House of Representatives
2 September 1965

25th Parliament · 1st Session

Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 10.30 a.m., and read prayers.

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Prime Minister · KooyongPrime Minister · LP

Mr. Speaker, the Minister for Supply (Mr. Fairhall) left Canberra this morning on the first stage of a visit to Britain, the United States of America and Europe on Government business. He will be absent for about five weeks. During his absence the Minister for Air (Mr. Howson) will act as Minister for Supply. In this chamber the Minister for Supply usually represents the Minister for Defence. While he is away the Minister for External Affairs (Mr. Hasluck) will do this.

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– I ask the Prime Minis ter a question about the Vernon Committee’s report. When the Martin Committee’s report was received by the Government in August last year honorable members expected its early publication, but we did not see it until May of this year. Will the Prime Minister table the Vernon Committee’s report immediately? If this cannot be done, will he table it within a reasonable time - that is, within the next two months - because the report is of tremendous importance to all Australians? It is the result of a lot of work by a number of distinguished people. Not only honorable members but everybody in the community would like to study its contents.


– I quite agree with the honorable gentleman. We as a Government have not yet concluded our examination of the report. We are in fact holding special meetings next week for this purpose because I agree that it is desirable that in the course of this session the report should be tabled, together with such observations as may be made.

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– I ask the

Minister for Health a question. Has further consideration been given to the inclusion in the medical benefits scheme of provisions to cover catastrophic illness?

Minister for Health · DARLING DOWNS, QUEENSLAND · LP

– This matter has been raised from time to time. Only recently I had an opportunity again to examine the matter carefully. We have found that the proposal for a higher rate of benefit with higher contribution would not be warranted for the small number of people who would be involved. We found also that the majority of such cases would be covered to a substantial degree by the present benefits. So, despite consideration that has been given to this matter, at the present time there is no intention to introduce a new table for this particular type of illness.

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– I ask the Treasurer a question along the lines of the question asked yesterday by the honorable member for Moreton. I refer to the £5,600,000 surplus amassed between 1957 and 1962 in the Commonwealth Superannuation Fund. When will the Treasurer be in a position to indicate when the surplus will be distributed, the basis on which refunds will be assessed and, particularly, the basis of reductions in contributions from 1962?


– I do not know whether the honorable gentleman has studied the statement which I made in the House recently on this matter. If that statement does not cover his query completely I would be glad to be advised. In that statement I pointed out reasons why it is not practicable at this stage to state with any precision when a Government decision on the matter can be announced. There is a good deal of actuarial work involving, literally, hundreds of thousands of cases that have to be gone into, and until the actuaries can complete this work we cannot proceed with the remainder of the action that is required to be taken.

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– My question is directed to the Minister for Primary Industry. Is the principal objective of the wool reserve prices plan to reduce extreme downward fluctuations and protect growers against exceptionally low returns, so enabling them to budget and plan farm operations on a more secure basis? Has the Minister examined the claim of the Sydney Greasy Wool Futures Exchange that wool growers can budget and plan on a more secure basis by hedging on the futures market than under a reserve price scheme, and at a considerably lower cost?

Minister for Primary Industry · FISHER, QUEENSLAND · CP

- Mr. Speaker, I do not know to what extent you would allow me to debate this issue when a bill which relates to it is at present before the House. I think that it would be more opportune to examine the merits or demerits of these proposals when that measure is being debated.

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Dr J F Cairns:

– Has the Minister for External Affairs studied a statement made by Air Vice-Marshal Nguyen Cao Ky, Prime Minister of South Vietnam, that “ the Communists were closer to the people’s yearnings for social justice and an independent national life than his Government”? Does the Minister recall that a member of this House said on Tuesday that statements like this amounted to “ peddling the Communist line “? Does he think that Air Vice-Marshal Ky, Prime Minister of South Vietnam, is now peddling the Communist line, or does he now feel that what Air Vice-Marshal Ky says is true and that it is better for him to recognise this without delay as being essential for the success of the United States policy in South Vietnam and elsewhere? Will the Minister say also what will be the effect on the intention of the United States to negotiate to end the war of the Prime Minister’s statement that South Vietnam is “ not ready for peace talks “?

Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– I have seen only newspaper reports of this statement which is said to have been made by Air Vice-Marshal Ky, and I would prefer to wait until I have an authentic official text before commenting in detail on it. As I understand the statement quoted by the honorable member for Yarra from a newspaper report, the Prime Minister of South Vietnam was making the general thesis that South Vietnam was unwilling at the present stage to enter into discussions with North Vietnam unconditionally. I am sure that anyone who has studied the history of this matter would appreciate the reasons why any leader of South Vietnam would be exceedingly suspicious and distrustful about entering into discussions with North Vietnam having regard to the past record of deception, intrigue, subversion and infiltration directed against South Vietnam by that Government.

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– My question is directed to the Treasurer. I ask him whether he has yet received a report from the interdepartmental committee to which he referred earlier this week on the question of drought relief funds in the sphere of banking accommodation. Can he indicate whether the special category of farmers unable to repay on normal banking terms has yet been investigated?


– 1 thought 1 had made it clear that the committee concerned was not merely looking into the availability of funds for drought relief. What I was putting was that the committee was looking into the availability of credit for rural producers, and that is a very much wider matter than an investigation into the drought situation. I have not yet received a report with respect to this wider aspect, but when I have it and as soon as I can make some further comment to the honorable member arising from it, 1 shall do so.

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– As the Prime Minister has very courteously agreed to investigate conditions under which life insurance companies in Australia insure the lives of Australians fighting in Vietnam, will the right honorable gentleman at the same time give consideration to the scheme under which the American serviceman receives a life policy for at least 10,000 dollars without cost to the serviceman while he is on combat service, and, in addition, the policy does not in any way prejudice his pension rights?


– 1 shall ask those who will inform me on the matter that was raised yesterday to give me such facts as they have on the matter raised by the honorable member. I warn him that it is not quite simple to compare American standards of pay and conditions with our own, as we have known for a long time.

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– Will the Minister for National Development indicate whether the

Snowy Mountains hydro-electric scheme is proceeding according to original plans, or whether modifications are contemplated to ensure greater potential for this national project?

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

– Some modifications have been made to the original plan which was put forward in 1949 for the development of the Snowy Mountains scheme. About two or three months ago, the Government decided to accept modifications of the scheme for Tumut 3 and Tumut 4. Under the new modified plan, there will be only one large dam at Tumut 3 with a very small dam called the Jounama dam below it. The purpose of this small dam is to catch the water used by Tumut 3 power station. That water will be pumped back into the Tumut 3 dam, I think this will be the first use of pump storage in Australia. This modification was made after close consultation with the States. They apparently require a large quantity of power over a very small period of peak load, and pump storage is the ideal way of obtaining it.

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– I address my question to the Minister for Air. Why was the Macchi trainer chosen? Is it a better trainer than the Canadian Canadair which I understand is used by the United States Air Force? Does the Minister agree that because of the Empire Air Training Scheme Canada has had more experience in air training than any other country? Have the Ottawa Agreement and other Commonwealth preference agreements been broken by the purchase of the Macchi trainer?

Minister for Air · FAWKNER, VICTORIA · LP

– As I have informed the House, we sent a team over to look at six different training aircraft. The team had been given an air staff requirement of the type of aircraft we needed for an all through jet trainer. The only trainer that fully met the requirement of the Department of Air was the Macchi trainer. For that reason, it is the one that has been selected. Apart from anything else, it also happens to be the cheapest, and this possibly will be of interest to the Australian taxpayers.

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– I direct a question to the Minister for Shipping and Transport. At the International Conference on the Safety of

Life at Sea held in I960, the regulations for preventing collisions at sea were revised. The revised regulations were to come into force on 1st September 1965. Is there any truth in a recent newspaper report that the Government has made a blunder by not bringing these regulations into force in time so far as Australia is concerned?

Mr Whitlam:

– On a point of order, Mr. Speaker, I point out that this question is taken from one on the notice paper in the name of my colleague, the honorable member for Stirling. It is question No. 1212. I submit that the Minister for Shipping and Transport should be given an opportunity to give a considered reply to that question.


– Order! The question on the notice paper has priority.

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– Can the Treasurer tell the House whether any application has been received from any American bank for a licence to operate in Australia? What is the policy of the Government on foreign banks establishing branches in Australia?


– Over the years requests have been received from various countries asking for the opportunity to establish banks in Australia. These requests have come from the U.S.A., Japan and from some European countries. The policy of the Government has been quite firm and consistent on this matter. It is one of opposition to the establishment of such banks in Australia. This policy has bees confirmed in quite recent times by Cabinet consideration of specific requests. There have been instances recently of some overseas banks establishing representative offices in Australia, but this does not represent an extension of their actual banking business to this country. This has been done, as I understand the view taken by those concerned, to enable these banks to provide a better service for their own clients in their own countries, and in order to equip themselves with wider and more accurate knowledge of what is going on in a country which strikes them as having great developmental potential.

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– My question is directed to the Minister for Health. It concerns the use of heroin. May I say, by way of very brief preface, that I understand there is a World Health Organisation convention prohibiting the manufacture and distribution of heroin, the philosophy behind this being that there is a high human addictability to the drug. I ask the Minister: Could the Department of Health make a fresh assessment of the validity of this philosophy, particularly as I have been assured that in the terminal stages of some diseases, such as cancer, heroin is of undoubted value to the medical profession and to sufferers?


– My Department does not undertake to evaluate drugs for any particular use. We have specialist committees set up for that purpose. As to the importation of drugs or the local manufacture of drugs, if they are to be included on the pharmaceutical benefits list they are examined by the committee set up for that purpose. If they are imported for general distribution or manufactured locally for general distribution we refer them for consideration by the Drug Evaluation Committee, which is a committee of specialists. I will see that the question raised by the honorable member is referred to the particular committee concerned and will let him have a reply later.

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– My question, which is directed to the Treasurer, concerns the Government’s refusal to subsidise the shipping service operating between King Island and the Tasmanian mainland. I ask: Is the Minister aware that the subsidy granted by the Government to the King IslandMelbourne shipping service has resulted in a substantial freight disadvantage to Tasmanian traders? Is he aware also that any attempt by the Tasmanian Government to equalise the subsidy for the King Island-Tasmania shipping service would almost certainly be regarded unfavorably by the Commonwealth Grants Commission? Will the right honorable gentleman, therefore, reconsider the representations that have been made for the payment of an equalising subsidy to the shipping service between King Island and the Tasmanian mainland?


– The House will appreciate that this rather involved question raises issues of policy. I shall therefore consider the text of the question and see what considered reply I can give.

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– My question is addressed to the Minister for Primary Industry. Does he know that it is reported that many head of stock in drought areas are dying owing to the inability of the owners to obtain finance to purchase stock feed? Is it true that there may be delay in providing such finance owing to the question of whether it should be provided by the Commonwealth or by the State Governments? Will the Minister treat as urgent discussions with the Prime Minister, the Treasurer and appropriate State Ministers with a view to sweeping away protocol and saving stock which are the very basis of our economic stability?


– I am well aware of the effects of the drought on the economic position of Australia and on primary producers. I know of my own knowledge the action that is being taken by the Governments of both Queensland and New South Wales in giving direct assistance by way of financial grants. The question asked by the honorable member for Cowper also has a bearing on this matter. The Treasurer has a committee looking into the further expansion of rural credits to provide drought relief. But, in the first instance, action has been taken by the State Governments to make finance available through their various instrumentalities. Queensland, for instance, has been giving grants of up to £500 per settler for drought relief purposes where there is a particular need. It does not always follow, of course, that this meets all the needs. Nor does it always follow, even if the grants are given, that the fodder is available. We all know that there is a distinct shortage of roughage to mix with grain for fodder purposes.

Mr Beaton:

– Is the assistance given by way of grants or loans?


– If I used the term “ grants “, I thank the honorable member for his correction. The assistance is being given by way of loans to primary producers in Queensland, and the New South Wales Government is taking similar action. In both States, freight concessions are being given to enable fodder to be transported more cheaply. So, in effect, the answer to the question asked by the honorable member for Mallee is that the responsibility rests with the States and there is no conflict about what the respective responsibilities of the State Governments and the Commonwealth are in this matter. I think all the Governments are looking at the problem sympathetically.

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– I direct a question to the Minister for External Affairs. I ask: Has he any information that the United States and Thai Governments are becoming increasingly alarmed at Communist penetration and agitation in Thailand? Is this agitation being assisted by graft and corruption? I quote from the “Wall Street Journal “ of 28th August. This is a conservative American publication with a national circulation and a standing equivalent to that of the “ Australian Financial Review”. I quote-

Mr SPEAKER (Hon Sir John McLeay:

– Order! The honorable member will not be allowed to quote the contents of a report in the publication. He may mention it as his authority.


– I shall not quote it. Graft and corruption among Thai officials in outlying villages was one of the biggest obstacles in overcoming the infiltration. I ask: What does the Government propose to do to eliminate this graft and corruption? Will the Minister assure me that if the Thai people revolt against this graft and corruption we shall not be involved in the suppression of a genuine people’s uprising?


– It is a well documented and well authenticated fact that, in accordance with the characteristic Communist pattern of aggression, use is being made of a dissident movement in any Asian country to set up something which might be described as a liberation front and which might be used as a means of undermining and overthrowing the government of the country concerned. Our attitude in this matter is that so long as the government of a country is constitutionally empowered to act on behalf of that country, our dealings are with the government and we do not make it our business-

Mr Jones:

– Does the Minister condone graft and corruption?


– Order! The honorable member has asked his question.


– Nor would it be a good principle in international relations to interfere in the domestic affairs of any country. Some opposition members are laughing. Would they appreciate the Government of Thailand seeking to investigate happenings inside Australia or to intervene in the affairs of Australia? The plain fact and the fact of importance to this country is that Thailand, a fellow member of the South East Asia Treaty Organisation, under its present Government, is engaged in resisting Communist aggression. We are aligned with it in S.E.A.T.O. and that is the dominant and most important fact for the Australian people and for the interests of the Australian nation. Whether in any country there may be an ideal government or a government that is less than ideal is not an issue for the Australian people. We must respect the domestic jurisdiction and the internal affairs and responsibilities of other countries. I suggest to the honorable member and to the House that the undisputed fact that is of greatest concern to us, and which overrides any other concern, is the Communist aggression that is taking place in Asia and is being directed against Thailand. The resistance of Thailand to this Communist aggression is a matter of supreme importance to the Australian people.

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– I address a question to the Minister representing the Minister for Civil Aviation. Has he seen the pamphlet placed in every seat of aircraft travelling interstate which, in part, is headed “ Your Captain Sees Even When You Can’t “? Does this refer to periods when visibility is near zero and by inference indicate that the aircraft can be landed under these conditions? If this is the intention, why are airports closed, particularly the Fairbairn airport, when a light fog shrouds them?


– I have not seen the pamphlet referred to by the honorable gentleman, but I presume it must refer to the instrument landing system that is installed in aircraft and at all capital cities. This system enables an aircraft to approach an aerodrome to within a height of 300 feet, but it must have forward visibility of about 800 yards. Some other countries use even lower standards than these. I think it will be a considerable time before we have a fully automatic landing system that will enable an aircraft to land in zero visibility. This undoubtedly will come at some time in the future, but the expense will be great and personnel will require a considerable amount of training. It is not likely to be used other than on international air routes for quite a long time to come.

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– My question is addressed to the Minister for Territories. On Wednesday, 18th August, in this House the Minister in reply to a question asked by me said that the timing of the independence of the Territory of Papua and New Guinea was a matter for the people themselves. Last Friday, he is reported as having informed a meeting of a Junior Chamber of Commerce in Melbourne that it could be 20 years before independence was granted. Is the correct interpretation of these two statements that, as long as the people of Papua and New Guinea do not want independence within 20 years, it will be granted by this Government? Does the Minister appreciate that internal or external pressures will be applied for the earlier independence of the Territory and that it is in Australia’s interests to have a much earlier target date than 1985?

