54 and 1965-66, company tax - which is paid not by the little men but by big business - increased by 1 per cent., in terms of a percentage of the gross national product. I notice that individual income tax has increased by .16 per cent, in that period. I also notice that estate and gift duties - which again are not paid by the small man - have increased by .02 per cent. The increases in company tax and estate and gift duties together are greater than the increase of individual income tax. which is paid by everyone in the community.

The Leader of the Opposition attacked the across the board U per cent, increase in income tax as adversely affecting the little man. I thought the Minister for National Development (Mr. Fairbairn) made a good point when he referred to the fact that a previous Leader of the Opposition abused the Government for reducing income tax by 5 per cent, because that reduction would adversely affect the little man. Let us look at the actual effect of this year’s increase. The Leader of the Opposition, in his speech on Tuesday night, referred to two groups of people. One was those who have incomes of £21 10s. a week or £1,118 per annum and under. He said that in that group there were 400,000 workers who were supporting 400,000 wives and 799,000 children. In other words, he assumed that each family had two children. I have some figures. 1 must admit that I had them prepared for me. They cover people on three different salaries, namely £800, £1,000 and £1,250 per annum. A person on £800 a year with two children will pay £27 a year income tax after the increase becomes effective. The rise in that case will be 6s. a year. A person on £1,000 a year will pay £54 19s., including an increase of 21s. a year. A person on £1,250 a year will pay £94 4s., including an increase of £2 7s. Assuming that those people have two children they will receive child endowment of £39 a year - 5s. a week for the first child and 10s. for the second. So the net result of his business dealings with the Government to a person on £800 a year with two children will be a profit of £12 a year. In the case of a man with three children under the age of 16 years the net profit will be £51 a year. A person on £1,000 a year will pay a net £15 19s. a year in his business dealings with the Government if he has two children under 1 6 years of age and will show a profit of £23 ls. if he has three children under 16 years of age. A person on £1,250 a year will pay £50 if he has two children and £21 if he has three children. So it is not right to say that the Government has slugged the poorer sections of the community. This Government has done a great- deal for the poorer sections of the community. When you bear in mind that taxes go towards the provision of defence, roads, education and local government, television and radio services I think it can be said that as far as direct taxation is concerned the Government has looked sifter the interests of the small people.

The Leader of the Opposition selected items that suited his case. In the debate last week on international affairs he said -

This debate comes at a momentous, troubled and ominous time in the history of this nation, and of the area- of the world in which this nation is destined, we hope, to live forever.

He referred to Indonesia and Vietnam and then said -

This is the sombre background against which this debate takes place. If the present is grim, the future contains the possibilities of disaster.

The Leader of the Opposition realises the situation confronting this country and the need for increased defence expenditure. So it is not fair to say that in this Budget the Government is slugging the poorer sections of the community. The honorable member for Stirling (Mr. Webb) was at pains to point out that a man on a small income will be £6 7s. 6d. a year worse off after this Budget.

Mr Webb:

– And because of increased prices since the rise in the basic wage.


– It is reasonable to assume that the majority of Australians are aware of the situation that confronts Australia today. The isolated examples that were cited by the Leader of the Opposition reminded me of the story of Robinson Crusoe. When he had been on his island for about three years he chopped down a great tree to make his first canoe. He took more than a year to make it. It was a magnificent canoe, 26 feet long, into which he put his goods and chattels and hoped to sail away. He had chopped down the tree some 300 yards from the sea. He started to dig a canal in order to get his canoe into the water. Then he calculated that it would take him 12 years to finish the canal. So he decided it would be easier to chop down a small tree that he could more easily move to the water. I do not think the Leader of the Opposition and the honorable member for Stirling were fair in selecting isolated examples. Like Robinson Crusoe, they have not examined the full situation.

Let us examine the trends in indirect taxation over the last 12 years. Indirect taxes between 1953-54 and 1965-66 have increased by .18 per cent, as a percentage of gross national product. It has been claimed that the Government has a shocking record as far as indirect taxation of the ordinary Australian citizen is concerned. What was the situation in 1949, the last year of the Labour Government? In that year indirect taxes accounted for 41.051 per cent, of total taxes. In 1965-66, strangely enough, the percentage has dropped to 37.758 per cent.

I regret that the Budget did not provide any increase in the general rate of social service pensions. I have a great sympathy for pensioners and retired people, as I hope soon to illustrate. In his speech last week the Leader of the Opposition acknowledged the problems that confront Australia in terms of external events and the prices that are obtained for our primary products. He attacked the Government, however, and said that it was not doing things correctly. The benefits that have been announced in the field of social services are fairly important. Of particular importance is the provision in regard to the pensioner medical service whereby every pensioner will obtain free medical attention without the application of a means test. This is an invaluable and important break through. I was pleased to see an increase in the supplementary allowance for single pensioners. These are the people in greatest need in the community. The new provisions in relation to allowances for pensioners’ wives, the funeral allowance and payments towards the education of children of pensioners also are important. The increases and concessions are not as generous as have been urged by the pensioner organisations, who do such a wonderful job in so many ways for pensioners, but they are a step in the right direction.

The provision of an intermediate form of repatriation pension is important and valuable. I am pleased to see this benefit introduced. I congratulate the Minister for Social Services (Mr. Sinclair) on being able in his first year as a Minister to influence the Cabinet to produce such important changes in our social services legislation.

Having heard the attack by the Leader of the Opposition and the honorable member for Stirling on the Government’s social services record, I thought it was time I did some homework to see just what the Government’s record was in this field. I am proud to support a government that has done so much in the fields of age pensions, invalid pensions, widows’ pensions, pensions for the blind, rehabilitation and that very important and valuable field of homes for the aged. We cannot actually stop there. I should like to see, as would many other honorable members, the abolition of the means test. I hope that does not take long to achieve, but if it is not possible to abolish the means test in the immediate future some fields of social services should receive urgent attention. Following the major breakthrough in regard to the pensioner medical service I should like to see a free medical service obtaining for all females over 60 and males over 65.

Mr James:

– The Australian Medical Association had to approve of the new extension.


– I am not talking about the Australian Medical Association at the moment. The honorable member has a look on his face as though a Timor stallion had kicked him on the shins. My friend the honorable member for Mackellar (Mr. Wentworth) has given me some figures for which I should like to express my appreciation. They show that at present in Australia some 411,587 people of an age which makes them eligible for a pension are not, because of the means test, receiving a pension.

I have been informed that the average annual cost of the pensioner medical service is £5 10s. 6d. per head. If we gave, to use an American term, Medicare to all aged people, on my calculation it would cost less than £3 million. I think that this is something which the Government should consider. I have very great sympathy for people who, because they have saved all their lives, or because they are in receipt of superannuation benefits, are unable to participate in the pensioner medical scheme. I should like to see a provision raising the income level at which such people start to pay taxes. I think that the present pension level is £312. I think it would be a just thing to give a tax holiday to that level.

I should also like to see greater thought and more assistance given to sections of the community - churches and other bodies - which carry out the invaluable work of assisting retarded people. Assistance could be given to these bodies to build the sheltered workshops in which retarded people spend so much of their lives as invalid pensioners. Assistance could be given that would make the lives of these people so much more worth while. They would be made to feel that they are part of society. This is something that both Federal and State departments could investigate, particularly where children are involved. At the moment this work is the administrative responsibility of the States. Some of the bodies who are caring for subnormal children continue to care for them after they reach the age of 16 years, although the States do not sub sidise schools in respect of children above that age. I think that some co-operation between the Federal Government and the State Governments could do a lot of good there, and I bring the matter up for the consideration of the Government. Assistance should also be given to people of all age groups in sheltered workshops although they may not be so seriously ill.

I should also like to see some thought given to the payment of pensions to pensioners in mental hospitals. Pensioners in other hospitals receive their pension payments. I understand that in some States mental hospitals are called by other names and because of this pensioners in them are able to obtain their pension payments. I think that there is also a case for the permissible earnings of children of civilian widows to be lifted. This would be of invaluable assistance to civilian widows who are in need.

Summarising my remarks, I say that this is a good Budget. It has been prepared with a great deal of thought Having heard the Leader of the Opposition and other members of his party I am sorry that during this weekend I will be unable to help my daughter in her attempt to maintain her leadership of the opposition in our family parliament. In conclusion, I should like to thank once again the Leader of the Opposition for producing the table which he incorporated in “Hansard”. The last line of the table shows that for the year 1953-54 the percentage of the gross national product received by Commonwealth authorities was 21.61 per cent. The percentage for the coming year is estimated at 23.02 per cent., which is. a rise of 1.41 per cent, during the 12 year period.

We have maintained full employment. We have had massive development. Our population has increased from just under 9 million to approximately 11.25 million during the 12 year period. The gross national product has increased from £4,509 million to the figure projected by the Leader of the Opposition, £10,600 million. This is a massive development and yet the proportion of the gross national product received by Commonwealth authorities is only the small percentage that I have already mentioned. I thank the Leader of the Opposition. He has paid the Government and the

Treasurer a great compliment by proving the efficiency of our administration.


.- The honorable member for Robertson (Mr. Bridges-Maxwell) started off acting like a clown and finished acting like a-

Mr Curtin:

– Trapeze artist.


– Something similar to a trapeze artist. I want to say at the outset that I support the amendment moved by the Leader of the Opposition (Mr. Calwell) to this Budget. Since the honorable member who has just resumed his seat took exception to the remarks of the honorable member for Stirling (Mr. Webb), who said that the Budget was slugging those least able to afford it, I want to declare myself immediately and say that I support wholeheartedly the honorable member for Stirling.

It is obvious that Government supporters have gone to great lengths in their speeches to make excuses for the Budget. In fact, they remind me somewhat of the Government supporters in another place last night who, as they cast their vote on a certain matter had shame written all over their faces. The speeches that have been made by Government supporters in this House indicate the shame they feel about this Budget which is slugging the people least able to afford it.

The Treasurer in his Budget speech said - the Budget has important social and economic effects, the policy of the Budget must be shaped both in the large and in detail with these effects in view.

In actual fact, the Treasurer is saying that this Budget will have a beneficial effect on the social and economic life of the people of Australia. This sort of philosophy is hard to understand, as it has already been pointed out by previous speakers that, due to the price-raising economic policies of this Government, the pay envelope of the low and moderate wage earner - indeed the pay envelope of those on salaries of £30 per week - has already been stretched to the utmost. For these people, therefore, the important social and economic effects of this Budget will be to put them further into the red and compel them to live above their economic means.

I would suggest to the Treasurer that when making statements that the majority of people in this country support this Budget he should direct his statement to the one and a half million people who are existing on an income of less than £21 a week and see whether they agree with the beneficial social and economic effect that the Budget is going to have on them. I know what the answer will be. I further suggest that the answer would be delivered in language which only true Australians could understand.

I want to deal with a matter which in my opinion is affecting the living standards of the people to a far greater degree than many other things in this community put together. I refer first to the high and iniquitous flat rates of interest being charged for home finance. Here is a field in which the Treasurer could have given outstanding economic help to the thousands who are struggling to buy homes. He could have taken action to outlaw the flat rate interest system and to lower interest rates to bring them within the scope of the pay envelopes of the low and moderate wage earners.

This factor in our economy is one that I can recommend to the Minister for Housing (Mr. Bury). He should ask the committee which is investigating housing to look at this aspect with compassion in its forthcoming deliberations. In fact, I would go so far as to say that this form of legal robbery is one that needs national inquiry and needs it promptly. Indeed, it would be most interesting to know whether the officers to whom the Minister for Housing has referred did have a look at this aspect of our economy when they made their close examination of the housing needs of those on the lower income, and in particular of those whose needs are the greatest.

Government members are apt to speak in glowing terms of record home ownership in Australia. I prefer to call it record home buying in Australia. But the Government says little about the fact that the lists of unsatisfied applicants for housing commission homes grow no less as the years go by. This indicates, of course, that the low wage earner is still struggling to obtain shelter for himself, his wife and his family in this affluent society so fondly referred to by Government supporters.

The aspect which in my opinion needs greatest investigation is the profits being made by dealers in housing and land. Their victims, of course, in the main, are the low wage earners. In fact, it would be of great interest to this country and this Parliament, and in particular to the framers of this and future Budgets, if the Treasurer would ascertain from the Commissioner of Taxation or other sources within the Treasury the number of individuals and companies who at the end of the latest available financial year were recorded with the Commonwealth Taxation Branch as being dealers in real estate, particularly dealers in existing housing, new housing and vacant residential land. Further, I suggest to the Treasurer that he might ascertain the aggregate capital profits of these dealers, the aggregate profits in respect of existing house, new houses and vacant land in relation to the terms of the transactions, the amount of such profits apportioned to the year of income, and the amount of interest recorded in the year of income as having been paid and received by such dealers. No doubt the Commissioner of Taxation would have these figures. If some or all the information requested is not available, especially that relating to the capital profits made by dealers on the purchase and resale of existing homes, new homes and vacant residential land, I ask the Treasurer whether he will direct the Commissioner of Taxation to obtain such information from the State land tax departments, or from the land tax records of individuals and companies, excluding the places of residence of individual taxpayers. If necessary, will he make the necessary administrative arrangements with the State land tax authorities, or State Governments, for such information to be compiled for the purposes of the Federal and State Governments?

As most dealers in real estate borrow money to finance their transactions so that they can conserve their capital for additional purchasing and reselling, I ask the Treasurer whether the Government will consider making an investigation of this kind in order to subdue the inflationary influences of dealer type transactions in increasing the costs of housing, especially existing housing. The dealers buy for cash and then charge the ultimate purchaser on terms a profit mark up of about ?1,000 per house, plus interest thereon, over the term of the contract. In my opinion, these things are very real influences in our economy. In fact, they are the greatest common factor in the pay envelope of the worker. Therefore, I think I am entitled to ask the Treasurer to take up with the State Governments the matter of the State Governments enacting monetary legislation to co-ordinate interest rates charged by lenders who operate under State jurisdiction on housing and land loans with the rates charged on housing loans by the banks operating under Federal jurisdiction.

With regard to these matters, I direct the attention of the Treasurer to the statement made by Dr. Coombs, Governor of the Reserve Bank, when addressing the 18th International Banking Summer School on the subject of maintaining stability in a rapidly developing economy. When dealing with the subject of correlation of monetary and fiscal policy, Dr. Coombs said -

The influence of the banking system over this vast body of expenditure (i.e. the total expenditure in an economy) is limited merely to the incentives which it can offer or it can persuade others to offer, to greater savings. It is clear that in these fields fiscal or budgetary action, if it can be brought to bear, offers better hope of exerting effective influence. . . . My own view is that monetary policy is an important part of total economic policy but that it is essentially supplementary.

Dr. Coombs went on to say

The long sustained policies of the savings banks over the post-war period in making finance available for new housing rather than existing housing, has meant that purchasers of existing homes for cash have been unable to obtain long term low interest finance for same. There has developed a large scale incursion of dealers in real estate into the purchase and resale of existing homes-. In effect they buy for cash and sell on a low deposit and terms of about five or six years at a premium of ?1,000 per house plus interest thereon over the period of the contract. This has in turn resulted in a heavy inflation of the cost of housing to the ultimate purchaser, well over and above the normal rises due to wages and other increases in the economy.

As existing homes in the inner and middle suburbs of the metropolitan cities have been mainly affected by such policies, one can estimate, on the 1961 census of dwellings, that at least one million homes have been affected by such dealer profit mark ups over a general turnover period of about 10 years, over the post war period, and the situation is still continuing. Tn effect this gives ? total dealer profit of at least ?1000 million in capital profit mark up, plus interest thereon at an average rate of about 6 per cent, over a five or six years period, amounting to about ?400 million, giving an aggregate of about ?1,400 million in dealer profit mark ups over the period.

Just think what a field that would have been for the framers of the Budget had they desired to look at it. In view of that statement by Dr. Coombs, and as interest rates represent the greatest burden to be borne in the purchase of a home, I ask the Treasurer whether the Reserve Bank has ever imposed any conditions or given any directions limiting the rates of interest that the big financial institutions may charge for money borrowed for home purchases. If no such directions have been given or are in force, will the Treasurer consider imposing conditions and directions that will place lending institutions on an even footing with the trading banks with relation to their rates of interest, their holdings in public securities and their policies with relation to advances? In my opinion, this is economic planning that would put some. value back into the £1 and thus fulfil the promise given by the Prime Minister (Sir Robert Menzies) so many moons ago.

In this country, the general policy with respect to money for housing involves giving priority to advances for new housing and curtailing the provision of funds for housing when the supply of labour in the building industry reaches saturation point. We see this happening today. In my opinion, it would be better to provide funds both for new and existing houses in accordance with the natural demand for the two kinds of housing. This would constitute a restraint on inflationary trends and help tremendously to overcome the housing problem.

The restrictive lending policy followed by the Australian savings banks has obliged them to ration their funds for housing, largely limiting such funds to loans for new housing and excluding existing housing. This has forced the majority of the home buying public, particularly those buying existing homes, to go to other lenders who charge a higher rate of interest than is chargeable by savings banks and certain other institutions. This is a factor that operates to increase still further the high costs of home buying in Australia.

While the Federal and State Governments use the State savings banks as a principal means of supporting public loan raisings, the obligations imposed on savings banks in this direction are not borne equally by other financiers operating in the market under State and Federal jurisdiction. For example, finance corporations, which are the principal competitors of tradings banks and savings banks and which have aggregate outstanding advances in excess of £600 million - for retail and non-retail finance companies - are not obliged to hold any portion of their depositors’ funds in public securities and, in fact, hold less than 1 per cent, of such funds in public securities, and they also charge a much higher rate of interest for loans than is charged by trading banks and savings banks.

Life assurance offices are obliged to hold 30 per cent, of their statutory funds in public securities, but they have also obtained important concessions from the Commonwealth Government in connection with income tax payable by them. The net result of this, combined with the higher costs involved in administering a housing loans department, is that a life assurance office must charge a borrower for housing about 7i per cent, interest to obtain the same net return as from investment of their funds in public securities with the tax concessions referred to above and taking into account the lower overhead costs involved. The assets of life assurance offices exceed £1,300 million, but their investment in housing loans remains practically stationary at about £158 million, and there is no indication of these offices granting any significant increase in housing loans except possibly as a means of attracting life assurance policies. I may tell the House that this information is gleaned from Treasury Information Bulletins.

It is interesting. Mr. Deputy Speaker, to study the figures giving the amounts of depositors’ balances in Australian banks and the amounts which those banks have invested in housing loans. The Commonwealth Savings Bank, for instance, had at the end of January 1964 a total of £983.2 million in depositors’ balances. It had lent £186.6 million for housing, and the proportion of housing loans to depositors’ funds was 19 per cent. In the case of the State Savings Bank of Victoria the amount of depositors’ funds was £375.7 million, and of housing loans £105.3 million, giving a proportion of housing loans to depositors’ funds of 28 per cent. In the case of the State Savings Bank of South Australia the figures were £144.9 million and £38.2 million, the relevant proportion being 26.3 per cent.

At this stage I would like to congratulate the smaller States, particularly Tasmania, for their performance in this field. The Hobart Savings Bank, a trustee bank, had depositors’ balances of £17.5 million and had put out £3.4 million in housing loans, representing 19.4 per cent, of depositors’ funds. This was a higher proportion than that which I have given for the Commonwealth Savings Bank. The Launceston Bank for Savings, a trustee bank, had depositors’ balances of £14.5 million and had advanced £3 million in housing loans, a proportion of 20.7 per cent.

I think I have shown that more can be done in respect of housing. I have shown the fields that can be traversed if the Treasurer wishes to traverse them to obtain additional Budget finance. It is worth recording that at the end of January 1964 Commonwealth controlled banks had depositors’ balances of £1,604.5 million and had advanced £303.3 million in housing loans, a proportion of 18.1 per cent. In the case of State controlled banks the figures were £534.3 million, £147.8 million, a proportion of 27.6 per cent.

It is worth noting that interest payments on housing loans and money borrowed for the purpose of consumer durables are not taken into account when the consumer price index is compiled, and so are not considered in relation to variations of the basic wage. This situation gives rise, of course, to continuing pressures for wage increases, over award payments and the like to enable workers to meet their commitments for interest payments and repayments of principal on money borrowed for housing and consumer durables. Therefore, if interest payments and housing loan repayments were reduced by £1 or £1 10s. or £2 a week, the savings to a worker would be of greater value than the extra income flowing from an increase in wages of a like amount, because more than 70 per cent, of the workers are either buying or building their own homes, while the rest are paying rents which include a component for interest and repayment of principal. History has shown that every time the basic wage is increased, the machinery is set in motion for an increase of prices so that what the worker has justly earned is taken back from him, despite the fact that the Commonwealth Conciliation and Arbitration Court bases its judgment on the ability of industry to pay the increases.

At this stage, I feel compelled to make some reply to the statement of the Treasurer that this Budget has important social and economic effects. This statement would have been better appreciated by the home seeker and the wage earner if the important social and economic effects of the matters I have mentioned today had been given consideration, especially in their relation to the people who need protection. Unfortunately these people have been given no protection in the Budget we are now discussing.

It appears that Or. Coombs is also concerned about these matters. In the 1965 report of the Reserve Bank of Australia we find the following comments -

The levelling off in lending for new housing by the major institutions might reflect, at least to some extent, a shift in home-seekers’ preference from individual houses to flats. In 1964/65 there was a slight fall in the number of private houses commenced, but the number of private dwellings in multi-unit buildings commenced during the year increased by about 50 per cent.

Complete information on the sources of finance for the purchase of flats is not available.

I think if Dr. Coombs investigated what is happening in the real estate business he would find out where the finance is coming from. The report continued -

Some of the major home financing institutions are now lending directly for this purpose but usually on a fairly small scale. It is clear, however, that just as the proceeds of the sale of existing dwellings are often used to buy or build new houses, they are also often used to buy new flats, so in an indirect way institutional money is finding its way into this type of construction.

These are comments that should be given full consideration. If we experienced an economic recession I shudder to think what effect it would have on many people who are engaged in acquiring homes.

Let me conclude by saying that if Dr. Coombs is concerned about these matters, so am I, and so, indeed, is every honorable member on this side of the House. Let me tell the Treasurer and the honorable member for Robertson (Mr. Bridges-Maxwell) that a Budget can be called a good Budget only if it protects those who need protection. This Budget protects those who need protection least and therefore it must be listed as a bad Budget for the wage earners of Australia.


.- Mr. Deputy Speaker, the presentation of a

Budget to the House by the Treasurer of the day indicates to the Parliament and the people the responsibilities of the financial aspects of the functions of the Commonwealth Government. I am sure that, after the presentation of this Budget by the Treasurer (Mr. Harold Holt), everybody had a full appreciation of the extent of the Commonwealth’s financial responsibilities. Anyone who has read the right honorable gentleman’s Budget speech and examined the various matters that he discussed, as well as the outline of the expenditure envisaged and the various responsibilities accepted by the Commonwealth, has, I am sure, a full appreciation of the reasons for the continuing increase in expenditure. The announced details of expenditure on the Defence Services, of payments to the States, of debt charges, of payments out of the National Welfare Fund and of the various other expenditures to be undertaken give us all a complete indication of the expenditure that the Government has to undertake in the discharge of its responsibilities.

One of the things that could be said on this occasion is that there has been general acceptance of the Budget presented by the Treasurer. I think one could safely say that it would be impossible to get on all sides complete agreement with any Budget presented and unanimous expressions of approval. Indeed, if this were ever to happen, the Treasurer of the day would probably rush straight back to the Department of the Treasury and call a conference of its senior officers in an effort to find out what mistakes had been made in the preparation of the Budget. I believe that on this occasion, if we look at the overall picture, we see that there has been genera! appreciation of the problems and difficulties confronting the Treasurer at the present time. There appears to be a realisation that money had to be found for increased expenditure on defence and that there had to be in addition an increase in the ordinary expenditure necessary to provide for the general progress and development of Australia, as well as to provide for the normal increase in population and in State expenditure. I believe that, because of these needs, there has been general acceptance of the Budget presented by the Treasurer, particularly when it is regarded in the light of the overall picture. As I said earlier, this does not mean that the Budget will be accepted by everybody in every circumstance.

In this speech, Mr. Deputy Speaker, I wish to discuss one or two matters in particular. First, I want to say something about the drought that has been experienced and is still continuing in certain areas of New South Wales, as well as in Queensland. The recent drought has revealed to us all some of the problems that confront the man on the land. In May of this year, I made some comments about the problems of the man on the land and the easy criticism of the country man by some people who have no appreciation or understanding of his problems and difficulties, and I asked the Treasurer a question on the subject. I have one criticism to make concerning the action taken by this Government in the present drought situation. This drought, as I have said, affects New South Wales and Queensland in particular and also other States. I appreciate and understand, as do other honorable members, the complexities of the drought situation. We fully appreciate that the full implications of a drought are not so quickly revealed as are the difficulties and financial consequences of floods, for example. Nevertheless, I suggest that away back in May those engaged in the primary industries already understood that the present drought would have serious effects on the economy of Australia. Therefore, I consider that the Commonwealth Government in association with the State Governments, should have taken action much earlier than it did. If I may say so now, I should like to state that I was disappointed in the statements made earlier by both the Prime Minister (Sir Robert Menzies) and the Minister for Territories (Mr. Barnes) about the action taken by the Government to deal with the drought situation. One could perhaps say that £1 three months ago would have been of far more value than £100 today.

Mr Holten:

– Nothing has been given.


– As my colleague, the honorable member for Indi, has said, nothing has been given. I appreciate that fact. It serves to illustrate what I am saying. In my view, assistance has been too long delayed. As I have said, I appreciate the complexities of the situation, in particular the constitutional responsibilities of the States, for this is a matter that directly concerns them. I believe that two factors were involved. One was that because of the difficulties and problems peculiar to droughts, it was impossible for the State Governments to assess how much financial assistance would be needed. And it was necessary to have an understanding that the Commonwealth Government would give assistance when the degree to which this was necessary became known. In my view the general terms of the announcement of the assistance that will be given are not strong enough.

I believe that one of the weaknesses in the whole situation is lack of liaison. To overcome this, I suggest that we establish in each State a committee similar to that which dealt with flood and bushfire relief. There should be among the members of each committee a representative of the Commonwealth Parliament, as well as representatives of primary industries and the State Government concerned. There would be a committee in New South Wales, one in Queensland and one in every other State if necessary. In circumstances like those which we have recently experienced, this proposal would enable assistance to be directed, to a greater degree, just where it was needed. This kind of liaison would prevent overlapping of functions in the rendering of both financial and other assistance.

In the recent drought, a great deal of help has been given by private individuals. I know that the residents of the drought affected districts of New South Wales, and particularly of my own electorate, have greatly ‘appreciated the gifts sent from South Australia and Victoria. But, as was said on a previous occasion, private efforts do not solve the problem, however much they are appreciated. Much more is needed, because this is a national responsibility.

Another important aspect of the present drought is that, unfortunately, its effects will be felt far into the future. As we have been told, it is impossible even yet to assess the full consequences of the drought. This is another reason why I suggest the appointment of a committee in each State. If a committee existed in each State, it could go into action immediately a drought situation developed. The Australian Country Party, to which I belong, has already established a committee, as you, Mr. Deputy Speaker, are aware, composed of representa tives of its Queensland and New South Wales Branches, as well as of the Federal organisation, to look into the problems that may arise in future droughts, the effects of droughts on our economy and measures that can be taken to lessen the problem and reduce the effects of drought on the economy generally and on both primary and secondary industries. But these are long range plans. Although they will be of great value, the immediate need is some kind of committee that can go into action immediately.

Much has been said about financial assistance and about additional money being provided through the private banks for the relief of people experiencing difficulties as a result of the drought. This is where, I believe, the Commonwealth Development Bank of Australia has not been used to the full advantage. Perhaps, to say that it has failed would be to use too strong a phrase. When the man on the land faces problems created by drought, he must be given assistance and it must be given quickly. If he is given assistance, he can recover from his financial difficulties far more quickly than he would if the assistance were delayed. Tt is all very well to say that the banks have been instructed to channel more money into this form of assistance. I think my colleague, the honorable member for Indi, mentioned this in his speech yesterday. The banks, after all, are business concerns. They have a responsibility to their shareholders.

As I said, the man on the land needs finance - finance quickly, finance at a low rate of interest and finance other than on the normal terms. If he has sufficient assets to enable him to increase his overdraft, he can obtain finance. But the man who is in difficulties because of drought has lost some of his stock and needs to buy fodder to sustain the stock that he has left. His problem is that at this time his assets are not sufficient to meet the requirements of the banks if he seeks a normal overdraft. It is in this situation that the man on the land needs special assistance. Surely this is the purpose for which the Commonwealth Development Bank was established and in this situation it should make finance available to those farmers who are in difficulties. If finance is made available quickly at a reasonable rate of interest, farmers will be able to overcome their difficulties. This would be an advantage not only to the farmer but also to the country, because it would result in continued economic stability. We all know of circumstances in primary industries in which sheep and cattle have been lost because the finance needed to sustain them has not been available. The effect of stock losses can be felt not only at this time but also in the future. In many instances, cattle in calf had to be killed; so the loss was not only a present loss but also a future loss.