Minister for Territories · MCPHERSON, QUEENSLAND · CP

– When I was addressing a meeting of the Melbourne Junior Chamber of Commerce I was asked to say when I thought Papua and New Guinea would obtain independence. I made it clear that it could be 20 years, but I also intimated that it did not matter what I or anybody outside the Territory said; it was for the people themselves to say whether they wanted self-government or independence. I might add that this was not a loose statement. I have had the opportunity to travel around a very large area of Papua and New Guinea, particularly in rather remote regions. These areas contain most of the inhabitants of the Territory. On all occasions they tell me that they will not be ready for self-government or independence for very many years. The type of expression one hears is: “ My son’s son will probably see self-government”. This is an expression by these people and I make no apology for taking notice of what they say. The fact is, Mr. Speaker, that pressures come from outside the Territory for rapid advancement to independence and selfgovernment. The Deputy Leader of the Opposition, I think, stated at a seminar: “Independence by 1970;” and a local European member of the House of Assembly said: “ Independence even sooner.” This is despite the evidence given to the Mission of the United Nations Trusteeship Council. It is a habit that noone takes notice of what the people really want themselves.

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– I wish to ask the Minister for Health a question supplementary to that asked by the honorable member for Moreton. Would the honorable gentleman obtain the necessary information and inform this House as to the annual reported addiction by Australian citizens in this country to the drug heroin over the last 20 years and also comparable figures for the drug pethidine?


Mr. Speaker, this information and the statistics concerned, of course, would mostly be held by the various States. The Commonwealth would have the responsibility so far as our own Territories are concerned. 1 will see what information can be obtained from the States and if it is necessary I will certainly provide it in a statement to this House.

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– My question is addressed to the Minister representing the Minister for Civil Aviation. Will the Minister have inquiries made to ascertain the reason for the present unsatisfactory service being provided by both airlines serving the Northern Territory? As the charges per mile on this service are greater than those charged on the inter-capital routes, will the Minister take action to see that the service provided is not of a lower standard than that provided on the other routes? At present the frequent delays of up to 24 hours are causing great inconvenience to those using the service, which seems to have deteriorated since the so-called rationalisation took place.


– I was not aware of the deterioration which the honorable member alleges in the services to the Northern Territory but I will certainly arrange to put this matter before my colleague, the Minister for Civil Aviation, in another place. He has just returned to Canberra and I will see that he presents a reply to the honorable member as soon as possible.

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– Has the attention of the Minister for Health been drawn to a booklet titled “ Sense No. 2, the World Wide Collapse of Medical Leadership “? Is he in a position to advise the House in respect of the standing of the Institute of Rheumatology which published the document? Is this a one man show? Could he also advise whether his Department has given consideration to the issue of a published statement with reference to some of the amazing criticism of current medical treatments which could be disconcerting to many sick people throughout the country?


- Mr. Speaker, I have not seen a copy of this particular book. If the honorable member has one in his possession I would certainly like to read it. I am not sure whether my Department has actually seen it. However, I will certainly make some inquiries regarding the matter and let the honorable member have some information later.

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– I address a question to the Minister for Housing. Have total new housing loans approved by Australian savings banks fallen from £40.8 million in the June quarter of 1963-64 to £35.2 million in the June quarter of 1964-65? Has there been a fall in undrawn housing loan commitments by such banks from £50.7 million to £42.3 million at the end of the corresponding quarters? Has the Minister examined the present extent of the diversion of labour from the limited building industry pool to the proliferating and economically redundant construction of petrol service stations, shopping centres and chain stores? Will the Minister inform the House of the extent and nature of any investigation that he may have made?

Minister for Housing · WENTWORTH, NEW SOUTH WALES · LP

– It so happens that it is my intention, when speaking on the Budget tonight, to deal with the factors involved in the changing housing situation. The honorable member will appreciate that there are many complex factors involved. 1 hope to deal with as many of them as I can in my speech tonight.

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Mr Kevin Cairns:

– In directing a question to the Minister for Labour and National Service I refer to an address given in Adelaide last week on the Minister’s behalf by Mr. Davidson of the Department of Labour and National Service. In this address Mr. Davidson referred to the greatly increased participation of married women in the Australian work force. Can the Minister indicate to what extent this increased opportunity to work is possible for women in the towns and provincial cities outside the metropolitan area compared with opportunities available in the principal capital cities?

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

– Last week, on my behalf, one of the officers of my Department read an address in Adelaide. It was pointed out that the addition of women to the work force or to wage and salary earners had made, last financial year, a notable contribution to the development of this country. In fact, had it not been for the addition to the work force made by women we could easily have found - I use this term advisedly - a crisis in the employment of labour in Australia. It is true that there are greater employment opportunities for women in the metropolitan areas than there are in some country areas. In particular, we have problems in areas such as Wollongong and its surroundings. What we are attempting to do is to convince many manufacturers and other employers of labour, particuarly those who can employ female labour, of the advantages if they can persuade women to move from country and other areas into areas where women can be employed. We also want to get into the minds of people - for example, in such areas as the Wollongong area - the fact that light industries that can employ women should be established in those areas. That would provide an opportunity for much more balanced growth than exists at the present moment. I will look further at the question asked by the honorable gentleman and give him a more detailed reply later.

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– I ask the Minister for Health a question. In view of the fact that existing pensioners, together with new applicants qualifying for pensions, from next January will all enjoy the pensioner medical service, is any special significance attached to the date 1st May 1965 which was mentioned by the Minister in his statement this week? Further, will the Minister give some thought to including among those eligible for the benefit recipients of mine workers superannuation who do not qualify for the age pension until they are 65 years of age but whose wives qualify for and receive age pensions on reaching the age of 60? Will he also tell the House why the Government finds it necessary to watt until 1st January 1966 to extend the pensioner medical service? Could he review the decision and apply the extension a few months earlier?


– -The main reason for the commencing date being 1st January 1966 is the volume of administrative work connected with the issue of pensioner medical service cards. The honorable member will understand that as about 137,000 people will be affected there has to be a careful check of all the records through the Department of Social Service? and Repatriation Department. All the names have to be sorted out and cards have to be prepared. So after the passage of the legislation by this Parliament some time will be necessary to enable this administrative work to be done. It has been estimated that 1st January 1966 would be about the earliest possible date that the scheme could commence. There is no reason other than purely administrative ones why the commencing date cannot be earlier than 1st January.

The significance of the reference to the means test applicable in May of this year is that the extension of the service is related to the existing means test; that is, the means test that applies at the present time. If any changes are made in the means test in the future, the matter will have to be considered in relation to those changes. I am afraid that the extension of the pensioner medical service to other people cannot be considered. The proposal relates merely to recipients of social services or repatriation pensions and their dependants, and to the existing means test.

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– I address a question to the Minister for Primary Industry. Apart from the first payment, what procedure is followed by the Australian Wheat Board in making payments to growers from wheat pools? Will there be any such payments in the near future?


– The first payment to the wheat growers is guaranteed by the Commonwealth Government through the Reserve Bank of Australia. The Australian Wheat Board sells on the market and when realisations from such sales create a credit balance - in other words, when the debit is liquidated - and the Board has sufficient money to make an interim payment it seeks approval from me to make that payment. Up to date, I think the No. 27 pool has paid 1 2s. 9d. a bushel for bulk wheat and 13s. 4d. a bushel for bagged wheat to the growers. The Board has requested my approval for a further payment of 7d. That payment will be made in due course, as soon as the Board is able to make the necessary administrative arrangements.

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– I address a question to the Postmaster-General. Is finance readily available for the purchase of housing for employees of the Postmaster-General’s Department? Will the Minister tell the House what action has been taken to procure additional housing for such employees in outlying areas?

Postmaster-General · PETRIE, QUEENSLAND · LP

– I have answered this question for many honorable members over the last 12 to 18 months. It is not the policy of the Department to provide houses or to make houses available for all employees who live in distant areas. There are many reasons for that policy. They include the fact that there is a required rental which bears a relationship to the salary or wages paid. Many employees find that they are able to obtain premises at lower rentals than are required for Commonwealth accommodation, and therefore they prefer the other accommodation. We seek to provide, where necessary, up to approximately 50 per cent, of the accommodation requirement in particular areas. But there are other factors in relation to various areas, which cannot all be enumerated at question time.

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– Does the Minister for External Affairs have information to indicate that a new phase in the struggle for Thailand has begun, as reflected in a question asked by an honorable member opposite this morning? Is it true that Marshal Chen Yi of China has long since threatened Vietnam-type aggression in Thailand during 1965? Is it a. basic Communist technique to suggest to the free world that no government, other than a Communist one, has the right to exist if it can be shown to be less than perfect by Western democratic standards?


– Each of the three parts of the question addressed to me by the honorable member shows great perspicacity and a true appreciation of the situation.


– I ask the Minister for External Affairs whether the Government is aware of any graft or corruption among Thai officials in outlying villages and of any efforts by the Thai Government to combat them. If so, has the Australian Government expressed its willingness in the terms of the South East Asia Collective Defence Treaty to co-operate with Thailand in measures to counter such practices?


– I think it would introduce a very bad rule in the conduct of Australian external policy if we started making public statements about the internal affairs of other governments. The only puzzlement in my mind is why the series of questions from the Opposition this morning, calculated to belittle and besmirch the reputation of the Thai Government, should have been raised in an Australian Parliament. Is it our business as an Australian Parliament to run Thailand? Is it in our interests as an Australian people to try to belittle Thailand and reduce the status of the Thai Government?

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Motion (by Mr. Harold Holt) agreed to -

That leave of absence for two months be given to the honorable member for Phillip (Mr. Aston) and the honorable member for Franklin (Mi. Falkinder) on the ground of parliamentary business overseas.

Motion (by Mr. McEwen) agreed to -

That leave of absence for two months be given to the honorable member for Gwydir (Mr. Ian Allan) on the ground of parliamentary business overseas.

Motion (by Mr. Calwell) agreed to -

That leave of absence for two months be given to the honorable member for Adelaide (Mr. Sexton) and the honorable member for Reid (Mr. Uren) on the ground of parliamentary business overseas.

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Motion (by Mr. Adermann) agreed to -

That the House, at its rising, adjourn until Tuesday, 14th September, at 2.30 p.m.

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

Second Reading

Minister for Trade and Industry · Murray · CP

– 1 move -

That the Bill be now read a second time.

This Bill proposes a number of amendments to the Export Payments Insurance Corporation Act 1956-1964. The most important of these are the amendments which I foreshadowed during the last session of Parliament in relation to the insurance of certain classes of Australian investment in overseas countries. This amendment will authorise the Export Payments Insurance Corporation to insure certain types of Australian investments in overseas countries against noncommercial risks which might arise in these countries. The other amendments proposed would authorise -

An increase of £1,000,000 in the capital of the Corporation.

An increase of £25,000,000 in the maximum contingent liability which the Corporation can accept under contracts of insurance and guarantee.

A reduction of the minimum value of export transactions in respect of which the Corporation may provide guarantees.

The investment insurance amendments will authorise the Corporation to insure Australian investors against three categories of risk -


Damage or destruction of property caused by war, riot, insurrection, and similar happenings.

Inability to transfer capital or earnings back to Australia.

These are risks which are deterrents to investment abroad and against which a number of countries, such as the United States of America, Germany, Japan and Denmark, already provide insurance. Others are considering its introduction. We are proposing that the Australian Government should provide this form of insurance, through the Corporation, because there are certain kinds of overseas investments which we believe Australian investors should be encouraged to make. These are investments which, broadly speaking, are aimed at preserving current and potential overseas markets for our exports, particularly the markets in the developing countries of the world.

The case for encouraging this type of investment can be put fairly simply. It is good business for us and at the same time should provide material assistance to developing countries in pursuing their industrialisation plans. The developing countries are already important markets for our exports - they take roughly 15 per cent, of our total exports. We are convinced that, in the years ahead, they will grow in importance. We are also convinced that, in the process, there will be significant changes in the composition of their imports - changes to which we must adapt ourselves if we are to secure the expanding share of this trade we are seeking.

The developing countries are determined to industrialise as quickly as possible, not only to save imports but also because, like ourselves, they see industrial growth as the main source of increased employment opportunities and incomes. The pattern of industrial growth is already emerging - more slowly perhaps, in some countries, than they and we would wish. Nevertheless, the forces at work are such that we may be sure that this growth will gather momentum and that, in the long run, they will secure the benefits we ourselves have reaped from a measure of industrialisation.

It is not enough, however, simply to acknowledge the need for industrial growth in these countries and recognise that it is inevitable. There must also be a willingness to support the basic international trading policies which will generate industrial development and then provide whatever practical assistance we can to help the establishment and growth of industry. We are already doing both of these things. Australia has consistently and strongly supported, through the General Agreement on Tariffs and Trade and the United Nations Conference on Trade and Development, the kind of trading policies that are needed. Better access to markets and better prices for the traditional exports of the developing countries: That is trade, not aid.

On the practical side, we have introduced a range of preferential duty rates for processed or manufactured imports from the less developed countries, which we hope will provide practical assistance in the development of their industries. At the same time, we must recognise that there are important implications for our own present and future trade in this pattern of development. As new industries are established, the developing countries will, quite naturally, take action to protect the goods they produce, by restricting, in one way or another, the importation of the same finished goods. This means, however, that as industry grows the market for finished products will tend to shrink, at least in relative terms and this is the changing pattern of import demand to which we must adapt ourselves.

At present, our exports to the developing countries contain a much higher proportion of processed or finished goods than our exports to other countries. In 1963, for example, over 70 per cent, of our exports to developing countries were processed ot finished, while only about 40 per cent, of our exports to Western developed countries were in this group. This is to be expected, of course, since many of the developing countries are still in the early stages of industrial development. However, as the pace of industrial growth quickens, and the production of finished goods expands, they will require a greater proportion of their imports in the form of materials or semi-processed products. In this situation, Australian exporters must be willing, as the need arises, to commence assembly or production operations within the market itself, if they wish to hold their overseas customers. In other cases, investment overseas may be the only real means of breaking into new markets for components or semi-finished products.

In short, exporters may be faced with the need to invest in the market or see their share of it decline. They may well decide, of course, that the comparative safety of investment in Australia is more attractive than a new and unknown range of investment risks in another country and nobody would blame them for making this choice. But, in the long run, it might not be the best course from the national point of view. Therefore, we need to be able to remove the new and unfamiliar risks, of a noncommercial character, which might deter Australian manufacturers faced with this situation, from investing abroad. This is what we propose to do in this Bill, by offering insurance against these risks.

There are two further aspects to this general question of development and investment, which I want to raise. The first is that the broad pattern which we expect the developing countries to follow, is basically no different from our own pattern of development, in the post-war years. We have had large scale development of import saving industries, in many cases by overseas firms which recognised that to maintain their sales in Australia they needed to come here and produce the goods in this market. Despite this import saving however, our overall growth has sustained an ever increasing demand for imports. There are solid expectations that this will also happen in the developing countries. As industrial growth generates higher incomes, new import demands will arise and our exports to these countries, though of a changing kind, will continue to grow.

The second aspect relates to our position as a capital importing country. On the face of it, it may seem inconsistent that, as a country which needs and will continue to need developmental capital and know-how from abroad, we should now seek to encourage the outflow of some capital and know-how. There is no inconsistency in this at all. In fact, we see it as a natural development of our industrial and trading growth. We have now reached a stage in our development at which we can, indeed must, pass on to other countries, at earlier stages of development, the know-how we have so far acquired. In many countries it is this know-how, rather than capital, which is required. In others, some capital will be needed but the amount will be small in relation to the volume we need and acquire, from both domestic and overseas sources, for investment in Australia. In short we have now reached the stage where we can trade, even though in a relatively small way, in capital and know-how, as well as in goods, to the mutual advantage of ourselves and our trading partners.

I refer now to the main characteristics of the scheme we are proposing. Firstly, I refer to the kind of investments which will qualify for insurance. Each case will be considered separately and on its merits and not against any rigid set of criteria. Indeed, we realise that because of the wide variety of investment arrangements which occur we will need to have a fairly flexible approach to this and a number of other questions. However, several broad principles will apply. The first is that before insuring an investment we will need to satisfy that it will bring to Australia either current or potential export benefits. This, after all, is the main purpose of the proposal - to protect and expand the markets for our export products- and where it is apparent that this will occur, the investment will generally be eligible for insurance. For example, an Australian manufacturer may establish a factory overseas and arrange for materials or components to be exported from the Australian parent company for processing, assembly and sale in the overseas country. This is the most common form of arrangement and provided there are no other obstacles, it would qualify for insurance.

The second principle we intend to apply is that there must be direct participation by the Australian investor in the overseas enterprise. In those cases where Australian investors establish their own business in overseas countries, this will present no problems. However, where they undertake joint ventures with investors in the overseas country, the arrangement will need to provide for some direct participation in the enterprise by the Australian investor, apart from the mere provision of capital.

At this stage, and until we have had some experience in this form of insurance, this distinction must necessarily be drawn in fairly broad terms. However, we regard it as important that we should encourage only those investments which are not only consistent with our own interests but will also make a genuine and worthwhile contribution to the industrial development of the overseas country. This, after all, is no more than we hope to see in overseas investments which are made in this country.

The Government also intends to administer these insurance arrangements in such a way as to encourage Australian investors to associate with investors in the overseas country in joint, rather than wholly Australian owned ventures. Whenever appropriate, for example, there will be a preferential premium rate for investment in joint ventures. Here again, we are merely acknowledging that we should encourage a type of investment which most countries, including ourselves, prefer to see. To put it in more general terms, we will be looking for investments which recognise the objectives of both countries, in the belief that, in the long run, these will be the most successful ones.

Insurance will be available not only to companies but also to Australian citizens, Commonwealth statutory bodies, Commonwealth and State marketing authorities, semi-government institutions, private organizations, and partnerships. However, the Government will reserve the right to refuse insurance in cases where, because of the structure or operations of the investing company, it would not be in our best interests to provide insurance. If, for example, the investing company were wholly, or very substantially foreign owned, or were subject to extensive franchise restrictions in its export operations, it would need to be demonstrated that there were very real and substantial export benefits in the investment, before it could be accepted for insurance. We are proposing that, as in the case of similar schemes operating in other countries, insurance should only be available for new investments. However, to avoid any difficulties which this might raise for investors who may have found it necessary to conclude investment negotiations in recent months, it is proposed that investments entered into after 1st January 1965 should be eligible for consideration.

I now add a little more to what I said earlier about the risks which will be covered. It is proposed to insure only against noncommercial risks which are outside the control of the investor. There will be no insurance against normal commercial risks such as failure to make a profit, or devaluation in the overseas country. Three broad categories of risk will be covered - expropriation risks, transfer or convertibility risks, and war and insurrection risks. Separate contracts will be available for each type of risk and an investor may confine his cover to any one of the three risks, that is there will be no compulsory “ blanket “ cover of all risks.

An expropriation risk contract will provide cover against direct Government action or Government condoned action, which results in loss by expropriation, confiscation or nationalisation. It will also cover discriminatory and substantial interference in the control or operation of the enterprise which might occur, for example, as a result of discriminatory treatment in respect of the firm’s output or prices or in the issue of import licences. Since discriminatory action of this kind can have the same effect as direct expropriation and is not an uncommon risk, we believe that it should be covered.

A transfer risk contract will cover losses due to the inability of the investor to repatriate capital or remit earnings, in Australian currency, as a result of the imposition of exchange restrictions, which were not in force at the time the contract was issued. Cover will also extend to losses arising out of the imposition of penal and discriminatory rates of exchange. A war risk contract will cover losses due to physical damage to property, as a result of war, civil war, riot, insurrection or any similar occurrence.

Although this form of insurance is particularly designed to encourage investment in developing countries, and in the event, will doubtless be largely confined to these areas, it is possible that a demand may arise for insurance in other countries. lt is therefore proposed, that insurance should be available for all eligible investments, regardless of the country of investment, although the Government will naturally reserve the right to refuse to insure investments in a particular country.

In the event of claims under contracts issued, the compensation paid will normally be limited to a maximum of 90 per cent, of the actual loss, the investor bearing the remaining 10 per cent. In this form of insurance, the Export Payments Insurance Corporation will be acting as the agent of the Government and, accordingly, income from premiums and other sources will pass to the Government and any compensation payable under contracts will be a charge on the Government. Contracts will normally be issued with a maximum term of fifteen years and a minimum term of five years. The five year minimum is designed to discourage the short-term, quick return, type of investment which, we believe, is not in the best interests of either Australia or the host country. lt is proposed that, as is the case with the United States, West Germany and Japan, the same premium rate should apply to insured investments in all countries, regardless of the varying economic and political conditions. However, actual rates have not yet been determined and these will be the subject of further consideration and advice by a committee of interested Commonwealth departments.

The present scheme does not cover investment in the Territory of Papua and New Guinea or other Australian Territories. The scheme is aimed at encouraging investment in overseas countries for the purpose of protecting and expanding Australia’s exports. It is therefore not equally suited for application in Papua and New Guinea where it is one of the objectives of the Government’s policy to make the local economy more viable by promoting investments which will stimulate exports from the Territory itself and reduce its relative dependence on imports. The particular requirements of investment in Papua and New Guinea are being further examined in the light of overall conditions in the Territory and the Government’s policy of promoting maximum development of the Territory.

I deal now with the other amendments to the Export Payments Insurance Corporation Act which are proposed in the Bill and which relate to the Corporation’s present payments insurance and guarantee facilities. The Government has decided that the capital of the Corporation should be increased from £lm. to £2m. The last increase in the capital of the Corporation was in March 1959, when it was raised from £500,000 to £lm. Since then, I am pleased to say, there has been a substantial increase in the volume of business being written by the Corporation and. as a result, there has been a corresponding increase in its contingent liabilities. These have risen from £10.6m. in March 1959, to £41. 6m. as at the end of last June. Although they are fully guaranteed by the Commonwealth, an increase in capital is needed to enlarge the reserves readily available to the Corporation to support its business. Income from the investment of the capital will also help to augment the reserves. I might add that in addition to this actual contingent liability, further business of the order of more than £20m. is at present under negotiation.

Because of the growth in liabilities to which I have just referred, the Government also proposes to increase the maximum contingent liability which the Corporation can accept under contracts of insurance and guarantee. The ceiling now stands at £75m. and, with current liabilities at about £42m., there is at present a reasonable margin within which the Corporation can negotiate for new business. However, the growth in business and liabilities in recent years has been quite outstanding - 25 per cent, in 1964-65 and 44 per cent, in 1963-64 - and if an increase within this range occurs during the present year, as we expect it will, the present ceiling might begin to hamper the Corporation in the conduct of its business. The Bill therefore provides for an increase in the statutory maximum from the present £75m. to £100m.

The Bill also proposes a modification to one of the conditions under which the Corporation may at present issue guarantees to banks which provide finance to export transactions involving credit terms of two years or more. When these guarantees were introduced last year, it was decided that they should be limited to export contracts valued at £100,000 or more. The limit was put at this level largely because we were feeling our way with a new facility and had little or no information at that time about the size of export transactions on terms of two years or more.

Since then however, various export organisations have suggested that the limit should be reduced and our own investigations into the volume and size of credit transactions have pointed up a need to broaden the range of exporters who might qualify for guarantees. For these reasons we are proposing in this Bill that the minimum value at which the Corporation may issue guarantees should now be reduced to £25,000 and that in view of the possibility that changing circumstances may call for quick review of the position, this figure should be prescribed in regulations, rather than specified in the Act.

Changes will also be made in several other conditions under which guarantees may be issued. These do not require amendment of the legislation but will no doubt be of interest to honorable members. The range of eligible exports, which is at present confined to capital and semi-capital goods, will be widened to include manufactures which are normally sold on credit terms of two years or more. In addition, the Corporation will be given authority to increase the cover provided under a guarantee during the first two years of the credit period, from the present limit of 90 per cent. to 100 per cent.

Finally, a further brief comment on the investment insurance proposals. This is a form of insurance in which neither we nor E.P.I.C. have yet had experience. Nor indeed have many of the countries with whom the Commissioner of E.P.I.C. regularly consults on insurance matters. Accordingly, we recognise that as Australian exporters become more experienced in overseas investment and as we become more familiar with its insurance, the need to modify the arrangements I have proposed may well arise.

This, in a sense, is an export aid for which there is already a need and for which I believe the need will grow as time goes on. The Government has an important role to play in this field, not only in providing insurance but also in showing the way, in encouraging exporters to look to the years ahead. We are a relatively small country in a world of rapidly changing political and economic attitudes and if we are to prosper in it we must be ready to recognise and, if need be, adjust to the changes going on around us. I commend the Bill to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 724


Approval of Work - Public Works Committee Act

Minister for Shipping and Transport · Forrest · LP

– I move -

That, in accordance with the provisions of the Public Works Committee Act 1913-1960, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to this House: - Provision of Additional Aprons, Vehicular Pavements, Electricity, Sewerage, Water Supply, Roads and Instrument Landing System for Melbourne (Tullamarine) Airport

The proposal involves the provision of engineering services and roads, additional aprons and pavements and the proposed instrument landing systems. The estimated cost of the work is £2.15 million. Upon the concurrence of this House in the motion the work can proceed in accordance with the Committee’s recommendations.


.- I oppose the motion. I do so on the ground of principle rather than because of any desire on my part to deprive the people of Victoria and elsewhere of the very best facilities in international and domestic airports that engineers, scientists and architects can provide. During the parliamentary recess the Government referred to the Public Works Committee a number of matters concerning work required by the Department of Civil Aviation in connection with the provision of international airports at Mascot in New South Wales and at Tullamarine in Victoria. Having studied those references I am impelled now to speak in opposition to the first of the two

Tullamarine projects. I do so in an endeavour to influence the Government to revise its airport policy which, as I see it, is at present loaded in favour of Victoria and against New South Wales and other States. In the short term there would not be a great deal of difference in the amount of money that is to be spent at the two airports, possibly a matter of a few million pounds; but because of the geographical differences between the two centres the long term results at the two places could be vastly different, as I shall try to show. lt has always been my understanding that in a national parliament State jealousies should be avoided whenever possible and that ut all costs one State should never be given an advantage over another State. Yet this is the very result that emerges from an examination of these two references. If my guess is correct, Mr. Speaker, there are persons in this Parliament and elsewhere who will stop at nothing to have Tullamarine established as Australia’s leading international airport; and by this means it is hoped this result will be achieved. I personally reject the Minister’s assurance that this result will not ensue, because actions speak louder than words. In my view intercontinental air services will proliferate within the next few years, and I believe it is quite possible that many overseas aircraft companies will, through their respective governments, endeavour to negotiate a new international air transport agreement which would entitle them to fly to and from Australia. It is well known that several American aircraft companies have already shown interest in international air routes which would include Australian airports, and that in fact Eastern Airlines of the United States has already applied to Washington for a licence to fly to Australia. Many others will do likewise when faster intercontinental services become practical.

Only recently the Fill aircraft was reported to have flown at more than twice the speed of sound, and for a long time the X2 has been flying at speeds of up to 4,000 miles an hour. I believe, therefore, that the next decade or two will be of great importance to the Australian air transport industry. We can expect intercontinental services involving direct flights between Australia and the other continents; and in such a situation aircraft companies that obtain licences to fly to and from Australia will have to establish maintenance depots, engineering workshops and terminals in this country. 1 believe that Tullamarine with all its modern facilities, especially with its domestic airline terminals soundly established at each end of the international terminal, would make Melbourne the logical choice of airline companies as the city in which to establish their headquarters.

It has already been decided to spend something like £18 million at Tullamarine, excluding the cost of the resumption of land; and of this amount about £3.5 million will be spent by the Government on terminals for Trans-Australia Airlines and Ansett-A.N.A. At Mascot about £14 million is to be spent, with apparently nothing at all to be spent by the Department of Civil Aviation on domestic terminals for either T.A.A. or Ansett-A.N.A. There appears to be a difference of only a few hundred thousand pounds in the cost of the international sections of the terminals at Tullamarine and Mascot, but because of the swampy nature of the site at Mascot, the site preparation and foundations for the project there will cost something like £4 million, which means that less will be spent on the building itself at Mascot than will be spent at Tullamarine. Whichever way one cares to look at the two references, Tullamarine has the edge on Mascot. If honorable members look at the report that is now before the Parliament they will see that I supported the proposal contained in the reference. I did so because I realise that in the next few years, and in the unforeseeable future, Australia will have to spend more of its public funds on expanding air services between this country and all other parts of the world. It is now, therefore, in the initial stages of new airport developments that proper planning should be undertaken.

At Tullamarine enough land has been reserved to enable almost unlimited expansion of future airport facilities. About 5,300 acres of land has been purchased. At Mascot, however, an area of less than 1,500 acres is available for aviation purposes. The present proposals for Tullamarine envisage an international terminal which should be able to cater for travellers far into the 21st century. As I have already said, domestic terminals for T.A.A. and Ansett-A.N.A. will be built at the same time, and the cost of these buildings is included in the estimates provided for the international terminal building reference to the Public Works Committee. Therefore, in the movement of interstate and intrastate passengers from their respective cities for international travel, inconvenience will be reduced to a minimum, as everyone will move through the same buildings. That is how it should be, of course, Mr. Deputy Speaker.

Full services at Tullamarine are expected to come into operation late in 1969. The facilities at Mascot, in a limited sense, will come into operation about the same time, or possibly some months later. But it could be an indefinite number of years before the domestic airlines operating out of Mascot will be able to afford to build their terminals adjacent to the international terminal on the north western side of the airport, if the Government does not undertake to include that work in the present references relating to Mascot, as it has done in respect of Tullamarine. If everything is on the level in relation to these references, the Minister should give us all the information we should have. I ask him to inform the Parliament of the reasons why the Government has allowed plans for work allegedly of an identical nature to cost tens of millions of pounds to come before the Public Works Committee for its consideration, knowing that at Tullamarine the whole project is to be completed in its entirety as one work, while at Mascot the plans provide only for the completion of the international terminal building, and completely disregard the requirements of the New South Wales domestic airlines and the great inconvenience that would be caused to all who use air transport in that State.

Anyone with any knowledge of both proposals knows that at Tullamarine there is practically no limit to what can ultimately be achieved in air transport facilities, whereas it is common knowledge that airport expansion at Mascot could well have reached its limit before 1980, or in approximately 15 years time. At Mascot, without huge resumptions of land, there is physically nowhere to go in airport development. Even with resumptions, expansion would be so limited as to compel the government of the day by the turn of the century to look elsewhere for airport facilities. It could well be that an airport would have to be built in an area much more remote from Sydney than would be the case if adequate facilities were sought now. For myself, Mr. Deputy Speaker, I would far rather continue to suffer inconveniences now - they will increase within the next few years, I know - if this would mean that Sydney would ultimately have an airport in all respects befitting the great city that it is, and if it would ensure that development of the airport would not become saturated within the next 100 or 150 years, if ever.


– Order! I remind the honorable member that the matter before the House concerns additional aprons, vehicular pavements, etc. at Tullamarine airport. The particular matter on which the Public Works Committee has reported, and to which the motion before the Chair relates, is reasonably limited, and the discussions should be confined to this matter. The honorable member may illustrate his remarks by reference to certain aspects of Mascot airport and works there, but I remind him that the debate cannot be allowed to develop into a general debate on international air terminals and international aviation generally. I suggest that the honorable member has sufficiently illustrated his remarks by reference to Mascot and has made his point as to why works at Tullamarine should not proceed.


– With due deference to you, Mr. Deputy Speaker, and to your opinion, which I respect, the motion is to the effect that it is expedient that this work at Tullamarine be carried out. I am trying to point out to the House why it is not expedient that the work be undertaken. The reason is that the matter involves not only work in one State. At present, it involves work in two States, and in all probability future work in the other four States will be involved in the years to come. I cannot put my argument without pointing out the reasons for it. I ask that I be allowed to continue outlining to the House the reasons why I suggest that the work at Tullamarine should not be proceeded with until the Government indicates whether it is prepared to adopt for New South Wales and all other States a policy similar to that which it has adopted for work in Victoria at Tullamarine.