I feel at times that our attitude to our monetary policy is wrong. High rates of interest are not necessarily an advantage to a developing country. Sometimes we seem to be directing money away from activities that are necessary and an advantage to the progress and development of the country into channels that do not produce the best results for us. 1 want to touch briefly on another controversial matter. I think everyone will congratulate the Postmaster-General (Mr. Hulme), the Australian Broadcasting Control Board and others associated with television on the plans that they have developed. When we take into account the problems and difficulties that arose with the introduction of television to Australia, we must agree that a magnificent job has been done by the Department and by all those associated wilh television, and no small measure of praise is due to the Australian Broadcasting Commission and commercial television interests. However, I believe that some comment should be made on one aspect of television arrangements in this country. I have noticed that New South Wales is not likely to have a direct telecast of the Davis Cup matches, although they will be telecast to Victorian viewers. My own belief is that a direct telecast does not restrict attendances at any sporting activity. I know that this matter can be argued. However, the lack of a direct telecast in the State in which sporting events are held means that people in country areas, people in hospitals and people who in any event would not be able to attend are deprived of the opportunity to see the events as they are being played. I do think that the authorities in charge of these sporting activities should consider these factors.

I am very glad to see that additional finance has been made available to the Postmaster-General’s Department. Lack of finance has prevented telephone and other services from being extended to country areas. I hope that more attention will now be paid to the need to establish more automatic telephone exchanges in rural areas. I want to say in all fairness that I am not unaware of the difficulties that confront the Postmaster-General’s Department. I know that a shortage of manpower and supplies makes it difficult for the Department to give a service to country areas. However, we must try to overcome these difficulties as quickly as possible because some country areas need rural automatic exchanges and their installation would contribute materially to the decentralisation about which we talk so much.

I want to speak now about our international situation. I have been disturbed about the security arrangements in relation to our forces in Vietnam. I am not sure about the situation in a time that is half peace and half war. I know very stringent restrictions apply in time of war, but I have been a little worried about the amount and the type of news that has been released from the forward areas. Sometimes these news items reveal the dispersal of our forces and other material information. I realise that in this age there may be a need for a public relations job to be done between the armed forces and the public. Because of my limited knowledge of these arrangements, I hesitate to be dogmatic, but it seems to me that there is a danger that, in conveying information to the public, we may also be conveying to the enemy Information that could be detrimental to our forces.

I want to read portion of a speech made by the British Secretary of State for Foreign Affairs, Mr. Michael Stewart, and I apologise to the House for doing so. This speech was delivered by Mr. Michael Stewart, when addressing the Oxford Union on 16th June last, and it has already been quoted on quite a number of occasions. I had the privilege of seeing the programme on television and of listening to Mr. Michael Stewart at this teach-in. I was most impressed. There is tremendous merit in his comments and I think that we should emphasise some of the points that he made.

He spoke about the division of Vietnam into North and South following the Geneva Agreement. He said -

Now, once that division had occurred it is important to notice that one million people moved southwards out of the Communist-dominated North. There was very little traffic in the other direction.

He went on to say that we should appreciate this fact, because it is similar to what happened between East and West Berlin. He continued -

Now, it is important to notice this because it shows that we cannot make the facile assumption that the ordinary citizen of Vietnam is anxious to be left under Communist rule.

He went on and gave the history and then said -

That went on until 1959. Then immediately after that came the call of the Government of North Vietnam demanding that the Viet Cong activities in the South be stepped up to a fullscale attack on the Government of South Vietnam. Not only did it call for that attack, it proceeded to give help to the Viet Cong in men, in weapons, and in military direction. And for evidence of that, we do not have to look to any partisan source*- we can read the report of the International Control Commission for the year 1962, putting beyond doubt that that was what North Vietnam was doing.

Now, there was no need for that action. The two parts were living in comparative peace, they could have lived in greater peace. They could today, if that call had never been made, be living in much greater happiness and at a higher standard of life than they are living today.

There was no need for this. It was a deliberate decision by the Communist North to make an attack on its neighbour, and it cannot be said - it cannot be said - that this could be excused by blaming it on a United States presence in the South. When this attack began there were only 700 American troops and civilian advisers in the South. It was not, then, the case that that justification, such as it might have been, could have been pleaded.

Mr. Stewart then went on to speak about the Gulf of Tonkin incident as follows -

As the Communist attack increased, naturally the help given by the United States to South Vietnam grew, but we should notice that it was not until 1964 - five years after the attack started - that United States’ forces struck at the territory of North Vietnam. And even that they did not do until there had been an unprovoked attack on United States’ warships in international waters, the Gulf of Tonkin.

He then went further and spoke of the sequence of events in these terms -

Now I said I would make some review of past events, and I did so in order to make clear that this complex problem cannot be solved by casual denunciation of (he United States. Nor can it be solved by the facile assumption that all you have to do is to give way to the Communist demands, because let us notice quite clearly what they are.

The only proposal for settling this problem that has come from North Vietnam and her allies is that first, before any conferences or discussions, all United States’ troops shall leave; and secondly, that the affairs of Vietnam shall be settled in accordance with the principles of the Fatherland Front in the North and the Liberation Front in the South - that is to say, in accordance with the principles of the Communists, and the Communists only. Now, that is the only proposal for solving the problem there is to the Communist side, that the Americans should leave at once and that Communists, and Communists alone, should determine the future of Vietnam.

It is no good honorable members disagreeing with me on this, because North Vietnam itself makes no secret of this.

I fully appreciate that it is not good to read portions of a speech because of the danger of a thing being taken out of context, but I would suggest that that speech of Mr. Stewart’s is worth reading. There has been, from a number of quarters on many instances, a suggestion that it is only a government of this complexion, a government of free enterprise such as ours, and only a Prime Minister with these principles, that would desire to continue the war in Vietnam, and that Australia’s participation is only a result of our particular philosophy and our thinking in the political sphere. That statement by Mr. Michael Stewart proves, to my mind, beyond any shadow of doubt, the falsity and stupidity of that claim. Might I say, Sir, that some people, perhaps with the best motives in the world but unfortunately without really thinking through this situation, are, if they would only realise it, placing Australia in danger because of some statements and comments that they have made. We know that some of these people are out and out Communists and Communist sympathisers and have only one idea in mind. That idea is to undermine the security of Australia. But unfortunately there are some people making comments in regard to the situation without, as I say, thinking through this problem and its complexity and seeing the situation as it is.

May I conclude by quoting an editorial which appeared in the Sydney “Sun” on

Tuesday, 24th August? Honorable members are critical at times of some of the things which the Press says and does. If I might say so, I think we are justly critical. But also I think there are times when we should commend the Press, not because it agrees with what we say but because it exhibits a sense of responsibility as evidenced in this editorial which reads as follows -

The Budget was a sober but not an alarmist document. The eager rapidity with which some prices were raised after it, on some lines on which the old lower duties had been paid, was disturbing.

There has also been comment on the raising of liquor prices by amounts more than enough to cover the increased excise, and while it may be true that the extra margin for the trade was bound to come, the two have been lumped into a fairly solid slug at a bad time.

At the same time, the consequences of a careful Budget may be further complicated by incessant union demands for more money.

This country, which is perhaps already and almost without knowing, marching into its long, unpredictable battle for survival, is bedevilled by powerful pressure groups which cause State and national disruption.

The Budget is not a perfect document, but at least it sought to play ball with the country and the country should play ball with the Government which framed it

The time is hard upon us to think nationally - as though we were in a state of war - and not sectionally or individually. If we allow cupidity or pressure to raise prices by one penny more than is necessary we are not playing ball with ourselves.

To my mind, that editorial expresses a pretty good thought and should make us think of the responsibilities that are confronting us at this moment. We have been given many privileges in Australia. At this particular stage, all sections of the community - and I have been critical of big business as well as of unions - should realise that we are facing problems because our area and our small population make the cost of development in this land high.

Therefore, each section and each person should ensure that they do not, by thoughtlessness or carelessness, enforce a greater cost for the development of this land. As we accept again this Budget presented by the Treasurer this year, we accept it with the responsibility and, I hope, the privileges that have gone wtih being citizens of this country.

Debate (on motion by Mr. Reynolds) adjourned.

page 512


Ministerial Statement

Minister for Supply · Paterson · LP

– by leave - I wish to inform the House of a statement made by the Minister for Defence (Senator Paltridge) in another place today. It will be remembered that 1 represent that honorable gentleman in this chamber. The statement concerns the new jet trainer for the Royal Australian Air Force and is as follows -

I wish to inform the House that the Government has reached a decision on the selection of a new jet trainer aircraft for the R.A.A.F.

Earlier this year a joint R.A.A.F.Department of Supply aircraft mission, headed by Air Commodore Eaton, Director-General of Operational Requirements for the R.A. A.F., visited Canada, the United States of America, Europe, the United Kingdom and Japan investigating available jet trainer aircraft. A member of the Royal New Zealand Air Force also was with the mission.

After a detailed examination of six aircraft available overseas the mission recommended the procurement of the Italian Macchi MB326H.

The Government has accepted the recommendation and has decided that the aircraft should be produced substantially in Australia. The Commonwealth Aircraft Corporation Pty. Ltd. will be the prime contractor with Hawker de Havilland Pty. Ltd. as the major sub-contractor. Seventy-five aircraft will be ordered initially and there will be a later follow up order of 33 aircraft.

The Macchi trainer will ultimately replace the Winjeel propellor driven aircraft and the Vampire jet trainer aircraft of the R.A.A.F. At present student pilots of the R.A.A.F. undergo about 120 hours initial training on the Winjeel, followed by a further 120 hours of advanced training on the Vampire jet aircraft.

The introduction of “all-through” jet flying training into the R.A.A.F. will necessitate moving the Air Force’s initial flying training school from its present location at Point Cook, Victoria, to the R.A.A.F. base at Pearce, Western Australia, where the advanced flying training school of the R.A.A.F. is already in operation.

There are many reasons for the change of location of the flying school from Point Cook to Pearce, including the difficulties associated with operating a flying school equipped with jet aircraft in the middle of an area which is already the centre of a complex civil air route system. There are also other considerations of a service nature which would be advantageous in transferring the location of the existing school, including the value of having both schools operating in close proximity.

I present the following paper -

Royal Australian Air Force - New Jet Trainer - Ministerial Statement, 26th August 1965 - and move) -

That the House take note of the paper.

Debate (on motion by Mr. Daly) adjourned.

page 513



– Last night on the adjournment debate the “ Hansard “ reporting staff–

Mr DEPUTY SPEAKER (Mr Brimblecombe:

– Does the honorable member claim to have been misrepresented?


– I have been misreported.

Mr Daly:

– Is the honorable member asking for leave to make a statement?


– Yes, under Standing Order No. 66. “ Hansard “, in its report of my speech on the debate on the adjournment last night, expressed in the affirmative a sentence which should have been in the negative. I did not see the green carbon copy of my speech in time to make the necessary correction, but “ Hansard !’ has agreed that the report should be corrected. I direct the attention of the House to the section of the report in which the mistake occurred. I was talking about some propaganda that had been issued in which opponents of the reserve wool price proposal stated that -

  1. . a vote will be given to people who have only a transitory interest in wool growing, or even no interest in it at all.

I am reported as then saying -

The debate to come will show quite clearly that this kind of thing takes place . . .

This was the sentence wrongly reported, and it appears in the first column on page 468 of the daily “Hansard”. My actual statement last night was -

The debate to come will show quite clearly that this kind of thing cannot take place.

I indicated that the people who will get a vote in the referendum will be legitimate growers with a proper interest in the industry. “ Hansard “ agrees that the report should be corrected, and has arranged for the passage to appear in its corrected form in the weekly edition of “ Hansard “.

page 513


Second Reading. (Budget Debate.)

Debate resumed (vide page 512).


.- I support the amendment moved by the Leader of the Opposition (Mr. Calwell). It might be as well for me to remind the House just what the amendment provides. The Leader of the Opposition moved -

That all words after “That” be omitted with a view to inserting the following words in place thereof - “this House condemns the Budget because -

Such taxation increases as it contains add further burdens to wage and salary earners whose living standards have already been eroded by price rises and the Government’s active intervention against wage increases;

Such meagre social service benefits as it proposes are inadequate, belated and partial in their application; and

The Budget fails entirely to deal with such problems as increases in imports and Australia’s dependence on foreign capital.

This House further declares that only by proper economic planning can Australia rapidly expand the resources required to meet its urgent needs in the fields of defence, development, education and social welfare”.

I intend to say something about two broad aspects - first, taxation and prices, and their relation to wages and social services; secondly, some problems relating to productivity and labour supply. Before doing so I want to pick up one point mentioned by the honorable member for Lyne (Mr. Lucock) who preceded me in the debate. He referred to the proposed increase of £10.3 million in the allocation to the PostmasterGeneral’s Department. I want to refer to the telephone position in New

South Wales generally, and in the metropolitan area of Sydney in particular. It is true that the Budget does provide £10.3 million extra for the capital works of the Post Office generally, but it is also well to remember that the Government expects to receive £16,676,000 extra in revenue as a result of the imposts that were applied last October.

The position in New South Wales is that the Sydney metropolitan area, which contains 22 per cent, of Australia’s population, has 46.3 per cent, of the total deferred telephone applications. I stress this point and drive it home. New South Wales has 61.2 per cent, of the total deferments for Australia. Contrast this with Queensland, whence comes the Postmaster-General (Mr. Hulme). Queensland has 6.3 per cent, of the number of deferments in Australia. I hope that in the allocation of this extra money the Minister and the Government will have special regard for the sorry plight of many people in New South Wales who have been waiting years for telephone services, particularly those in the metropolitan area of Sydney. I am still making inquiries on behalf of people and have been told that they may get a telephone service in the 1966-67 financial year. For people who want to engage in business or those who are stricken with ill health this is a most unhappy plight. I hope something will be done about it and that great emphasis will be given to providing telephone services in New South Wales.

I was rather alarmed when talking recently with a telecommunications engineer to hear his comments about the new crossbar equipment that has been installed in our telephone service. I had been led to believe that this was equipment par excellence, that it was something we had to bid for in competition with other countries in order to get supplies from Sweden. According to this telecommunications engineer the equipment has been rejected by almost every other country. It is not used in the United States of America and it has been rejected by the United Kingdom authorities. In fact, he said - and I am anxious to hear whether or not this is correct - that Sweden is about the only other country using this equipment. He said that it is a very intricate type of equipment, and is costly to maintain, and that when some fault, even a minor fault, occurs it ia likely to throw out 50 services, whereas the equipment we were using previously - the step by step equipment as it is called - does not suffer from this type of breakdown. I hope that we hear from the Minister on this point.

This Budget provides for a very regressive programme of taxation. By regressive I mean, of course, that the burden is most heavy on those least able to bear it. In this Budget there is a heavy resort to indirect taxation. Many people have complained bitterly about the increases in the prices of beer, spirits and cigarettes. I have a strong sympathy for those people, particularly as the prices of beer and spirits have been increased not merely to cover the increase in excise but also to obtain a greater profit margin for the purveyors of these products.

However, I am more concerned about the increase in excise on petroleum products. I believe that this plants a time bomb in our economy at the present time, because the incidence of the increases in the prices of petroleum products will be felt throughout the economy as a whole. It is pretty obvious that this is already happening. The airline companies have announced that they will have to increase fares to obtain an additional £1 million in revenue to enable them to offset the increased cost that will result from this impost. The Retail Traders Association of New South Wales has warned that higher prices for all goods will follow the increase in road cartage costs. This was stated by the secretary of the Retail Traders Association, Mr. J. B. Griffin, and was reported in the Sydney “ Sun “ on 19th August last. Honorable members have already heard that building costs are expected to rise on the average by £60 or £70 for each house constructed in the coming year. It has already been reported that costs on the average have risen by £100 for each house built during the last 12 months.

Wherever one looks there are indications of price rises resulting from increased transport costs which have been brought about by the increase in petrol tax. This tax can only be described as grossly inflationary. In this sense, the price of petrol is a production cost which is passed right along the line of production of goods. One has only to consider how ludicrous the position will be in a little over a month hence when the Government will commence to implement the promise it made at the last election nearly two years ago to subsidise petroleum prices in various areas of the Commonwealth. The Government will subsidise the price of petrol in country areas so that it will cost no more than 4d. a gallon above the city price; but in the same breath the Government will increase the price of petrol by 3d. a gallon. I hesitate to think what the effect of this will be on our export industries, particularly primary industries which still account for about 80 per cent, of our exports. Because of this tax our export prospects will be so much worse off. At the same time imports will enjoy a corresponding advantage because our costs of production will rise by the amount of the increases in charges which will result from the higher excise duty on petrol.

The main point about all this is that the vast mass of people who make up the wage earning community will not be able to meet these considerable increases in the prices of goods generally. This position will result basically from the action of this Government in going before the Conciliation and Arbitration Commission and arguing against any increase in the basic wage to offset increased prices. The worker has deliberately been left unprotected. I can hardly think of a more callous action than that of the Government in going before the Commission and arguing that prices increases should not be reflected in increased wages and then, having the advantage of that judgment, to come into Parliament and increase the excise on petroleum products. The Government knows from previous experience that that can only result in all round increases in prices. I repeat that this was a very callous ‘act on the part of this Government. I imagine that if the Commission’s judgment had been different, the Government would not have increased the excise on petroleum products. But now the Government is taking advantage of that judgment.

One has to remember that the judgment of the Commission was a majority decision of three to two. In the judgment of two of the five members of the bench there should have been an increase of 8s. a week in the basic wage to compensate for price increases that had already occurred. I am referring not to increases which will result from the proposals contained in the Budget but to increases which had already occurred in the 12 months since the previous judgment had been made. It was stated in the Commission’s judgment that the basic wage was to be determined annually in future, concurrently with margins, on general economic grounds - on the highest level which the capacity of the economy was estimated to be able to sustain for the ensuing year.

It is important to note that whereas previous alterations of the basic wage were made mainly on the basis of what had occurred - on things that were objectively, or fairly objectively, measurable - including changes in the consumer price index, from now on any increase in the basic wage is to be made on the judgment of the Commission of what is likely to happen in the year ahead and what is likely to happen in respect of productivity. Therefore, I believe it is quite right for the Australian Council of Trade Unions to interpret this decision as substituting a consideration of future prospects in place of a direct measurement of things that had occurred, including price changes.

The Commission rejected any notion of variations in the consumer price index as being a basis for basic wage adjustment. The Government pretended to go before the Commission as a neutral observer, but almost with his first breath its representative argued that any increase in the basic wage would be fraught with danger, would lead to price increases and would impair Australia’s export potential. Having secured a judgment of that kind, the Government deliberately and callously has come into Parliament and set in train price increases against which the salary and wage earner, the social service benefit recipient and the person living on superannuation benefits will be unable to protect themselves. As the Treasurer (Mr. Harold Holt) pointed out, this Budget is not just an isolated incident; it is related to other things. Among the other things are not only the basic wage but also the action of the banks, at the behest of the Government, in increasing interest rates which have already reached abnormally high levels in Australia.

The report of the Reserve Bank of Australia which was recently tabled showed that the bank felt obliged to increase interest rates. Among other reasons stated, it said that it wanted to compete against financial institutions outside the banking service in the community. In other words, the Reserve Bank was left with the task of trying, by this means, to plug the hole that the Government had made by its neglect to implement the recommendations made by the Constitutional Review Committee in 1959. Among the many recommendations made by that Committee was the one that the Commonwealth should be empowered to control these other institutions, such as the hire purchase companies and finance companies. But the Government has resisted doing that and has put the legitimate banking institutions, if I may call them that, in the position of having to compete for funds against the semi-official institutions, if I may so term them. In order to bring credit under some kind of control, the Reserve Bank has had to reach out and compete with these other institutions by using competitive interest rates. The result is that interest rates have increased substantially and these increases have been reflected in the costs of production. This, also, must impair our export potential.

An interesting point which was made by the representatives of the working community was that whereas the mass of wage and salary earners could not protect themselves against price increases, it was still possible for employers to protect their incomes by increasing prices whenever there was an increase in costs. In the 12 months between the June quarter of 1964 and the June quarter of 1965 the consumer price index increased by 4 per cent. Since the June quarter of this year prices have increased further, and the prospects are that they will increase substantially in the future.

That was what provoked me to say at the outset of my speech that a time bomb has been placed in the Australian economy by these budgetary measures. The increase in the excise duty on petroleum products will lead to all round increases in transport costs which, in turn, will lead to increased costs of production and increased prices in respect of the whole range of commodities. It is quite likely that we will see a substantial growth in inflationary processes in the year ahead. Already we are in severe trouble in respect of our balance of trade. Last year our imports increased by £250 million or 22 per cent.; but our exports decreased by £74 million. Whereas our overseas reserves increased by £228 million in the year before last, last year they fell by £158 million. Yet the Government is provoking this renewed bout of inflation and is aiding and abetting it by increasing interest rates. Such increases can only be reflected in increased costs.

Part of this programme is supposed to be designed to dampen down, to some extent, the consumption rate within the economy. But why should consumption spending be reduced? Last year personal consumption expenditure was not notably buoyant; it was not a notable part of our national income figures. Last year personal consumption expenditure rose by a bare 3 per cent. in real terms. The big spenders were the public authorities, whose expenditure rose by 12 per cent., and private investors. Fixed private investment, excluding stocks, rose by 15i per cent. The big expenditures in the community last year were on the big insurance company buildings that have been erected in every capital city of Australia and on the brand new banking buildings that we see on every street corner in our major cities. These massive, brand spanking new insurance and banking buildings have been given top priority in our community; not railways, schools, gymnasiums attached to schools or other facilities that might help to boost productivity. I believe that it is time the Australian people had another look at their priorities in respect of spending.

The wage earners have not been protected from the price increases that have occurred and the much more substantial ones that are likely to occur. Neither have the people who live on pensions or other social service benefits been protected from them. This Government has brought down a very frugal programme of social service increases. The total programme of increased benefits for recipients of social service benefits will cost only £5.18 million this year in a Budget expenditure of £2,667 million. A small number of peope will receive increased benefits in the form of supplementary assistance. I remind the House that supplementary assistance is given to single pensioners who are paying rent and who have not more than £209 worth of assets.

It is also given to some married people, as mentioned in the Budget speech. There is no supplementary assistance for all the single pensioners, to say nothing of the married pensioners, who are not paying rent but are paying off homes and, in many cases, are paying a darned sight more than are people who are paying rent. A person might have just bought a home. He might have been compelled to buy a home because, if he had not done so, he would have bad to get out of it. He has to pay off his home, pay council rates and water rates and pay for the upkeep of his home. Yet such a person, who is at such a disadvantage, does not receive any of the supplementary assistance which ‘has been increased from 10s. to £1 a week.

There are small amendments in respect of children’s allowances and the funeral benefit. The funeral benefit has been increased for the first time since 1943, when it was introduced by a Labour government. When it was introduced the benefit was £10 and it has remained the same right up until now - for 22 years. Only now is it being increased to £20; but it will be £20 only when the cost of the funeral is met by another pensioner. Of course, this is a ludicrous position. It is an impossible position administratively. All that will happen is that, if the son of a pensioner wants to pay for his father’s funeral, he will give the money to his mother, she will pay for the funeral, and because she is a pensioner she will be able to collect the £20; whereas if the son paid for the funeral he would receive only £10.

The Government has introduced a guardian’s allowance. Also, it makes a great to-do about eliminating the pensioner medical service means test; but it does not tell the House that there was no pensioner medical service means test until October 1955 when this Government introduced it. The Government has perpetuated it for 10 years. At no time has it been eased. AH sorts of inequities, inequalities and injustices were perpetuated under that means test. I have spoken about them before. I cannot labour them in the time available to me this afternoon. I am very glad that that means test has now been wiped out and that all the decent people who, during their working lives, paid into superannuation funds and then received pensions which excluded them from the pensioner medical service, will now be able to participate in it.

But, having said that, what else is there? The fact is that so many things which ought to have been done have not been done. Pensioners generally were expecting to receive some help in meeting the increase in the cost of living that has occurred in the last 12 months, as shown by the 4 per cent, increase in the consumer price index. They were expecting to receive some increase in pensions, modest as it might be. But they received nothing. There is no easing of the means test on pensions. This afternoon I heard the honorable member for Robertson (Mr. Bridges-Maxwell) regretting the fact that civilian widows, who could well have done with an alleviation of the means test on income, will still be limited to an income of £3 10s. a week. The community is supposed to be short of labour. The alleviation of that means test would certainly be one way to help widows to get back into the work force.

One of the interesting things in Statement No. 1, which was attached to the Treasurer’s Budget Speech, is that in 1964-65 the payment to the National Welfare Fund was £6,970,000 less than the Budget estimate. The Government spent nearly £7 million less than it expected to spend on national welfare. Nobody has explained to us why that happened. It is interesting to note that one of the items included under this heading is the homes savings grants scheme. On this item the Government spent £4,325,000 less than the estimate. In other words, there was nothing like the demand for this service that the Government expected. Expenditure on unemployment and sickness benefits was £1,430,000 less than the estimate. Expenditure on age and invalid pensions was £1,371,000 less than the estimate. Expenditure on medical benefits was £762,000 less than the estimate. Expenditure on tuberculosis medical services and allowances was £556,000 less than the estimate. Expenditure on medical services for pensioners was £390,000 less than the estimate.

Getting away from social services, payments to or for the States were £3,820,000 less than the estimate. It is very interesting to look at some of the items on which Government expenditure was not anything like the expectation. One such item was rail standardisation. In that instance the expenditure fell short of the Budget estimate by £3,901,000. Why did this happen? We are supposed to be the guardians of the public purse. We should be told why almost £4 million less was spent on rail standardisation than the Government estimated it would spend in last year’s Budget. But all that we are told is that this happened. It is high time we knew the reasons for some of these happenings. It appears that national development in this field has not gone ahead in the manner the Government expected it to go ahead 12 months ago. Contributions towards the capital cost of State health institutions fell short of the appropriation by £518,000. Expenditure on development of brigalow lands in Queensland fell by £435,000. We are not told why this great work did not go ahead to the fullest extent. Was the work done more cheaply than had been expected or was the work not completed? We should know about these things. Is the Government to be allowed to come here one year and tell us that these great works are to go ahead and then permit them not to be completed? We should be told the position. The amount spent on beef cattle roads in Queensland fell short of the appropriation by £410,000. What has happened?

I should like to say something about efficient production. One issue that has been raised in the course of this debate has centred around productivity and the availability of manpower. May I briefly say that it is obvious, as the Government concedes, that we need more manpower, particularly skilled manpower? I wonder what has happened to the adult technical training scheme which the Minister for Labour and National Service (Mr. McMahon) was hawking 12 months or two years ago. No more has been heard of that scheme. I am told that there is a reduced intake of apprentices now. Why is this? One very good reason why we are not getting all the apprentices we need is that we are not prepared to pay them enough. It is as simple as that. With all the attractions in the community today you cannot expect young fellows to stint themselves for four or five years while they do an apprenticeship course on the allowances that are paid to them.

Similar observations could be made about Commonwealth technical scholarships. Last year the Government made available 2,500 technical scholarships but it is the most difficult thing in the world to get information about what happened to those scholarships. I read in a newspaper recently that somebody who made an inquiry about these scholarships ascertained that in New South Wales last year 940 scholarships were nominally available but only 50 per cent of them were taken up. Why? The same article relates that applications for technical scholarships this year close on 17th September, but at 19th August no application forms were ready. I have made inquiries of the education authorities with a view to obtaining a booklet describing the scheme but no such booklet has yet been printed. There is still argument about the scheme. Its full details have not yet been finalised. These are some of the things that are hindering the supply of technicians and other trained people in the community. The Government has provided £5 million annually for technical education throughout Australia. That amount will hardly begin to solve the problem. You could spend that much in Sydney alone. The Commonwealth should undertake a survey of the requirements of technical education in Australia. It has done this in respect of universities. It has done this in respect of teachers’ colleges, although it disregarded the recommendations that came out of the inquiry. The Government sponsored an inquiry into higher education. Why has it not conducted a survey into technical training which is vital if we are to have skilled tradesmen?

What has happened to the agricultural extension services that were advocated by the honorable member for Indi (Mr. Holten)? I have not heard anything more about them. These services are an important part of training in the United States of America. What has happened in regard to educational television? In the United States there are 90 educational television stations. Despite the fact that the PostmasterGeneral (Mr. Hulme) told me that a report on this subject had been given to him last February, the Government still has not made up its mind. The PostmasterGeneral told me that the report had been submitted to the Minister-in-Charge of Commonwealth Activities in Education and Research (Senator Gorton), but that he has not yet returned it. The PostmasterGeneral said that he hopes at some time in She future to make a recommendation.

Mr DEPUTY SPEAKER (Mr Brimblecombe:

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

Sir Wilfrid Kent Hughes:

– I propose to confine my remarks to defence and foreign affairs. I do so for the simple reason that without security every other item in the Budget becomes, more or less, nonsense. Unfortunately, our security today is in jeopardy. I was very interested in the debate last week on international affairs. In my opinion it was one of the most vital and important debates that has been initiated in this House for a long time. I am sorry that I was not present during the debate but I have tried to study it as a final phase of my investigations of five weeks duration into the situation in South East Asia, covering Vietnam, Thailand, Laos and Malaysia. By courtesy of the United States Air Force and with the valuable assistance of our diplomatic representatives abroad I was able, not only to contact Ministers and leaders In those countries, but also to visit our men in the field where they are fighting for us, to visit other teams which are carrying out projects such as the road project in Thailand, and to get inside knowledge of what was going on, not only at the red carpet level but also down in the bazaars. I was not as fortunate as the Labour Party delegation which was there at the invitation of Mr. Lee Kuan Yew. Members of that delegation were able to travel around South East Asia in a Royal Australian Air Force V.I.P. aircraft; but not so a member from the Government benches. However, I have no criticism of that. I am only sorry that the Labour Party delegation was not able to visit Saigon.

In the debate last week the important aspects of the situation in South East Asia were fully and very well covered by the honorable member for Bradfield (Mr. Turner) and the honorable member for Gippsland (Mr. Nixon), who were in the area on a short visit just before I was there. These aspects were dealt with also by the honorable member for Batman (Mr. Benson), the honorable member for Fremantle (Mr. Beazley) and countless others who took part in the debate. I do not propose therefore to try to cover the ground that they covered. I was interested but not amused by the recipe of the Leader of the Opposition (Mr. Calwell) for peace negotiations, based on ideals which all of us would support. But unfortunately we do not live in an ideal world. This is a world of human relations, of materialism and realism. Although we all can write out an ideal on paper, the important thing is how far it can be followed through in the conditions which we must face up to today. Peace on earth, good will towards men - the old Christmas message - is in the hearts of all of us, no matter how we may think this aim should be achieved. But the original translation was: “ Peace on earth to men of good will “. Unfortunately today there are international dictators who are still trying to set about world conquest and who have no good will towards those who would thwart their ambitions.

So once again we are faced with the situation which I and the honorable member for Lalor (Mr. Pollard) thought we had finished with when the First World War ended. We thought also that we had finished with it when the Second World War ended. But unfortunately today we are faced with another position of insecurity in this region of the world. I imagine that those honorable members who have criticised me in the past for what I have said about Indonesia would concede in their own minds that unfortunately I was correct. Only this year - on 17th August - President Sukarno in a speech told the United States of America to get out of South East Asia or face defeat at the hands of Indonesia, China and China’s allies. He was referring to Red China and Red China’s allies. I make that distinction because he was not talking about Nationalist China. In the debate last week the honorable member for East Sydney (Mr. Devine) said -

The South East Asian people are being driven towards Communism because of their poor living conditions.

May I remind honorable members that in Malaysia and in South Vietnam in 1958 the living conditions of the people were being considerably improved under the leadership of Tunku Abdul Rahman in the first instance and under President Diem in the second. It was because the Communists - the Indonesian Communist Party, the P.K.I., and the Vietcong in Vietnam - did not like this example of progress right alongside them that they decided they had to stop it. This started the Vietcong aggression - it was not the sole cause of it - in Vietnam and the confrontation of Malaysia on the part of Indonesia.

I should like also to say that the honorable member for East Sydney (Mr. Devine) impressed some of the people who met him in South East Asia by his sincerity, although they did not agree with his views. All of us, I suppose, when we first visit South East Asia have a bit of the “Alice in Wonderland “ complex. That is only natural, but it is unnatural for the Deputy Leader of the Opposition of this House (Mr. Whitlam) to go over there and have a “ Whitlam in Blunderland “ complex. We are all very sorry, I know, about the separation of Malaysia and Singapore, but I think we should remember that as outsiders it would be wrong for any of us to try to allocate praise or blame to one side or the other. What we have to do now is to try to help in any way we can to bring about a reconciliation. I believe that most of the people in Malaya, the Borneo States and Singapore feel that the parents have become divorced, but the children want them to get together again in the not too far distant future in the interests of the whole family.

But, in helping, let us remember a few mistakes that we have made. The Deputy Leader of the Opposition on his first visit interfered in internal politics in a neighbouring country by having a Press interview in Singapore at which he said that the People’s Action Party had the best policy for any newly emerging country. You can imagine how that went down at that time particularly with U.M.N.O. - the United Malay National Organisation. Then again on this last trip he made statements about joining up with the Socialist International - a strange name for a non-Communist organisation - or is it the International Socialist Organisation? Whatever it was, the People’s Action Party was a most important member of it. That did not help.

Furthermore, the Government made a diplomatic blue in issuing an invitation to the head of a component part of Malaysia without saying a word about the invitation to the Government of Malaysia until such time as the invitation had been received and accepted. In other words quite unwittingly, but unfortunately, to a certain extent we did exacerbate the existing tension at that particular time. I hope that we will avoid such mistakes in the future. I know that people with our western ideas will say, “ Well, what was wrong with the invitation? “ We expect others, when they come here, to understand our diplomatic routine courtesies and our customs, and the same thing applies to us when we visit them or in our dealings with them. It is no good singing the song of “ My Fair Lady “, “ Why can’t they be more like us “. They are not like us. They do not think, and probably never will think, exactly the same way as we do. As we expect them to think and understand the way we think and act, the same thing applies in reverse in regard to ourselves.

I do not want to say any more on the Malaysia-Singapore question, except to suggest to the Government that one move at the present moment which would, I think, help in some ways would be to offer through the Malaysian Government to send two or three extra teams of engineers - possibly from the Snowy Mountains scheme - and some finance to assist in the road building plans and development of Sabah and Sarawak. These two component parts of Malaysia have had a pretty rough deal ever since confrontation started, because money that was to have been spent on development has had to be spent on defence. I was astounded - I should have known - to see the way in which the road building programme being carried out partly by one of our Snowy Mountains scheme teams at Khon Kaen in Thailand is helping to pull that whole country together in a manner unknown before. Villagers who were isolated during the wet and never moved far in the dry are able to move further distances to obtain new markets for their products. The same thing would apply in Sarawak. There are practically no roads in Sarawak but there is a ten year programme. If that programme could be reduced to four years the people of Sarawak would see that their friends were willing to come and help them. Now is the time, not to say farewell, in the words of the old Maori song, but now is the time of opportunity. If we delay two or three months we will lose that opportunity. I would like to suggest to the Government, therefore, that it think over that proposition and make the suggestion to the Malaysian Government at the present time.

I want now to turn from Malaysia and Singapore to what has been the principal issue and the main matter in the minds of most Australians for many months past. That is the security of Australia, which depends again on the security of South East Asia. First, it is the old pincer movement. It is one and the same strategy, whether it is in the shape of pressure in the north on Laos and Vietnam or the holding confrontation job in the south as far as Indonesia and Malaysia are concerned. It is not a local war. It is not a civil war, as some people would try to persuade Australians. To me it is the front line, and I think to most people who have studied the position, it is the front line of the free world - not just of South East Asia or of Australia. We are engaged, unfortunately, in World War III. at the present time. The honorable member for Yarra (Dr. J. F. Cairns) should read, I suggest, Mao Tse-tung’s document, or operation order, for world conquest. It was taken by Chou En-lai to Moscow in 1953. It was actually read into the Congressional record in Washington in 1954 by Senator Knowland. It is a most enlightening document. It sets out as the first step in world conquest aggression by infiltration, subversion and guerrilla warfare in order to conquer South East Asia for Communism. That was the first step. The Communists have followed the document paragraph by paragraph and item by item. The only thing that was wrong with it was the timing, because Mao Tsetung did not realise what the reaction of the Americans would be. Thank God for the American reaction.

It has not been easy for America. For a long time she had to more or less go it alone, and I am delighted that our Government decided, together with one or two other Governments, to send some of our forces. Not that I am delighted that our boys had to go and take risks in the front line, but the fact that we are there - chickenfeed as our forces may be in the overall strategy - shows to the American public that we are willing to go in with them. It shows them that we realise the importance of the job they are doing, not only for Australia, but for the whole of the free world. I hope that with the speech that President Sukarno made on 17th August last, and the realisation that this is war in Vietnam - and, unfortunately, with Indonesia - there will be no more gifts of telecommunication equipment under the Colombo Plan and that America will have another think over the proposed gift of tropospheric scatter communication equipment which cannot be jammed. Troops in the field do not understand this sort of thing, and I do not think that most of us do either. As I said, I am very glad the Government has taken that action and I support it very strongly; but we are still doing too little too late and too slowly. It is unfortunate that we are faced with this vital situation. We are also making the same mistakes as we made in 1939, and with the same people. One can forgive the original mistake, but one cannot forgive making it a second time. We ought to be calling up 14,000 men a year for national service training, not just increasing the number to something like 8,900. We are fully extended or perhaps over extended with two battalions and ancillary troops overseas. That is not our fair share of the responsibility, particularly when our security is involved. I think it was Sir Ragnar Garrett who suggested two years ago that the number should be 14,000 even if we cannot give them barracks, bedside lamps and sheets. During the First World War we were trained in tents. What are the men living in at Bien Hoa today? They are living in camouflaged Indian pattern tents and, I might say, under very unpleasant conditions.

While I am on this point, I should like to mention one or two matters which, although they are small in the shape of things at the present time, are of great importance to the troops in the field, because as a result of some of them the troops feel they are being forgotten by the people home in Australia. However, the first matter is not in that category. It relates to equipment. We have already lost one Minister who died in the service of his country as a result of going overseas to buy TFX aircraft when he should not have gone as he was very sick. I am not an expert in aircraft and I suppose the purchase of the TFX aircraft was a good thing, but I do know that everybody in the Services in Vietnam today, whether he be American or Australian, says without hesitation that the Phantom is the best aircraft for that type of warfare. I suggest to the Government that its advisers should listen to the experts in the field.

I should not like to be accused of giving away information which might be regarded as restricted so I will say no more about the Phantoms. But when I found that the troops in the front line, where there are slit trenches both fore and aft of every tent and machine gun posts all round the perimeter of the camp are short, even though temporarily, of 50,000 sandbags, I began to wonder what the hell was the matter. I hope they have arrived since I left. I found, too, while I was there, that when the troops twice a night had to go out into slit trenches on alerts in the peak of the monsoon season, they are often up to their knees or above, in water. They reckon they will develop web feet. In another camp the troops were being given Chinese Communist made sandbags that do not last a month under tropical conditions. The bags were being painted over with a weak mixture of cement and water in order to try to make them last. Perhaps this is a quid pro quo for the good grain we sell to them. These things react on the morale of the troops and make them feel they are being forgotten.

I come now to rations. I found our troops were on the American rations and were complaining about too much poultry meat. They said they wanted the Australian meat ration. I do not know whether anyone has gone into this, but I told them that when going out on jungle patrols it was no use not using scented soap or toilet preparations for 48 hours beforehand if they were meat eaters. The Vietcong have a very sharp sense of smell. The Chinese always told us we smelt in World War II in Malaya, but we did not realise it until after we had become prisoners of war. When we had no meat ration we lost all body odour. The Vietcong down wind in the jungle can smell a meat eater at 30 or 50 yards and I would much prefer to go without a meat ration and have that extra protection when I am on operations in the jungle.

Another matter to which I wish to refer is the question of awards and ribbons. There is a general service ribbon for Malaya, and there is a Borneo Star ribbon, but as yet, for some reason, there is no ribbon- for Vietnam. If the boys get a mention in despatches - an M.I.D. - there is no ribbon to put it on. I believe this is under consideration; but why the delay? One wonders what is happening here on the peaceful shores of Lake Burley Griffin when a soldier in the field who is recommended for a high American decoration gets a reply from the military authorities saying that Australian troops are not permitted to receive foreign decorations in times of peace. I do not know who is responsible for this nonsense but whoever it is, he ought to be sent over there. Even in the training camp at Hue all the doors and windows are sandbagged. If you go out in a jeep, the individual always carries weapons, there are sandbags on the floor forcing your knees up under your chin, in case you happen to hit a land mine. Is this peace time? The Alcatraz architecture of the buildings over on the other side of Lake Burley Griffin have so imprisoned the minds of the people within those buildings that they do not realise that Vietnam is not experiencing times of peace. These things annoy the troops in the front line, naturally, and I hope that they will be corrected very quickly. Finally, I hope that the Treasury officials will not do what they did when I was in Thailand 18 months ago - spend a week in a camp and finally decide to reduce the field ration allowance from 12s. 6d. to 12s. a day to justify their inquiry.

I would like to say a word, too, about the forgotten few up in the North. When the Australian military history of this war comes to be written there will be a special chapter - an almost incredible fairy tale - on what these chaps in the north are doing. Bits and pieces of news do come through. I noticed a paragraph in the “ Sun “ last night, and in the “ Australian “, I think, on Tuesday, but the full story cannot yet be told. The job these fellows are doing up there is incredible. I take my hat off to them as young Australians. They are not only training troops but they are going out advising in the field of operations, administering various areas, and helping to keep peace with the Montagnards. As I say, it reads almost like a Hans Andersen fairy tale. Have a Budweiser beer session in the mess, as I did, with some of them, and you will learn a great deal more about what is going on than you can learn from an official briefing. Their morale is good and their prestige is high.

The Caribou pilots have won a tremendous reputation, even with the American Air Force where the standard of flying is very high. The Caribous are helping an airlift of supplies all around the countryside because practically all the bridges are out. This is an exercise which makes the Berlin air lift like a kindergarten project.

I would suggest, if I may, that a visit by the Prime Minister (Sir Robert Menzies), the Deputy Prime Minister (Mr. McEwen) or the Treasurer (Mr. Harold Holt) would have a tremendous effect on the morale not only of our troops but of all those small nations in South East Asia that are carrying much heavier burdens that we are at the present time. All of us want to see peace negotiations, but I utter two words of warning. One is that the Communists regard armistices as just another phase of the campaign. An example of that is what happened in Korea. We do not want a patched up peace of that nature. Secondly, the South East Asian countries themselves should first be consulted. I know that the Commonwealth of Nations peace mission intended to go to Saigon first, but it was led astray, it went to visit Peking, Moscow and Hanoi, the enemy centres. But the people who are suffering most at the present time are the people of South Vietnam whose capital is Saigon.

I want to spend the last few minutes I have at my disposal dealing with another very exciting and thrilling challenge that faces Australia today. Without security, it would be useless, but now that security has been guaranteed by the Americans, by ourselves in a small way, and by other nations in other small ways, it is of great importance. I have said before in this House that stopping Communism is not sufficient. What we have to do is give every assistance we can in the parallel project of regional cooperation and development. I believe that regional co-operation has more hope for world co-operation in the future than have 140 individual nations all pushing their own barrows in the United Nations.

We see this regional co-operation in Europe for the first time in history in the European Common Market, in which European countries are trying to come together by peaceful means. The organisation has its difficulties and its problems, but it is proceeding. Then there is the Organisation of American States which, although in perhaps an embryonic stage at the moment, has been formed on the same fundamental basis. Australia must try to help the South East Asian nations to make a success of regional co-operation and development. If we succeed in doing so we will be able to shape the whole course of future events in that part of the world, and the course of events will be in a direction the reverse of that which they would take if the Communists were allowed to overrun South East Asia.

We should keep several things in mind, however. First, any organisation that is formed must be a South East Asian organisation, because the countries involved are South East Asian countries. When a plan is devised do not call it the Johnson plan or an Australian plan. It must be a South East Asian organisation that is established. Possibly an Association of South East Asian States, started by Malaya, Thailand and the Philippines, would be a suitable organisation. South Vietnam and Laos must be included in this association. Now that America in her generosity and wide perspective has guaranteed the security of the countries involved there is no reason for the organisation not to succeed. At present certain small projects in this region are going ahead and the success they are achieving car be seen. The organisation, once formed and with security from Communist aggression guaranteed, would probably attract Cambodia and even, when Ho Chi Minh dies, North Vietnam and even Burma.

Of course it will be necessary to obtain finance. I understand that research is already being carried out in connection with the proposed formation of the Asian Bank, and that the Australian Government is prepared to participate. The United States of America, with a generosity unparallelled in history, has made a further offer to assist with this project. There is no time to go into all the problems of the proposed Asian Bank, although they are not very great.

The question of location and other questions can be left for another time. But where Australia comes in in a big way is in the field of technical assistance. These, countries want Australians because they know the job that Australians are doing. We are a small nation and cannot be accused of being aggressive. We are treated as one of them, and therefore we have a very big job to do in the giving of technical assistance. It will not be easy and it will not be cheap.

But the security and prosperity of the South East Asian nations is not all that is involved; our own security and prosperity are equally involved. Whether you look at the matter from an altruistic or egotistical point of view, you must come to the same conclusion. We must also consider the question of markets. It is no use helping these countries to develop and increase their production if they have !no markets for their products. But this also can be discussed on another occasion.

Finally I suggest that the Government should back an Australian peace corps. The members of the American Peace Corps in Thailand and Borneo and other places are the best ambassadors America has in South East Asia. We have a voluntary community aid organisation, but it must have a wider scope and Government backing. Its members should be properly briefed. It is no use our students going over there on vacation with a lot of enthusiasm and without being told exactly how to go about their task. At present we find first or second year economics or commerce students going to these countries. They get alongside some local resident and, without bothering to find out who he is, start telling him how to run the country. The person in question may turn out to be an honours graduate of Oxford, Cambridge, Harvard or Yale. That sort of thing does not go down too well.

I am sure that there are dozens of young Australians who would welcome a chance to join an Australian peace corps. There may be some who have had their national service training deferred in order to continue their studies and who would appreciate the opportunity afforded by membership of an Australian peace corps to serve not only their own country but also their friends and neighbours in a very big way.

I hope the Government will give this suggestion earnest consideration and. that it will agree to give its backing to such an Australian peace corps.

Finally let me say that success in regional co-operation will, by its example, have a very big effect on future world events. It is exciting,, it is humanitarian and it is thrilling. It is in the best interests of this country, as I have said, from whatever standpoint you look at it. I have discussed this matter with many people in South East Asian countries. They have capability and adaptability, and I feel sure that working together we could make a success of regional co-operation. In this challenge Australia has a big part to play and, for my part, what useful years of life are left to me I would like to ‘give to this cause in any capacity, because I believe that with security guaranteed and successful regional cooperation we have the best chance to build the bigger and better world for which so many Australians have given up their lives in two world wars and others are now giving their lives in a third world war.

Smith · Kingsford

– I rise to support the amendment moved by my Leader, the honorable member for Melbourne (Mr. Calwell) on Tuesday night last. As my contribution to the debate on the Budget proposals I would like to say something about a matter that is making a considerable impact on the economic and social life of the average Australian family. I refer to automation. I propose to criticise the Government for its weak-kneed approach to this great problem.

The Australian trade union movement, always alive to the everyday problems that affect our economic life, has already outlined its policy on this question. But what of the Government’s approach? It has given no indication what it proposes to do to combat the after-effects of automation. The Australian Congress of Trade Unions in September 1963 expressed its approval of automation when it reaffirmed the summary on the subject of automation issued by the Congress of 1961 in the following terms -

That the introduction of planned automation by joint government, trade union and employer consultation holds out the promise of vast improvement in the standard of living. Its application can -eliminate routine, repetitive or arduous work. Legislative powerof governments, aswell as the properlyorganised forcesof employment and labour, mustbe directed to:

Avoiding dislocations of the labour force which cause social hardships or labour displacement.

Training or re-trainingin skills to meet the new technological development.

Ensuring that purchasing power is expanded to keep pace with the nation’s productive capacity and with the lessened need for human effort, improved living standards and greater leisure.

The Australian Council of Trade Unions therefore calls on the Commonwealth and State Governments and employers to accept their responsibility, with the trade union movement, for joint consultation and planned introduction of automation during the transition to the era of the new technology. In this way beneficial results may follow instead of the hardship and industrial chaos that were experienced in countries that introduced automation without proper planning and adequate consultation between governments, employers and trade union organisations. The A.C.T.U. reaffirms the general policy adopted in 1947, calling for, amongst other things, increased production to be reflected in increased purchasing power, joint consultation to ensure planned introduction of automation with the least possible dislocation, maintenance of full employment, training and retraining to be provided where necessary, severance pay, increased leisure as living standards increase, planned resettlement of displaced labour.

The A.C.T.U. is conscious of the fact that the impact of automation, improved mechanisation and technological advancement will vary considerably from industry to industry. In order to obtain a complete and accurate picture of problems likely to be met, and in order to provide that necessary machinery is established to ensure the trade union movement’s rightful place in the solution of these problems, the Congress endorsed the 1958 decision of the interstate executive. The Congress declared -

We are of the opinion there is need for a section of the Commonwealth Department of Labour and National Service to be established as a permanent organisation equipped to deal with the effects of automation and mechanisation, and to co-ordinate remedial measures that must be taken to replace labour and overcome the social problems involved.

I refer that declaration to the Minister for Labour and National Service (Mr. McMahon). The principle which should be pursued is the establishment of an advisory committee composed of representatives of the tradeunion movement, employees’ organisations and Federal and State Governments, and, when problems concerning any particular industry are involved, representatives of toothemployers and employees in that industry should be co-opted. Experiencessince the previous Congress have shown that the rationalisation and speeding up that are features of modern industry have brought more clearly before the trade union movement the involved nature of the problems that have to be met by individual unions or groups of unions as a result of mechanisation and rationalisation and the adoption of semi-automated processes. The Congress therefore determined that conferences of unions on an industry basis are essential to meet not only ultimate problems but also immediate difficulties and that, where requested by unions, such conferences be held without delay and the results circulated among all affiliated unions.

The Congress also determined that a further request be made for an adequately staffed section of the Department of Labour and National Service to deal with automation and particularly with the forecasting of trends of employment due to the introduction of automation techniques. The Congress further determined that where an industry refused to measure up to its social responsibilities, it should be nationalised in the public interest. This, Sir, is very important The Congress also declared that it realised that automation introduced overseas would have greater effects on the employment of the work force and, for this reason, directed that regular meetings be held to watch trends in Australia and to deal with specific problems and the standards that should be applied under the headings set out in the 1959 report to the Congress. The Interstate Executive emphasised the obligations of affiliated unions to keep the Australian Council of Trade Unions continually informed on the application of automation in the various industries affected.

The foregoing is trade union policy on the great problem of automation. What is this Government’s view on this very important question? Does the Government support the approach of big business, which is based on bigger and better profits and more unemployment? As we have heard in reports from heavily automated communities overseas, such as that in the United States of America, automation brings more unemployment. Recently, I read in an article published in the London “ Daily Express “ that in the United States automation is driving 4,400 Americans out of their jobs every day. What a problem to face up to. While I was in the United States last year, I found that 27 million Americans were working only part time.

Mr James:

– How many?


– I found that 27 million Americans were working part time. That is a problem for all Australians to conjecture over. I learned also that seven million Americans were completely unemployed.

Mr James:

– The United States is a highly capitalist country, is it not? ‘


– It is. What a terrible situation to exist in any community. It has been brought about by faulty planning and the chase after profits and still more profits. We must never allow a situation like- that to develop here through lack of planning for the onset of automation. We must meet the dangers of automation sooner or later. The trade union movement, sensing the inherent dangers in the transition, calls on this Government to set in motion the machinery needed for a peaceful transition. Already, statistics show that unemployment figures in Australia are starting to creep upwards. This indicates a dangerous trend. We hear from day to day reports that things in Australia are not as good as they were. This shows that the creeping paralysis of automation is slowly but surely affecting industry. Recent unemployment figures published by the Commonwealth Statistician show that at the end of June 42,000 persons were out of work. Similar figures are not available for July, but I know that in that month the number increased by 300. All the excuses offered by the Minister for Labour and National Service will not alter these statistics. When will he wake up to the real cause of this unsavoury situation?

Recently, an address on automation was given by Mr. W. P. Evans, Vice-President of the A.C.T.U., at the International Congress on Human Rights. Professor Gal- braith, a leading American economist, said that this address was the best he had heard from a trade unionist on the question of automation. I am proud to think that an address of which that could be said was given by an Australian unionist. Mr. Evans covered much ground and made some timely observations. Among other things, he said -

A major problem before us is not how to increase productivity but how to have widely and fairly distributed the great abundance that automation makes possible.

Later, he added -

It is futile to achieve an abundant production of the people’s needs unless we at the same time devise the means by which those means are placed in the people’s hands. A fundamental cleavage in our society is between investors on the one hand and workers on the other.

Where there is abundance, as Mr. Evans concedes there is, why is this cleavage apparent? What is there to fight about? According to the Commonwealth “ Year Book “, the sum of wages and salaries paid in the manufacturing industries represents about 23 per cent, of their total costs. If to this we add about 5 per cent, to represent the sum paid as dividends to investors, we see that the total of personal incomes distributed represents about 28 per cent, of total costs, or prices. This shows plainly a difference of more than 70 per cent, between consumer incomes and prices. It is quite beside the point to say that other industries also are distributing income. There are, and this is admitted. But these industries, like the ones cited, also show a disparity between costs incurred and incomes distributed. Consequently, whether we take one industry or all industries together, this inherent disparity is inevitable. Every machine that displaces human labour means that less is paid in wages and more machine costs are incurred. Therefore, every new machine increases the disparity. Machines, though they increase output, make it harder to sell the goods produced, for they also reduce the number of workers with money to buy at the prices tasked.

This brief analysis makes clear the fact that the solution to automation is to be found not in a new division of existing incomes but in providing the means to buy total production. In this state of affairs, it must be obvious that what is needed is an addition to all incomes, plus a reduced number of working hours. The hours worked should be sufficient to enable the worker to buy whatever industry can produce. At present, I believe that the time is opportune - I say this deliberately - to relate the question of automation to a reduced working week. I would suggest that we introduce a 35 hour week or a 30 hour week. This would act as a brake on productivity and would ensure that more people were employed. It would also improve the field of distribution. We can imagine the dangerous trend that the introduction of automation could take in various industries if it were not controlled. This trend, of course, could make a serious impact on our economy.

Let us consider the motor vehicle industry, which now shows signs of reaching saturation point. Reports in the daily Press suggest that this is so, and I shall quote from an article which appeared in the “Sydney Morning Herald” of 19th June 1965. It was accompanied by a photograph and it said -

Hundreds of 1965 Holden sedans and station wagons are stockpiled in buildings at Sydney Showground. The cars, worth more than £1 million, are stored in animal pavilions, in ‘the Agricultural Hall and the Dairy Hall. The number is growing as the cars overflow from parking lots at the O.M.H. factory at Pagewood.

Of course, excuses are made for the stockpiling, but I believe that the industry is reaching saturation point.

Let us have a look at other industries, including industries that are the object of almost daily controversy, especially as they affect the economic life of our whole society. I refer first to the stevedoring industry. This industry is in constant turmoil because of the stubbornness and greed of the average shipowner. Mechanisation and automation in the industry are now accelerating the trend that has been evident for some seven years and which has resulted in a large part of the work force being displaced. The effectiveness of automation in depriving men of jobs can be gauged from figures supplied in reports of the Australian Stevedoring Industry Authority. In 1955, work was available for a real labour force in all Australian ports of 23,396.6 men. The Authority’s report for the year ended 30th

June 1962 showed that the real labour force had reduced to 19,158.4 men. This is a reduction of 4,239 men or more than 20 per cent. But this does not give the complete picture. The figures also show that in 1955 an average of 18,303.2 waterside workers were employed daily throughout Australia. In the year ended 30th June 1962, this had reduced to an average daily number employed of 12,764.3, which is a reduction of 6,038.9 or almost 33J per cent.

In 1955, 80.4 per cent, of the labour in attendance was employed, but in 1961-62 only 61.9 per cent, was employed. In 1955, a waterside worker could get 32.2 hours work a week, but in 1962 he could get only 25.7. Yet the Minister cries about the activities of the waterside workers. The net man hours worked per year by waterside workers in the year ended 30th June 1962 were 12,758,476 hours less than in 1955; but the amount of cargo handled by waterside workers in the year ended 30th June 1962 was 3,977,000 tons more than in 1955. It must also be remembered that waterside workers in 1962 were not handling many of the bulk cargoes, such as sugar and soda ash, that they handled in 1955. Tons handled per man hour increased from 0.651 to 1.13 tons, giving the productive increase that I have mentioned of 73 per cent, over the 7 year period or an average yearly increase of over 8 per cent.

What is the degree of mechanisation on the Australian waterfront? The mechanised means of handling cargo on the wharf include fork lifts, straddle trucks, mobile cranes, specially equipped fork lifts to handle newsprint paper, the use of fork lifts below decks to stack cargo in ships’ holds, the use of front end loaders below decks to bring bulk cargo to the square of a hatch for discharge by grab, the use of bulldozers below decks to trim bulk cargo such as coal, the use of mechanical augers and conveyor belts below decks and the use of mechanical scrapers for bulk cargo. Modern shore-based cranes have appeared in most major ports and, when applied to the handling of steel, scrap iron or pig iron, they have altered the loading and discharging pattern of vessels to an amazing degree. The average increase over the ships’ gear handling is in excess of 100 per cent, on manufactured steel, and on scrap iron and pig iron it can best be shown by saying that, where previously some 180 men per 24 hours would be employed for anything from fourteen days to three weeks on a 7,000 ton ship, it can now discharge its cargo employing some fifteen men per 24 hours in three to four days. Despite this, freight rates are rising.

The most spectacular developments are associated with bulk loading, vehicle deck Ships and the use of containers. I will deal with bulk loading first. Previously this had been applied generally to ores or phosphate, but it is now applied to a variety of cargo, including sugar, grains, mineral sand, liquids, solids shipped in liquid form, paper pulp now shipped in bulk as pellets, cement now shipped in clinkers, soda ash and fertilizer now shipped in liquid form. To understand the effect of this, it is necessary only to examine the change in the loading of sugar from bag to bulk in Queensland. Sugar loading terminals are semi-automated installations and handle up to 750 tons an hour. Six of these installations were erected on the Queensland coast at Mackay, Lucinda Point, Townsville, Bundaberg and Mourilyan Harbour. A seventh was planned for Cairns. One man controls the loading operation and the total labour force employed in the terminal is just over 20 men, none of whom is a waterside worker. The capacity of the terminal is 150,000 tons of sugar. What has been the effect of these terminals? The following table, which gives the average number of men employed daily at north Queensland ports, clearly shows the effect on waterside workers -

I have here further figures which show the effect of this trend on the wages of waterside workers and, with the concurrence of honorable members, I incorporate the table in “ Hansard “. It is as follows -

I thank honorable members for their courtesy.