– I appreciate the reasons why the honorable member was illustrating his remarks by reference to Mascot. My suggestion to him is that he should not devote the major portion of his remarks to Mascot. I concede that the honorable member is entitled to illustrate by reference to Mascot the reasons why he opposes the undertaking of the works proposed at Tullamarine, but I suggest that the illustration relating to Mascot should not take up too much of his speech.


– Although I believe that all that I wished to say was germane to the matter under discussion, 1 shall endeavour to keep my remarks within the limits imposed by your ruling, Mr. Deputy Speaker. As I see the issue, if we are to accept the proposition that air transport, in a matter of years, will move through the subsonic and supersonic stages to the era of rapid intercontinental travel, with direct flights from one continent to another, in my view now is the time for Australia to begin building airports designed to cater for such services. I believe that, in respect of Tullamarine, planning to meet this kind of need is taking place. I reject the assertion, so often made by the experts, that nowhere near Sydney, except perhaps at Towra Point, is there a location at which a proper international airport could be built, for, in my view, where there is a will there is a way. Furthermore, with the advent of automation and technical science, we have already available machinery, equipment and the knowledge needed to enable us to remove bulges from undulating terrain and to bring large areas of land to the condition desired for the construction of runways, pavements, taxiways and the like. Steel and cement can also be used to provide the required surface.

In my view, suitable land is available in New South Wales near to Sydney and this could be used to achieve the same object as is sought at Tullamarine. But we need broadminded, farsighted Ministers and departmental heads. Many of them at present have no desire to look into the future. On our own roads, expressway conditions would provide the solution to problems of distance, as has been found in other major capitals throughout the world. I suggest that the people living in the suburbs surrounding Mascot are entitled to relief from the continuous noise, which increases in volume year by year. Eventually, the noise level will be just as great as that being provided for at Tullamarine. The people living in the area surrounding Mascot are entitled also to the maximum safety for themselves and their families. A properly planned airport such as I have suggested would provide necessary relief for all the residents of the adjacent areas, who are so badly affected now. If necessary, the construction of an airport of this standard could be financed from revenue over a number of years.

In the economic sense, Mr. Deputy Speaker, I think that many of us, if we were honest with ourselves, would admit that, in view of the speed of the progress now being made in aircraft and aviation development and the international aircraft in which we can expect to be flying in the future, there should be only one major international airport in Australia. Since the present jet aircraft can fly from Melbourne to Sydney and from Brisbane and other capitals to Sydney and Melbourne in the matter of an hour or two, I ask whether we are justified in building huge airports adjacent to the capital city in each State, especially since the airline companies in the future may find it impossible to operate economically from those airports or, for obvious reasons, be unable to use them.

In view of this likely development, I consider that the Parliament should have appointed a parliamentary committee to make world-wide inquiries into the possible ramifications of airport needs in relation to aircraft development. If this were done, there would be no danger of anyone in this Parliament having his fingers burnt in respect of this very vexed question. As matters stand, thousands of people booked for international travel from Mascot will for some years have to put up with inconvenience in all kinds of weather because they will have to be transported from the terminal buildings of the domestic airlines to the far side of Mascot airport to trie international terminal. In my view, any such concept is intolerable in this age.

Because the Government, through the Department of Civil Aviation, has announced one policy for Tullamarine and, by its silence as to its intentions at Mascot, has indicated that it will adopt a different policy on airport construction in New South Wales, I record my objection to the Tullamarine project being given the green light by this Parliament and to further work at that airport being allowed to proceed.

In the absence of an assurance from the Minister or the Prime Minister (Sir Robert Menzies) that there will not be any discrimination in the construction of airports at capital cities at any time and that the two projects, Tullamarine and Mascot, will be carried forward to completion simultaneously, I hope the House will reject the resolution.

La Trobe

.- It is always a great pleasure to follow a large and unbiased mind. I am quite sure that most honorable members, including Opposition members who come from Victoria, are as amazed as I am to find the honorable member for Shortland (Mr. Griffiths), who is a member of the Public Works Committee and who signed the recommendation that this work should proceed, has decided now that the item is before the House to make a speech which, for parochial emphasis, has been unequalled by any other speech made in the House in the time I have been here. One may well ask whether Federation is not likely to fall apart. Perhaps in the future, when approval is sought for some work to be done in New South Wales, we in Victoria should object and, when approval is given for work to be done in South Australia, Western Australia should threaten to secede. To me, this is an extraordinary proposal. Federation has had a few bumps, but it has worked very effectively. But now my honorable friend suggests that a nation of the size of Australia should have only one international airport.

The honorable member’s speech seemed to suggest that he did not know of any reason why any airport should be built at Tullamarine until Mascot was improved. His attitude seemed to be that, until the people in the adjoining shires, suburbs, villages and hamlets had been given every facility at Mascot, no progress should be make with an international airport anywhere else in Australia. I know that he has been overseas. Can he tell me of any country of about the size of Australia with a state or province with, if he likes, the population of Victoria and the wealth of Victoria, that does not have an international terminal? Can he as an Australian lift himself slightly and envisage that an international airport in Victoria may be of some importance not only to Victoria but indeed to the nation as a whole? He has suggested that a parliamentary standing committee should whip around the world and inspect international airports. I can only hope with all sincerity that he never makes the grade, because if he does this money will be wasted. People who arrive at Mascot from abroad frequently land at 6.30 or 7 o’clock in the morning. They submit themselves to customs and health checks and go through other procedures. They then must sit around and wait for a local, interstate aeroplane provided by either Trans-Australia Airlines or Ansett-A.N.A. to take them to Victoria. I have heard more people complain about this arrangement than about anything else, and I think they can justly complain.

I think it is essential that Victoria should have an international airport. The Minister for Civil Aviation (Senator Henty) has assured the honorable member and members of the local councils, or hamlet councils or whatever they are in New South Wales, that they are not being overlooked or overstepped, that Mascot will be the major and No. 1 international terminal in Australia. I, as a Victorian, do not resent this, but it would seem that the honorable member does not believe the assurance.

Mr Griffiths:

– I do not believe it.


– Frankly that does not worry me one iota and frankly it does not worry the majority of people in Australia. I would think that Melbourne is entitled to an international terminal. Western Australia has an international terminal and I should think that the day must soon come when Queensland and the other States will also have one. But we in this House should not start behaving as competitors in football matches. Nor should we say like children: “He has an extra toffee apple; I want one too “. If that situation were ever to develop, I wonder what the Federal Parliament would come to. The honorable member for Shortland, as a member of the Public Works Committee, signed the recommendation that the work at Tullamarine should be done. That is all I have to say. With the usual dignity of people from the conservative State of Victoria, I will sit down, but I hope that a Victorian member of the Opposition will answer his colleague.

Question resolved in the affirmative.

page 729


Second Reading. (Budget Debate.)

Debate resumed from 1st September (vide page 706), 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 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 support the Budget and oppose the amendment moved by the Leader of the Opposition (Mr. Calwell). Before the introduction of the Budget, I was interested to observe that few speculations appeared in the Press about its contents. Usually, before the introduction of a Budget, all sorts of authorities make statements to newspapers and try to stampede the people into believing that some provision they forecast will be included in the Budget. However, these forecasts did not appear on this occasion and, since the introduction of the Budget, most favorable comments have been made about it, especially in the Press. That is all I want to say on that aspect. Before proceeding to deal with a few of the matters that I want to raise, I would like to answer the statements made by two honorable members in the House last night. One is a member on this side of the House and the other is a member on the other side of the House. The honorable member for Balaclava (Mr. Whittorn) referred to subsidies.

I will not read the whole of his speech, but in the course of it he said -

I would like the Parliament to realise that all of this money–

He was referring in this instance to the subsidy of £13.5 million a year paid to the dairy industry - is coming out of Consolidated Revenue. Taxpayers’ money is being used to bolster these industries

I object to the use of the word “ bolster “. The industry is only receiving something that it is justly entitled to receive. Other honorable members in the past have used more stringent terms when referring to subsidies, particularly to the subsidies paid to the dairy industry and the meat industry. Opposition members - they know who I mean - have called the subsidy a hand out to the dairy farmers. The honorable member for Grayndler (Mr. Daly) who is sitting at the table, usually uses this expression when he speaks about the subsidy for the dairy industry. Let us consider the reasons for the payment of this subsidy. What does it mean? Before I come to that point, I would like to read a little more from the speech of the honorable member for Balaclava. He went on to say -

Taxpayers’ money is being used to bolster these industries at a time when the Treasurer has said that the terms of trade of primary producing countries are running against those which produce and export primary products.

The honorable member for Wakefield (Mr. Kelly) interjected -

Do not forget tariff protection.

I take it that he meant that a tariff was another form of subsidy which was paid to enable secondary industries to carry on and to pay a decent wage so that the workers in the industries could maintain a decent standard of living. I think that the people in the dairy industry also are entitled to a decent standard of living. The cost of production figure was worked out by members of the industry and the Bureau of Agricultural Economics. It was decided that a certain amount be paid to people in the dairy industry so that they would have a reasonable wage and be able to maintain themselves in reasonable comfort. The figure required an increase in the price paid by consumers for butter. At that particular period if they had not paid the subsidy the consumer would have had to pay an extra 7d. a lb. for his butter. An arrangement was worked out rather than increase the price to the consumer. That would have restricted buying. It is the Australian Dairy Produce Board which fixes the price of butter. The Board said: “If you give us what we are justly entitled to - that is the difference between what you are going to charge the consumer and the cost of production - we are prepared to make a deal with you”. Bear in mind that no margin of profit is included in the cost of production. The subsidy benefits the consumer although the dairy farmer receives it. I think it is time that accusations to the effect that the dairy industry is being bolstered and receiving hand-outs should cease. I believe that the honorable member for Balaclava was sincere but I believe he approached this question in ignorance. He should be informed on what the subsidy really means.

I want to deal with a statement made by my good friend the honorable member for Wide Bay (Mr. Hansen), a fellow Queensland member. He made mention in his speech of the Mount Isa railway line. He said -

Queensland …. had been given a rotten deal in connection with this project

Mr Hansen:

– I said that the Premier of Queensland said that.


– I am reading from your statement. I will go back. Yes, it was the Premier who said it. The honorable member for Wi’de Bay said -

I point out that while other States could get up to two-thirds of the cost of a project as a Commonwealth grant, with the remainder as a loan repayable over 30 or 40 years . . .

Now, let us go back and see what really happened, what was agreed to and what arrangements were made between the Commonwealth Government and the State Governments regarding the standardisation of railway lines in Australia. I am not too sure whether an agreement was signed by the Commonwealth and the States but the arrangement was made when the late Sir Earle Page was Treasurer of the Commonwealth. It was arranged that on any standardisation project the contributions should be 70 per cent, by the Commonwealth and 30 per cent, by the State. Any new project or any reconstruction project was to be the responsibility of the State. Now, in Western Australia the work on the railway line from Kalgoorlie to Perth is on a 70 per cent, to 30 per cent, basis. That is a standardisation project. The Mount Isa line is not a standardisation project. It involves the reconstruction of a railway line. That is the responsibility of the State. The first standardisation project in Australia was the extension of the 4 ft. 8i in. gauge line from Kyogle to South Brisbane. That was many years ago and the Commonwealth Government made a contribution to that project of 70 per cent, and the Queensland and New South Wales Governments paid it back over a number of years.

There is a distinct difference between a standardisation project and a reconstruction or a new project. Yet this matter has been bandied round the countryside. I agree with my honorable friend from Wide Bay that the Premier of Queensland did make that statement. But he was misinformed. He did not know the background and did not know the conditions for standardisation of railway lines and those for new projects. I hope that my honorable friend from Griffiths (Mr. Coutts) will not peddle round the country allegations that the Commonwealth Government treated the Queensland Government any differently to any other State regarding standardisation and the construction of new railway lines.

Mr. Deputy Speaker, I know that the drought question has been spoken of extensively during this debate. My colleagues sitting beside me, members of the Country Party, have put the case very clearly and concisely and very forcibly. They have put all the reasons why some sort of scheme should be devised and brought in - a long range scheme, to help to mitigate the ravages of this drought which has hit Australia. Droughts are quite common. They occur every seven to ten years in this country. My honorable friends have covered the question very well I think but, for the information of the House, I wish to show how these droughts occur and the losses they cause down through the years. I will read to the House some figures which I have read before. I think they are very impressive and they show what a huge loss droughts cause, not only to the producer but to the economy of this country. Before I read the figures I want to say that I am not agreeing that every primary producer is doing what he should do. There are certain people who are taking precautions to try to mitigate the effects of this problem but in the long run they are caught up with finance. I want to give honorable members an idea of some of the losses that have occurred over the years. My friend, the honorable member for Riverina (Mr. Armstrong), mentioned some of these figures in his speech yesterday but I think they are worth repeating.

Let me refer to the period 1891 to 1902. In 1891 Australia had 106,400,000 sheep. Between 1891 and 1902 - a period of eleven years - the sheep population suffered a loss of 49.5 per cent, due to drought conditions. The figure dropped from 106,400,000 to 53,700,000, a loss of 52,700,000. In 1910 we had 98,100,000 sheep and by 1916 - a six year period - the figure had dropped to 73,100,000. There was a loss during that period of 25,000,000 sheep. By 1943 Australia had built up its sheep population to 124,600,000. By 1947 it had dropped again to 95,700,000. That was a loss of 23.2 per cent. I have the figures only up to 1947 but I understand that the loss has not been as great over recent years. This is due to the fact that we have been able to provide better water facilities in most areas. Most of the losses to which I have referred were not altogether due to loss of feed but to the scarcity of water right throughout the areas concerned.

Regarding beef cattle, in Queensland in 1894 there were 6,600,000 head of cattle. By 1902 that figure had dropped to 2,000,000. There was a loss of 4,600,000 head of cattle. In 1921 the figure had built up again to 6,400,000 but by 1928 it had dropped back again to 4,200,000. In that period there was a loss of 2,200,000 head of cattle. Those figures reveal terrific losses. They were due to recurring droughts and we have gone through another one recently. Although it has been more or less confined to two States although it partially affected a third State, nobody knows yet what the losses will be. We probably will not know for about another six or eight months, even if the drought breaks in the places affected now. I say that because we cannot muster sheep now. We are not game to muster them. Most of these properties are only keeping their breeder sheep alive and have turned the rest of the sheep into the back paddocks of the properties where they cannot be seen. The property owners cannot afford to feed them. They do not have scrub to cut and, eventually, most of the sheep die. I could continue telling stories of stock losses that have occurred over many years.

I will tell the story of an event which occurred closer to my own home. There was a man who had about 2,000 or 3,000 sheep. When he arrived at my place after being on the road for months he had about 500 ewes left. They started to lamb and every morning he went down to the flock and cut the throats of the lambs so that he could save the ewes. He did so because he had no money and he could not get any. He was free of agistment costs, but he found it necessary to cut the throats of the lambs. That sort of thing is happening all the time and I could go on to mention many similar instances. Last Sunday I inspected a herd of cattle belonging to a chap who was at the end of his tether. He had spent almost £20,000 to keep his stock alive. He had only 500 head of cattle left and they were lying in the paddock dying. Some were trying to get up. However, he was nowhere to be seen because he could not put up with the situation any longer. As a consequence the cattle were left there to die. What does all this add up to? It adds up to a terrific loss, not only to the individual but to the economy of the Commonwealth. We cannot allow things of this sort to continue.

I can recall the Minister for Trade and Industry (Mr. McEwen) saying that droughts are always with us and that we must stop thinking that they are an act of God and do something about them. The effect of drought can be lessened to some extent. My colleagues have mentioned that assistance could be given by finance and other means. I suggest that one of the main keys to the elimination of some of the ravages of drought is water conservation. I believe that water conservation should be given the number one priority in the expenditure allocated for capital works. It was said the other day that in this country water was more important than oil. There is a certain amount of common sense in that suggestion. We are spending many millions of pounds - the expenditure has reached £100 million now - on the exploration for oil. We have found some oil and I hope that the search will continue. Provision is made for an expenditure of £5 million this year to subsidise the exploration for oil. We would derive great benefit if we could spend only portion of that amount on the conservation of water.