Let us take another industry, the coal industry, the employees of which are the butt of much bad publicity in the daily press. Abuse seems to be the order of the day when and where coal industry employees are mentioned. A little examination of the state into which this industry has drifted is appropriate. I want to refer to automation and mechanisation and its effects on the coal industry in New South Wales. The industry in New South Wales was producing 14,264,000 tons of coal in 1953 and the percentage of mechanically won coal was 57.5 per cent, of the total production. By June 1964 the percentage of mechanically produced coal had increased to 98 per cent, of the total for New South Wales. The increase in mechanisation automatically meant an increase in coal production and, also, a very substantial reduction in the number of employees. With the concurrence of honorable members, I shall have incorporated in “ Hansard “ a table giving a clear picture of the effect of mechanisation on the coal industry.

The effect of mechanisation and increased coal production upon the number of mine workers in New South Wales was very great. In 1954 there were 20,210 mine workers in New South Wales. Coal production increased from 14,264,000 tons in 1953, 57.5 per cent, of it being mechanically loaded, to just over 20 million tons by June 1964 when mechanisation had increased to 98 per cent. The number of employees - and this is important - was reduced to 11,414. We see that with mechanisation increasing by 40.5 per cent, coal production increased by almost 6 million tons and the number of employees was reduced by 8,796, or 43.5 per cent, of the total work force in the industry.

Mr James:

– That justifies a 30 hour week.


– I certainly hope it does. With the concurrence of honorable members I shall have incorporated in “ Hansard “ tables showing the number of employees and details of output in the industry.

Finally, Mr. Deputy Speaker, I would like to say that the figures mentioned indicate the position existing in the two very important industries that I have mentioned. I think honorable members opposite, under those circumstances, might have regard to the wonderful performances of those men under those circumstances and curb their criticism in this chamber, day after day, of those who work in the coal mines and on the wharfs in the stevedoring industry. They are two very important industries. What does the future hold for these mechanised or partly mechanised industries? I emphasise that the Government must get down to some serious planning in an effort to combat the after effects of the full implementation of automation in our economy which is inevitable.

Mr. JEFF BATE (Macarthur) (5.19]. - Mr. Deputy Speaker, honorable members are indebted to the Prime Minister (Sir Robert Menzies) for the statement about the drought in New South Wales and Queensland which he made today and the statement made by the Minister for Territories (Mr. Barnes) in respect of the Northern Territory. I want to thank the Prime Minister. Unfortunately, he was away when the request from the State Government of New South Wales was made and he has not been able personally to see the situation in, perhaps, the same way as he did when he went to Casino and inspected the flood situation in that area. That inspection resulted in the flood mitigation grant of £2 for £1, as is known to honorable members. But the Prime Minister has now made a statement as a result of consideration by his officers of the drought situation.

I think that public reaction to the drought is now similar to that of the Press. The Press of course goes for news and when a situation is not new, no matter how drastic it is, it seems to die out in the Press. Some people think that this drought in New South Wales is over. In fact, in the Prime Minister’s statement he said that there had been rain in dairying areas. The Prime Minister went on to say that fortunately there is now some relief from drought in the dairying areas. I want to make it clear to honorable members that the position has only eased in respect of the stock water in some areas. There is a pretty terrible story to tell.

I propose to give the House details of the drought situation in New South Wales and in South Queensland. Perhaps one of the reasons why people think that the drought is nearly over or that certain districts are all right is that they know of the effects of pasture improvement, fertilisers, more adequate transport - not adequate enough, but a little more adequate - bringing the ability to move stock a little better on better roads, and better water arrangements. The effect of this drought has been lessened to some extent. But in New South Wales it has been consequent upon the lowest rainfall since records were kept in that State. This is probably so in Queens^ land, also. As a matter of fact in some districts the rainfall is half the previous lowest rainfall recorded. If honorable members look at the records kept by the Bureau of Meteorology and the work that it did on droughts they will see that some of the droughts in some areas have lasted for three years 11 months, particularly in the areas known to the honorable member for Gippsland (Mr. Nixon). We are now in the middle of this drought, yet some people say that it is not bad.

Mr Kelly:

– How does the honorable member know that this is the middle of the drought?


– How does the honorable member for Wakefield know it is not? Everybody is hoping that the drought is over. But the rains we have had are of no use whatever without follow up rains. Many men on the land have spent money developing improved pastures, taking the advice of agricultural advisers. In the past, those who have improved pastures and who have used fertilisers have grown more feed during the good seasons - and we have had 18 good seasons before this disastrous thine happened - and have had more feed on hand when a drought hit them. But now the grass has dried out, right to the roots and there is nothing left. These winter rains that have fallen have done nothing except for the oat crops or silage crops planted in soil that has been plowed up. In such cases there is some amount of growth. But pastures have practically finished and when summer growth starts there will be weeds. Therefore, there has been a terrific loss of pastures and there will be no summer growth if there are no follow up rains.

Mr Kelly:

– Did the honorable member refer to a period of 18 good years before this?


– The wet cycle in New South Wales lasted from 1947 to the end of 1964 except for some of the worse areas such as Dungog and Gosford. Had there been any soaking rain during this period it would have been all right, but the rain that has fallen has done no good whatever. All that remains is a desert. There are some small twigs, but generally there are dead grass roots and young trees - and in some instances big trees - dying. The situation is tragic.

I am informed that in the last two months in Dungog 250 farmers have been supplied with feed worth £150,000. This has been worked out at £6 a head of cattle for each two months. The co-operative butter factory, despite the fact that spring is coming and there will be an increase in production - although much lower than in the previous year - is faced with financial difficulty. During this period 2,800 tons of hay has come to the district, 1,100 tons of which was gift hay from “ Operation Goodwill”. Sir Chester Manifold of Camperdown has been one of the main promoters of this scheme. The balance of this free fodder was raised by the Congregational Church in the Victorian - South Australian border districts. I publicly thank those responsible. Sir Chester Manifold, on a very cold night led the other farmers in his district. The spirit in which the hay was donated was particularly good, because the Victorian farmers said: “ We remember when we were in difficulties after the war and the New South Wales farmers sent hay to us “. It is not often we have this type of reciprocity across the Murray River, and it is good to see.

In another district not far from Dungog some rain fell in June and July. Immediately this happened people said: “Well, the drought has broken”. However, this was not so, because the rain fell in the winter on country which was dry deep down. To get feed, there has to be soaking, penetrating rain. We fear that the improved pastures, which are so important, have been destroyed. In one district where seven inches of rain fell there is no feed, but there is stock water.

Mr Kelly:

– That seems to be a lot of rain.


– The honorable member probably sees seven inches as the total annual rainfall in his area, but in the New South Wales coastal districts the summer irrigation requirements are seven inches a month, and as they did not get seven inches a month during the autumn there has been a deficiency equal to 30 inches of rain. This is the problem. Rain did not fall to nourish the soil. The seven inches of rain which fell in the district I am referring to was good for nothing but stock water. In this district half the stock has gone. Pregnant cows have been slaughtered with their unborn calves. This represents losses for many years ahead, and tremendous costs in restocking.

At Bourke, in the western district of New South Wales, Tancred Bros. Pty. Ltd. meatworks has closed down and 200 men are out of work. Half the stock of the district has gone. Some stock has been moved by train and other means to South Australian and Victorian pastures. The Bourke district will not recover from the effects of the drought for at least three years. Restocking is a problem. The farmers cannot get castforage ewes from Queensland as they have done in previous droughts. Those growers who can afford it are selecting 2,500 ewes and hand feeding them so that they can form the nucleus of the future breeding stock in the district. However, it will take years to multiply from these sheep.

Last year the wheat crop of New South Wales totalled 60 million bushels worth 13s. a bushel. This year no wheat was planted in the north west and this will represent a loss of £35 million in export trade. Freight losses on road and rail will amount to between £5 million and £10 million. Losses in fat lambs - 15 million to 20 million - will total about £5 million. The loss on milk production will total about £6 million and on butter production about £1 million. Government advances for fodder will cost £2 million. The loss on wool exports from 60 million sheep, if each sheep lost 1 lb. of wool, is estimated at £15 million, if each sheep lost 2 lb. of wool, £30 million, and if each sheep lost 3 lb. of wool, £45 million. Of course, some sheep will never carry wool again, because they are dead. About £1 million has been spent in rebating freight charges for fodder for starving stock and for moving starving stock. It is estimated that in New South Wales the Commonwealth has lost £100 million worth of exports.

In Queensland the main cost to the State has been in freight rebates. Gift fodder valued at £80,000 has been subscribed in Queensland. It will probably cost £100,000 to transport the fodder to the areas requiring it, because the transport of fodder would cost more than the value of the fodder. Some rain has fallen in Queensland and wheat crops are growing, but the pastures have not benefited from the rain. There has been little relief, and then only in the form of stock water. The Agricultural Bank of Queensland has strained its resources by lending up to £500 to each farmer. In New South Wales £2 million has been lent at li per cent, interest. In Queensland the Agricultural Bank is not charging interest for the first year of the loan. The Queensland Government has asked the Commonwealth Government to come to its aid.

The Prime Minister in his statement said that if a State had had pressure on its finances - unusual pressure because of the drought - the Commonwealth Government would be prepared to consider assisting the State by means of a general purpose assistance grant, but this will be allocated at the end of the financial year. In other words, a year will pass before assistance is given. I put it to the House that this will be too late for many men if the drought continues. At present there are many districts in New South Wales where it will be impossible for farmers to recover. Many share farmers have left the land to seek other employment. The State cannot afford any more assistance and the dairy factories are unable to keep the farmers going, so there is a breakdown of finance in New South Wales. I should like to refer to what was said about, assisting the States by means of general purpose grants. This has been an automatic procedure which has always been followed. Every year when a State has found itself without enough funds, or its Budget has had a serious knock because of flood or bushfire conditions, the Commonwealth has come to its assistance by means of special general assistance grants.

At page 5 of the statement made by the Prime Minister there is a reference to the trading banks dealing sympathetically with demands for finance. I have been informed that in some districts of New South Wales the position with the trading banks has eased in the last two or three weeks. Until about the middle of June there were not many demands for drought assistance from trading banks, but this had not got through to the Reserve Bank or the Federal Treasurer (Mr. Harold Holt). By about July the full financial effects of the drought began to be felt and at that stage the trading banks experienced quite a run for funds to enable the farmers to keep going. In southern New South Wales farmers sold their herds in February of this year. The prices in Victoria were high and they sold their herds in that State. These farmers were not able to get an income after they had sold their herds. By this time they had come to the banks for assistance. The farmers were now needing cash for re-stocking, if they could not get it from the stock and station agents, the pastoral bankers or the brokers who handled their produce.

So the statement by the Prime Minister seems to me to deal with a situation which was expressed in the “Australian Economy” which was written by the Treasury and published on 5th June this year. It stated that primary production had achieved its fifth successive record peak year. That is to say, the gigantic wheat crop in New South Wales last spring, the wool clip throughout Australia, the slaughterings of cattle due to the drought, and sugar and dairy production made a very big total for the financial year 1964- 65. But this only masked what was happening underneath in this peak year because by December 1964 the drought had started. In some districts it had already been in full blast for a year. In the north coast area around Gloucester and Dungog, from December 1963 the drought had been serious and any rain that has fallen since has not done any good. The Prime Minister, on behalf of the Government, has said that it was not appropriate to make loans to individual farmers. I think it would be true to say that the Commonwealth would have no machinery to do so. However, the States have the machinery for this purpose in institutions such as the Rural Bank in New South Wales and the Agricultural Bank in Queensland.

Let us consider what has happened as a result of some of the other tragedies that we have experienced. Prior to 1946 there were 12 dry years in New South Wales and then the Commonwealth Government took a great deal of action about droughts. I am not now dealing with floods. The serious floods started in Maitland on 17th June 1949 and 17th June 1950, and in 1951 the water was 20 feet deep in Maitland. That is a separate area. I am dealing with the period prior to the 17-year wet cycle which extended from 1947 to 1964. In that period the State and the Commonwealth Governments made special provision for drought. In 1940-41 the Commonwealth passed the States Grants (Drought Relief) Act, which was Act 72 of 1940, and New South Wales passed Act No. 4 of 1941. By its legislation the Commo’nwealth set aside £320,000 for the wheat growers in New South Wales for crops that had been sown for grain. Under the Loan (Drought Relief) Act, which was Act No. 71 of 1940, the Commonwealth applied £750,000 through the Rural Bank. This sum was exhausted in 1952 and the State applied a further £250,000. This money was repaid to the Commonwealth. In that instance the Commonwealth paid half the interest, which was at If per cent., and the State paid the costs of administration. From 1944 to 1947 £900,000 was made available. These funds were used as grants with no means test, except that they were not paid to anybody whose yield was more than six bushels to the acre, which was half the average wheat yield for that State.

In 1946-47 the State loaned £50,000 and then £100,000 to farmers at H per cent. In 1944-45 and up to 1947 the Commonwealth provided the following amounts: In 1944-45 it provided £948,000 for drought relief; in 1945-46 it provided £130,000; and in 1946-47 it provided £1,490,087. These sums were made available to cereal growers at the rate of 12s. an acre for wheat, 10s. an acre for barley and 7s. an acre for oats, and provision was made that the creditors could not take this money from the farmers - it had to go to them. The dairy industry got its funds from the rural industries agency in each case at 11 per cent. In 1944-45 the Commonwealth provided a price subsidy of £180,000 for the milk zone, which enabled a payment of 4±d. per gallon for the two months of December and January and lid. per gallon in February 1945. In the case of the first amount which was given - £180,000 - the Commo’nwealth found 60 per cent, and the State 40 per cent., and after the £180,000 had been provided the Commonwealth found the balance up to £231,000. In 1946-47 butter producers received £216,000. That expense was borne equally by the Commonwealth and the States. At that time the milk zone received £66,000. No grants were made for graziers, but rail freight on fodder for starving stock and on the carriage of starving stock was rebated or partly met by the Government. These are examples of what the Commonwealth has done in respect of drought.

After 1947 we entered the flood cycle and the Commonwealth then began to subsidise the States by matching their expenditure £1 for £1. For Maitland the Chifley Government provided £7,000 in 1945 and £17,000 in 1948, and in 1949 it provided £76,000 for Maitland and Kempsey. In 1950 the Menzies Government found £43,000 for Wagga and £185,000 for the whole State. In 1954 it granted £245,000, and in 1955-56, when a great deal of New South Wales was under flood, it provided £835,000 for immediate relief. This amount included a gift from the United Kingdom Government of £250,000 sterling, which was equivalent to about £313,000 Australian. About £130,000 was made available for flood relief on the Hawkesbury. A great number of payments have been made for or on behalf of the States. They are listed in the Budget papers and they total more than £4 million. This information shows that the Commonwealth adopts a principle of providing funds but, except in the case of bushfire and flood, it offers to find money after the event has happened.

I believe that the Commonwealth will have to find some money for relief from this drought. I put it to the House that it is. important that the Commonwealth payments be made now because a number of things will happen if that is done. Assuming that the Commonwealth will have to make payments - it has practically offered to do so - making the payments now would build upmorale tremendously. If the Commonwealth said: “ We will find £2 million, or some amount like that, to match the States’ expenditure “, that would draw attention to the drought. The Commonwealth would be saying, in effect: “ This is a serious drought. We believe that these farmers ought to be helped before it is too late.” If that is not done, many farmers will be broken and will be in a tragic situation.

Unfortunately, it is the young farmers, or the farmers who have just bought their properties, who are the hardest hit by drought. Often the ones who have spent money on pasture improvement, fertiliser, water supplies and so on bear the brunt of drought. Such farmers will not get over this drought for a number of years. The time has arrived when the Commonwealth should assist. I believe that people who are advising the Treasury have made a mistake about this matter. The statisticians are inclined to look at these disasters afterwards. They are saying that primary production has been at record levels; but that was a year ago. Today there is a serious drought in New South Wales and Queensland.

It is urgently necessary that the Commonwealth view the situation at first hand and consider not only what has happened in the last three months but also the prospects for the next three months. The statisticians look at what happened six months, a year or two years ago. They compare the figures for one year with those for the previous year. But the farmer has to look ahead. He has to make plans for what is ahead. He has to see that he has feed for his stock. He has to see that his dairy stock or cattle breeding stock are well nourished. Some people say to the farmer: “ You have had 17 wet years. Why have you not stored fodder? “ I tell the House - in this statement I am supported by Professor Geddes - that nobody could have stored enough fodder or enough water for this drought. This is the most serious drought that has occurred since we started keeping records. Nobody could have provided completely for this drought. Nobody could have had enough dams, enough hay sheds or enough fodder stored away. This drought has exhausted all the storages of fodder, grain and water.

I plead with the Commonwealth Government to deal with this matter as it has dealt with flood relief and bush fire relief. In those cases there have been revolving or continuous funds in the State Treasuries and the Commonwealth has matched State expenditure £1 for £1. The Commonwealth should do that in this instance, and it should do it quickly. Perhaps it could do what it did in respect of flood mitigation. In that case it provided £2 for each £2 from the State and £1 from the local authority. It could do that in association with the farmers or through the co-operative associations or the farmer organisations. Otherwise, the Commonwealth could match State expenditure £1 for £1. If the States had a stake in the result they would watch the expenditure. The States have the instruments for doing that.


.- I am sure that the House sympathises with the honorable member for Macarthur (Mr. Jeff Bate). He must be greatly disappointed with the failure of the Prime Minister (Sir Robert Menzies), when he enunciated the Government’s ‘attitude to the drought today, to see the urgency of the drought situation, which is affecting the wellbeing of so many farmers throughout various parts of Australia, and especially in northern New South Wales and southern Queensland. Despite some rainfall in those areas, a very serious situation exists.

I also was disappointed. Let me tell the honorable member for Macarthur that he does not stand alone in his disappointment. In fact, it is fair to say that this issue probably is a common denominator for members on both sides of the House. I know that many members of the Australian Country Party are greatly upset because adequate aid is not being provided for drought stricken farmers. This is one of the rare occasions during the 10 years that I have been in the Parliament on which I find myself in agreement with the honorable member for Macarthur. Today the Prime Minister said -

  1. . provided the drought does not extend into the coining season, the indications are that it should not have a seriously adverse effect on the overall economy in terms of loss of total rural production and export proceeds from primary products.

That does not indicate a feeling of great concern and consternation by any means. The Prime Minister went on to indicate that, in his view, the Commonwealth could not do very much about drought relief. He said that under the constitutional division of responsibilities it is essentially a matter for the State Governments concerned. That is pretty poor consolation for the drought stricken farmers. He went on to say that there will be no grants and no loans from the Commonwealth. He said -

After careful consideration, we have decided that it would not be appropriate for the Commonwealth to participate directly in the financing of such measures; nor do we think it would be a proper function for the Commonwealth to participate in making loans to individuals or providing other forms of direct financial assistance to those who may be having difficulty, for reasons such as drought, in financing their business activities.

The honorable member for Macarthur is well and truly justified in complaining, because the Prime Minister simply went on to say that if the States of New South Wales and Queensland find themselves in financial difficulties the Commonwealth will be prepared to consider assisting them by means of general purpose assistance grants. Apart from that, the miserable handout from the rich man’s table was a proposition for tax relief. Of course, everybody knows that, when assistance is given to drought or flood stricken farmers on the basis of tax relief, the wealthy farmers receive more assistance than those who are in the greatest need. So, a very unsatisfactory position prevails.

Let me tell the honorable member for Macarthur and other members of the Government parties that the farmer has been treated shockingly. When we look through this Budget, which provides for an expenditure of £2,667 million, we can hardly see one item that is related directly to the farming community.

Mr Duthie:

– The farmers will have to pay more petrol tax.


– Yes, and they will pay more tax in other ways, too. Make no mistake about that. The loans and grants to the country community are extremely limited. An amount of £1.6 million is to be spent at Weipa. It might be considered that that expenditure is for country purposes; but. in fact, it is for the benefit of an overseas investment concern which is exploiting Australia’s bauxite deposits.

Mr Anthony:

– Does not the honorable member believe in northern development? He is against northern development, is he?


– I admit that the amount is not a very large one. However, we would like to see a great public enterprise established to take over the Weipa deposits of bauxite - the raw material for aluminium - which are sufficient to supply the whole world for 300 years. This Government - and, apparently, the Minister for the Interior, who has been interjecting - seems to be content to hand those deposits over to overseas investors. Any person with an ounce of Australian blood pulsating through his blood stream must be appalled at the Government’s lack of national fervour in regard to these matters. The Government is providing a loan of only £1 ,635,000 for the Weipa project. For the great beef cattle roads scheme in Queensland and Western Australia the Government is providing only £2,750,000. These expenditures are out of a total Budget expenditure of £2,667 million. More honorable members from the Country Party benches should be rising in their places to express their concern and indignation at the offhanded and indifferent treatment meted out to our farming community. It has been said that Australia rides on the sheep’s back. This Government would do well to take heed of that well founded adage.

At best, this Budget may be described as a stay put or status quo Budget. It represents a slavish emulation of discredited policies which, through sixteen years of Liberal-Country Party coalition Governments, have caused injustice and inequality and have led to unfulfilled potential. Throughout this uninspired and unimaginative document, the Treasurer has demonstrated his incapacity and his Government’s incapacity to see new horizons or to come to grips with the changing times. As I have indicated, there are no Snowy schemes enunciated in the Budget. Cooma, today, has no tomorrow. The residents of the town know not what lies ahead. The great coherent forces of engineers and scientists who have developed the great Snowy Mountains concept are apparently now to be dissipated - scattered to the four winds - as a consequence of this Government’s failure to pay proper regard to our developmental requirements.

The future of the Ord River scheme also is obscure. No-one knows what will happen. The diversion dam has been laid down. People have started to pour their life savings into small properties. One wonders whether the Government will press on with that great scheme. The Director of the Northern Division of the Department of National Development has thrown up his hands in despair. He was appointed by this Government. He had a great vision of the development of the north. But he has finally realised that it is hopeless to put all his eggs in the Liberal-Country Party basket because this Government has no development plan for the north - not even for the Ord River area. National development is a nonentity in this Government’s vision for the future. The same kind of indifference is seen in relation to many other national problems, such as the need to increase our ownership of Australian industry and the need for a new and enlightened policy in respect of health. We know what a great burden the Australian community, particularly the underprivileged section, is bearing in respect of health services. We have an urgent need of policies on education, housing and communications, including television. We need to do something about social services, because this is a matter that has received rough treatment at the hands of the Treasurer.

Sitting suspended from 5.59 to 8 p.m.


– Among its many deficiencies this Budget fails to alleviate a wide variety of problems which are technically and constitutionally the responsibility of the States, and through them the responsibility of local government. The Commonwealth Government is the central taxing authority, and the point I want to make in the short time available to me is that the Commonwealth is not giving either the States or local government a fair go in regard to the disbursement of uniform taxation funds. In January 1946 the Commonwealth informed the States of its intention to continue uniform taxation, and a reimbursement formula was agreed upon. The formula had very little regard for contemporary concepts or for State obligations. It continues to disregard new standards in health, education, transport facilities and a wide variety of local government services such as meeting road requirements, sewerage and things of that kind.

The arbitrary division of power between the Commonwealth on the one hand and the States and local government on the other results in some important community services suffering from financial malnutrition. When one looks at the movement in tax figures over the years it is staggering to see the increase that has taken place. In 1955 taxation per head amounted to £103 3s. Today it is £168 6s. 3d. This is the amount of tax paid by every citizen in this country. It is made up of £104 3s. lid. in direct taxes and £64 2s. 4d. in indirect taxes. Although £168 6s. 3d. is collected from every citizen the States receive only £44 8s. per person. In other words, the States are receiving only 26 per cent., or about 5s. in the £1, of the taxes collected within their borders. This obviously gives them nowhere near the amount of money necessary for them to fulfil all the great services for which they are responsible. As a result, we see public squalor amid private affluence. Unsealed roads are the order of the day. They are dust bowls in summer time and quagmires in winter time. Whenever we go to see depressed country towns throughout New South Wales, Victoria, and, in fact, every State of the Commonwealth. This is because local government is denied adequate financial assistance through the States from the Commonwealth.

I was in Queanbeyan the other day. The local government debt in that town amounts to £1 million. That is typical of the position of many other local government authorities. The total loan indebtedness of local governments at June 1962 was £311.8 million, and the annual interest liability at that date was £15.3 million. Local government is paying very dearly for its money, and the figure which I mentioned has become greatly inflated during the period intervening since 1962.

In New South Wales there are 10 shire and municipal councils which have outstanding rate bills amounting to more than £2 million. The Local Government Association of New South Wales, and local government associations throughout Australia continually ask the Commonwealth to look at this problem. They have asked for a 5 per cent, allocation of Commonwealth income from taxation revenue for local government purposes, but so far their requests have been ignored and the heavy burden of the cost of local services is falling on the rate payers. Obviously this burden of taxes is a very unfair one, since it has very little regard for the capacity to pay. The Commonwealth could assist in many ways but it fails to do so. For example, it imposes pay-roll tax to the extent of nearly £3 million a year on local government. It is estimated that the Commonwealth pays only about one-sixth of the rate bill to which it could be justifiably expected to contribute. Section 114 of the Constitution of Australia says in effect that local governments and State authorities have no power to levy rates on Commonwealth properties, yet there was in previous times an inclination by the Commonwealth to pay its way. Now, by way of ex gratia payments, the

Commonwealth is contributing only one-t sixth of the payment for which it should be liable.

Requests for Commonwealth intervention have failed, and the New South Wales Government has set in train a royal commission to try to come to grips with the problem. This royal commission is charged with the job of analysing the sources from which local government can obtain the necessary funds, what kind of valuation system should apply and matters of that kind.

Let me indicate the extent to which local government income has increased. In 1939 in New South Wales the rate yield was £5.7 million. It increased to £54.2 million by 1964. Rate revenue has risen by 653 per cent, from 1947 to 1964. That is for New South Wales. For Australia as a whole, in the period 1948-49 to 1964-65 local government taxes rose by 460 per cent. Compare that with the increase in Commonwealth taxes, during that period, of 240 per cent. Those figures show the extent to which local government is required to bear this financial burden, and every citizen is suffering as a consequence.

Local government has tremendous power; it lacks only the wherewithal to get on with the job. Once, of course, the old rate system was designed simply to provide access roads, but today the position is very different. It is not just a case of providing access roads. Local governments have to meet the contemporary needs for parks, libraries, baby health centres, town planning, various kinds of health services - including immunisation and sullage services - and parking facilities. Imagine what kind of burden this latter item is with the great increase in the number of motor cars. Local governments also have to provide rest rooms, bus shelter sheds, playing fields and all kinds of recreational facilities. In some areas life-saving arrangements have to be made. In my own electorate 13 life-saving clubs receive substantial assistance from local government. Then there are lesser things such as tree planting and beautification generally. This all creates a very real problem. These things are certainly important to close on one-quarter of a million people in my electorate, who live on the fringe of Sydney. These are the things which concern and interest them most, but ley are the things which this Government cares least about. It is my view that it is time the Commonwealth pulled up its socks and had a look at the obvious need to contribute towards the provision of some of these services, many of which are more important than matters on which Commonwealth revenue is being expended.

In the Sutherland Shire - part of my electorate - we have, for example, one million sanitary services a year. What is more important to people than a sewerage system? The lack of sewerage is a hazard to health. In this rapidly growing district 1,500 applications a year are made for septic tanks which cost £200 each. That means that £300,000 a year is spent on septic tanks which some day will have to be bulldozed into the ground - destroyed - when eventually sewerage comes along. In addition, each year 38 million gallons of sullage are shifted by the Sutherland Shire alone, which is on the southern fringe of the metropolitan area of Sydney. This is a rapidly expanding area where close to 4,000 buildings to the value of £10 million are being constructed. Yet only 35 per cent, of 135,000 people in this southern portion of the metropolitan area of Sydney have the benefit of sewerage services. These figures are contemporary because I obtained them from the local authorities today. I also took the trouble today to contact the Sydney Metropolitan Water, Sewerage and Drainage Board, a very worthwhile authority that is doing a magnificent job. Here again activity is restricted by inadequacy of funds. A Board representative told me over the phone today that it supplies water to 742,618 homes but that only 513,681 homes have sewerage. That is to say, in the Board’s area there are 228,937 homes with a water service that are not connected to sewerage. If we take as our basis four people to every home, this means that there are 915,748 people in the Sydney metropolitan area who are denied this amenity. My colleagues from Melbourne, especially those who have been associated with the Melbourne and Metropolitan Board of Works, tell me that the position is not so very different there. Nor is it different, proportionately, in many other capital and large provincial cities throughout Australia. It is not sensible for this Government to go on ignoring and denying this problem which, as I have said, is of more importance to people than many other things.

The rate of installation of sewerage in the Sydney metropolitan area is 27,305 a year and if there is no increase in demand it will take 10 years to catch up with the present back lag. But there surely will be an increase in the demand for this service. Why, the population of my electorate alone will double in the next ten years. Therefore, I make this plea to the Government now to contribute more Commonwealth money for State and local government services. It is not good enough to continue merely giving back 5s. out of every £1 collected in the State when work on transport services, roads, and things of this kind are languishing for want of funds.

Mr. Maunder, the Chairman of the National Association of State Road Authorities has said recently that it will cost Australia an estimated £3,600 million to meet minimum road requirements over the next ten years. But what is being done about this in the Budget? The two Ministers now sitting opposite me, the Minister for the Navy (Mr. Chaney) and the Minister for Housing (Mr. Bury), might be good enough to tell me whether any of the proposed increase in the price of petrol is to be directed to local government finance. Once upon a time the whole basis of distribution of petrol tax moneys was to direct it to local governments through the State Governments so that roads could be properly serviced. This principle has been steadily eroded away with the result that today, although we are imposing an extra 3d. a gallon on the price of petrol, we are disregarding the needs of the States. I believe that this matter has to be looked at with the utmost expedition.

I wish now to refer to the basic wage decision since this Budget affects a. large number of decent citizens, many of whom have contacted me individually while others have contacted me collectively on a trade union basis. Last week we saw King’s Hall crowded with thousands of representatives of the trade union movement.

Mr Bury:

– How many thousands?


– I think the official delegation numbered 3,000. How many did the Minister for Housing see there? We would double that number quite readily if it would serve to stimulate his interest in the problem. All these people are disgruntled because, despite very heavy increases in prices, the Commonwealth Conciliation and Arbitration Commission has completely disregarded their claim for a basic wage increase and adopted instead what is known as a total wage concept.

Let me indicate to the Minister for Housing the great difficulty which is encountered by people who are living on the basic wage or something close to it. A gentleman from Queanbeyan got in touch with me and said: “ It is time that members of Parliament started to speak about fundamental matters. Why do you not tell how people live on the basic wage? “ He gave me an account of his experience. He is a good citizen and has two children. The basic wage stands at £15 8s. today, and this is how that income is being dispersed in his family: He pays rent of £4 a week. I know that the percentage weight for rent in the C series index is 10.7, but where can you get a house for 30s. a week? He pays £4 a week and considers himself very lucky to get a house for that.

He spends £5 a week on groceries. His fruit and vegetable bill amounts to £1 10s. a week. Bread costs him 14s. a week or 2s. a day and it would be very hard to get below that figure. Milk costs him 14s. a week or 2s. a day also. Meat costs £1 10s. a week or 4s. 3d. a day. His total food bill for the week is £9 8s. This works out at 3s. a meal. I do not doubt that even the Minister for the Navy would concede that 3s. a meal is not an excessive sum. After buying his food and paving £4 a week for his rent this man has £2 a week left. He spends £1 on light and fuel, making his total expenditure £14 8s. He then has £1 left. Out of that, he spends 10s. on fares and is left with only 10s. What can he do with the princely sum of 10s.?

The C series index contains a miscellaneous group for which a weight of 25 per cent, is allowed. This is supposed to cover private motoring costs, such as registration and insurance, tobacco, cigarettes, beer, the cost of the hairdresser, shoe repairs, dry cleaning, postal and telephone services, radio and television licences, newspapers, cinema admissions and so on. It makes no mention of things like classical entertainment. Nor does it mention taxation, medical and hospital benefit contributions, doctors’ bills, or the cost of education. A campaign for State aid for other than State schools has been initiated. But such a heavy burden is placed on the parents of children going to public schools that a campaign should also be launched for State aid for public schools. Yet no allowance for education is made in the basic wage. Such things as books which are needed for school instruction and entertainment, as well as the cost of insurance, are completely disregarded. Are these items of expenditure excessive in the view of honorable members on the Government side? Do they realise that their Government actually intervened at the hearing of the basic wage claim by the Commonwealth Conciliation and Arbitration Commission a short time ago?

This affects a large number of people. The basic wage of £15 8s. a week works out at £800 16s. a year. If honorable members care to take the trouble to look at the table contained on page 5 of the Commonwealth income tax statement issued by the Treasury, they will see that 1,637,305 people receive incomes of £799 and under a year. In addition, there are 91,006 spouses, 110,537 first children and 74,891 other children of these taxpayers. In all, there are no fewer than 1,913,739 people who, according to the Commonwealth income tax statement are living on incomes of less than the basic wage. These people receive no margin at all on the basic wage. They receive the basic wage or less and, as a consequence, receive no benefit in these times of rising prices. The Budget puts new imposts on petrol, beer, spirits, cigarettes and so on. Then, of course, price increases for most commodities must inevitably flow from the effect that the increased price of petrol will have on transportation costs. There is an old and fundamental aphorism that characterises this Budget; it is to this effect: “To him that hath shall be given and he that hath not shall be denied “. In a Budget bristling with benevolence for big business, the little man - the family man - is not only hard hit but in every respect he is denied any consideration at all.


.- This is a Budget that has given tremendous con fidence to Australia. It is a record Budget in that respect. When we think in terms of expenditure exceeding £2,000 million it is to the credit of this Government that in the framework of the Budget it is able to provide for a vast range of benefits of a kind that will ensure progress and development, maintain full employment and give to this country added defence protection. The provisions of the Budget will also help to boost sales of our products overseas so that we may earn greater export income, which is vitally necessary for the maintenance of our economy. In this connection, of course, primary industry plays a vital role. The gloomy comments that have been uttered by honorable members with even gloomier faces on the other side of the House undoubtedly do this country no good at all.

Let us consider the rural sector of our community and what has been done by that sector. The total value of rural production in 1963-64 was 74 per cent, higher than it was in the three immediate pre-war years, and more than 40 per cent, higher than it was 10 years ago. This is a record that can scarcely be excelled in any other field. When we remember that our primary producers have, not seen comparable rises in their net income we must appreciate that we have at least one section of the community which deserves a good deal of consideration. I am pleased to see that this Budget provides for benefits for primary industries not only by way of tax concessions and the provision of additional finance for roads and bridges and for the various facilities that make primary industry possible but also by way of provisions for the encouragement of water conservation and irrigation projects and for flood mitigation, which is vitally necessary on the Northern Rivers of New South Wales. Honorable members will be aware that the subject of flood mitigation has taken up many hours of debate in this chamber on various occasions over a period of 20 years or more. My predecessor in the electorate of Cowper, the late Sir Earle Page, devoted more time to this subject than probably anyone else has devoted to one subject in this Parliament since its creation. This Budget provides for a continuation of the work that will bring real progress.

When we turn to subjects such as education and housing we are aware of the remarkable record of this Government and we see the beneficial provisions that are being made for the year ahead. Provision is made for a useful programme to be carried out over a period of years. This is so in respect of flood mitigation and also of irrigation; there is provision for a programme extending over a period of six years. The Government is making a practical approach to the problems it faces. The measures it is taking mean that at the end of a stipulated time one will be able to see the job finished and say: “ Here is something that we have accomplished “. How often have we seen projects started in this country which have simply gone on and on, with costs rising all the time. A notable example is the Sydney Opera House which was commenced by the Labour Government of New South Wales, and which we are now told will cost £30 million. Is it not remarkable that a building which was originally estimated to cost £3.4 million is now to cost £30 million? Is this an example of good planning? Is this the kind of a job of work that our friends on the other side of this chamber would do if they occupied the treasury bench?

Mr Devine:

– We must have culture.


– We have seen a lot of culture in this chamber in the debates during the last few days! This Budget covers a vast range of Commonwealth responsibilities both direct and indirect. It provides for the financing of operations of the States as well as those of the Commonwealth, and the Government has had the onerous task of determining how it would raise the necessary finance. We therefore see in this Budget provision for a slight rise in income tax. Undoubtedly the rise has surprised many people including, I am sure, the members of the Opposition. It was widely believed that the rise would be greater. Of course we are very happy to see that the percentage of increase on existing rates of taxation is not greater than is provided for in the Budget. Looking back over taxation rates in this and other countries during the last 15 years - and the rates for other countries are easily ascertainable - the rates in Australia have been much more attractive for the taxpayer than the rates in the United States of America, the United Kingdom or any other of the developed countries of Europe.

This has been due undoubtedly to the good management of this coalition Government.

Reference has been made to indirect taxation, and of course we know that there has been a rise in a variety of fields. But it is quite surprising to find that certain people, even after increasing their prices to cover the rises in excise rates, have decided to do even better and make even further increases. It is gratifying to know that at least some groups of hotelkeepers have not followed the advice of the Australian Hotels Association to increase their prices beyond what was necessary to cover the increase in excise rates. We have read in the newspapers that service station proprietors increased petrol prices before they were legally correct in doing so. These are remarkable things, but I am sure that the public has a very clear understanding of what has occurred. Any criticism that has been uttered certainly cannot be levelled at this Government, because a very clear statement was made and advice given about the increase in prices that might be expected as a result of the Budget provisions.

I have already referred to primary industry and I want to devote some part of my contribution to this debate to the current drought. This morning, the Prime Minister (Sir Robert Menzies) made a lengthy statement on this subject. He made what I thought was a fair comment on the current position. We have heard many estimates of the losses due to the drought, and I do not think these estimates have been unduly exaggerated in any way. The drought is a very serious problem for primary producers who have been directly or indirectly affected, particularly in northern New South Wales, southern Queensland and central Victoria. I was amazed to hear a midday news bulletin broadcast by the Australian Broadcasting Commission following the statement made in this House by the Prime Minister, the leading item of which was in these words -

The Commonwealth will not volunteer any special relief grants to drought areas in New South Wales and Queensland beyond those already available. The Prime Minister, Sir Robert Menzies, made this clear in the House of Representatives today. He said, however, that two States, Queensland and New South Wales, were free to seek further revenue grants to cover excessive spending due to the drought.

That is a completely false and misleading statement. It is unfair that a drought or any other serious situation should be used to work up purely spurious news items. The truth of the matter is made very clear in the Prime Minister’s statement. He said -

If, as a result of action related to the drought, the States of New South Wales and Queensland find it necessary to meet abnormally large calls on their budgets that are established to be beyond their financial capacities, we will be prepared to consider assisting them by means of general purpose assistance grants. I am advising the two Premiers in these terms.

That is a clear and precise undertaking. The Prime Minister, on behalf of the Government, has undertaken to meet drought relief requirements in the States mentioned. We all are aware of the statement concerning the Northern Territory made by the Minister for Territories (Mr. Barnes).

Mr Pollard:

– That was all wind.


– The honorable member, who spoke after the Prime Minister and the Minister had made their statements, was quick to adopt his usual jackass approach to the problems of primary industries. He shot off his mouth in no uncertain manner concerning what had been said by the Prime Minister. In fact, he did what the Australian Broadcasting Commission did subsequently in its news bulletin. He completely confused the facts of the matter. 1 want to say now that the statement of intentions we have been given in this House by the Government today represents a much more useful proposition than anything we would have been given if the honorable member for Lalor (Mr. Pollard) had had his way. He advocated a £1 for £1 arrangement. The Prime Minister, on the other hand, has offered to underwrite the financing of drought relief measures. I venture to say that, compared to assistance given to tobacco growers not so long ago and to assistance given on other occasions in other fields, what is now offered for drought relief goes far beyond the scope of a £1 for £1 proposition. This is a practical and sensible approach. Do we want to tie relief measures to a £1 for £1 approach and so restrict the States as to make them feel that they cannot get on and do the job of work required in the interests of the drought victims and the primary industries, which need a vast range of aid measures?

The New South Wales Government has already undertaken a sizeable programme to assist in meeting the drought situation. Notable in this field has been the subsidy on the transport of fodder. At this point I wish to take a moment to express the appreciation of the farmers of the Northern Rivers district of New South Wales, stretching from Newcastle to my own area, which takes in Grafton and Casino, for the £92,000 worth of gift hay that they received from Victorian farmers, including the honorable member for Corangamite (Mr. Mackinnon), the honorable member for Gippsland (Mr. Nixon) and many others who displayed a purely Australian approach to the problem. When a drought has reached the proportions of that which we have been experiencing in New South Wales, it is of no use then to talk of growing fodder or attempting to find it anywhere within the drought area. Aid must come from outside the drought region, and what better source of help is there than fanners who are not in the affected area and who are prepared to reach into their own pockets. In this instance, farmers in Victoria contributed £92,000 worth of hay, as I have said. The New South Wales Government acted quickly and assisted in the transport of that hay. I understand that the total cost of moving it to the drought area was something like £100,000. The farmers there received this hay at no cost to themselves. The action taken was highly commendable. This is the kind of thing that could not be done under a £1 for £1 scheme such as that proposed by the honorable member for Lalor.

When we think of the immediate requirements of drought relief, we realise that they embrace a whole range of responsibilities. First, there is a responsibility to those who have suffered real personal hardship. I have travelled extensively through the drought area in New South Wales. I have been on properties where stock losses have been huge and where men and women have worked day in and day out, and well into the night, trying to look after their herds. I have talked to property owners who have exerted every last bit of their personal ingenuity in their efforts to keep their herds alive, only to find, when a cyclone followed the drought, that human endeavour could not protect the remaining livestock. Losses of 70 and 80 head from herds of 90 and 100 were common.

Relief measures in circumstances like these require careful thought and positive action. An attempt is being made in New South Wales to think out carefully the relief measures that may be taken and then to give effect to them by positive action. This is the sort of action that is backed up by the statement made today by the Prime Minister. In effect, he said: “ Do your job of work and then tell us what you need. We shall do the rest.” This was the undertaking that he gave in very clear terms. To the Governments of New South Wales and Queensland I say: “ Here is your chance to take the Prime Minister’s statement at its face value.” I urge them not to be sidetracked by comments of the kind that we have heard from the honorable member for Lalor.

Time does not permit me to traverse all aspects of this drought problem. In the last two weeks, we have heard at question time references to bank finance for primary producers who are badly affected by the drought. I was pleased this morning to hear the Treasurer (Mr. Harold Holt), in answer to a question that I had directed to him, say that the Commonwealth Development Bank of Australia could really give assistance in this field. He also undertook to look into the problems of farmers who have not enough equity in their properties or enough financial capacity to enable them to make repayments under the existing terms of ordinary bank accommodation arrangements. He referred, quite properly, to the statement that was later made by the Prime Minister. In that statement, there was reference to the kind of action that ought to be taken in this field. In New South Wales, a sum in excess of £2 million has already been spent on fodder. This has been advanced to farmers, through co-operative societies, at an interest rate of li per cent., with repayments to extend over a year. Repayments will be deferred where this is found necessary or appropriate. In addition, the total contribution by the State Government to help pay for the cartage of fodder represents a sizeable sum.

As I have said, this morning I asked the Treasurer a question about assistance for farmers who cannot obtain financial accommodation within the ordinary field of bank lending and who require special loans. This matter was very plainly dealt with in the statement on drought relief measures in the Northern Territory made by the Minister for Territories. He intimated that the Commonwealth, within its jurisdiction in that Territory, would make available loans up to a limit of £3,000 at concessional rates of interest, with repayments extending over a seven year term. This undertaking quite clearly gives to the New South Wales and Queensland Governments licence to do likewise within the framework of their own administration. In addition, we have the statement by the Prime Minister, which virtually authorises and underwrites this kind of action.

So I think it is fair to say that a good start has been made on measures to deal with the drought problem. But, as has been said, if the drought continues the demand for financial and other assistance will grow. The ultimate magnitude of the help that will be needed cannot be assessed while the drought continues. All we can say is that we must provide whatever is required to meet the need as it arises day by day and week by week. It is too late to act when stock are dead. It is too late to act after farmers have reached the point of no return, economically and financially, in the conduct of their properties. Far from being humbugged around by the kind of comment we have had in this chamber, the Government, and especially the members of the party to which I belong, will be alive and active and will ensure that a practical and proper approach is made and continued. Primary industry today is too important to this nation and to our overall economy for it to be neglected and, if it is possible for us to aid it in even the smallest way, we shall do so. When it comes to assessing requirements, the individual is important.

I referred earlier to the incomes of primary producers. Despite the vast increase in overall production and the resulting contribution to our economic status because of the export earnings of primary industry, we should think of the problems of some of the small, individual farmers. We often hear references to the wealthy graziers; we often hear reflections upon primary industry that are unworthy of those who make extravagant comments. I believe that every man who has an interest in primary industry is a dedicated person. Dedication, ingenuity and great effort are required of those who remain active on the land. I was interested recently to have a discussion with a constituent who had been experiencing a season that was not so good. In the course of our discussion he said: “ I will be glad to tell you exactly my position.” Me had a reasonable dairy farm, but because of seasonal conditions his total income was £750, before anything was paid out. All he received in total income was £750. He showed me his indebtedness in the ordinary fields - the small accounts with the storekeeper, the baker, the butcher, the doctor and so on. These accounts were just in excess of £750. In addition he is expected each month to find about £35 to pay off the indebtedness on his property. This is the situation of these people and it results from the force of the growth of this country on our economy, the increase in costs and wages and other factors that affect primary industry incomes. These are well known to the honorable member for Lalor, who is attempting to interject.

We have received certain advantages in respect of meat, for instance, but in terms of butter, wheat and a whole range of primary products the gross return, and of course the net return, has not increased. Yet this afternoon we heard many references to wage increases in the last few years. Wage earners have enjoyed far greater increases than have primary producers. We should think in the immediate future in terms of what more we can do for our farming communities. What can we do to help them to do the job that they are glad to do in contributing to the national economy? Although they make this contribution, they have a serious income problem, which must carry tremendous weight when we look at it in the cold, hard light of an analysis sheet. I want to refer briefly to what the Budget does in other fields of development in and around the country.

Mr Duthie:

– The honorable member has Just said what it does not do.


– My friend interjected that I have just said what it does not do for primary producers, but, of course, the facts clearly are these: I have referred to the items on the credit side, but I certainly am not here merely to talk about the good points. I am not here, representing my constituents, just to speak about the favorable side. I am here to advocate action that ought to be taken in the future and to raise matters to which we ought to apply ourselves. This is one of the subjects and undoubtedly it will receive consideration by the Government. The record of the Government in many fields is evidence of its ability and capacity to turn its mind in this direction and to do something worth while.

On the matter of water conservation, which I mentioned earlier, the Budget provides for a 10-year programme of survey. It provides for an arrangement with the States for the assessing of water resources, for the gauging of our rivers and our rainfall to determine what we can do and what is the best plan in the river valleys and overall for Australia. I was pleased recently to read the announcement of the Minister for Public Works in New South Wales that his Government will undertake valley development by co-ordinating work on flood mitigation, water conservation and related matters. This will bring about development that will add to the economic structure of primary industry and will foster an increase in rural population and rural productivity. These are the practical results that planning can achieve. Of course, with a Budget of the kind that we are dealing with now we can see a very sound approach to water conservation and to other problems that is useful and worth while.

One could spend much more time than is available in this debate in referring to other fields of development. The Labour Government in New South Wales allowed a project on the Northern Rivers known as the Iluka port to drag on for 20-odd years and, like the Opera House, the cost has kept on increasing. Today, the port is still not an accomplished fact, but it does offer some hope of construction being concluded within a reasonable time. Undoubtedly, the present approach will see a reasonable result in planning. But of course to make this port worth while, a link between the coast and the tablelands in northern New South

Wales is needed. I hope that sufficient interest will be taken by all those concerned to build a railway to link the northern tablelands to the coast.

Mention has been made of the drought. The production of wheat is a most vital primary industry in a drought. It is vital to the economy of the Commonwealth. It is not inconceivable that a big improvement could be effected in our ability to transport wheat to the seaboard and across the country for stock feeding purposes. In northern New South Wales we have a big chance to do something worth while and tonight I want to press strongly for special attention to be given to the completion of the Iluka port. I hope that it will be made a wormwhile port on the Australian scene and I hope that it will be comparable with Portland, the newest port in Victoria. The port at Iluka could do good work for the rural area and, if it were linked by rail to the northern tablelands, we could see a real improvement in our commerce and industry.


.- I support the amendment. As I listened to the honorable member for Cowper (Mr. Robinson) I thought that he started like an Eskimo Prince but finished like a broken down draught horse. No honorable member in this Parliament has seen a more happy, more congenial, more enthusiastic speech up to the point at which he dealt with the drought and the statement made today by the Prime Minister (Sir Robert Menzies). We had the spectacle of the Prime Minister promising nothing in the way of drought relief but the honorable member for Cowper said that he was completely satisfied with the Prime Minister’s statement. The honorable member for Cowper is one of those who in this Parliament have demanded action from State and Federal Governments on this issue. Yet at this stage he has told the people of Australia that he is completely satisfied with proposals announced by the Prime Minister that give very little, if any, relief to the people concerned. He finished his great statement with a cowardly attack on pressmen who had truthfully reported the Prime Minister’s comments. Is it any wonder that the Prime Minister gives the Country Party nothing? Here is a man who has received nothing and is satisfied with it. Why give him anything at all? The Prime Minister quite rightly treats the Australian Country Party as it ought to be treated - with complete contempt. He does that because it does not represent the country people and its members are not prepared to fight for what country people want. If it were not for the former member for Cowper, Mr. McGuren, that electorate would not have got flood relief although it was represented for years by the Country Party. If there is one thing that the electors of the Northern Rivers need to do more than another in State or Federal politics it is to get Labour members to represent them - not members who behave like the Country Party member who has just resumed his seat. I do not have any more time to spend on the honorable member for Cowper and the attitude of his party to flood relief but it is nearly time that the people of Cowper had a new member because this one will not fight for the things they want and for the things wanted by other country districts.

The introduction of this Budget by the Treasurer (Mr. Harold Holt) once again gives us the opportunity to survey the country which we live in and which is governed, according to a journalist’s rather colourful language, as a benevolent dictatorship. In relation to this Budget we survey a country where the Government allows the economy to develop unplanned and unchecked; where prices skyrocket; where wage earners, their families, pensioners and other less fortunate people in the community struggle to keep body and soul together in this age of affluence. We survey a nation where huge monopolies make unlimited profits at the expense of the Australian people. We survey a defence effort which commits this nation to wars without treaties, conscripts Australian boys to serve abroad, relieves unnaturalised migrants of the need to protect the nation of their adoption and at the same time leaves this country defenceless. In other words, we survey a nation which cries out for a change of government in order that the un-Australian policies of this Government affecting our own people, nationally and internationally, shall be halted.

In the time at my disposal, I want to survey just briefly the contents of this colourless, depressing and ineffective document which provides for a record expenditure of £2,667,030,000. The taxation increase which the wealthy member who has just resumed his seat said did not matter totals £72,470,000 for the remainder of this financial year and £84,790,000 for a full year. An increase of £81,430,000 is proposed in defence spending which will be 27 per cent, greater than the actual expenditure for 1964-65. The cost of social service benefits will increase by £7,720,000. The proposed increase in repatriation benefits is a very small amount. Net loan raisings have been estimated to total £75 million. The Treasurer, in his remarkable way, has estimated a surplus of £19,415,000. Your guess is as good as mine. It could be up or it could be down. It could be up to £119 million. Honorable members know the predictions of this Treasurer and his inability to estimate more precisely what he will have over.

We find, too, that the remarkable thing about this Budget is that the reasons given for the increases in taxation are defence requirements and decimal currency. What strange reasons for increasing taxation. The increases have been justified, amongst other things, by saying that they will make decimal currency fit more easily into the taxation pattern. So long as the Government can get the coin in the slot, as it were, it is prepared to increase taxation. The Treasurer went on to say that defence is not the largest item in the Budget. If that is so, where do we stand under this Government’s policy on defence? I ask the Government whether this country is at war today. Is this nation at war? Are we really in danger? If such is the case why is defence expenditure increased only by £81 million? If we are at war, and the Government says that China is a threat to us, why, as the honorable member for Fremantle (Mr. Beazley) asked the other night, does the Government sell wool, wheat and strategic materials to China which plans to attack us? Until the position is clarified, it mav be that we are at war with Indonesia. The Prime Minister implied that we were at war with that country. Why was it, then, that until comparatively recently the Government trained officers from Indonesia in the military academies of this country at the expense of the people it is proposing to tax under this Budget?

The Australian Labour Party says that defence is essential but it is necessary that we should know clearly and without doubt where we stand in our relations with the various countries of the world at this stage. The Government is withholding social service benefits from the people under the pretext of being at war. Yet, as the honorable member for Chisholm (Sir Wilfrid Kent Hughes) said today, the Army recently would not let man accept a foreign decoration as this nation was not at war.

As the Leader of the Opposition (Mr. Calwell) said- a few nights ago, this is a dishonest Budget. Under the pretext of saying that it must have additional money for defence, the Government is placing a great imposition and burden on the lower wage earner, the pensioner and others. The Government is denying social service benefits to the people of this country. At the same time it is refusing to state precisely what commitments it has entered into regarding defence and whether or not this country is more involved militarily than it cares to admit. Under the pretext of defence, the Government has imposed harsh and unjust taxation on the people least able to afford it. In addition to fighting the wars, those same people are being called upon to pay for them. In addition to being called upon to defend the country those least able to afford it, including pensioners with the least goods to defend, are called upon to pay for defence under the impositions of indirect taxation in this Budget. Indirect taxation which is opposed to every principle of justice is imposed in a vicious way. The beer, the cigarettes and the petrol used by everyone from pensioners to capitalists are taxed at the same rate under this Government’s policy. Whilst the Prime Minister travels the world de luxe and feasts in the banquet halls of London, New York and Washington, Australian boys, conscripted by a scandalous ballot system, are literally dragged from their homes to serve in Asia and the paddy fields of Vietnam in time of peace. In fact, no one knows where they will eventually fight and very few of them know what the war is all about.

Prominent national figures at the Prime Ministers’ Conference in London, in the House of Commons and in the United States of America have said that, far from providing a solution to the war in Vietnam, Australia’s military participation may extend it and for all time slur the good name of Australia in Asia. This is what we are called upon to finance with the pensioners’ taxation. Reluctant though I am to say it, Mr. Acting Speaker, the fact remains that the decision to send Australian troops to Vietnam - a decision to conscript Australian boys for wars abroad in peace time - and the meanderings of the Prime Minister and the Treasurer may well confirm the suspicions of many Australians that the Prime Minister and his Government are very concerned with finance and investment in this country. The Government has not yet convinced many thinking Australians that it is not providing troops for trade at this very time in our history.

This is the Budget we are called upon to support - a Budget in which finance is being raised from pensioners. Australian parents with boys conscripted to fight abroad in peace time, and perhaps give their lives in the war in Vietnam, may well be reminded that while their sons are conscripted to fight and die for what the Prime Minister says they are fighting for, there are 240,000 unnaturalised persons enjoying all the freedom and security that Australia gives them, who are exempt from any form of military service. Yet the Government does nothing about it, to its eternal shame. One could hardly blame parents and fair minded Australians if they demonstrated outside every conscript military camp in Australia where boys are being trained to give their lives at the command of a Government which, in 16 years, has made no attempt to defend Australia, except at election time and, so it appears, only in the face of financial threats from abroad. That is the policy of defence which we are financing today at the cost of the pensioner’s cigarette and his beer. Yet, despite the wage earners’ inability to pay, the Government asks them for money to implement that policy.

Increased direct taxation under the Budget proposals will be imposed on wage earners and this year the increase under that heading will amount to £18,900,000. A miserable 6d. in the £1 is to be taken from people on low incomes in order to meet, so we are told, the cost of war abroad in time of peace in which conscripted Australian servicemen are engaged. There is to be no increase in company taxation under this Budget. Nothing extra is to come out of the last profit of £19,625,313 of the Broken Hill Pty. Co. Ltd. Nothing extra has been taken from the profit of £18,772,465 made by General MotorsHolden’s Pty. Ltd. last year. Nothing extra is to come from the £2,090,512 profit announced for Imperial Chemical Industries of Australia and New Zealand Ltd. for a period of six months. Nothing extra is to come from the Colonial Sugar Refining Co. Ltd. which made a profit of £6,522,861 this year. Nor is anything to come from the numerous powerful monopoly organisations which are making millions of pounds in profit. They can go their way unchallenged. Yet the Government takes a miserable 6d. in the £1 from the wage earner and half a cigarette or a beer from the pensioner. There is to be no increase in taxation on the companies; but a few miserable pence will be taken from motorists and from the young men who are conscripted to give their lives, if necessary, in wars of which they know little and in which, as in Vietnam, Australia should never have become militarily involved. Wealthy interests escape their responsibilities whilst others give their lives in our defence. The very least that should be done by this Government is to spread the taxation burden over our society as a whole.

Why not conscript the wealth of the great companies which I have mentioned? Why not increase company taxation and let those with the millions pay the extra, as they can well afford, to do, when men die to defend Australia and people live in poverty and yet must make a financial contribution to our security? The Government’s taxation policy is brazenly and unashamedly robbery under arms. It is indefensible patronage of the wealthy interests behind the Government. Why, the newspaper barons of this country have been knighted. The Government has granted television licences to the people who support it. The radio, television and newspaper monopolies are controlled by the Government’s friends who, in return for favours and patronage that have been given to them, offer very little criticism of the Government. All this is done in the name of the defence of Australia at a time when the Government knows that it is blundering along nationally and internationally, knowing not where its policies will take it. I say to the Minister for Housing (Mr. Bury), who is at the table, that an apathetic public will soon awaken to what has occurred and realise how little the Government has to show for its huge expenditure on defence. Belatedly the Government tries to pull the wool over the eyes of the Australian people by dramatic measures when political events important to the Government are pending. What a tragic record this Government has in defence. One does not have to go back as far as 1939. Had it been left to this Government, Australia would have been under Japanese domination today.