We have water resources, both underground and on the surface, along the coast and also inland. There are several projects on the books already which have been investigated thoroughly. One scheme that comes to mind is the one about which I have been pressing the Government to do something for quite some time. It is now 40 years since a border rivers commission was appointed to do something about weiring the streams for irrigation purposes along the Queensland and New South Wales border. This subject has a long history. A certain amount of work has already been done, but it has not been enough. About 12 months ago the Queensland and New South Wales Governments made a joint approach to the Commonwealth Government for the provision of weirs on Pikes’ Creek and Weir River to enable the waters to be dammed for irrigation purposes on both sides of the border. As much as 80,000 acres would be irrigated by this scheme and the States wanted the Commonwealth to contribute a third of the total cost of the project, which at that time would have been about £21 million. I suggest that if we had gone ahead with that project and had completed it prior to this drought many thousands of head of stock would have been saved. I know that area very well, and I know that stock in the area are still dying. In addition to the saving of stock we would have increased the carrying capacity of the area and would have been able to turn off better stock from it. Further, we might have been able to avoid much of the trouble that is now occurring at the tobacco sales in Brisbane.

Because the water level is so low in some dams and rivers, farmers can irrigate for only a few hours on each of only a few days a week. A result of the low water level has been that the water has been charged with chlorine so that much of the tobacco leaf has an increased chlorine content which precludes its use in the manufacture of decent tobacco. The extremely high chlorine content of the tobacco leaf has been one of the causes of the trouble at the Brisbane sales. Had the sum of about £21 million been expended on this irrigation project I am sure that we could have saved that amount of money within a few years and could have recouped the expenditure from what we had saved in stock, apart from what we would have gained in the natural increase of the stock.

The Government has a big capital works programme planned for the coming year and proposes a big expenditure on defence. I suggest that there are other sources from which money could be raised to meet the expenditure that would be necessary to make greater use of our water resources. I suggest that the problem of water should be given a first priority on the list of capital works. The Government should approach the World Bank for Reconstruction and Development and explain that this work would be an economic proposition. That would be easy to prove, because one estimate places the losses in north western New South Wales at more than £100 million. That loss could have been avoided if water had been available to the area.

Mr Turnbull:

– What about a pipeline?


– The honorable member for Mallee mentions a pipeline. I know that in many places a pipeline would be an advantage, but let us get on with the job I am speaking of, because it is an economic proposition. The World Bank has financed similar projects in Pakistan, India and Egypt to enable those countries to use their water resources to feed the people and to provide hydro power. Let us take this matter a bit further and see whether we can raise the money from an outside source - particularly the World Bank - so that we can get on with the job.

I should like to refer particularly now to the taxation provisions contained in the Budget. I wish to mention only the depreciation allowance on certain items. Honorable members will recall that in tha Budget presented last year an allowance was made for country people who erected their own telephone lines, both on private property and along the highways. The depreciation allowance extended to those people was an innovation last year. At the moment there are plenty of people in country areas who would like to have electricity extended to their properties. In some cases it would cost the individual anywhere from £1,000 to £3,000 to have electricity on his property. Property owners are required to pay this amount from their own pockets. They receive no reimbursement from the electricity authority, despite the fact that eventually the installations will become the property of the authority. All I am asking is that the Treasurer (Mr. Harold Holt) and the Government consider allowing a depreciation allowance on such expenditure so that the expenditure can be written off over a period of five or six years. This is a developmental project and is another means by which we can accelerate the decentralisation about which we have been hearing so much. It would be a means of providing amenities to country areas.

I had proposed to talk on a few other matters contained in the Budget. I want to refer now to one of our great export earners, the wool industry.

Mr Peters:

– Hear, hear!


– I will not be getting so many cries of “ Hear, hear “ by the time I have finished. We know that a recommendation has been made to the Commonwealth by 36 wool growers - all practical men - that the Commonwealth hold a referendum to decide whether we will have a floor price plan for wool. The people who made this recommendation were members of the Australian Wool Industry Conference. They are all wool growers who are practical men and very able. The policy of this Government has been that when a recommendation or approach has been made by any industry for certain assistance the Government will give the proposal serious consideration and, if practicable, implement what is asked for. That is all that this referendum means. It means that the wool growers are asking for this industry to be stabilised. What do we find at the present time? We find that the majority of the people who oppose the plan are city wool growers.

Mr Birrell:

– George Street farmers.


– Yes, George Street or Queen Street farmers. I want them to say whether they believe in the principle of stabilisation of industries, because that is the main point of this plan. I agree that there are a number of anomalies in it. They have been mentioned. I have had more than 40 years experience of trying to organise producers of various other primary products. Wheat and cotton are two of the major ones. On those occasions we faced the problems that we are facing now in regard to the wool industry. We were able to solve those problems. We were able to convince the people who were opposed to us that the principle was sound. We agreed that there were certain anomalies, as there are in this instance; but we ironed them out.

I say definitely that something should be done in this Parliament to see that this issue is decided quickly in the interests both of the people who are against the plan and those who are for it. This dispute is not doing the industry any good; it is not doing the economy any good; and it is not doing Australia any good. I urge the Minister for Primary Industry (Mr. Adermann) and the Government to get this matter finalised as quickly as possible.

Mr Irwin:

– What about the plan itself?


– I am talking about the broad principle of the plan, which is stabilisation. Does the honorable member agree with that principle? Of course he does. Wool growers have enough experience to follow the example of other industry organisations and to know that the principle of stabilisation is sound. Certain factors that apply to the wool industry do not apply to other industries. These matters can be ironed out by the growers. They do not want all these instructions from city wool growers. I do not deny the city wool growers’ right to put their case, if they have one; but I suggest that they make up their minds whether they believe in stabilisation.

I ask the Minister for Primary Industry to speed up this matter and to get it decided quickly. It is hanging on too long. I have received a number of requests from people in my area, which is one of the major wool growing areas in Queensland–

Mr Nixon:

– The biggest.


– It is not the biggest; but it is one of the major wool growing areas in Queensland. I have received requests from people who are for the plan and people who are against it Fortunately, very few people in my area are against it. But even the people who are against it want the matter decided, and decided quickly. I am talking about the real wool growers, not the city wool growers.

Mr Maisey:

– They own the wool.


– Yes, and this is their business and their problem. I ask the Minister for Primary Industry and the Government to get on with the business and to get this matter decided quickly.


.- I support the amendment which was presented so ably by the Leader of the Opposition (Mr. Calwell). To say the least, the Treasurer (Mr. Harold Holt) has been very fortunate in the presentation of his Budget to this House. It was preceded by an elaborate Press coverage for some weeks, in anticipation of a Budget in which all sections of the community would be called upon to share. This was highlighted particularly by the variations in share prices on the stock exchanges in every State of the Commonwealth in the weeks preceding the presentation of the budget. It was also very noticeable that business on the stock exchanges levelled out at least a fortnight before the presentation of the Budget. The atmosphere was conditioned to a large extent by Press budget forecasts which were uncannily accurate.

The section of the community which the Government again has singled out to bear the brunt of record Commonwealth expenditure is the wage and salary earners. This coalition Liberal Party-Country Party Government, ever since it was first elected in 1949, has deliberately diverted the emphasis from direct taxation to indirect taxation. This is a rich man’s Government. It continues to tax items purchased by the section of the community in which the average person predominates. It does not increase company tax. Again it has refrained from introducing a capital gains tax. The Treasurer, apparently facetiously, has commented that the Government would have to reimburse people for capital losses if it imposed a capital gains tax.

No attempt has been made by the Government to correct the glaring anomaly that exists in respect of part time students who are prepared to further their studies.

Full time students receive the full lax deduction for education expenses, but no similar deduction is available to part time students who can incur education expenses as high as £100 a year. This is a long standing injustice to students who are prepared not only to contribute to the nation’s work force but also to improve their knowledge.

I take this opportunity to express my concern at the rapid rate at which the traditional family doctor is disappearing in many parts of this country. The community requires and deserves medical care of the highest standard. Whether we live in a large city, in the suburbs or in the country, all of us, throughout our lives, need personal medical care. The general practitioner who personally interests himself in his locality is able to obtain the confidence of the patients who visit him and to understand readily whether their complaints are physical or mental. What is most important is that his services are available when the people of his area require them.

In many areas today the general practitioners are combining in group practices. That tends to preclude a patient from receiving the services of the doctor whom he prefers. In the district in which I reside, this situation has been brought to my notice on numerous occasions. I reside in a relatively new district which has very limited telephone facilities. So, it is understandable that in emergencies many of my neighbours request permission to use my telephone. My attention, therefore, repeatedly - particularly at week-ends - has been drawn to the fact that when a person’s doctor has not been available he has been directed to consult another doctor who resides well outside our district. This direction is generally conveyed to the person by an automatic recording. The manner in which people receive these messages is, to say the least, confusing. I have been told that people have engaged in conversation with the automatic recording, only to realise eventually that they are talking to a dead telephone.

Whilst the system of group medical practices may be classed as efficient and businesslike and whilst it assures doctors of reasonable leisure, it fails to provide the essential personal and confidential relationship to which people are entitled. Only during the last seven or eight years has this system become general. It leaves much to be desired compared with the previous tradition of the family doctor.

Sitting suspended from 12.44 to 2.15 p.m. [Quorum formed.]


– Prior to the suspension of the sitting I had concluded my remarks about the manner in which general medical practitioners were combining in group practices and transgressing, in my opinion, the traditions of the family doctor. I should now like to bring to the notice of the House the plight of the increasing number of people who are forced to go overseas to seek medical treatment because the appropriate service is not available in this country. My attention has been drawn to two of these cases within my electorate. Both families concerned have experienced extreme financial hardship by virtue of have ing to seek medical attention overseas. The first case concerns a constituent who visited numerous doctors and specialists in this country in a vain endeavour to obtain relief for a condition of arteriosclerosis in the leg. He was finally informed that he would have to undergo an operation for amputation of the leg. He was told that this was the only method of treatment for his condition which the medical profession observed in this country. He was a German migrant and he learned from German friends of a doctor Wilhelm Möller, of Kessel, West Germany, who had achieved outstanding success in the treatment of arteriosclerosis by oxygen therapy. The treatment consist of injecting oxygen into the arteries by use of a machine. The constituent sold his motor car and obtained payment for long service leave due to him. With this money he proceeded overseas for treatment. After three months treatment in Dr. Möller’s clinic he returned to Australia free from pain and in the belief that he was completely cured.

Although Dr. Möller has been using his treatment for some years, during which time he has treated thousands of patients, I understand that he does not claim to effect a permanent cure for arteriosclerosis and that he advises patients that a further course of treatment may be necessary. Nevertheless, a number of people from Australia have been successfully treated by Dr. Möller’s methods and are now enjoying the best of health. In another place Senator Cavanagh has asked whether the Minister for Health (Mr. Swartz) would invite Dr. Möller to lecture and demonstrate in this country his methods of treatment. The honorable senator has been informed that Dr. Möller has intimated that he would willingly accept an invitation to demonstrate his theories in this country. In answering a question placed on the notice paper by Senator Cavanagh the Minister stated -

Details of the treatment have been made available by Dr. Möller at the request of my Department. They have been referred to, and studied by, the Royal Australasian College of Physicians. The report of the College has just reached me and may be summarised as follows: -

There is great variation in the progress of peripheral vascular disease in different cases andit is therefore difficult to make a general assessment of the merits of any particular treatment. However, it is the view of the College that no really satisfactory evidence hasbeen given of the value of Dr. Möller’s therapy.

A report from the Max Planck Institute may be helpful, as Dr. Möller states that information regarding his treatment has been sent to the Institute for evaluation. I have accordingly asked the Director-General of Health to endeavour to obtain the views of the Institute on Dr. Möller’s methods.

Intra-arterial injections have been commonly used in Australia for diagnostic purposes and have also been used in the treatment of peripheral vascular insufficiency.

The next part of the answer is important -

In view of the report from the most expert medical body in Australia on this subject, I do not feel that the approach suggested by the honorable senator would achieve any useful result.

The adoption of this attitude will deprive thousands of sufferers of the opportunity to receive treatment overseas. Those people who have already incurred financial hardship in travelling overseas for treatment certainly will not be in a position again to go overseas for further treatment should the necessity arise.

The second casethat I bring to the notice of the House has involved one of my constituents in tremendous expenditure and continues to be a heavy burden upon him. He is paying large sums of money for medical, hospital and nursing treatment for his twin sons. The boys are the youngest of a healthy family. The father is Mr. Ron Bennett, of Elizabeth. South Australia. In their early years the boys developed normally. They received their triple antigen injections on 28th January 1961 and their first Salk injections on 22nd November 1961. On 4th January 1962 they received their second Salk injections. This second injection did not affect one of the boys, but a week later the other boy developed a weakness in the left arm and left leg. Later his right side became affected and 20 weeks later he could not eat or drink and he had a high fever. He became very spastic and was having extensor spasms. On 22nd November 1962, together with his twin brother, he had a third Salk injection Following this injection the other twin showed symptoms identical to those shown earlier by his brother.

Mr. Bennett obtained the best hospital care and medical advice available in this country but he was informed ultimately that the complaint from which his twin sons suffered appeared hopeless. The Bennett family had a nice home in Elizabeth. Mr. Bennett sold his home. With the proceeds from the sale, and a spontaneous appeal by people in the Elizabeth area, together with assistance provided by his employers, he was able to take his sons to the United Kingdom. They were admitted to the Middlesex Hospital for investigation and examination. Subsequently they were referred for enrolment at the Children’s Polio Clinic in West Germany under the directorship of Professor Dr. Joppich. Under the care of Dr. Joppich the twins showed immediate signs of improvement. Under his treatment they gradually progressed to the stage when the Bennett family could safely return to Australia. Since their return to this country the boys have continued to show improvement under Dr. Joppich’s treatment. As recently as this week I observed one of the boys, who appeared to be happy and contented.

I have made representations to the Minister for Health and to the Minister for Immigration (Mr. Opperman) seeking an act of grace payment and re-imbursement for an assisted passage for the Bennett family from the United Kingdom. The Ministers have courteously informed me that no provision exists within their Departments whereby such assistance can be made available. The Minister for Health has agreed to my further representations that officers of his Department make a detailed medical report on the Bennett boys. Mr.

Bennett has been interviewed by the Commonwealth Director of Health in Adelaide and has forwarded certain correspondence in the matter to the Minister. I pay a tribute to Mr. and Mrs. Bennett for their unselfish devotion to their children. Despite the enormous financial debt involved they unhesitatingly put their children’s welfare above other considerations, and despite the terrific odds which they initially faced they are now in the happy position of knowing that everything that could have assisted their children’s recovery has been done. I make this appeal to the Minister and to the Government because the cases I have quoted are only two of many. It is the responsibility of this Government to provide the fullest possible health services to the community. If it is necessary to invite doctors of the calibre of Moller and Joppich to this country, the Government should welcome that opportunity to provide the medical profession with the fullest information on successful methods and treatments which are available overseas.

The Commonwealth Electoral Act which was amended during the last sessional period now foists on the Australian people a political gerrymander from which, up to that stage in our parliamentary history we had been completely free. Previous governments have always acknowledged the fundamental right of the people to elect their representatives through democratic arrangement of the Federal electoral boundaries. I noticed at the time the Bill was debated the humiliation and discomfort of some Liberal Party members who had’ received instructions to support the measure. I particularly noticed the jubilation and eagerness with which all members of the Country Party gave the measure their support because they firmly believed that the first steps had been taken, with the adoption of the amendment, towards their becoming the major force in the coalition parties which constitute the Government. Situations such as this amuse me and cause me to be exhilarated by a warm glow. They make me proud to be a member of the Australian Labour Party, because honorable members on this side of the House command the support of 46 per cent, of the Australian electors despite the anti-Labour forces, which comprise the Liberal Party, the Country Party, the D.L.P. and the Communist

Party.It is certain that the Australian Labour Party will occupy the seats opposite at a future date. When that time arrives it will administer the affairs of this country in accordance with the Australian Labour Party’s platform.