Although honorable members opposite criticise the Labour Party on defence, our party has been proved to be the only party in this country which the people will trust in office in time of war to win through to victory. This Government has dithered for years. Our forces have been depleted. Hardly an able-bodied soldier is available for home defence. There are no recruits. The Government is dependent on conscription today. Inadequate rates of pay for members of the Services have deterred people from enlisting or taking up service life as a career. Australia is declared by the Prime Minister to be at war, while he feasts, as I have said, in the capitals of the world. Finally, to make up for the Government’s incompetence, the poorest people in the nation must meet the cost from meagre incomes in pounds, shillings and pence, whilst the wealthy, the influential individuals and the companies I have mentioned, escape their responsibilities while reaping rich monetary rewards. Is it not time the Government was tossed out of office lock, stock and barrel and a party, which is truly Australian, elected to take its place?

The Government points to purchases of radios, motor cars and television sets as signs of prosperity. It forgets to tell honorable members that the hire purchase debt in Australia at March 1965 totalled £715,900,000. Honorable members opposite forget that people cannot afford to pay cash for these items, which are necessaries and not luxuries in this day and age. Under this Government the great body of the people are unable to earn wages adequate to enable them to pay for these articles as promptly as they would like to do. Honorable members opposite have referred to direct and indirect taxation and what has occurred in

Great Britain and other places. They have cited the taxes on beer, cigarettes and petrol in Great Britain and other places to show that it is cheaper to live in Australia. They refuse, however, to accept a comparison with Great Britain in respect of its national health service because, they say, that service is socialised. Honorable members opposite know that such a comparison completely destroys their claim that we have a national health scheme in Australia. Nothing is too blatant for the Government. In economics and defence we have heard Government supporters quote the Labour Socialist leaders of Great Britain as authorities to support their theories. Yet recently, when the Labour Party was in opposition in Great Britain, they regarded its members as socialist tigers and relied on Lord Home and his colleagues to give them advice on how to lead this country in what they thought was the best way. These are timely reminders to the Government.

Honorable members opposite talk about the taxation in Australia. Let me say briefly that for every £1 that people had in 1949, latest statistics show that under this Government it is worth only 9s. 6d. This is the Government that went into office to put value back into the Australian pound. I seriously think that it is changing over to a dollar currency in order to escape the results of its failure to honour that promise. Let us consider direct and indirect taxation. Government supporters talk about low taxation. In 1949 when Labour was in office each person in this country paid on the average £62 13s. 2d. in direct and indirect taxation; today that average is £186 ls. 4d., an increase of 300 per cent. In every respect this Government’s policy has resulted in increased taxation. The position today under this Government is that every increase in taxation has been made at the expense of the worker and those in industry, particularly the low wage earner.

A survey conducted last year by the Department of Labour and National Service showed that 68 per cent, of factories were working overtime and that 36 per cent, of the workers were receiving overtime or over-award payments. It showed also that 40 per cent, of the labour force in Australia consisted of married women. There was a very good reason for that. Both husband and wife had to go to work in order to meet their commitments under this Government’s policy and because of its failure to prevent inflationary prices. We find also that men have to work overtime in order to make ends meet. These are the burdens that the Government seeks to impose again on the people for a further twelve months under the guise of a defence effort. I have not the time to go into all the details of indirect taxation. I simply remind honorable members of what the Leader of the Opposition (Mr. Calwell) said on Tuesday night and elaborated with figures. He stated that despite the H per cent, increase in margins the ordinary tradesman over a year will be £6 7s. 6d. poorer as a direct result of the Government’s wage and economic policies. That, in itself, proves how the Government is niching from the people of Australia the benefits to which they should be entitled in these days of progress. The fact is, as honorable members opposite well know, that it was announced the other day that the average weekly income of many families was £42. That seems a lot, but nearly everyone in the family, in addition to the husband and wife, would have to work to help to earn that amount in order to provide the essential commodities and to meet the costs of living under a government which is supposed to maintain price stability.

In the few minutes remaining at my disposal, let me look briefly at the question of social services. This generous Government will spend £7,720,000 on increases in social services.

Mr Reynolds:

– In a full year.


– Yes, that is right. It is significant that all the increases are lumped together. The Government did not itemise the increases for the simple reason that many of them would look miserable when considered separately. In order to show the value that the Government places on sections of our society, I point out that the expenditure this year on the subsidy to equalise petrol prices will be £4i million. So, pensions for the aged, sick and infirm, widows’ pensions and maternity allowances are worth only a couple of million pounds more than this Government will spend on the petrol subsidy in order to please its supporters.

The Government will not even provide money to enable people to be buried decently. For 20 years the rate of funeral benefit has been pegged at £10. Today you could not bury a dog for £10. Yet at this stage the Government still is not prepared to make the benefit more than £20. The benefit will be £20 only in special circumstances and will still be £10 in other circumstances.

Mr Reynolds:

– Pick a box.


– Yes, pick a box, as the honorable member says. I will not go through all the social service benefits. We will do that in the debate on the Estimates and when the relevant legislation is being debated. The social services provisions in this Budget contain no increase for about 750,000 pensioners. The base rate of pension is pegged. It is true that under this Government’s proposals the rate of pension is actually reduced by the increase in the cost of living and no increase is being granted in order to counteract that reduction. What kind of legislation does this Government believe in? Honorable members opposite, including the affluent farmers who belong to the Country Party, say: “Forget the pensioners”. The Country Party has always been a no social services party and a low wage party. It rode into office on that basis. Now it sends young, handsome men of affluence into this Parliament to deny benefits to underprivileged people. These men are here only to get petrol subsidies and drought relief for farmers and to try to benefit the huge wealthy interests behind them.

Another disgraceful aspect of this Budget is that none of the benefits that it grants - small as they are - will commence until the relevant legislation is passed by the Parliament. We remember that when the superphosphate bounty was introduced the Government back-dated the legislation to ensure that the cockies - the wealthy people whom members of the Country Party represent - received the benefit of it from the day on which it was announced. But poor old Joe Blow, who is dependent on an increase of a couple of shillings in his pension as it comes along, must wait until the relevant legislation is passed by the Parliament before he receives the increase. The simple reason for that is that the Government is ashamed of its policy on pensions and other social services. It knows that we cannot criticise legislation because we will hold up the payment of the increases. If the Government were sincere, the very least it would do would be to pay the benefits from the day on which the increases were announced.

It is no use saying that this cannot be done. If we go to the Department of Social Services in Sydney in this age of automation we can press buttons and see things turned out like sausages. Yet the Government tells us that it cannot back-date social services increases and that they have to be paid from the date on which the relevant legislation is passed by the Parliament. When the judges received salary increases they did not have to wait until legislation was passed. They received their large increases, and I think the increases were back-dated about six months. I am not complaining about that; but I say: Why cannot the Government do that for pensioners if it can do it for people who receive thousands of pounds a year? The fact of the matter is that the Government is ashamed of its policy on these matters. It knows that it ought to back-date social services increases. Honorable members opposite ask why we did not do this when we were in office. For the last 10 years we have been telling the Government to remove the means test on the pensioner medical service. This year, the Government, in its slow and quiet way, has removed that means test at the demand of the Labour Party. The people should know that this Government imposed that means test. Now the Government has changed its mind and removed it. The Government has taken the advice of the Labour Party and has changed its policy. In some cases it has filched policies from us.

Why does not the Government wake up to itself and adopt the suggestion that we have made in amendments that we have moved in this Parliament, by back-dating the social services increases to 1st July? There is nothing wrong with that suggestion. That should be done. The Government says that 120,000 pensioners will benefit from its proposals in regard to the pensioner medical service. The people should keep well in their minds the fact that for 10 years this Government has taken it out on the aged, the sick and the infirm by imposing the most vicious means test ever imposed on medical services.

What kind of an Australia do we live in under this Government? We live in a country in which taxation is levied on the poor and not on the rich, and in which rising prices prevent our people having security and happiness. We live in a country in which people must work overtime in order to meet commitments and in which, in thousands of families, both husband and wife must work in order to provide for the family and to have the ordinary comforts of living. We live in a. country in which social services and health services have long since ceased to provide for the aged and the needy. We live in a country which is defenceless, in which boys are conscripted to fight abroad and in which migrants can enjoy our prosperity and security and yet remain aliens, without responsibility militarily or electorally. Above all else, we live in a country which has long since ceased to give to its people the security, happiness and independence that sound and stable government should give. That also describes the kind of Budget that the Government has brought down.

Mr Nixon:

– Who wrote that?


– Is it any wonder that honorable members opposite squeal? I know that you have been very tolerant with your colleagues of the Country Party, Mr. Acting Speaker, because the facts that I have presented have hit hard on them in particular. Australians are entitled to a better country than the one that I have described and to a better Budget than this one.

This is what I think a budget should provide and what could be provided by a Labour administration: In this dynamic age of affluence, when the more fortunate sections of the community prosper personally and organisations profit under the benevolent care of this Government, it is not too much to expect that all citizens should have their claims justly considered. This Budget should provide for prosperity and economic security for our people. It should provide adequate wages for men and women - married and single - to enable them to live in comfort and security. It should provide adequate pensions and social service benefits to enable people to live by right, and not by charity as they do under this Government. It should provide a complete and comprehensive national medical scheme which is available to all in need. It should provide for the adequate defence of Australia.

It should provide for homes at low interest rates and reasonable prices. Homes in which families can live in comfort and happiness should be readily available. It should provide for an expanding economy in which all - the old, the young, the rich, the poor - can live with equality, security and opportunity. Above all else, the Budget should ensure that the burden of taxation is borne by those best able to bear it. Individuals and organisations which are prosperous and best able to meet the responsibilities should be called upon to meet the financial demands of the nation. The Government fails to do these things.

Mr Cockle:

– Fred for leader.


– The honorable member who just interjected would not be so cheeky if he did not represent a safe, wealthy Liberal seat. After 15 years in office, this Liberal-Country Party Government still muddles along, devoid of ideas, inspiration or advanced thinking. It does not provide for our defence, our security or our future. It deserves to be condemned. For that reason, I support without reservation the amendment that was moved so ably by the Leader of the Opposition.


.- It was very difficult to find any concrete reference to the Budget in the rather rambling discourse to which we have just been treated. It was something of a Little Sir Echo effort. We heard gleanings from here and gleanings from there. We heard arguments that have been proffered around the chamber during the weeks that have passed. We heard questions such as, “ Are we at war or are we not?” - reminiscent of the bishops - and, “Are we trading with China in strategic goods?” The honorable member for Fremantle (Mr. Beazley) raised the latter question in the foreign affairs debate. It can be and has been answered very adequately. Of course, trade with China is just another old chestnut to pull out of the fire. The situation, as has been explained, is that there is an index of goods which the nations of the free world together have agreed should not be exported to China. None of the things that are proscribed on that index is exported by Australia. That and many other things will not waste our time tonight’.

We learned that indirect taxation is most unjust. That was gleaned from the Leader of the Opposition. How unjust is it, in a time of national emergency, to put an impost on luxuries such as cigarettes and beer? The honorable member for Grayndler (Mr. Daly) did not explain that. But when we got away from these gleanings from other people to pure Grayndler we heard about the Prime Minister (Sir Robert Menzies) travelling the world de luxe. If the honorable member for Grayndler were to pause for one moment to think he must surely agree that the Prime Minister has contributed a great deal to the world by the dignified way in which he has represented this country at great personal expense and great personal effort. All I can say is that the honorable member by his discourse tonight gave us very little reason to believe that he understands at all. The honorable member referred to the war in Vietnam - a war in which he thinks we should never have been involved. One had only to look at the smiles on the faces of his colleagues as he went his rambling, bumbling, puzzled way to understand why he could not make the A grade debating team of Waverley in 1930.

The honorable member berated the Government for spending only an extra £7 million this year in removing the means test from the pensioner medical service. This amount, said the honorable member, was only a couple of millions pounds more than will be spent on the petrol equalisation subsidy. This is rather different from what the Treasurer (Mr. Harold Holt) said about expenditure from the National Welfare Fund being the second largest hem in the Budget. He said -

We estimate that, on present scales of benefits, it would amount to £465,652,000, an increase of £20,469,000 over expenditure in 1964-65.

But of course, the honorable member for Grayndler then reversed his argument and towards the peroration of his speech referred to this age of affluence.

To get back to the purpose of the debate tonight, which is an examination of the Budget, I am sure that this Budget has brought a sense of relief to a great many people m the country. It has been well received and it is well based. The first reaction of most people to the Budget was one of gratification that in the adverse circumstances of drought and the drain of defence spending we were still able to plan for a gradually expanding economy. The honorable member for Grayndler said nothing about the degree of expansion of growth. He made no reference to the lauding that is given to this country’s economy by overseas experts. AH we heard was a gloomy tale and a final complaint that affluence was not sufficiently well distributed.

I want to devote some time this evening to a discussion of future Budgets because I believe we have had evidence in the last few years that certain sectors in the economy, particularly sectors subject to taxation, need closer scrutiny and a new emphasis. As has been referred to by honorable members on this side of the House, we have seen the crazy spiralling of prices that has followed the moderate rises brought about by the Budget. In too many instances we have seen the emergence of greed to threaten us once again with its spectre of a boom economy, not only wiping out the relief obtained from concessions in the Budget but replacing it with anxiety.

In my opinion three sectors of the community are at present to a marked degree worse off than they have been in time past. The first and obvious sector comprises recipients of superannuation pensions and those people who because of the means test are beyond the scope of social services. The second group comprises wage earners with young children - ‘not, as may be thought, wage earners on the basic wage or close to it but, according to the statistics which I hope to present, wage earners who are earning in excess of £25 a week and up to about £35. The third group comprises social service pensioners.

Let me discuss these three categories at some length. The majority of honorable members will agree that defence spending in Australia is a must. I refer to the majority because there are exceptions. But there are those who share with me the feeling that we are still going too slowly - that there are vital areas in our defence spending and thinking that are still being neglected. I am by no means convinced that our current attitude is good enough to meet the challenge. I will develop these views at greater length later.

Let me speak first of the effect of our current budgeting on the classes of people I have mentioned. Take first the case of families. Obviously defence and prosperity demand large family growth in Australia. It is a truism that the best migrants are those who are born in this country. At the same time we all are aware of the fact that our birth rate is declining. Why is this so? It is easy to say that it is because of the pill, but why do married couples turn to these techniques? There are many reasons. Some may be selfish and others may be laudable but at least one reason is the growing disregard for the family man in the attitudes of successive Australian governments, Liberal and Labour.

Take the vital area of taxation. Compare the figures relating to taxes as they apply in various countries with outlooks similar to ours. Take the case of a man, his wife and three children. In the United States of America such a family would attract deductions for income tax purposes of 600 dollars for the man, 600 dollars for his wife and a like amount for each dependent child. That family of five would attract in the United States a total deduction of 3,000 dollars or about £1,350. In Canada the picture is much the same. That family would attract deductions of 1,000 dollars for the man, 1,000 dollars for his wife and 300 dollars for each child, making a total deduction of 2,900 dollars or about £1,300. In Germany the situation is much the same - perhaps the deductions are a little lower than others I have given. The family of which I have spoken would attract a deduction of 3,360 Deutsche Marks for the parents, 1,200 Deutsche Marks for the first child, 1.680 Deutsche Marks for the second child and 1,800 Deutsche Marks for the third child - a total of 8,040 Deutsche Marks for the family or about £900. In addition in Germany an allowance is made for domestic help obtained in case of sickness, age or where there are at least three children in the family. In the United Kingdom a married couple attracts an immediate deduction of £240 sterling plus a further £140 sterling or two-ninths of the earned income of the wife, which ever is the lesser, plus £85 for each child. So in the U.K. my family of five would have a deduction of £794 Australian.

But what happens in Australia? The deductions have remained roughly the same for a number of years. There is no deduction for the taxpayer himself. For his wife he is allowed a deduction of £143. For his first child he is allowed £91 and for each other child he is allowed £65, making a total deduction of £364. To sum up, Australia, which needs to stimulate this sector of its growth more than any of the countries I have mentioned, has a sorry record to exhibit in this field. Under present conditions this is all the more serious. It would not be at all inaccurate to say that a large section of the burden of defence and other expenditure today is sitting on the wrong shoulders. After the Budget had been brought down I spoke with a number of men who are in the upper income bracket - the executive bracket. It would be a fair and honest summary of their comments to say that they thought the Budget had let them off rather lightly. One said bluntly to me: “Fellows like me could have been socked an extra £100 or £200 under the circumstances, but it is the poor cove with a wife and children on £25 to £30 a week who is really bearing the burden”. This general and lay impression is, I believe, backed up by the figures and by the experts.

I have done something of a scrutiny of the taxes paid by various groups of people during the past eight to ten years. Let me take for example the period from 1958-59 to 1962-63. In those five years the number of people earning a gross income of between £1,500 and £2,000 a year increased from 5.73 per cent, of the population to 11.2 per cent, of the population. That is, this particular bracket of wage earners rises by 96 per cent., or nearly double. In the same period this group’s contribution to the total tax yield rose from 11.2 per cent, to 15.64 per cent., or by 40 per cent. Take the same period for a group that would be in the executive class, a group whose members earn, say, between £3,000 and £4,000 a year. In the same period this group rose in proportion from .88 per cent, of the population to 1.55 per cent., or a rise by 76 per cent. But during the same interval the group’s tax contribution rose only from 6.78 per cent, to 8.09 per cent, of the yield, or a rise by about 19 per cent. That compares with 40 per cent, for the other group.

These figures will appear in “ Hansard “ and if honorable members will direct their attention to them they will see that they disclose some discrepancies in the tax burdens borne by people in these two groups. Recently there has been published in Australia, as a result of a symposium, the views of some of our most renowned economists, in a booklet entitled “Taxation in Australia “ by Professors Downing, Arndt and others. I shall quote one or two of their comments to support what I have to say. At page 170 they say -

The general increase of money incomes during the 1950s has meant that most taxpayers, except those in the higher income brackets, are paying larger percentages of their incomes in tax now than they were in 1949-50.

Referring a little later to tax progression the economists say -

The substantial degree of progression of tax paid in relation to taxable income is significantly abated by erosion of the income tax base, and by avoidance and evasion of tax liability, all of which favour higher income groups relatively to lower income groups. In comparison with the tax rata structure in the United States and other Western countries . . . middle incomes appear to be taxed more heavily.

Those are the comments of some of our leading economists, and I believe that it is necessary for those of us who are on the Government benches, as well as honorable members opposite, to direct our attention to these apparent anomalies in what is overall, I am sure, a highly acceptable budgetary situation.

The subject that I spoke about first related to families and allowances for dependants. When we read what the economists have to say about this, we find that they make some startling propositions. For instance, they say -

We propose that the 1948 purchasing power of child endowment should be restored by approximately doubling the rate of benefit at additional cost to the revenue. In addition, existing deductions . . .

This point that they make is perhaps revolutionary - for dependent children should be abolished, the gain in revenue being used to raise rates of child endowment, and to extend it to student dependants under 21.

They say further -

We propose that existing deductions for other dependants . . . should be abolished, and instead there should be a system of tax rebates.

In other words, what these Australian economists are proposing for consideration is something along the lines of the tax structure of a country like Sweden, where there are no deductions for children or dependants as such. Swedish mothers are paid 400 kronor a year for each child up to 16 years of age as a national child subsidy. The payment is not taxable. On the other hand, as I say, there is no tax deduction or allowance for dependent children.

The reason for these propositions, as given by the economists, was that there was - ft greatly worsened position of parents in the lower income groups . . . due to-

  1. Change from rebates to concessional deductions in 1950 making deductions of variable real value.

That is to say, as a person’s taxable income increases the amount of benefit he gets from a particular deduction obviously increases. The second reason given by the economists was -

  1. inflation having- more than halved the purchasing power of child endowment.

I have worked out some figures based on the present rate of taxation. A deduction of £91 for a first child for a man on £1,000 a year provides him with an effective saving of £20 a year in tax. For a man on £3,000 a year the same £91 deduction gives a saving of £33 in tax, and for a man on £5,000 a year an amount of £50 is saved in tax. I do not concur with the revolutionary proposition of doing away with deductions for dependants and children. It is a purely academic attitude to adopt, and my own conviction is that the retention of deductions, at a considerably increased rate, is desirable for several reasons, not the least being that the psychological value of deductions at the time and the point of taxation is a valuable one and adds to the incentive towards family life which is built in to such a plan.

The overall thesis I wish to present, however, is not so much dependent on the machinery of ensuring greater tax concessions to families as on the fact that this nation has taken the first of what I fear will be a long series of pulls at our economic belt. Clearly, if we are to meet the challenge of both Chinese and Indonesian expansionism, even greater sacrifices will be required in the years ahead. I believe that the Government has a solemn duty to ensure that those most able to afford such sacrifices are the ones who are first asked to make them.

This is an extraordinarily favoured country. Despite the things which have been said in, I think, purely a caricaturing and extravagent fashion by honorable members opposite, we have a broad spectrum of comparatively well to do people. Anyone who reads the weekend newspapers can see how much space rs devoted to leisure pursuits - tourism, water sports and other expensive luxury activities in which a large section of the community engage. But it seems to me that there is an appreciable sector of the nation which has to face great financial stringency. I personally feel ashamed, as I am sure most honorable members do in similar circumstances, when I talk with pensioners and retired elderly people on fixed incomes and find just what they have to live on.

My proposal as regards family taxation is quite definite. I believe that we should allow the following deductions, or something near them, in order to bring our tax scales somewhat nearer to those of other countries similarly placed. I suggest a deduction of £250 for a spouse, for the first child a deduction of £150, and for the second and subsequent children a deduction of £100. This would mean that for a family of five the deductions would be £600 instead of the present £364. In the United States the deductions for such a family amount to £1,350, in Germany to £900 and in the United Kingdom to £700. If my suggestion were adopted it would still mean that Australia would be well behind other nations, but it would be a step in the right direction.

I suggest that to compensate for the loss of revenue the overall rate of taxation should be increased by a suitable percentage, and in addition that we adopt some of the suggestions of Downing, Arndt and company, namely, that family incomes should be aggregated for tax purposes other than the wages and salaries paid to individual members. The net result of this would be, first, to place more of the tax burden on single persons; secondly, to discourage plural working parents - mothers, in particular, taking outside jobs - thus adding very greatly, I believe, to the soundness and stability of the family unit. Who can measure the cost to the country of the neglect of children brought up by working mothers? Thirdly, it would increase the progression of taxation in the higher income groups, thus encouraging towards family life a sector which at present tends to seek more luxuries rather than more children. I have mentioned pensioners and that increasingly needy group of superannuated persons on fixed incomes who are precluded by the means test from enjoying social service benefits. I am - and I make no bones about it - by instinct and conviction an opponent of the means test. In my view, it is a penalty on thrift and responsibility, lt encourages reprehensible practices and forms of department dodging which again penalise the most scrupulous, and it acts to exclude people from valuable fringe benefits such as medical benefits, travel concessions, concessions on rates, and the like, often to people who badly need these things.

So I urge the Government to give renewed consideration to the plight of people in this group which often includes some of the finest and most deserving people in the community - retired school teachers whose superannuation units are now laughably out of date with the cost of living, civil servants and all manner of persons some of whom have given great service to the nation and who are saddled with the often unproductive results of their thrift We all know of people who have invested in property which is subject to rent control and thus becomes a liability rather than an asset because it precludes the owners from getting the full benefit of social services.

However, it would not be proper for me not to mention with great approval and appreciation, the decision of the Government to extend medical benefits to all pensioners. This at least gives some degree of real security to the persons whom I have been discussing in that they can look to such care and attention if the worst happens to their dwindling fortunes. In tackling the question of the means test, one must always bear in mind the fact that, with so many other calls on the public purse, there is always a limited amount of money for the provision of age and other pensions. The Government is therefore forced to ask whether it is justified in spreading available funds over a still wider number of persons, inevitably either reducing the quantity available to each individual or at least making increases of pensions less and less possible.

Perhaps the best solution lies, as the economists have suggested in the book to which I have referred, in some form of compulsory superannuation linked with other revenue producing -schemes, together with a scheme of compulsory saving for the young. These are ideas which require a great deal more consideration than is possible in the few minutes left to me tonight, but Downing and Arndt make an interesting proposal for a scheme of compulsory superannuation that will return to every contributor the kind of money that it is possible to earn or accept without penalising their receipt of the age pension. They suggest a contribution of 1+ per cent, of income received by persons between the ages of 21 and 65 years, up to a maximum of £26 a year. Contributors thereby would acquire the right to receive, at age 65, a lump sum plus an annuity of £3 10s. a week, which would not, under the means test, prevent receipt of a full pension.

Similarly, they have proposed what I think is a very valuable idea. It is that all people below the age of 25 earning more than £104 a year, who are not the main breadwinners, should contribute one-eighth of their income, by way of compulsory saving, and that the contributions should be repaid with interest at the age of 25 years, or earlier marriage. Let me now sum up on those sections about which I have been speaking. I believe that we are entering a period in which taxation is spreading like excessive coats of paint over the contours of a system which sought to give justice to all sectors. As successive layers are added, the definition of each becomes less and less, patches of uniformity begin to creep in, and these are militating at the moment against the special sectors to which I have drawn attention and which I believe need new scrutiny.

There are obviously certain areas in any budgeting situation to which the Government must give priority. I would place the family, especially the family of strictly limited means, high on the list. The second group that in my view should have priority consists of the aged, both pensioners and others who are forced to live on fixed incomes. Then, of course, there are the elements of defence, education and national development.

I believe that a budget is right in discriminating against luxuries as this one has done. I believe that there is, however, a call for a wholly new approach to family taxation.

I have often spoken on matters relating to defence, including the question of fuel and the restrictions which are placed at the present moment by subsidy arrangements on the exploration for oil. I have spoken recently in terms of our defence requirements and the need to meet the threat to the overall security of the country which, of course, in these days, must be paramount. There is not much use painting the cabin of a sinking ship. We have to be sure that we possess the country before we can plan adequately for its future. The first and primary task of the Government is to ensure the security and integrity of the people whom they represent.

So I present tonight my own congratulations to the Government on its handling of the whole economic situation of this country. I believe that we have been soundly and wisely led. We have been brought through many difficult periods. We have faced national disasters. We have faced a threat that most of us hoped would never have to be faced. This threat has loomed up in the north with great speed. We have found the whole nation once again faced with this most undesirable but essential task of racing ahead to build up its defence structure. But this Government has brought the country to the stage where we can do these things’, where we can look ahead with a great degree of confidence to development in various sectors of activity and therefore to the secure future that we desire. However, I have pointed tonight to some sectors where I believe more attention is needed; where I believe a new approach is needed, I have done so by no means seeking, as the Opposition would try to make out, to belittle the Budget as a whole, but to indicate that there is need for continual revision and thinking by all of us who pride ourselves on the country in which we live.


.- First, I must say how delighted I am to rise while you occupy the Chair, Mr. Brimblecombe, to support the amendment moved by the Leader of the Opposition (Mr. Calwell). I recall that I spent my boyhood days and received my primary education in the area which you now represent. I have very happy recollections of those days and I do appreciate the harshness of life which the pioneers experienced in the very important district of Maranoa.

The second thing I wish to say is that, as is usual, when preparing Budget speeches, I reserve 10 minutes of my time to reply to points made by the speaker who precedes me. But I find that on this occasion 1 cannot use that time. Having listened most attentively to the honorable member for Evans (Mr. Mackay), I can only say, in the words of one of my colleagues, “ Good ‘eavens “. In all fairness, the honorable member for Evans must support the amendment moved by the Leader of the Opposition because, although he may not have intended it, his speech certainly did justify the attitude being taken by honorable members on this side of the House. The honorable member for Evans is now leaving the chamber, possibly feeling flayed by my remarks and worried by his conscience. But he has certainly left me nothing to say in criticism of his contribution. I can only praise him for his honesty and say how delighted I am that, by his observations, he has supported the amendment moved by the Leader of the Opposition.

The Budget presented by the Treasurer (Mr. Harold Holt) follows the pattern of previous Budgets. It takes from the less privileged in the community by increasing prices and taxation on their incomes, thereby reducing the purchasing power of their salaries and wages. It exploits the exploited still more. It is a Budget which is typical of the Liberal Party - a party that exists to serve the interests of bankers, moneylenders, usurers, employers, airline monopolists and profiteers. It gives little. That submerged one-tenth of the people, the age and invalid pensioners, receive no base increase, notwithstanding the increase in the cost of living. The Government, through the Treasurer, is denying the retired, aged people social and economic justice, just as the Commonwealth Conciliation and Arbitration Commission is denying the millions of Australian workers wage justice by its refusal to increase the basic wage in accordance with increased, productivity and prices.

Child endowment is ignored. Its purchasing power has almost disappeared through inflation and the refusal of the Treasurer to review this payment to mothers. All through the circle of life from womb to tomb, from birth to death, injustice besets the people - the. little people, the workers, the aged and the infirm. In this fair land, injustice abounds, privilege, wealth and power are worshipped, and the Treasurer goes on his merry way ignoring the pleas of the masses of the people for a just share in the productivity and wealth of the nation and the cries of the aged and infirm for some easing of their lot in the twilight of their lives. There are some fringe benefit improvements in social services, but these are small and will not affect the bulk of the aged.

Defence, we are told, is the principal cause of the taxation increases which will be levied on the nation. If that is so, one would expect that the great industrial undertakings, the trading companies, the land owning organisations, would be asked to join with the wage and salary earners in meeting the increased expenditure. But the Government, being aware of the power of the hidden men who control its political destiny and being true to the exploiting principles of the Liberal Party, exempts those organisations from responsibility by pegging company taxation. This is when we are asked to meet the cost of defence preparations in order to defend what the people hold and enjoy and profit by. On the other hand, the Government increases taxation on wages and salary earners by 2 per cent, or 6d. in the £1 - no mean amount.

The year 1964-65 has been a boom year for Australian industrial undertakings. Profits have increased beyond all reason. I shall give some figures that have appeared in recent newspaper reports. The Broken Hill Pty. Co. Ltd. has made a record profit of £19 million for the year just concluded. General Motors-Holden’s Pty. Ltd. has made another record profit. It has been making enormous profits during the whole of the life of the Menzies Government. Its profits for the year just ended reached £18 million. Tableland Tin Dredging NL, a company exploiting the tin resources of the

Atherton Tableland in my State, has jumped its profits by 51 per cent, compared with the previous year, and its profits for the year reached £199,000. The Repco company, an organisation supplying motor parts - and I suppose we are all customers of that company - has increased its profits to a record total of £2,163,’000. Electrical Equipment of Aust. Ltd. jumped its profits by 34.7 per cent. Farley and Lewers Ltd. increased its profit by 45.5 per cent. Those people are quarry owners, supplying the materials for the construction of roads and buildings. J. Blackwood & Son. Ltd. improved its profits by a mere 29.7 per cent. That company supplies commodities for engineering firms. Harbour Lighterage Ltd., a company of tug and barge owners who get their profits to some extent from the increased charges made by shipping companies on our primary exporting industries, raised its profits by a mere 25.7 per cent.

These figures, have all been gleaned from Press reports on one day only. The tobacco manufacturing companies,, while denying to Australian tobacco growers a just price for their products and charging smokers excessive: prices for cigarettes, have experienced - to use the phrase used in the People’s Republic of China - the great leap forward. Their profits last year were the highest on record. Even Berlei Ltd.,- the foundation builders - that is, of ladies’ garments - are building profits as well as girdles. The profits of that organisation for 1964 were 33.5 per cent higher than for 1963, while its profits for 1965 were 74.7 per cent, higher than in 1964. Those people are not the nation builders of whom Henry Lawson wrote. Drug Houses of Aust. Ltd. improved by 11.6 per cent. Tasmanian Timber increased its profits by 50 per cent, while the cost of the average home in Australia rose by £300 in the same year. P.G.H. Industries Ltd., which supplies building materials for the construction of homes, increased its profits by 22 per cent. Stedman Henderson’s Sweets Ltd. managed to get only an extra 8 per cent, from sweet toothed Australian children. The mere men of Melbourne were more fortunate than their girdle-buying sisters; the profits of Leviathan Ltd. of Melbourne increased by 9 per cent, and the company maintained a steady dividend of 15 percent, from the sale of men’s clothing.

I could go on for a long time giving instances of profiteering by traders and industrialists. However, I have managed to give a minute indication of the bonanza which these companies are enjoying while the Treasurer (Mr. Harold Holt) says “ Let them go”. This is the profiteer’s age. Here is a Liberal Government in Canberra whose policy is, to quote the Bible -

For he that hath, to him shall be given: And he that hath not, from him shall be taken even that which he hath. ‘

Sir Wilfrid Kent Hughes:

– Amen.


– I now refer to the working people who have to meet heavy increases in direct taxation on salaries and wages. I remind the House that the Treasurer has said that prices increased last year by more than he would have liked to see. The Commonwealth Conciliation and Arbitration Commission, by a majority of three to two, has ignored this increase in prices, just how much the Treasurer would have liked prices to increase, I do not know. He has expressed his disapproval but he has done nothing to check the increase in prices or to deal with the profiteering that is taking place.

The appropriate industrial organisation in Australia, the Australian Council of Trade Unions, has reviewed the effect of the income tax increase of 2i per cent, on workers’ incomes. Mr. Monk, the President of the Council, commented scathingly on the Government’s proposals. His views were reported in the Press as follows -

Despite the li per cent, increase in margins granted recently, the average tradesman would now be £6 7s. 6d. a year poorer . . .

This is a result of the Liberal Treasurer’s Budget. Mr. Monk was speaking after attending a meeting in Melbourne of the Economic Committee of the A.C.T.U., which will report to the Council on the Budget and other financial matters on 30th August. Giving Mr. Monk’s views, the newspaper report continued - the tradesmen’s lower income would be the direct combined result of the Federal Government’s Budget and its influence in the Arbitration Commission’s refusal to adjust award wages for movements in prices. an examination of what had now happened to the rise of 6s. awarded by the Commission showed why the Federal Government stood condemned by any fair-minded citizen.

He further said that the 6s. a week increase awarded by the Commission to tradesmen represented an increase of £15 12s. a year. Soon after the decision was given, the consumer price index figures for the June quarter were published. They showed an increase of 4s. a week. So, immediately, £10 8s. of the £15 12. was taken from the tradesman’s pocket. Before the latest increase in income tax imposed in this Budget, the rise of 6s. a week in pay attracted from a tradesman with a wife and two children an additional £2 10s. a year in tax. With the 21 per cent, increase in tax rates imposed in this Budget, such man will now have to pay an additional £1 1.4s. a year in tax. So I return to my earlier observation, which was received by an honorable member on the Government side of the chamber with the exclamation, “Amen”, which, translated, means: “So be it “. I repeat -

And he that hath not, from him shall be taken even that which he hath.

This situation should cause Government supporters who have a conscience or any sense of justice, if there are any who have, to blush with shame.

Indirect taxation is contemptible. I say that it implies an admission that the imposer - the Treasurer - is a moral and political coward and that the imposee is, so the imposer hopes, incapable of assessing values and consequences. The Treasurer, with a fiendish smile, has announced his indirect taxation proposals. I repeat them without the enthusiasm and vigour that he exhibited, and with a sense of shame and an air of apology, because this Parliament, of which I am a member - thanks to the electors of the intellectually and industrially advanced Division of Griffith in Queensland - should be reminded of them. Excise - the name for an indirect and concealed tax - on beer is to be increased by ls. 6±d. a gallon, raising the total excise to lis. 4d. a gallon, compared with 7s. 4d. in the United Kingdom and 3s. 4d. in the United States of America.

The Treasurer always watches trends and is, so he says, completely informed on all monetary matters. He is paid a large and generous salary to keep himself informed on these matters. In an attempt to soften the blow of his punch below the belt, he stated as he presented the Budget that the increase per 10 oz. glass of Fourex amber clear beer would be Id. Owing to the absence of any form of Commonwealth prices control arid the absolute contempt in which the right honorable gentleman is held by the profiteers of Australia, the price that the consumer will pay has been increased by twice as much as he said it would be. Here is a breakdown of the costs of the constituents of an 8 oz. glass of beer in Brisbane, Australia’s most placid and - thanks to good local government - loveliest city. Of the price of ls. Hd. per 8 oz. glass, which has now been raised by 2d., thanks to the Treasurer, the trade takes 7.7d. and this Government takes 6.8d. The principal constituent of beer is water. The Brisbane City Council, which supplies this pure, health giving and cleansing commodity, charges for it ls. 6d. per 1,000 gallons. The Lord Mayor of Brisbane ought to look with envious eyes on the Commonwealth Treasurer.

Last financial year, excise on beer produced £130,238,000. The sum collected will be increased to £146,798,000 this financial year. At this stage 1 shall not make any breakdown of spirits. As I have said, excise amounts to a concealed tax. Because of the increase, an additional £5,390,000 will be collected in excise on spirits this financial year, making a total of £15 million. The Treasurer, despite his charm and his modern look, has not risen above the circumstances of the Roman Empire, in which the tax gatherer was the publican, and a hated citizen. The only change today is that the publican is a respected member of the community, although he is still of the tribe of Matthew.

Tobacco and cigarettes have not escaped the right honorable gentleman’s taxation net. The additional excise on tobacco and cigarettes that this non-smoking gentleman has imposed will bring in an additional £10.700,000, making the total £105 million.

Mr Hughes:

– What is wrong with that?


– I shall tell the honorable member in a moment or two, because of my sense of justice and fair play. I abhor indirect taxation. I believe that each citizen should accept his share of national expenditure, whether it be on social services, national development or defence. The excise on beer, tobacco and spirits for this financial year will total £267 million. Our defence expenditure will amount to £385,921,000. So 70 per cent, of defence expenditure will be borne by those who drink beer and spirits and those who smoke cigarettes. This is unfair. I speak feelingly as one who is personally affected. I want to bear my share of the defence effort of this country. Playing my part in defence is no new experience for me. But the Treasurer’s fiscal policy prevents me from playing my part now. I am a very moderate drinker. I drink much less than the average consumption of beer and spirits quoted by previous speakers in this debate. I am a non-smoker - not by choice, but by compulsion. Tobacco makes me sick. I am, therefore, getting my defence on the cheap. 1 oppose this form of concealed taxation and will continue to do so in the future. I urge the Government to finance defence by direct, graduated taxation. This is the accepted and sound principle of taxation - from each according to his ability to pay. One honorable member in a sneering interjection suggested that I should make a contribution to the Treasury. I am happy to do so, provided it is by way of a taxation levy made on income earned and received. I dislike this system of snide taxation, of sneaking like a thief in the night to place the hand of the Treasurer into the pocket of the man who buys a packet of cigarettes each day or who, having played his part in the development of this nation by hard work, has a drink on his way home. If he does, half the price he pays will go to the Commonwealth Government in taxation. 1 think the honest course to follow is to make a direct charge on income. If this were done, we would find that the companies I have mentioned, such as Drug Houses of Australia, Broken Hill Pty. Co. Ltd. and General Motors-Holden’s Pty. Ltd., which have not been called upon to pay any increased taxes but whose stake in this country is being safeguarded by increased defence expenditure, would be asked to pay increased taxation. Instead, the working man and the middle class salary earner are being asked to pay an extra 6d. in the £1, which, as I said, is no mean charge on his income.

I think the attitude adopted by the Treasurer is mean and contemptible. He is hiding behind the easy way of obtaining revenue. I have been in this House long enough to hear the Treasurer, the same right honorable gentleman, on previous occasions impose these charges, and 1 have heard these staggering sums brushed aside in a sneering way. The Government is contemptuous of the man who has a drink or a cigarette. What a godsend these people are to the Treasurer and to the Commonwealth of Australia. The “ Sydney Morning Herald “ said recently in an editorial that beer, spirits, cigarettes and tobacco are not essential. What would happen to the Government if each of us decided to do without them? Let us think of what would happen if each one of us said: “ No more. We will follow the excellent example of an industrialist and take direct action. We will not have any more drinks or any more cigarettes.” This Government would be embarrassed. It would then have to adopt a reasonable and honest line of taxation and impose a fair and equitable form of taxation on incomes. It would have to insist that those who make the profits pay a fair and reasonable sum towards the cost of the defence of this country, and this they are not doing now. As I said, the less privileged in the community are being asked to bear more than their fair share of the burden of our defence. 1 am glad that I have had an opportunity to support the amendment moved by the Leader of the Opposition. It has been moved by a man who has made a fair assessment of the Treasurer’s speech and of the Bill that is now before us. The Leader of the Opposition has made a very good case for Australia, for the little people of this country and for justice and fair dealing.


.- 1 commend the Budget and give it my firm support. I am sure that the great majority of the people of Australia are agreeably surprised to see how much has been achieved at the cost of only a tiny increase in taxation. All responsible citizens hope to see a strong Opposition, an Opposition that can give us fair and firm criticism. But these people must weep to hear the contributions that have been made by most of the Opposition members who have taken part in this debate. Unfortunately, most of their criticism has been in the form of vituperation and name calling. The honorable member for Griffith (Mr. Coutts), who has just concluded his speech, made numerous references to the increased taxation on the small wage earner and the increase in in direct taxation. Many honorable members on this side of the House have already dealt with this matter successfully. The name of the honorable member for Robertson (Mr. Bridges-Maxwell) springs to mind. He gave a detailed analysis of this problem and showed quite conclusively the small increase that the small wage earner will be called upon to pay in taxation. In contrast, he showed the crippling burden of direct and indirect taxation under which the people groaned when the Labour Socialist Party last ruled this country.

I oppose the amendment moved by the Leader of the Opposition (Mr. Calwell). I maintain that this is a defence Budget and I hope to deal with this aspect particularly. But first a few of the remarks of the Leader Opposition call for some comment. Of course, we are accustomed to his annual jeremiad, full of the gravest forebodings of the disasters which he says will follow each Budget. These disasters just never seem to happen. Once again this year we have been subjected to the same mournful dirge. The chorus of this threnody is unnecessary and unworthy of the Leader of the Opposition and of this House. This has simply been a catalogue of nasty names, and speeches by other Opposition members have followed the same pattern. The Leader of the Opposition called this a dishonest Budget, an unjust Budget, a bookkeeper’s Budget - apparently that is meant to be a term of opprobrium - and a futile, planless Budget, if I may take a few of the expressions he used. I allow this sort of material to speak for itself, but I would like to advert to a brief lesson in Calwellian grammar.

Our mentor says that the Treasurer (Mr. Harold Holt) is ungrammatical when he claims that our economy is running at full pitch. Our opponent asks -

How can an economy nin at full pitch? Anybody who has read even the first Nessfield grammar will know that that is bad English.

We know, of course, that it is asking too much of a Socialist economy for it to run at full pitch. But the honorable gentleman is confused by the word “ pitch “, which has many meanings. I thought at first that he had in mind the 22 yards of lovingly prepared turf or perhaps the action of unworthy bowlers upon it. But then I saw my mistake. I thought of the pitch and toss, for example, of the British ship of State upon the economic waters that have been made dangerously rough by the icy gales of Socialist ideology. In a vain effort to still these waters, the wind has blown first from one direction and then from another; but the waters have become ever more turbulent and hazardous and the ship continues to pitch. But our Treasurer was referring to the pitch of a propellor. The Australian vessel of State may well be likened to an aeroplane, its propellors running at full pitch and borne aloft on the wings of brilliant budgeting. Of course, we cannot expect understanding of this from the Australian Labour Party, which, with its horse and dray outlook, it seems, will never get off the ground.

Proceeding onwards, we find that the Leader of the Opposition said it was dishonest to depict this as a defence Budget. Yet it most assuredly is a defence Budget. The Government has been accused of spending £83 million more on defence this year but an additional £185 million on matters other than defence. That accusation is very misleading. I say that because the activities of many other government departments, including the Department of Works, the Department of Shipping and Transport, the Department of Civil Aviation, the Commonwealth Railways, the Postmaster-General’s Department and the Department of Territories all have very important, indeed essential, bearings upon the defence of our country. I have examined this aspect and I estimate that more than £120 million more has been spent on items essential to the defence of this country. Of the remaining additional expenditure, about £61 million more is being made available to or for the States, yet the Leader of the Opposition has accused the Government of starving the States. The Government has been very generous indeed because a lot of this other expenditure will benefit the States. Over £20 million more will be spent on social services.

I believe that this gives a vastly different picture and reflects great credit on the Treasurer. He has managed to do a great deal with a tiny addition to the tax burden. Of course we cannot expect honorable members opposite to share this view but we take comfort that these matters have been clearly appreciated by the people.

I listened with keen interest to the speech of the honorable member for Robertson today. He made a most interesting speech and I agree with most of what he said. Like him, I am most grateful to the Leader of the Opposition for the table he included in “Hansard”. It bears a great deal of study. The Leader of the Opposition compared the year 1953-54 with that of 1965-66 and then accused the Government of trying to hoodwink the citizens of Australia. I might say that he made some very unworthy references to our citizens and pointed out that the Government was spending a slightly smaller percentage of our gross national product on defence now as compared with that spent in 1953-54. But what he chooses to forget is that the effects of the Korean war were still being felt at that time. He also overlooked that in the intervening period there was an increase in expenditure on Commonwealth works of almost 1 per cent, of the gross national product. A great deal of that work was essential to defence. Lumped together, we see that there was certainly a most significant increase in defence spending. This table tells us, amongst other wings, that cash benefits such as payments to pensioners have risen by nearly 1 per cent, of the gross national product in that time. I think that is a magnificent achievement. This laudable progress has been made by increasing direct taxation by only about one-tenth of one per cent, and by increasing indirect taxation, of which we have heard so much from honorable members opposite, by little more than one-tenth of one per cent. Yet company tax - something of which we have heard from the Opposition also - has risen by ten times this proportion in the meanwhile to about one per cent, of the gross national product.

My friend, the honorable member for Robertson, projected our scrutiny back to the bad old days of Labour rule and revealed the tremendous burden of taxation under which we groaned at that time. I remind honorable members of the restrictions, the petrol rationing, the black markets and the shortages of that time. I ask honorable members opposite to remember how few people owned their own motor cars and refrigerators in those black Labour days. Certainly they well know that it is a Marxist truism that people must make a sacrifice to the shibboleth of socialism. This is proved whenever the socialist experiment is inflicted upon a country. A bitter reminder of this is presently being administered to the unfortunate people of Great Britain.

Before considering defence matters, however, I want to point up a suggestion which the Leader of the Opposition made in his speech. He suggested that a national inquiry be made into the nature and extent of poverty in Australia. In my own humble way I am conducting a very modest survey of this nature in my own electorate at the moment. I believe that such a survey would help us to know much of vital importance in the framing of our future social legislation. It would tend to indicate more clearly those sections of the community which are most in need. At the moment we can only make an incompletely informed guess. Such a survey will give us more definite information. From the number of objections from honorable members opposite I conclude that they do not support their Leader in this request for an inquiry into the nature and extent of poverty. The reason for that could be, I think, that there is less of it than some might, be lead to believe. However, such an inquiry would also show the magnitude of the need and where it is greatest. I would comend it to this Government for favorable consideration.

However, I am very much afraid that much of the remainder of the speech of the Leader of the Opposition is to be viewed with a far less favorable eye, especially those portions of it in which be spoke about defence. For example, I question not only the accuracy but also the justice and probity of his accusation that this Government has neglected defence for the last decade. Certainly the Government has had no help from honorable members opposite during this difficult period. Their ideas on defence are turbid and ill conceived. One must expect this of a diverse political group which views international affairs and defence requirements from many different standpoints, some of which are very close to those of international Communism. I need do no more than mention the catastrophic Labour policies in the matter of the North West Cape and its insistent and oft repeated demands that the Government purchase the TSR2 aircraft which was never fully developed and which was rejected even in its country of origin. When the Leader of the Opposition spoke about our alleged neglect of defence did he really forget the attitude of his colleagues at that time? This Government was assailed repeatedly and most bitterly by Labour members who said, in the strongest terms, that our defence spending - in this time of alleged neglect - was grossly in excess of our need? I believe that that action of the Labour Party, its irresponsible and perhaps one might say, Marxist tinged action, in applying this pressure was detrimental to our defence planning. It certainly made the Government’s task far more difficult.

Fortunately, however, this democratic Government of ours is quite sensitive to the opinions of responsible citizenry and this strengthened it in its resolve to maintain a defence expenditure fully consistent with apparent need, having regard to the international situation at that particular time. Unfortunately this situation is clearly deteriorating and the outlook, especially for the peoples of this sector of the world, is very grave. As this became apparent the Government began to take appropriate steps. I believe that the Government has acted in time. Australia’s defence will be built up at an increasing tempo. I trust that we will be ready for the ultimate clash which, with the deepest regret, and, in fact, with horror, I believe now to be inevitable. This clash must result in the slaughter of vast numbers of our fellow human beings, mainly Asians with whom we wish to make friends - people whom we wish to help, people whom we wish to see realise all their legitimate new found national aspirations without outside interference. Taken individually these people have much which attracts our instinct for friendship and admiration.

But some of these people are being exploited by their evil dictators for their own ghastly ends. Their minds, remembering clearly the recent colonial days, are more susceptible to the attacks of the insidious. These attacks, in the form of constant propaganda and the use of any device whatsoever which might be of help, used without regard to truth or morality, are deforming and conditioning the minds of many people to our near north. The Marxists, with their misrepresentations and their claptrap, accuse the free world of all the crimes which the cynical and amoral masters of these captive hordes are themselves committing. They call us imperialists or imperialist lackeys. They call us neo-colonialists. Indeed, we have been imperialists in the past, but I venture to say that the British colonial rule conferred many benefits, including stability, law and order, justice, individual freedom and protection.

Most members of the former empire, however, have now developed their own legitimate nationalistic pride and they wish to determine their own affairs. Britain and Australia are giving all the help they can towards this end. We have not the slightest desire to interfere in the internal affairs of these countries. But we are helping these countries to defend themselves from the attacks of those very carrion crows which accuse us of neo-colonialism. These aggressors are not themselves neo-colonialists, I agree. There is nothing new about their blatant imperialist aggression which has been manifest off and on throughout the centuries. I refer in the main, of course, to the vicious forces behind the Chinese empire and the Javanese empire, otherwise known as Indonesia. The Russian empire is a bit out of our sphere and, in any case, its conquests have been halted pro tern and this country may even have to rethink about its position. The worst of the two, the Chinese bird of prey - I hope that no one mistakes it for a dragon - even now is stained with the blood of its victims, although I must say that the Indonesians are also somewhat soiled. Fresh victims have been marked down and, make no mistake, we are included in the list. Many of us cannot bring ourselves to believe this, but we have been warned by these people many times. An eminent Australian of my acquaintence was travelling in Red China quite recently and, although he was courteously and well received, he was assured that we in Australia will be conquered in the not too far distant future. If that day comes - and I repeat, I believe we shall fight it off successfully - nothing, not even Marxist beliefs - this may give some honorable members opposite some cause for uneasiness - will save us from the xenophobia of these evil men.

Luckily, China, although it has formed a part of a number of vast empires in the past, is not quite the formidable opponent that it appears prima facie to be. The two most celebrated examples of Chinese imperialist aggression, indeed, occurred when that country was itself wearing the yoke of foreign conquerors, the Mongols and the Manchus. It is interesting to note that both of these attempted to conquer Japan and were soundly thrashed each time. History repeats itself, too, because the Mongols had previously attempted to engulf Java, but again without success. The present rulers of the Chinese empire are obviously hoping to be more successful this time by using more subtle methods.

As one would expect, the Javanese empire has never been particularly formidable and, indeed, has only made a couple of fitful appearances upon the stage of history. I expect that the present Javanese empire will last just about as long as its predecessors. But there is still no doubt about its active aggression and amoral acquisitiveness. No one will ever convince me that there was any justification whatever to allow the helpless untrained natives of West New Guinea to be thrust into Indonesia’s greedy maw. It is clear that this primitive but very pleasant people is far from happy that this state of affairs has occurred. Despite the intensive indoctrination to which they have been submitted, spontaneous rebellion has already not only broken out .but also has been admitted by the rulers of the Javanese empire. These colonialists are obviously striving to acquire as much territory as possible, but they will not get far. The chief danger here is that, riddled as it is with Marxism, it will fall an easy prey to China and thus bring the world’s arch enemy to our very doorstep.

We can learn much from history. I believe that in Australia now we face a situation which is very similar to that experienced by ancient Greece in about the 5th century B.C. There are many very close analogies. The Greek people of that time were very keen on sport, as we are in Australia. I think we can profitably briefly examine and compare our two situations. At the time of the Emperor Xerxes, the Persians had, by conquest, swallowed up most of the then world and, as a result, it is interesting to note that Indians, Egyptians, Russians and Greeks all were serving in Persia’s vast army. It is interesting To note that there is another analogy. Not all of the Greeks admitted that the Persians posed a serious threat to liberty. The result was that some, for this reason or for their own ends, actively assisted the Persians and either joined their armies or attempted to dissuade their countrymen from fighting the Persians and endeavoured to weaken the Greek determination to fight from within. The more discriminating Greeks called this treason and treated it accordingly.

The result was that in the end only a few puny Greek city states stood alone against a vast army of nearly half a million fighting men and a huge fleet. No one would give the Greeks much of a chance, and yet by great courage and tactical skill the invaders were defeated and freedom was preserved. I believe that we are in a similar position. I ask honorable members to consider seriously this analogy because it is a very close one. Here we are being opposed by a vast army and many people say that if we try to oppose it we must inevitably be defeated. Here we have a fine example of someone in a very similar situation who was not defeated. Therefore, I believe it is worth our while to engage in the defence of this country. It is not a futile proceeding. It is essential. I believe that if we do we will succeed. We are very fortunate in that we have powerful friends who will assist us, but we cannot expect any salvation if we do not strengthen our own defence forces to the utmost. This time of trial, I am very much afraid to say, must come, but I believe that we will overcome this evil force and disperse these clouds which are darkening our horizon. To do this we need courage and determination and adequate defences. We are fortunate that this Government has recognised our danger in time and, aided by this Budget, is calmly and systematically preparing us in the most efficient way. without any disruption of the economy, for any eventuality.


.- I think I should treat the remarks of the honorable member for Bowman (Dr. Gibbs) as the Treasurer (Mr. Harold Holt) would treat the workers of this country - with complete contempt. But, of course, the striking difference between the two is that the workers do not deserve that treatment. This Liberal Party-Country Party coalition Government is certainly consistent in one line of thought, because once again, as a result of this year’s Budget, the people in the lower income groups will be called upon to carry the greatest burden in raising the increased revenue that the Government intends to raise by way of increased taxation. This burden on the lower income groups is quite obvious from the fact that, of the total of £84.6 million that the Treasurer expects to be added to this year’s revenue by way of increased taxation, only £18.9 million will be raised by way of direct taxation, whilst the staggering amount of £65.7 million will be collected by way of indirect taxation.

According to the Treasurer, the additional £65.7 million will be collected as a result of increased excise duties on such things as petrol, tobacco, cigarettes, beer and spirits. All those things are purchased and used by practically every adult, irrespective of whether he is in good circumstances or poor circumstances. That means that the person on the basic wage or even less than the basic wage will pay the same amount in that type of taxation as will the man who is on £5,000, £10,000 or £20,000 a year. For instance, a pensioner, who has a total income of £300 a year and who buys a glass of beer, a packet of cigarettes or a gallon of petrol, will make exactly the same contribution to taxation revenue on those purchases as will another person who buys the same article and whose income is £5,000, £10,000 or £20,000 a year. That means that the Treasurer and the other Ministers of this Government will pay no more tax on such articles than a pensioner will pay. So, when incomes are compared, it is quite evident that by far the greatest burden of indirect taxation is borne by the people in the lower income groups. That is completely wrong and completely unfair.

Surely it is only proper, and surely it is only fair to everybody, that a person who has only the small amount of £290 at his disposal for a full year’s living expenses - that would be the position of many pensioners - should be required to make any contribution to taxation revenue only at a rate that is in keeping with his income as compared with that of very wealthy people. Let me take the simple case of a pensioner whose clear total income is £5 16s. 8d. a week and who drinks two glasses of beer each day of the week. Surely no-one would deny him that simple little pleasure. As a result of this Government’s latest

Budget decision, that pensioner will pay an additional amount of indirect taxation of at least ls. 2d. a week on those few glasses of beer alone. Therefore, in respect of that type of indirect taxation, he will pay an amount equal to 1 per cent, of his clear income; that is, his income after any direct taxation that he has to pay has been deducted.

If a person with a clear income of £50 a week was obliged to pay in indirect taxation the same percentage of his income as the penisioner pays, he would have to pay 10s. a week extra for the same amount of beer; that is, 14 glasses a week. In other words, instead of paying an additional Id. a glass, he would have to pay an additional 8id. a glass. A man with an income of £100 a week clear of direct taxation - honorable members opposite would have plenty of friends with clear incomes of £100 a week or better - should pay not an additional Id. a glass, as paid by the pensioner, but an additional ls. 5d. a glass. The same applies to all the items of indirect taxation. The pensioner whose clear total weekly income is £5 16s. 8d. and who buys cigarettes is obliged, as a result of this Government’s actions, to pay a further 3d. a packet. If other people had to pay the tax at the same rate commensurate with their income, the man with an income of £100 a week would have to pay an additional 4s. 3d. a packet. The same applies to petrol, the price of which will rise by at least 3d. a gallon.

Of course, everyone knows that indirect taxation cannot be applied in that way, with different taxation charges for people in different circumstances. I gave that example merely to illustrate how unfair and unjust indirect taxation can become when it, rather than direct taxation, is used to raise additional revenue. Under indirect taxation, the low income group is always at a considerable disadvantage compared with the wealthy group. We know that this method of collecting revenue is favoured by this Government because it suits the Government’s wealthy friends. Under direct taxation the people who can well afford to pay and who should be contributing much more to the revenue and welfare of this country are not called upon to do so. We know that additional revenue is required. But there are many ways of raising it other than by indirect taxation, under which people who cannot afford to pay are called upon to do so.

As I have just said, the Government has increased the rate of excise duty on petrol and automotive distillate by approximately 3d. a gallon, according to the Treasurer. That means that the price of petrol has increased by at least that amount. Honorable members will recall that earlier this year the Parliament passed the States Grants (Petroleum Products) Bill, which is now better known as the petro] subsidy act. The Minister for National Development (Mr. Fairbairn) said that the Bill would cost the Treasury about £6 million in a full year. Honorable members will also recall that late in 1963, just prior to the last House of Representatives election, the Prime Minister (Sir Robert Menzies) and members of the Government parties promised the electors that if the Government were returned it would bring down legislation to ensure that people in country areas would pay no more for petrol than 4d. a gallon more than city prices. Of course, we all know that the Government has never honoured that promise. We all know that when the relevant legislation was introduced it fell far short of the promise that had been made. Even so, it is now nearly two years since the promise was made and motorists in Western Australia are now paying more - many of them are paying much more - than they were paying before the election.