When the Minister introduced his proposal to amend the Commonwealth Electoral Act he went to some length to assure the House that the provisions relating to the distribution of the States into divisions had not been changed since Federation and that the Bill did not intend to alter in substance the existing provisions. New subsection 19 (1.) of the Commonwealth Electoral Act reads -

In making any proposed distribution of a State into Divisions, the Distribution Commissioners shall–

That is the important word - so determine the proposed Divisions that each Division contains a number of electors not exceeding, or falling short of, the quota of electors by more than one-fifth of the quota.

The amendment to section 19 of the Act now makes it mandatory on the Commissioners to underload rural electorates and overload electorates where there is a density of population. This is a complete departure from the previous provision in section 19 which provided that the Distribution Commissioners “ might “ adopt a margin of allowance.

I said previously, and I repeat, that the adoption of that legislation established, for the first time in the history of this country, a Commonwealth gerrymander of electoral divisions. Some State Governments have, through the years, rigged electoral boundaries for the purpose of retaining office against the majority opinion of the electors. In the forefront in this category was the deposed Playford Government in my own State of South Australia. The South Australian Constitution was founded upon a resolution of the then Legislative Council in 1856. The resolution specified that the members of the Houseof Assembly were to be elected on the basis of manhood suffrage for districts equal in population. By subverting the whole basis of the original democratic Constitution of South Australia the former Playford Government, by altering the boundaries of the electoral districts to provide electorates widely unequal in population, was able to retain office for nearly 30 years despite the fact that only on one occasion during that period did it receive a majority vote from the people.

The Playford gerrymander resulted in 662/3 of the electors of South Australia being represented by 13 members in the House of Assembly and the other 3341/3 being represented by 26 members. Under this rigged electoral system the State electorate of Enfield, which incidentally is within the Federal division thatI have the honour to represent, returned my Labour colleague, Mr. Jack Jennings. This district, with 36,000 electors enrolled, had more than five times the number of electors than there were in districts represented by members of the previous Playford Cabinet, each of which contained approximately 6,000 electors. In other words, one Labour member had to represent 36,000 electors whereas five Liberal members were representing districts containing 6,000 electors each. Following its inglorious defeat at the 1962 State elections, when only 18 Liberal and Country League members were returned in an assembly of 39, the Playford Government remained in office, but only by making one of the independent members Speaker and inducing the other independent to join the Liberal and Country League with the perk of portfolio of Minister for Lands. Immediately on assuming office in 1962 on a minority vote, one of the first legislation measures of the Playford Government was the appointment of an electoral commission which made the following recommendations -

In compliance with the provisions of section 6 of the Act the Commission has -

divided the rural area into 20 approximately Assembly districts;

divided the remaining area of the State not being outside a radius of 30 miles from the General Post Office at Adelaide into 20 approximately equal Assembly districts; (c)–

And this is the important one - provided for two additional Assembly districts comprising areas outside a radius of 30 miles from the General Post Office at Adelaide, which are sufficient in size to contain a number of electors equal to at least two-thirds of the average number of electors per district in all the remaining 20 Assembly districts referred to in (b) above;

  1. divided each proposed Assembly district into subdivisions.

Paragraph (c) provided, for the first time, for the establishment of what can be best described as an industrial rural electoral district, sufficient in size to contain a number of electors equal to at least two-thirds of the average number of electors in each of 20 other seats. An interesting aspect of the recommendation of the Commission in relation to industrial rural seats is the complete departure from one of the major principles used in arranging electoral boundaries. That principle is the preservation of community of interest. As an example, I mention the three northern towns of Whyalla, Port Pirie and Port Augusta. In order to get the two districts, it was necessary to cut the industrial town of Port Augusta right down the centre. The Commission was faced with this complex problem and, in effect, that was what it did. It recommended that the State district of Port Augusta be sliced right down the middle and this, in effect, was a transgression of the principle of preservation of community of interest.

It is interesting to note that the total enrolments recommended in accordance with the restricted terms of reference of the Commission, were 20 rural seats with 146,029 electors, 20 other seats - including many areas which had previously been regarded as rural areas - with 366,980 electors, and two industrial-rural seats with 25,409 electors. The action of the deposed Playford Government in its unsuccessful attempt to give effect, by legislation, to the Electoral Commission’s recommendation has been aptly described as the art of gerrymandering the gerrymander. It was the action of a Government which places its own interests above the verdict of the people. It is now history that at the last election in South Australia the people of that State rejected the dictatorial attitude of the Playford Government and overwhelmingly elected a Labour Government.

Debate interrupted.

page 738



– I have been misrepre sented and wish to make a personal explana tion. In this morning’s issue of the “Daily Telegraph” there appears a report of a -confidential joint party meeting, which states -

Mr. Nixon (CP., Vic.) criticised Mr. Hughes’ attitude. He said that Mr. Hughes was asking the Government to tell the industry of details that the industry would work out for itself when it decided at a referendum whether or not it should abandon the present auction system of wool selling for a floor price scheme.

I have been misrepresented in relation to two matters. I did not say that the industry would decide the details for itself, as the details of the plan are being provided for the industry with the vote. I certainly did not say that the industry would decide about the abandonment of the auction system because, whether the reserve price scheme is carried or not, there will be no abandonment of the auction system.

page 738


Second Reading. (Budget Debate.)

Debate resumed.


.- The House has before it the Budget for 1965-66, and I do not propose to follow the line or argument adopted by the honorable member for Bonython (Mr. Nicholls). He spoke of matters which are exclusively within the competence of the people of South Australia and they are quite able to look after their own affairs without any interference from this Parliament. I propose to confine my remarks to the Budget. The Budget has long since ceased to be merely a statement of the revenue and expenditure for the previous year and of the anticipated revenue and expenditure for the current year. For many years, the Budget has been one of the main economic measures for fulfilling the policies of the Government. This Government has determined, for the welfare of Australia, upon a policy of growth; development, price stability and full employment, and the Budget is one of the means of implementing that very desirable policy.

The Budget also is framed with two objectives. The first is the collection of revenue from the more fortunate sections of the community, and the second is the distribution of that money through the media of social services and health services to those most in need. For both these objectives the Budget is to be ‘highly commended. At times, when trade and commerce is sluggish or depressed, the Budget is used for injecting additional purchasing power into the community and thereby stimulating trade. Likewise, when trade is exceptionally buoyant, when speculation is tending to become rife, and when prices are rising rapidly, the Budget is used to withdraw purchasing power from the community, thereby steadying up the exceptional buoyancy of the economy.

I think we can say that at the present time no economy in the world is in better balance than the economy of Australia. We have had a year of quite exceptional development and growth. We also have completely full employment, which I define as being a situation where there are more job vacancies than there are people to fill them. At the present time, the economy needs neither stimulation nor restraint. But for the deteriorating international situation, it is quite obvious that the revenue to be derived from the increased incomes, salaries and wages of the community, and from increased purchases, would have been ample to provide for the needs of the Government and the community.

Unfortunately, the international situation has deteriorated considerably in the last twelve months and I do not think there is anyone inside this House, or outside it, who does not recognise the absolute need, under present international conditions, for increased expenditure on defence. The Government has therefore decided that an additional £81 million shall be spent on defence. If this money were to be spent on defence without any increase in taxation, then obviously £81 million would be added to the purchasing power of the community -an injection of purchasing power which, under present circumstances of full employment, could create speculation and an undesirable boom. Therefore the Government has decided upon the very wise course of increasing taxation purely for the purpose of meeting the increased defence expenditure.

As I have stated, it is proposed that an extra £81 million shall be spent on defence. It is likewise proposed that taxes shall be increased to provide an additional £84 million in the full year. Therefore we can say that the extra money to be spent on defence, most of which will circulate amongst the Australian community, will be offset by the withdrawal from the community through taxation, of purchasing power of the order of the £84 million. Those are the only two ups and downs, if I might put it that way. If it had not been for the increase in defence expenditure, the present rates of taxes would have been ample to provide for the increased social services at existing rates. They would have been sufficient to provide also for the new social service and health benefits which are proposed in this Budget.

In raising the additional taxation revenue to meet increased defence expenditure, the Government has been particularly careful to see that the increased taxation payments are within the capacity of the people and are not likely to raise the cost of living. The increases in taxation include Id. on a 10 oz. glass of beer, Hd. on a nip of spirits, 3d. on a packet of cigarettes and 3d. on a gallon of petrol, as wen as a 2i per cent, increase of income tax. If anyone finds it difficult to meet his commitments and to pay these additional taxes as well it is entirely within his choice to consume less beer, spirits or cigarettes so that he will still be able to meet his essential commitments for food, clothing and the necessaries of life. Similarly, if a person finds it difficult to meet the increased excise on petrol, it will not be difficult for him to cut down his private motoring to a corresponding degree. 1 suggest that a 2i per cent, increase in income tax is a very small price to pay for the security of this country and for the many liberties and privileges and the high standard of living that we enjoy. The only item among the increased taxes that could cause an increase of prices is the increased excise on petrol, which may have some effect upon our transport industries. However, I believe that those industries will be able to absorb these extra taxation payments without raising transport charges.

The Government proposes to increase social service and health benefits. Even without the increases outlined in the Budget the expenditure in the current year will be £20,400,000 more than it was last year. This, of course, is brought about mainly by the increase in the number of pensioners and the improvements in certain social services which were provided last year, the full effect of which will be felt this year. The total expenditure on social services for the current year is expected to be about £466 million. I do not think that any other country pays more per head of population out of its Budget for health and social services than this country does. We can be extremely proud of the manner in which the Australian community looks after the aged and the sick. We all, of course, would like to see more done, but at the same time we should give credit where credit is due and recognise that the Menzies Government has a most liberal and substantial health and social service programme.

I now want to deal with the very valuable alterations that are to be made in’ our health services. Before the Menzies Government came to power a very dark cloud continually hung over the aged and the sick. Aged people knew that they could provide for their food and clothing and reasonable rent charges out of the pension, but they knew also that if sickness befell them they would have no hope of paying their medical or hospital bills. When the Menzies Government came to power, for the first time in the history of Australia a free pensioner medical scheme was introduced. When this scheme was being considered it was realised that the Commonwealth Government had no power to fix prices and that it could not introduce such a scheme unless the medical profession voluntarily agreed to provide medical services for pensioners at a fixed fee. An arrangement was made with the British Medical Association, as it was then called, for medical services to be provided for pensioners at a fixed fee according to a schedule.

At that time the permissible income for a pensioner, being the income that the pensioner could receive without having his pension reduced, was 30s. a week. As 1 have said, an arrangement was made with the medical profession to provide these services at a scaled charge. This arrangement continued until 1954. In that year the Government, realising that many people who were receiving just a little more than the permissible income were in need, liberalised the means test to provide for a permissible income of £3 10s. a week. The medical association then said that although ils members were prepared to provide services at the scaled charge to those they considered most in need they were not prepared to extend that benefit if the means test was liberalised to bring into the scheme many hundreds of thousands of additional pensioners. The Government had no alternative, therefore, but to provide virtually a means test within a means test. What was known as the medical card system was brought into operation. People whose incomes did not exceed £2 a week in addition to their pension received medical cards entitling them to free medical attention and medicines. Those who received an income higher than £2 a week did not get the medical card.

This change caused very great distress and sorrow amongst pensioners. It was decided that all pensioners who had a medical card at that time, even though their income was greater than the amount laid down, would be entitled to retain those cards, but those who became pensioners after the specified date and whose incomes exceeded £2 a week in addition to the pension were not to receive medical cards. There are about 120,000 pensioners who are not entitled to the pensioner medical card under the existing legislation. Many of these people feel extremely aggrieved, first, because there hangs over their heads the possibility of medical and hospital bills which they might not be able to meet.

Mr Cope:

– Why has not the honorable member been saying this during the past ten years?


– The honorable member will have plenty of opportunity later to say it for himself. In 1964, the Government Members Social Services Commttee recommended the abolition of the special means test applicable to the pensioner medical service. On behalf of the Committee, I congratulate the Government and thank it for having acceded to this very desirable reform. The Committee realised that this could be done only with the co-operation of the Australian Medical Association and only if the Association were prepared to provide medical services for pensioners at a fixed fee. The late Senator Harrie Wade, when Minister for Health, negotiated with the Australian Medical Association, and the work that be began has been carried on by the present Minister for Health (Mr. Swartz). I and all other members of the Committee are delighted to know that the medical profession has agreed to waive its earlier objections and that it is now willing to provide medical services at the scale charge for all persons now in receipt of an age, invalid or widow’s pension. 1 believe that this is a major breakthrough. It is a reform that has had number one priority in the minds of the aged and the sick. I am sure that every member of this House is delighted to know that discrimination has now been removed and that a person who receives an age, invalid or widow’s pension will now be entitled to free medical attention and free medicine as soon as the necessary legislation has been passed by the Parliament and assented to by the GovernorGeneral.

Mr Stewart:

– That will become effective from 1st January next.


– If that is to be the date set down in the legislation, that will be so. I am sure that every member of this House is delighted also that the Government has seen fit to use the additional money to be made available for social services for the benefit of those most in need. For example, the supplementary assistance payable to a single pensioner who is deemed to be dependent solely on the pension and who pays rent is to be increased from 10s. to £1 a week. This assistance is also to be extended to married couples, where the husband is a pensioner and his wife receives a wife’s allowance - in other words, where there is only one pension coming into the home.

As I have said, this assistance is payable at present to single pensioners who pay rent or board and who are deemed to be dependent solely on the pension. In the past, the words “ deemed to be dependent solely on the pension “ have been interpreted as applying to those whose income does not exceed 10s. a week in addition to the pension and whose assets do not exceed £200. This very severe means test is now to be substantially liberalised, and supplementary assistance will be paid, provided that other necessary conditions are fulfilled, to a person who has no income in addition to the pension and whose assets do not exceed £980. This represents a very substantial increase of the previous permissible sum of £200.

Supplementary assistance will be paid to a person who has an income of £52 - £1 a week - if his assets do not exceed £460. It will be payable also to a person who has an income of 30s. a week if his assets do not exceed £200. The entitlement of persons can be calculated under the merged means test formula, between those limits that I have mentioned, according to the merging of the income and the capital of the particular pensioner.

The members of the Government Members Social Services Committee are delighted also to know that the Government has decided to adopt the Committee’s recommendation that the student’s allowance be extended to children up to the age of 21 instead of 18 as before. At present, there is a definite anomaly. The Government decided to pay child endowment for a student child up to the age of 21, but the child’s allowance paid in respect of children of age, invalid and widow pensioners cut out at the age of 18. The ceiling for the payment of allowances in respect of student children is now to be lifted to the age of 21, as is the case with child endowment. This has corrected an obvious anomaly and it represents a very well worth while reform.

In the past, Sir, an allowance for the child of an age pensioner has not been paid unless the pensioner has been totally incapacitated. Both child’s allowance and student’s allowance will now be paid whether or not the age pensioner is totally incapacitated. In the past, the pension of a class A widow has cut out when her youngest child attained the age of 16. If the widow has a student child, in future her pension will not cut out until that child attains the age of 21. Running right through the reforms provided for in this Budget, we see clear evidence of the Government’s determination to encourage people to give their children the best possible education. Lack of means should not be a bar to a student’s getting the education that he needs. These reforms that I have mentioned will ensure that lack of means will no longer prevent a child from undertaking secondary or higher education. Previously, widows and aged people were in an impossibly difficult position. They had to cut down their own small allowance to enable their children to continue at school. Class A widows were at a particular disadvantage because their pension ceased when the youngest child attained the age of 16. The provision that the pension shall continue until a student child attains the age of 21 represents a tremendous improvement.

Another innovation now proposed is the payment of a guardian’s allowance to a widow or other unmarried person receiving an age or invalid pension who has the care of one or more children. This will remove another anomaly. Only last year or the year before, we introduced a mother’s allowance payable to a widow with children. That, of course, did not help widowers. It is proposed in this Budget that guardian’s allowance be paid and this will enable a widower to get help in the care of children. Another feature of this Budget is the proposal to raise the funeral benefit from £10 to £20 where a pensioner is liable for the funeral costs of a spouse, a child or another pensioner. This, too, represents a very desirable reform. There is no need to increase the funeral benefit where a pensioner is not liable for the cost of a funeral. However, where the cost has to be borne by a pensioner, it is desirable that an additional benefit be given, and in such cases the £10 at present provided for will be doubled.