I started to point out that, although the Minister for National Development made great play on the £6 million which was his estimate of the cost of the subsidy scheme, we now find that as a result of the Government’s action in this Budget fuel users in Australia during the next full year will pay at least £20 million more than they paid in fuel tax in the last full year. That amount of £20 million allows for the £6 million which, it is claimed, will be saved as a result of the subsidy. That is so because the Treasurer said that the increases in duty will come into effect immediately and are expected to yield an additional £25,060,000. When we remember that the subsidy scheme has not yet started to operate, we can assume that fuel users will have to pay at least an additional £20 million - perhaps more - in fuel tax this year. We hope that this gracious and generous Liberal-Country Party coalition Government eventually will arrange for a subsidy for country motorists and fuel users at a cost of about £6 million. But, in the meantime, the Government has imposed on the same country motorists and fuel users a tax that will take from them an additional £10 million or £12 million.

Early in 1964 it was rumoured that the Government intended to increase the tax on petrol at about the same time as the petrol subsidy legislation became operative. On 9th April of last year, when asking the Prime Minister a question about the Government’s promise on the petrol subsidy, 1 also asked whether it was correct that the Government intended to increase the petrol tax. In reply to my question, the Prime Minister said -

I have read that one or two Premiers favour increasing the petrol tax. We certainly have never said that we do.

Of course, it was not a matter of whether the Government had said that it would increase the petrol tax; it was a matter of whether it intended to do so. That is the point. I suggest that the Government’s recent action on petrol tax is clear proof of its earlier intention. I would go further and say that there is no doubt that the Government, before drawing up the petrol subsidy legislation and even while in the process of making its election promises had reached a decision to increase the petrol tax substantially. Either the Minister for National Development (Mr. Fairbairn) was speaking with tongue in cheek when in introducing the petrol subsidy legislation he claimed that it would be such a great assistance in relation to transport costs, or he was not in the know. He said -

It is expected that this measure will cost about £6 million in a full year. As a result of this expenditure we shall achieve a most useful practical measure towards decentralisation by moderating in one important respect the burden of transport costs on people living in the more remote areas and on the industries that they pursue there.

Whilst I have not had time to examine properly the effect of the subsidy over the whole of Australia, I have been able to make a full examination of the position in Western Australia. In 388 districts or localities of the total of 480 listed in the Western Australian Schedule to the Act the subsidy will not be more than 3d. a gallon and in 378 of those 388 localities it will be less than 3d. a gallon and as low as id. a gallon. The increase in excise which the Government has now imposed of 3d. a gallon means that the cost of petrol on a wholesale basis and at the bowser has increased by at least the same amount. It has increased by at least 3d. a gallon. This in turn will mean that in by far the larger part of Western Australia not only will the subsidy be cancelled out, if ft ever eventuates, but in fact there will be an actual increase in the price.

As I said earlier, the Minister claimed that the petrol subsidy legislation would be of great assistance in relation to the transport of goods by road and would mean a reduction in the cost of those goods at the place of purchase, Apparently the Minister was convinced that a reduction of id., Id., 2d. or 3d. a gallon on fuel would bring about a substantial reduction in the cost of goods in country areas and in the north of Australia. Well, if that is so, and it certainly should be so, we must examine the effect in reverse. That is, we must examine what will be the effect now that petrol prices have been increased as a result of this Budget.

In my examination of the subsidy schedule for Western Australia, I find that in 108 districts the price of petrol will increase by 3d. a gallon, even after allowing for the subsidy, should it ever eventuate. In 58 districts the price will increase by 2id. a gallon. In 76 localities it will increase by 2d. a gallon. In a further 58 localities it will increase by lid. a gallon. In another 58 localities it will increase by Id. a gallon. In 22 districts the increase will be id. a gallon and in ten districts there will be no change. So in 378 districts out of a total of 480 - that is, right throughout the State - there will be an increase in the price of petrol notwithstanding the subsidy.

The Government has fallen down badly on its election promise of 1963 to make petrol a uniform price in country areas of not more than 4d. a gallon above city prices. The Government has not honoured that promise. It has, however, introduced legislation some 18 months later which at some time in the future may mean a reduction in price in 378 localities in Western Australia of id. or more a gallon. But now, as a result of the Government’s decision to increase the petrol tax, we find that although 378 localities could have been obtaining some small benefit, the number has been broken down to 98 districts and even the benefit that they would have received from the petrol subsidy scheme will be reduced by at least 3d. a gallon.

The Minister for National Development and the Government must agree that if the petrol subsidy was to be of considerable benefit, as has been claimed by the Minister, the effect of this Budget decision in relation to petrol and other fuels will be very damaging - in fact disastrous - to transport costs and living costs in country areas and in the north of Australia. The Government’s attitude towards the development of the north of Australia is perfectly clear not from what the Budget contains but from what it does not contain. Apart from the projects to which the Commonwealth was previously committed - that is, those projects in relation to which it was agreed two or three years ago that certain amounts of money would be provided over a period of time - there appears to be no provision in the Budget for any further finance for further development of the north of Western Australia. In fact, in the “Notes of Estimates and Expenditure “ accompanying the Budget we find that for northern development in Western Australia it is estimated that £151,000 less will be spent in the next financial year than was spent last year. This surely does not indicate any real interest in northern affairs or northern development.

In his speech the other night the Minister for National Development endeavoured to cover up for the Government’s failure to develop the north by referring to what had been spent in the north in earlier years. But it is the future that we are looking to, not the past. One would have expected the Minister in his defence of the Budget to draw attention to anything the Government intended to do in relation to future northern development. He did not do so, so apparently there was nothing to which he could draw attention. The Budget makes no mention of further finance for the Ord River project. In fact, there does not seem to be any mention of the project at all. The Minister in his speech devoted a couple of minutes to the Ord River project but it appeared to me that he did so only in order to let it be known that the Government still was not satisfied that further finance should be made available for the scheme. The Minister seemed to be in some doubt as to whether this year’s cotton crop is likely to prove anything. It would appear from the general attitude of the Government that it is still looking for an excuse to refuse the finance required to complete the Ord River scheme.

The Minister for National Development was at the Ord recently. He was there only a few days after I was there. The Press reported the occasion. A headline in black type about a quarter of an inch high read, “This is Place to Grow Cotton, says Development Minister”. Another line in slightly smaller type was “Fairbairn enthusiastic on Ord River Project”. I shall quote the report of the Minister’s remarks because his attitude seems to have changed -

The most suitable area for cotton growing in Australia - that is how the Minister for National Development, Mr. Fairbairn, today described the Ord River.

Mr. Fairbairn in an interview spoke enthusiastically about the future of the project, giving the Ord its most encouraging support so far from a senior Federal Minister.

Mr. Fairbairn said the Ord River appeared to have a better climate for cotton than New South Wales irrigated cotton districts.

The high yield of this year’s Ord crop, now being harvested, provided considerable encouragement about the future of the scheme.

The yield was much better than last year’s crop.

Everyone who takes any interest in the Ord - this would exclude most Government supporters^ - is clearly aware that this year’s cotton crop will be considerably better than last year’s. Only a few days before the Minister for National Development made his remarks about the Ord the Deputy Prime Minister (Mr. McEwen) was reported to have described as magnificent reports that the yield from the cotton crop at Kununurra was expected to be between 50 per cent, and 60 per cent, higher than it was last year. The report pointed out that the crop would yield between 2,000 lb. and 3,500 lb. of seed cotton per acre. Why does the Minister for National Development now adopt a different attitude? Why does he simply say that it looks as though this year’s returns from cotton will be higher than last year’s? He knows very well that they will be considerably higher. Why has he ceased to be enthusiastic? Has he been told by the Cabinet to play the project down and treat it as a rather doubtful proposition? It would certainly appear to be so, unless, of course, both he and the Deputy Prime

Minister (Mr. McEwen). like the Prime Minister (Sir Robert Menzies) simply wax enthusiastic when they are in the area or the State because it suits their purpose. Then when they leave the area and come back to Canberra they go completely cold on the issue and play it down.

J want now to say a few words about the social service provisions in this Budget which, to say the very best of them are pretty miserable. The Government has failed once again to do anything worthwhile. It has failed to recognise the basic rights of the people as far as social services are concerned. It has failed to ensure that every pensioner, irrespective of marital status, will receive an amount of money which will allow him or her to live in a manner in which any citizen of this country is entitled to live. The Government has continued to allow the position where so many pensioners, because of lack of money, are obliged to live under conditions so disgraceful that each and every one of us must feel ashamed. Once again the Government has failed the married pensioner couples. There is no increase in pension for them. They are obliged still to live on the same amount, even though there has been quite an increase in the cost of living, and although, as a result of this Budget, there will be a further substantial rise in the cost of living. In fact, the position of the married pensioner, in comparison with that of the single pensioner, has become far worse. However, even in the case of the single pensioner the Government has not actually increased the pension.

At long last this Government has decided finally to restore to pensioners the right to the pensioner medical service irrespective of their income. The Treasurer, by his use of words, endeavoured to make it appear that by extending the right to the pensioner medical service he was breaking new ground, and was extending a new benefit to pensioners. Of course we all know, as do many of the more elderly pensioners, that prior to November 1955 all pensioners were entitled to participate in the pensioner medical service, and that it was this LiberalCountry Party Government which brought down legislation taking away from the pensioners the right to a medical card. Ever since 1955 members on this side of the House, by way of questions and in debate, have endeavoured to have the benefit returned to all pensioners, but I cannot recall ever hearing any Government member supporting our requests. I have never heard Government supporters raise the issue by way of questions or in debate, in support of honorable members on this side of the House, but now they try to take the credit for the re-introduction of the benefit and suggest that the Government should be applauded for its action. The fact is that the Government should be condemned for ever taking the benefit away and should be ashamed that it has taken 10 years to restore it.

Many other aspects of social services require attention and improvement. Many relate to pensions and some not to pensions. I refer, for instance, to child endowment, maternity allowance, and unemployment and sickness benefit, none of which gained even a mention in the Budget. Labour members have been pressing the Government for many years to increase the funeral benefit for pensioners, but as with the pensioner medical service I have never heard an honorable member on the Government side voice his support. Now we find that the funeral benefit is to be increased to the magnificent sum of £20 but only in certain circumstances, such as where a pensioner is responsible for the funeral expenses of his spouse. If a pensioner should die and his wife is not a pensioner, she will not receive the £20, but only the old amount of £10. This is just another foolish and very unfair decision by the Government. The funeral benefit should have been increased in keeping with the cost of funerals today, and there should not have been any strings attached to it at all.

The Treasurer informed us that the increases in social services will cost an additional £7,720,000 in a full year. To some pensioners this may seem a very substantial increase, but they need to examine the position as a whole. The £7,720,000, says the Treasurer, will be paid out as an additional amount to pensioners, but what aboutall the money they will pay back in taxes on tobacco, cigarettes, beer, petrol and spirits? The increased excise and customs duties on those commodities are expected to bring in a total of £65,680,000 in a full year. Pensioners who smoke the odd pipe of tobacco or the odd cigarette, or who indulge in an occasional glass of beer or whisky, or who happen to buy petrol, will in many cases pay out in twelve months much more than they will actually receive by way of increased pension or allowance. Only those who do not smoke or drink are likely to show any improvement at all in their financial position and even they, before long, will be worse off because of the increased cost of living which is bound to flow from the Budget decisions. Some pensioners will receive a little extra on pension day, but in the result all pensioners will have considerably less. However, I hope to have something more to say on this matter when the social service legislation is introduced.

The Treasurer referred also to a shortage of labour requirements. In the north and north west of Australia there is a very large group of people who could very soon become available to meet these labour requirements if the Government was prepared to provide a sufficient amount of finance for the specific purpose of training them. I refer to the many Aborigines who are at present idle, or practically so, and have little prospect of obtaining employment. I know them fairly well, and I am not foolish enough to suggest that they would all be suitable for training. A large percentage are beyond the possibilities of training; at least they are beyond the possibilities of learning. But there is a large number who could be trained, and this is particularly so in the advanced school age group and amongst the young men and women. Many of those people, after one or two years training, could become suitable in the ordinary fields of employment. It may take a little longer to make them efficient for the more advanced types of labour.

Unfortunately there is no place in those areas where they can be trained. When one considers the amount of money paid out to these people at present, for which virtually nothing will ever be recovered, in my opinion it certainly would be worthwhile to institute a system of training for them. I visited the north of Western Australia recently, and notwithstanding the cries of labour shortages and the suggestion of the Liberal Government of Western Australia that contractors should be permitted to bring their labour requirements from overseas under the indenture system, I was surprised to learn that Aboriginal labour was not being engaged. On the Finucane Island job and associated works, where a large number of men are employed and more were required, I was astonished to hear that only two Aborigines were employed. There can be no excuse for that state of affairs. While there would be many who would not be suitable there would also be plenty of Aborigines who could hold down a job if given the opportunity to do so, but there seems to be an inclination not to employ native labour because of their background of instability. Because of this it is most necessary that the Aborigines should be trained so that they can take their place in the field of employment. It is a great pity that so many people who should be able to fill a place are not trained to do so. I hope that the Minister for Labour and National Service (Mr. McMahon), or the appropriate Minister in this House - and those in this Parliament generally - will take action along the lines I have suggested to allow these original Australians to play an equal part with the migrants who come to this country.

There are many things I should like to speak about in regard to this Budget, but unfortunately I have not the time to do so. All in all this is a very miserable Budget. The additional revenue which is to be collected will be collected largely from people who cannot afford to pay. Far too little is to be provided for pensioners and recipients of repatriation benefits. Practically nothing is to be provided for the north. This is a clear indication that as a result of the implications of the Budget a substantial increase will take place in the cost of living to the detriment of everyone except the wealthy class. Notwithstanding the introduction of this Budget nothing will be achieved in the way of defence.


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

Debate (on motion by Mr. Hallett) adjourned.

page 568


Messages received from the Senate relating to changes in the membership of Senators on the following joint committees -

Parliamentary Proceedings Broadcasting - Appointment of Senator McClelland and Senator Sim.

Public Works - Appointment of Senator Scott in place of Senator Marriott, resigned.

Foreign Affairs - Resolutions agreed to bythe Senate -

That Senators Branson and Scott be discharged from attendance on the committee.

That Senators Cormack, McManus and Mattner be members of the committee.

That, until such time as the remaining vacancies for members of the Senate on the committee are filled by members ofthe Opposition, Senators Bull and Wright be members of the committee.

page 569


Waterside Workers’ Federation

Motion (by Mr. McMahon) proposed -

That the House do now adjourn.


– This morning, as I read the Melbourne “Age” I noticed in a sub-leader reference to the present trouble on the waterfront. It contained one paragraph which impressed me strongly and which I think ought to be brought to the notice of the Minister for Labour and National Service (Mr. McMahon). It reads -

Employers are certainly not impressed with the wharfmen’s cease-fire. A Sydney spokesman described it as “ subterfuge “, pending the hearing of the margins claim. Be this as it may, it was better left unsaid. Employers can hardly expect a better atmosphere on the wharves if they criticise the union not only for calling stoppages but also for calling them off.

I thought that might sink into the mind of the Minister. This morning, we sawthe Minister walk into this chamber with a sheet of paper in his hand and it appeared obvious that there was a prepared question somewhere on the floor of the House. Sure enough, it came. Immediately I heard the answer to the question I knew that, just as the question had been cooked, so was the answer cooked. The Minister said -

I should like to put before honorable members certain facts which I think they should have in their minds–

That was in reply to a question as to what changes in wages had been made in recent years. The Minister said -

The average wage on the Sydney waterfront was £15 18s. 3d. in 1955-56, whilst in industry generally it was £18 19s. In 1963-64, the average wage on the Sydney waterfront was £29 6s., and in industry it was £26.

I knew at once - and the Minister knew it - that not only was the question cooked but the answer was cooked. I remind the Minister right away that either he or his informant had to go to the 1956 report to get this information. The 1956 report of the Australian Stevedoring Industry Authority, makes it quite clear at page 9 that it was not until 1st July 1956, the very year that the Minister selected, that the waterside workers in this country received the benefit of what might be called the “ two and a half times decision” that had applied to every other worker in this country from November 1954. What he implied in wage calculations at this stage was a miserable trick.

Mr McMahon:

– I take exception to that phrase and ask that it be withdrawn.


– I suggest that the honorable member for Blaxland withdraw the remark and restrain himself.


– I will withdraw it, but now I will show why I said it.


– Order! I ask the honorable member to withdraw the remark without reservation.


-I withdraw it unreservedly and will now show why I said it. At page 9 of the report to which the Minister had to go, it is stated -

The margin for waterside workers was increased by £1 a week. As a result, the hourly rate of pay was increased by 8d. from 9s. 2d. to 9s.10d. The minimum period of engagement was increased from four to six hours. Payment was to be made subject to certain conditions, for public holidays not worked. Sick leave of 30 hours per year accumulative for two years was also granted.

The award was not applicable until 1st July 1956. It was the first award condition of substance which these men had received since 1936. The Minister knew that because he had on his table a report which was the result of the setting up by his predecessor of a committee of inquiry. That report was received by the Minister on 7th March 1957, and it told him of that very situation at page 31.

Mr McMahon:

– I was not the Minister.


– You were the Minister when you made this statement today. At page 31, the report states-

The award foi the industry made in 1936 as varied and modified from time to time is in a state of the utmost confusion and uncertainty. The absence of a new and complete code or award has been a very serious source of trouble and inefficiency in the industry and in particular of disputes and stoppages.

I repeat, that report was presented to this Parliament on 7th March 1957 and the Minister had full knowledge of it when he brought this information to the House today.

Let me go, now, to the next report at which he had to look - the report for 1964 -and refer to page 89. This relates to the comparison made by the Minister. He compared 1955-56, which was one of the worst years so far as man hours lost on the waterfront are concerned with one of the best years. The man hours lost through rain in 1955-56 were 5.3 per cent, while those lost through stoppages totalled 8.6 per cent. He compared that year with 1963-64 when the man hours lost through rain represented 3.9 per cent, and the man hours lost through stoppages only 1.6 per cent. Does the Minister want a continuation of what happened in 1956? Is that what he is asking for? Here is the type of comparison that he makes in this House. Now let me show how dishonest-

Mr McMahon:

– I take exception to the type of phrase the honorable member is using. I know he is excited, but I take exception to his use of the word “dishonest “.


– Order! The honorable member for Blaxland did not go any further than the word “dishonest”. I was waiting to see to what he was referring as being dishonest. If the honorable member for Blaxland is applying the word to the Minister, I ask him to withdraw it.


– I am not using it as applying to the Minister; I am using it to describe the figures he used in this House this morning. I do not blame the Minister for doing it. I say that the figures he produced were neither fair nor reasonable and that they were dishonest. He compared a year when the average hours worked on the waterfront per man per week totalled 28.9 with the year 1964 when the average hours worked on the waterfront were 37.6; and he compared the average earnings of a man working 28.9 hours with those of a man working 37.6 hours. If that is not a dishonest application of the facts, I want to know what is.

Let me now go back to the year 1955-56 to which the Minister referred. If he had gone back two years before that - to the time before the two and a half times decision was applied - he would have found that the average earnings in industry generally were £15 a week while the average earnings of waterside workers were £14 19s. a week. If in 1956 the average hours worked - leave aside what 1 have said about wages - were 37.6, then the average earnings, before the inclusion of the increase in margins, were £20 13s., while the 1956 average for all workers was £18 19s. These are the most dishonest figures I have seen presented to this Parliament. The Minister said that this is something we should keep in our minds. II have not time to go through all the figures, but if the Minister wanted to make a proper calculation there was one year, 1962, that he could have used. In that year the average hours were 28.5, compared with 28.9 in 1956. 1 invite the House to compare those years, and if honorable members do so they will find that they just about break even. Yet the Minister comes here with a heap of cooked figures designed to give the Press representatives and members of this House a completely incorrect picture of the wages position on the waterfront.

The other night when the Minister spoke he finished up by saying that I was aligning myself with the turbulent elements on the waterfront, who, he said, are engaged in the worst form of industrial blackmail we have ever known in this country. I throw back in the Minister’s teeth. I do not align myself with forces that attempt to destroy this country. I align myself with fair treatment and truth, and will do so as long as I live. I say to the Minister that to live a lie is worse than to tell one, and that to put a lie in the records of this Parliament, as was done today, to mislead every member of this Parliament-

Mr. ACTING SPEAKER (Mr. Lucock). - Order! The honorable member will withdraw his remark about putting a lie in the record.


– I did not put the Minister in that position. I do not know who compiled the information, but what I say is that whoever did it was prepared to see go into the records of this Parliament a lie that will live as long as Australia lives.


– Order! I suggest that the honorable member withdraw the remark that he made. The Minister was the person who presented the information to the House, and the words used by the honorable member constitute a reflection on the Minister.


– Out of deference to you, Sir, I withdraw it.


– The Minister for Labour and National Service has risen. Before he replies I would point out the position. The Minister moved that the House do now adjourn. This means that if the Minister now exercises his right to reply he will close the debate.

Minister for Labour and National Service · Lowe · LP

– I rise for no other reason than that I sympathise with the honorable member for Blaxland (Mr. E. James Harrison). I am sorry that he became so excitable about the matter.

Mr E James Harrison:

– I hate liars.


Sir, I must ask the honorable member to withdraw that remark.


– I suggest that in the circumstances the honorable member should withdraw the remark.

Mr E James Harrison:

– Well, if the Minister feels that it fits him I withdraw it.


– I rose this morning to answer a question and I had one purpose only, that was to enable the House to have the facts before it.

Mr Pollard:

– They are not the facts.


– 1 say they are the facts.


– Order! I warn honorable members that if interjections continue I will take action. The Minister is now replying and I suggest that the House should do him the courtesy of listening.


– I rose for the purpose of letting the House have the facts on which it could make up its mind whether or not there had been a fall in throughput- on the waterfront and whether or not the waterside worker had received relative wage justice. The figures are here in official statistics and they are available for anybody who wants to see them. Every one of these figures has been taken from an official source and can be verified. I must ask members of the Opposition whether they want to know the facts.

Mr E James Harrison:

– My word we do.


– Well, they have been given and honorable members opposite should have been satisfied with them. It is perfectly obvious to me, after listening to members of the Opposition, that they do not want to listen to the facts and make up their minds whether or not the waterside workers are giving a fair day’s work for a fair day’s pay.

I want to give some figures again. I would have given more this morning if I had had more time. The simple fact is that if we consider the remuneration gained by waterside workers and compare it with the hours worked, and then consider the changes that have occurred over a period of four or five years, we must come to the conclusion - and now I reply to the question I could not answer this morning - that under our arbitration system the awards and contracts that have been made in favour of the waterside workers after negotiation with the employers have resulted in their receiving greater benefits than have been received by the average wage earner in Australia. I do not want to deny them those benefits. I believe in the payment of the highest wages that industry can possibly afford. But what I do say is that the wage earner on the water front has improved his position considerably and has improved it greatly in relation to workers in other industries. If the honorable member for Blaxland does not want to hear these facts that is his business and I make no comment about it.

Now I come, to the next point. I thought every honorable member would have welcomed information on this, because it affects the export income of Australia. It is a fact that unless we can get better loading times and a better turnround of shipping, we cannot hope to compete in international markets. It was my opinion that if the House knew the facts honorable members would, in the event of a subsequent debate on the matter, be able to make contributions on an informed basis. I am sure that honorable members to the right of you, Mr. Acting Speaker, wanted to know the facts. No-one has objected but the honorable member for Blaxland and other members of the Opposition. What I ask honorable members is this: Do they feel a great deal of pride when they hear the facts stated? The honorable member for Hindmarsh (Mr. Clyde Cameron), the honorable member for Blaxland and other honorable members opposite can tell me whether they are proud of the achievements of waterside workers. They are these: General overseas loading decreased in Sydney from 15 tons an hour to 13.27 an hour. Despite the fact that there has been some mechanisation - not a great deal - the loading rate has fallen substantially. But let me go further, because I -want to drive this point home.

Mr Clyde Cameron:

– Did the Minister say that the amount they load has fallen from 15 tons an hour to 13.27 tons?


– I am talking about gang sizes. The general overseas loading decreased from 15 tons an hour to 13.27 tons in Sydney. Let me turn to two vital cargoes that every one should be interested in and should be informed about. The first one is, in truth, the life blood of our export earnings, bringing us international exchange of about £450 million a year. What has happened in connection with this cargo? I again quote the figures for Sydney although I can give them for Melbourne and other ports. The overseas loading in respect of wool decreased from 15.33. tons an hour to 12.16 tons an hour per gang. I want every honorable member representing a country constituency and who thinks about these problems to ask himself whether this is not a tragedy from the point of view of Australia as a whole, and if so whether it is not an astonishing thing that the Opposition is applauding it.

Mr E James Harrison:

– That is not true, either.


– Supporting it, then, if the honorable member would like a better word. I now turn to one other cargo, because I believe this is a cargo that should be highlighted. Many of us consider that if we are substantially to increase our export income over the next few years, apart from being able to sell large volumes of iron ore, which we now expect will bring us about £50 million a year, the second category of cargo to which we can look for substantial improvement is that carried in the meat and the freezer trade. What has happened here? These are tremendously important figures, because they show the extent to which our capacity to compete in international trade has been changed. Loading rates for meat and freezer cargoes have decreased from 12.21 tons an hour to. 10.30 tons an hour. This is a clear illustration of a reduction of throughput in the port of Sydney despite mechanisation. As I have pointed out, Sir, similar reductions in throughput have occurred also at Melbourne and in other ports throughout the Commonwealth.

I repeat what I said earlier, Mr. Acting Speaker: I think the facts ought to be known. If the Opposition resents them, let it take the consequences of its actions. But, so long as I am here and so long as I have ready access to the officially compiled statistics, I shall regard it as my responsibility to let the House know the facts, and honorable members can then make up their own minds about what they think of the activities of the waterside workers.

Question resolved in the affirmative.

House adjourned at 11.32 p.m.

page 573


The following answers to questions upon notice were circulated -

Superannuation. (Question No. 1120.)

Mr Webb:

b asked the Treasurer, upon notice -

  1. What is the percentage of the Commonwealth contribution towards the retirement pension of Commonwealth public servants on (a) the lower and (b) the higher ranges of salaries?
  2. What is the maximum retirement pension expressed as a percentage of terminal salary for which (a) lower paid and (b) higher paid public servants may contribute?
Mr Harold Holt:

– The answers to the honorable member’s questions are as follows - 1. (a) and (b). Five sevenths, or approximately 71 per cent., in each case. 2. (a) 70 per cent, for officers on salaries up to £2,663 per annum; and

  1. For officers’ on higher salaries, the percentage progressively diminishes to a minimum of approximately SO per cent.

Repatriation. (Question No. 1138.)

Mr Webb:

b asked the Minister representing the Minister for Repatriation, upon notice -

  1. Is it a fact that a Naval vessel has to be in a prescribed area for 30 days before Naval personnel are covered by the Repatriation Act?
  2. If so, will the Minister consider an amendment of the Act to provide an immediate cover?
Mr Swartz:

– The Minister for Repatriation has supplied the following answer -

No. The Repatriation (Special Overseas Service) Act provides repatriation benefits in respect of members of the Defence Force who have suffered incapacity or die as a result of “special service” in a prescribed “ special area “, irrespective of the length of such service.

Telephone Services. (Question No. 1144.)

Mr Daly:

y asked the Postmaster-General, upon notice -

How many telephone applications are outstanding at this date in (a) each State and (b) Australia?

Mr Hulme:

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

The number of outstanding applications for telephone service are assessed at the end of each calendar month. As at 31st July 1965, the position in each State and the Commonwealth was as follows -

Telephone Services. (Question No. 1154.)

Mr Reynolds:

s asked the PostmasterGeneral, upon notice -

How many telephone applications are outstanding in (a) metropolitan and (b) country areas of each State at the present time?

Mr Hulme:

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

The number of outstanding applications for telephone service are assessed at the end of each calendar month. As at 31st July 1965, the position in each State and the Commonwealth was as follows -

Cancer. (Question No. 1135.)

Mr Webb:

b asked the Minister for Health, upon notice -

  1. Did the National Health and Medical Research Council recommend that a cancer registry be set up in each State to aid in the investigation of cancer cases?
  2. If these registries have been established, have they been able to fulfil the recommendations of the Council?
Mr Swartz:

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

  1. Yes. In October 1962, the Council recommended “ that a cancer registry be set up in each State, to aid in the follow-up of cases, the assessment of the value of therapeutic measure* and preventative programmes, epidemiological research, sociological inquiries and medical education “. In May 1963, the Council recommended that, “ pending establishment of central cancer registries in each State, the work being done by various bodies in the field of cancer registration should be supported and co-ordinated by the States concerned “.
  2. At the last meeting of Council in May 1965, it was considered “that the time appeared opportune to review the activities of existing cancer registries and to define their objectives and those of proposed new registries”. A Cancer Registry Sub-committee has been appointed by the Chairman of the Council to make this review. The Sub-committee will meet on 26th August 1965, and its report will be considered at the next meeting of Council in October 1965. The extent to which cancer registries in. the various States are fulfilling the recommendation of the Council will be known after this review by the Council has been completed.

Cite as: Australia, House of Representatives, Debates, 26 August 1965, viewed 22 October 2017, <>.