In the field of repatriation, the Government has shown its intention to provide for those most in need. A class of persons has been created between those receiving the 100 per cent, war pension of, I think, £6 a week and those receiving the total and permanent incapacity pension, which is more than double that figure. This Budget proposes that an intermediary pension shall be payable to meet the position of those who are able to do a little part time work but are not able to engage in full time work. That is a most desirable reform and I am sure that we all congratulate the Government for introducing it.

In my 20 years of experience in this House and in another place, I have never known a Budget to be better received than this one has been. In fact, it has been so well received that, since the day following its introduction, it has hardly been mentioned outside the Parliament. The people are prepared to accept it. They realised the necessity for increased expenditure on defence and they were willing to pay the additional taxation to meet this expenditure. I think they were all delighted to know that the increased taxes would be no higher than is necessary to meet the increased defence expenditure. I believe that the Government is to be congratulated upon a first class Budget, which aims to remove anomalies and hardships in the community but does not take more from the taxpayer than is required to meet the increased defence expenditure necessitated by circumstances over which we have no control.


.- I listened intently to the honorable member for Sturt (Mr. Wilson). He praised the Government for the Budget and emphasised the improvements in social service benefits. He also mentioned that the Government is spending an additional £81 million on defence. I do not think that the Australian people would mind if this extra money were spent on defence, but I am inclined to believe that an increasing number of Australians realise that this money will be used for offensive purposes in Asia and not for defensive purposes in Australia. I believe that when the true facts of Australia’s involvement in the undeclared war in Asia are known to the electors, they will turn on this Government in a way that has never been experienced before in our political history. I believe in strengthening Australia’s defences, but not in furthering our involvement in wars in other countries. These should be left for the people of those other countries to resolve. I believe in maintaining a peace keeping force of the United Nations, but 1 do not believe that the Government should involve Australian boys in a war in Vietnam. Soon the overwhelming majority of Australians will know the truth of this involvement and they will speak out much more strongly than they have to date.

The honorable member for Sturt also praised his Government for abolishing (he means test on the pensioner medical service. But he did not say that during the term of office of the Labour Government medical entitlement cards were given to all pensioners. I am reminded by my friend, the honorable member for Grayndler (Mr. Daly), that on 31st October 1955 this Government took away the privilege that had been extended to pensioners by the Labour Government for many years. Now the honorable member for Sturt praises his

Government for giving back to the pensioners a privilege that his Government took away from them. Honorable members on this side of the House have advocated time and time again that the means test for the pensioner medical service should be abolished, but the honorable member for Sturt has voted against Opposition amendments that were designed to provide a free medical service for pensioners.

I understood the honorable member to say that this extension of the pensioner medical service had been effected with the cooperation of the Australian Medical Association. He would have been more correct if, instead of saying “ the co-operation of the Australian Medical Association “, he had said “ the permission of the Australian Medical Association “. If the Association had not agreed to this concession, the pensioners would not have had it today; they would not have had it until the leaders of the medical profession had agreed to the Government extending the pensioner medical service to all pensioners. I am sorry that the Government did not go a little further and make medical entitlement cards available to miners whose health has failed and who have been compelled to seek a pension before they have reached the miner’s retiring age of 60 years. These are the people who are savagely bit by medical expenses because this entitlement has not been extended a little further. I hope that in the not too distant future the Government will agree to extend the pensioner medical service to miner pensioners who retire at 60 years of age.

I support the amendment moved by the Leader of the Opposition (Mr. Calwell). It reads -

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”.

One of the education journals in Australia has said for some time that an expenditure of £42 million would be needed to bring Australia’s education system up to the standards that are enjoyed by other Western countries. People who realise that a nation’s richness depends on its standards of education have been clamouring for a long time for our education system to be improved. The Government’s refusal in this Budget to impose increased taxation on people in the higher income groups and its failure to increase company taxation mark it as the true capitalist, big business, monopoly Government that it is. Once again the small wage earners and the people in the low income groups will be stung the hardest by the indirect tax imposts levelled against them by the Government. The Government is proud to stress, for instance, among other things in this Budget, that it provides £10.3 million extra for capital works, principally for Post Office improvements which we know are sadly lacking in this country.But one must also keep in mind that the Government expect? to receive £16.676,000 in revenue in the next 12 months as a result of increases or imposts applied in October 1961.

The Sydney metropolitan area is grievously short of telephones yet it embraces 24 per cent. of Australia’s population. It is the capital city of the premier State but how is it treated regarding telephone installations? It has 47 per cent. of the total delayed telephone installations in Australia. One honorable member on the Government side just said that it does very well. If that honorable member would listen he might learn some of the facts asto how well the Government treats New South Wales, which has 61.2 per cent. of the total delayed installations in Australia. That indicates how New South Wales is treated regarding telephone installations. Never do I visit Sydney from my electorate near Newcastle without some acquaintance asking me how I can help him to get a telephone installed. I tell those people that the only way to get a telephone installed more quickly is to change the Government.

Let me remind honorable members that as a result of action by the present and previous Postmaster-General, both Queenslanders, we find that Queensland has only about 6 per cent, of the total Australian deferments of telephone installations. I know of a reputable importing firm at Marrickville which has been trying for six months without success to get an additional two telephones. One hopes that the extra revenue the Government hopes to receive from the present Budget proposals will remove these long injustices so far as telephone connections are concerned. The Newcastle area also has a considerable lag in telephone installations, but I do not consider that the lag there is as bad as in Sydney.

Two years ago, as election bait, the Government put it to the people of Australia that it would bring the price of petrol down. Many political thinkers in this country thought that that was quite reasonable and fair. The proposal was agreed to by members of the Opposition although they thought that in reducing the price of petrol to the Australian consumer the international Oil cartels should have been compelled to contribute more to lessening the burden of petrol and diesel oil consumers. It was some time before the Government introduced this legislation - it certainly did not hurry - to bring petrol anywhere in Australia to within 4d. of city prices. An honorable member on this side of the House has reminded me that the consumers of petrol in Australia still have not the benefit of that legislation. So, even before the people get the benefit of this legislation, which was put out as election bait prior to the last general election, they find they are faced with an imposition of 3d- per gallon. If it were not for the Press, radio, and television backing up this Government the people of Australia would realise that it is the greatest bunch of confidence men that has ever sat on the Government benches.


– Order! The honorable member for Hunter will restrain himself.

Mr Killen:

– I rise to order. I hesitate to interrupt my honorable friend, but the use of that language - while I am by no means sensitive to any form of language - is quite unbecoming to the House. 1 request that it be withdrawn.


– Will the honorable member for Hunter withdraw the remarks he made?


– I withdraw the statement to which objection has been taken. Now we find that the Government has increased the price of petrol by 3d. a gallon by increasing the excise on petroleum products.

If ever there was a section of the community in Australia which has been pummelled it is the motorist. In recent times motorists have been struck with increased registration fees, drivers’ licence fees, parking meters and now higher petrol costs. We also find that the insurance companies have indicated their intention of raising premiums, on new cars in particular, by from £8 to £10 a year. The airline companies have indicated their intention of raising fares to obtain an extra £1 million to offset the additional price they will have to pay for fuel. The New South Wales Retail Traders Association has indicated that prices of the goods its members sell will increase as a result of the increased road cartage costs due to the rise in the price of petrol. Mr. J. B. Griffin, the Secretary of that Association, made a public statement to the people of Australia in the “ Sun “ newspaper, I recall, on 19th August. Building costs are expected to rise by from £60 to £70 for an ordinary home during the coming year due to the actions of this Government and the impositions on the people proposed in the Budget including taxation and petrol costs.

I want to make a few remarks about the drought that has savagely hit, particularly, the man on the land in Australia. The Government claims great generosity, suggesting to our drought stricken farmers that it will recommend to the banks that farmers who have suffered savage economic loss as a result of the drought should be able to borrow from the banks, in all probability at 4i or 4i per cent, interest.

We are reminded by statisticians that this drought is one of the worst for about 100 years, particularly in New South Wales. 1 know, Mr. Deputy Speaker, that your particular electorate has suffered greatly as a result of the drought, as has the Hunter Valley. In the Hunter Valley in particular there have been great losses of cattle and sheep in the Dungog-Gloucesterr area, as well as in the Muswellbrook, Singleton, Pokolbin and Wollombi areas. One would have expected the honorable member for Robertson (Mr. Bridges-Maxwell) to show a deep concern for the people in the area of Wollombi by making a statement similar to that made by the honorable member for Macarthur (Mr. Jeff Bate). I hope to be attending a meeting at Wollombi in the not too distant future. I will remind the electors of Robertson of the non-vigorous activity of the honorable member for Robertson who has failed to give them more direct aid as a result of the economic losses suffered by those people on the land in that part of his electorate.

This Government, in its generosity, says that it will arrange for the man on the land to be lent money to overcome his- difficulties at an interest rate of 4) or 4i per cent. How generous this is! It is not the activity of a Government which claims to be genuinely concerned about the plight of the men on the land, many of whom today are facing financial ruin after months of working night and day in order to try to save their starving stock. In order to relieve the poor farmers of the savagery of the elements and what they have suffered as a result of this savage drought, why has this Government not given £1 for £1 grants as previous Labour Governments have done? Immediately after the 1947 floods devastated the Hunter Valley, and in particular Maitland, the Labour Government then in office helped the farmers and others in the Maitland area who had been affected by the savage flood, by matching £1 for £1 the flood relief grants made by the New South Wales Government. For Maitland alone the Chifley Government provided £7,000 to help people who needed financial aid. In 1945 the Labour Government contributed £17,000 for the relief of the flood stricken people of Maitland, and in 1948 and 1949 it provided £76.000 for those affected by the floods in Maitland and Kempsey.

But what do we find the present Government doing? It says that it will recommend to the banks that they lend money at 4i per cent, interest to help farmers over their financial crisis. If this is generosity then I do not know what the word means. I am reminded by the honorable member for Cunningham (Mr. Connor) that the Treasurer (Mr. Harold Holt) admitted yesterday that he could not advise the farmers which banks to consult to obtain these loans. So, I suggest that people have reason to be suspicious about the sincerity of the Government’s stated intention to help them in periods of dire financial need.

Before passing from the serious position brought about by the drought I should like to commend honorable members opposite who co-operated in the scheme to have gift fodder sent to drought stricken farmers in the Hunter Valley areas who were battling to keep their cattle alive. However, I want to condemn vigorously those producers of fodder who took advantage of the plight of some of the poor farmers and charged them exorbitant prices for fodder. 1 have been told by some farmers that they have had to pay as much as £35 to £45 a ton for hay. 1 know that one fodder distributor in Newcastle was charging 5s. 9d. a gallon for molasses which was badly needed to enable farmers to keep up their milk production and to prevent their cattle from dying. With the aid of one of my colleagues on this side of the chamber, the honorable member for Wide Bay (Mr. Hansen), I was able to arrange for molasses at 2s. lOd. a gallon to be brought from Queensland to farmers in the Hunter electorate. People who were in dire need were being shockingly exploited. We know that this could happen only under a government of the type that now occupies the Treasury bench. I cannot understand why the Government did not marshal the transport resources of the Army to bring fodder to New South Wales from other States. Such action would not have adversely affected the livelihood of interstate hauliers, because they were unable to meet the demand for the carriage of fodder to drought stricken areas. I believe that the interstate carriage of fodder would have been a good driving training exercise for young Army recruits.

In the time at my disposal I should like to make a few remarks about the coal industry. I should first state that my concern is at all times for my constituents in the electorate of Hunter, which I am proud to represent. Some time ago I pointed out the grip that the oil monopolies have on Australia. Although the people of Australia were proud when oil was found at Moonie, we find now that great difficulty is being experienced in having the product refined by the foreign owned refineries. The result is that oil produced at Moonie is being stockpiled. The Australian taxpayer has paid out millions of pounds to subsidise the search for oil in Australia, yet when oil is found there is difficulty in having it refined. I believe that there is an obligation on the Government to have this grievous and shocking anomaly corrected as rapidly as possible so that Australia’s oil resources can be refined for the use and benefit of Australia.

The Government proposes to increase defence expenditure by £81 million because of the alleged threat of invasion from the north by the yellow hordes. Yet it will not ensure that oil produced in Australia is refined. If Australia were to become involved in war the first commodities that would be cut off would be our petrol and oil supplies. We on this side of the chamber do not think that there is an imminent threat to Australia’s shores from the peoples of Asia. We believe that the Government has been beating the war drums to justify increased taxation for defence expenditure.

Mr Kelly:

– Does the honorable member think that we should hot bc spending money on defence?


– If it is for the defence of Australia, but not for offensive actions in Asia, as I made clear in my opening remarks. The Australian taxpayers’ money has been pumped into oil search, yet a shocking state of affairs exists regarding oil produced at Moonie, because it cannot be refined for use on the Australian market.

I refer now to an article which appeared in the August 1965 edition of the “Coal Miner”, which is a worthwhile and reputable magazine. The article points out that the office of the coal research section of the United States Department of the Interior has stated that the estimate of the price at which 100 octane gasoline can be produced from coal by one process now moving into the pilot plant stage is about 11 cent’s a gallon, which is a reduction from a former estimate of 13.6 cents a gallon. The article states that this price is considered to bc competitive at certain inland points. If it is possible to achieve this result in West Virginia, where the United States Government has set up a coal research pilot plant, a similar result could be achieved in Aus tralia. I am afraid that there is some truth in the suggestion that governments in Australia are held by the throat by foreign oil monopolies. Australia would be one of the richest countries in the world if it developed its own oil and petrol resources, whether the oil were obtained in a natural state or from coal. Statistics produced by the Commonwealth show that Australia pays about £150 million a year to overseas oil monopolies for oil that is imported. I consider that the most appropriate place for a coal research pilot plant to be established would be on the northern coal fields of New South Wales where the economy has suffered the most savage transition of that in any coal field in Australia, brought about by the intrusion of mechanisation and automation. I believe there would be room for a further coal research pilot plant on the coal fields in southern New South Wales.

In my concluding remarks I wish to comment on the growing concern of Australians about the war in Vietnam. I noticed that the honorable member for Chisholm (Sir Wilfrid Kent Hughes) devoted about 90 per cent, of his speech on the Budget to the situation in Vietnam. 1 have been reading a copy of the “ Far Eastern Economic Review”, a magazine printed in Hong Kong. I regard this magazine as one of the most impartial publications available in the Parliamentary Library. I should like to place on record the words of Senator Wayne Morse which appear in this publication. Remarks of his have often been quoted in this place, but 1 propose to quote a statement that 1 believe has not so far been recorded in “ Hansard “. In a letter written by Markbreiter - an independent, impartial and forthright journalist - and published in the “ Far Eastern Economic Review “, there appeared the following extract from an Associated Press report of a speech made in a public debate at Portland’s Memorial Coliseum by Senator Wayne Morse, that very forthright, frank and honest senator - “Our hands are dripping with blood in Asia - to our everlasting discredit.” He added that “ our policy in South Vietnam has been mistaken from the beginning - our reliance upon wealth and military power to bring about a pro-Western government in South Vietnam has been a failure”.

Markbreiter went on to say -

Since the publication of my articles I have been congratulated by both Westerners and Asians.

Mr Jess:

– What was the last vote in the United States Senate?


– I do not know what it was. The honorable member takes more interest in United States affairs than he does in Australian affairs. It is a pity that he does not put Australia first, instead of putting the United States first. That is all I have to say to him. I quote the following from another issue of the “ Far Eastern Economic Review “ -

The Americans on the other hand will have to decide whether to strive for victory over the Vietcong - in which case they will need not 200,000 men but perhaps 500,000- or to conduct merely a holding operation designed to ensure that a few important towns remain in Western hands.

I ask this Government, as I have asked it before, to strive more vigorously than ever and to use its good offices to bring about peace in South Vietnam, the withdrawal of the Australian troops and contentment, decency and improved living standards for the people of Asia by economic aid and not by guns, bullets and bombs.

St. George

.- One thing of which we can be certain is that the honorable member for Hunter (Mr. James) always makes an entertaining speech. I appreciated his wide canvass of the points that he wished to bring forward in this Budget debate; but I wish to direct attention to the attack that he made on the honorable member for Sturt (Mr. Wilson) with reference to the pensioner medical service. In view of his criticism of what happened in 1954 and 1955, I remind him that this Government introduced the pensioner medical service. This Government introduced the free medical service for service pensioners, made war widows eligible for war service homes, introduced the age allowance for taxation purposes for people who are not entitled to receive pensions, introduced supplementary allowances, abolished the means test on blind pensioners, introduced the mother’s allowance for class A widows, reduced the qualification period for migrants from 20 to 10 years, and now has introduced the guardian’s allowance.

I suggest to the honorable member for Hunter that it would be worth his while to compare this Government’s social services record with that of the Labour Government prior to 1949. In fact, it would do him good to look at the Budget presented in 1949 and to see whether the Labour Government introduced anything even similar to what this Government has introduced this year. This Budget provides for the expenditure of £7 million in addition to the natural increase of £20 million in the social services bill. That represents an increase of 4£ per cent, on last year’s expenditure. Let the honorable member look at the Labour Government’s Budget and see whether there was any addition to the supplementary allowance or, in fact, whether there Was any supplementary allowance at all; whether the funeral benefit was increased; and whether the allowance for student children up to the age of 21 years existed. He will find none of those things. In fact, all he will find is 4s. a week for dependants of invalid pensioners. That was the best that the Labour Party - this so-called party of reform - could do in 1949.

Mr Devine:

– People could buy more with that 4s. than they can buy with £6 now.


– In reply to that interjection, I point out that some days ago the honorable member for Grayndler (Mr. Daly) put forward the proposition that the £1 of 1949 is worth only 9s. 6d. today. Using his figure as the yardstick, we can calculate that the value of the present pension in 1949 would have been £2 17s. 6d. I ask the House to compare that with what the Labour Administration offered at that time, namely £2 2s. 6d. There is a discrepancy of about 36 per cent, in purchasing power.

The scale of social services provided in the Budget this year is commensurate with the thinking of this Government during its term of office. It is generous to the extent of £7 million in addition to the natural increase in expenditure of £20 million. There is a 4i per cent, increase. This is of great value and will be appreciated by the people. As has been pointed out adequately by previous speakers, in the light of the pressures, particularly the external or international pressures, that are being exerted on this country today, the people accept this Budget. I believe that the ability of the Treasurer (Mr. Harold Holt) to present a

Budget which has evoked less criticism than has any other Budget that I can remember is a tribute to the Government and to him in particular.

I wish to emphasise a few points during this speech. I direct my attention principally to the speeches made by the Leader of the Opposition (Mr. Calwell) and the Deputy Leader of the Opposition (Mr. Whitlam). The arguments advanced by the Leader of the Opposition have been adequately disposed of in the speeches of the honorable member for Robertson (Mr. BridgesMaxwell), the honorable member for Bowman (Dr. Gibbs) and the honorable member for Henty (Mr. Fox) in particular. On Tuesday the honorable member for Henty, with a shattering argument, completely dismantled the argument advanced by the Leader of the Opposition, just as a boy dismantles a Meccano set.

Mr Bryant:

– Who did that?


– The honorable member for Henty. I refer the honorable member for Wills to that speech. In fact, I commend it to the House and to the public at large. From beginning to end it was a classic example of what a speech on the Budget should be.

Mr Bryant:

– The honorable member for Henty is leaving the chamber; you are embarrassing him.


– Perhaps that is so. He is such a modest gentleman that I can understand his embarrassment. I commend his contribution in this, the major forum of the Commonwealth.

The Deputy Leader of the Opposition went out of his way, in no uncertain manner, to support the suggestion that the northern development that is being carried out and organised by this Government is being handled in a manner that is detrimental to the country. He made innuendoes and oblique and not so oblique references to the effect that an unsatisfactory job is being done. He said that he wished to be specific. When referring to beef roads he said -

Let me be specific on these northern projects. There has been £111 million spent on the beef roads project which began in 1961-62. Only onequarter of a million pounds remains to be spent on the project. In a few months lime not another penny will be available for beef roads in tha States.

The honorable gentleman presented his case to the House in that manner. In fact, he included this year’s estimated expenditure with money that has been spent already. I submit, therefore, that his conclusion is invalid. The expenditure on beef roads in Queensland to date is £5,997,000. The estimate for 1965-66 is £2 million. That makes a total of £7,997,000. In Western Australia £2.7 million has been spent to date and estimated expenditure this year is £750,000. So the amount still to be spent in Western Australia and Queensland is not £300,000 but £3 million. The honorable member has completely neglected to refer to the Northern Territory, where an amount of £2.68 million is still to be spent. Referring to northern development in Western Australia the honorable member said -

In Western Australia work on the Ord River project and the Broome and Wyndham jetties began back in the 1958-59 financial year. On these projects the Commonwealth has spent £8i million. Only £300,000 remains to be spent. That means that all the Commonwealth assistance for northern projects in Western Australia will peter out in the course of the next few months.

The situation is that the final payment of £1.33 million is expected in 1965-66 to bring the total to £8i million. The Derby jetty project was the subject of a separate agreement, the last payment for which - £800,000 - was made in 1964-65. So again the honorable member is a year ahead of himself. Not £300,000 but £1.33 million remains to be spent.

Dealing with Queensland the honorable member said -

There are two projects which will continue to receive Commonwealth help throughout the year, to wit the Brigalow project and the Weipa development. They will both peter out nextfinancial year. Such projects require planning. They require some time to get under way, but the Government has undertaken no plans to extend such projects. The Government has made no appropriations for any new projects to get under way. So whatever the Minister for Labour and National Service may say about the ability to carry on national development, there is no question that the Government has made no provision for carrying lt on in the north.

The actual situation is that Commonwealth assistance this year for the Weipa development will amount to £750,000. The total allocation for this project is £1,635,000. When these works and others to be carried out by the company are completed the current phase of expansion will have been achieved and there will have been established a deep sea channel and port and large scale mining enterprises producing bauxite for use at Gladstone and for export. I point out that in 1966-67 an amount of £4.15 million is to be expended on the Brigalow project. So in criticising the lack of provision for northern development the honorable gentleman has not given due recognition to the many major works being carried on in the north by the Commonwealth, the States and private enterprise. Obviously his thinking is restricted to development in terms of the Ord, Weipa and similar projects.

The honorable member stated, in his attack on recent sales of Australian iron ore, that the Minister for Trade and Industry (Mr. McEwen) recognises the problem but baulks at its solution. The honorable member said -

He knows that minerals are being used purely as a source of export income; that they are not being used as they should be - as a source of national development and of new development and new skills. Yet he does not make any provision for this.

Apparently the honorable member also recognises the problem but baulks at it. In fact, he shies away from it for if he were to study the statistics provided by the Bureau of Mineral Resources he would see that the situation is quite different from the one that he presents. To argue in broad terms that all is not well with national development - that in fact everything is on the way down hill - is, to say the least, not doing the right thing by the Australian public.

Mr Bridges-Maxwell:

– The honorable member is up to his old tricks.


– He is indeed. To obtain some indication of whether production in the mineral field is increasing and whether we are producing an amount proportionate to our known reserves it is important first to know what our known reserves are. Some astonishingly large deposits of iron ore, for example, have been discovered in recent years. Take the Mount Tom Price deposits, where the estimated potential is 600 million tons. But this is only a fraction of our known potential and pays no regard to our undiscovered potential. In May this year the Broken Hill Pty. Co. Ltd. opened at Whyalla a production mill which will increase the company’s production of ingot steel by 500,000 tons. The company will increase its annual production of ingot to 111 million tons. Production of tinplate has increased by 20 per cent. Production is 41,500 tons greater than the 241,000 tons previously produced.

What would the Opposition have us do with the minerals that we discover in this continent? Are we to let them lie in the ground for posterity or are the people of today to derive some value from them? I submit that our current production techniques are absorbing all of the minerals that it is possible to process. At the same time we are improving our overseas reserves by exporting some of these minerals. Is there any difference between this practice and the use of our assets to raise loan moneys? Is it not desirable to export as much as is prudent in order to gain vital overseas reserves so that we may continue to import? Certainly there may be some reservations about the rate of our imports at this stage, but only 17 per cent, to 18 per cent, of the goods that come into this country could be classified as luxury goods or finished consumer products. I submit that this fs a modest proportion when we have regard to the standard of living in this country. Since the last war we have advanced and developed. The Australian worker works hard. He has produced goods and brought his country to a high standard of living. He is entitled to enjoy this high standard of living. What are we to do? Are we to cut down on the rate of importation of consumer goods? Are we to deny the worker these luxuries? What is he working for? Would the Opposition deny the worker these extra things in life? Would the Opposition like to marshal labour and direct it into channels to produce more steel? I suggest not. I suggest that the average Australian is satisfied with the rate at which his country is progressing. We still have a shortage of skilled labour. To achieve its rate of production the B.H.P. company had to recruit about 1,700 tradesmen overseas last year. Including dependants the total number of people brought out under the company’s scheme was more than 6,000. Do we have sufficient tradesmen in this country, skilled or unskilled, to produce at a rate greater than we are producing now? I suggest that this is a matter for conjecture. I doubt whether the question can be answered conclusively.

A good deal has been said about the export of iron ore from this country, particularly from the vast and lucrative fields in north-western Australia.. I point out that the production of iron ore increased by 28 per cent, this year. Production of pig iron increased by 38 per cent. As to the controversial bauxite deposits, production of bauxite is up by 1,000 per cent. At the same time, aluminium production is up by about 700 per cent. Are not these figures comparative? I should like to emphasise the fallacy of the argument put forward by the Deputy Leader of the Opposition (Mr. Whitlam), particularly with regard to aluminium. In 1962 we exported 40 tons of aluminium, worth approximately £14,000. At the same time, in 1962, we imported 31,000 tons at a cost to this country of £71 million. The situation today is that we imported only 26 tons in one year, a reduction from 31,000 tons to 26 tons, and our exports increased from 40 tons to 15,128 tons. This export brings in an income of £3,181,000. The value to the country is something about £101 million. How can the honorable gentleman submit an argument to the House that all we are doing is shipping our raw materials overseas only to obtain export income?

I will leave it at that. If the honorable gentleman requires any. further argument I could refer to what is going on in respect of iron ore deposits. He has conveniently overlooked the fact that included in the contracts with the overseas companies areprovisions for advanced processing of iron ore after a certain period. At least two of the companies concerned have contracted already to produce pellets here, and the others are under an obligation to go into advanced production of steel in due course. I would also remind the honorable gentleman that the Government rejected submissions made in regard to the Gove bauxite deposits. Let me digress to point out to him that the Territories are the sole areas which in this respect come under the direct control of the Federal Government. The Government did take that action. It rejected the original submissions made to it, indi cating that it wanted more Australian content in the ventures and desired that a smelter be established on the spot. It is timely to point out that the two submissions being presented at the moment are from organisations which contain a substantial amount of Australian capital. I remind the honorable gentleman also of the recent report put out by the Bureau of Mineral Resources which sets out the tremendous increase in mineral exports. I have no doubt that if the honorable member cares to, he can find sufficient, data, to prove beyond doubt that this Government is proceeding with national development and the development of the resources of the north to the satisfaction of the Australian people, and certainly to the benefit of the country.

I made mention earlier of social services. While I admire the Government for the new benefits it has introduced during the 15 years it has been in office and for the benefits that it has introduced this year, certainly nobody in this House would suggest that the social services complex, as we see it at the moment, is complete. I have no doubt that the Government will give due consideration, in order of urgency, to submissions that are made to it from time to time. One item to which I want to refer is supplementary assistance to married persons. The problems of people who own properties in city areas are building up year after year because of increased valuations, increased general rates, increased water rates and other items that are involved in maintaining a property. I believe if. would be worth while for the Government to consider this particular facet of social services and to provide some sort of supplementary assistance for the married person.

I recognize that there is a need for pensioners to assist in building up the work force. I commend to the Minister and the Government the need to do something about the incomes of pensioners working in sheltered workshops. Instead of imposing a means test on a certain portion of the income, as is done at present, the Government could well introduce a sliding scale whereby during the first two years in which a pensioner works in a sheltered workshop, the first £2 of his income could be completely exempted from the means test. The exemption could gradually disappear over a period of time as the person’s ability, and therefore his income, increased. I think, too; it would be worth the Government’s while to have another look at war pensions and consider exempting them from permissible income in relation to applications for social services. After all, the pension is paid as a compensation for the contribution that the individual made towards the safety of this country. These people deserve more consideration. The department has seen fit to ignore income from boarders and lodgers and from saving accounts and so on when determining permissible income. Why not ignore the war pension too?

I do not need to remind the House or the public of the outstanding legislation introduced by this Government during its term of office in relation to aged persons homes. I suggest that this is one of the most outstanding pieces of social services legislation ever brought before the Parliament not only because of its generosity to pensioners but also because of its effect on the community at large. The achievements under this legislation have been outstanding. About 20,000 people have been housed at a cost to the Government of about £25 million. However, I believe that the public could do more about this matter, particularly persons in positions of responsibility and those who acknowledge the need for these homes. People associated with the real estate business could give a lead to charitable organisations and encourage them to set up homes. There is no reason, too, why this scheme could not be extended to sheltered workshops, because in this sphere again we are trying to increase the productivity of the country by adding to the work force. I believe that the application of the scheme to this particular social welfare requirement would bring rewards not only to the Government but also to the country at large.

Finally, I should like to bring to the notice of the House the case of A class civilian widows. I realise, of course, that any submission I put forward now would have an effect on other facets, and other scales, of social services where children are involved. However, I believe that the Government and the House should make a reappraisal of the status of the A class civilian widow, who is, of course, a widow with children. She should be lifted out of the ordinary category of pensioners in view of the fact that she has children to care for. In my opinion this woman is dangerous. I hope that honorable members will not misunderstand me when I say that. In most of these cases the husband disappears from the scene rather rapidly, to say the least. The woman is left to her own resources. In most cases the administering of the household had been the task of the husband, but when he goes suddenly from the scene the woman is left to deal with matters other than merely domestic problems, I think we need to be frank about this matter. In some cases she is not adequate for the task. That position is part of our way of life and we should recognise the fact. My submission is that some sort of education allowance should be made to the class A civilian widow, and to other pensioners who are responsible for rearing children up to the age of 16 years and student children up to the age of 21 years. I believe that the scale should be so balanced that the basic pension should be something of the order of the basic wage. I also believe that the amount of permissible income should be extended so that a widow, if she ls able so to organise her affairs, can enjoy an income of about £24 or £26 a week, which is the average wage in the Australian community today.

Let me summarise this proposal to the House by citing the case of the class A widow who has three children. The pension should remain at £6 a week. The mother’s allowance should stand at £2 and the allowance for children at 15s. The education allowance should be £1 for each child between the age of twelve and sixteen years, and if a child continues with his or her studies beyond sixteen years of age, the allowance should be increased to £2 a week. With her base pension and child endowment, such a widow would receive £14 15s. Od. a week. If the maximum permissible income were £3 10s. Od. for herself and extended to at least 30s. for each additional child, the family would have the opportunity of earning another £8 a week, thus bringing the total income to something like £23 10s. Od. a week, which is about the figure for the average Australian male wage.

My time has run out. I wished to refer to many other items, such as Asian aid, volunteers for service abroad, scholarships, and, particularly, civil aviation. Suffice is to say that it is my pleasure to support the Government and oppose the amendment.


.- I support the amendment moved by the Leader of the Opposition (Mr. Calwell) condemning the Budget because the taxation increases proposed in it will add further to the burdens of the wage and salary earners; because the proposed social service benefits are partial and sectional in their application, and because nothing has been done to assist the great mass of people who are on the base pension rate. As the amendment also states, the Budget fails entirely to deal with such problems as the increase in exports and Australia’s dependence on foreign capital.

The Leader of the Opposition and other speakers on this side of the House have dealt very fully with the case for the Opposition. I wish to deal briefly with the question of imports, which is referred to in the amendment, and I shall refer in particular to the importation of frozen peas and beans under the free trade agreement with New Zealand which was signed this week. This agreement has caused great concern in Tasmania, for reasons which I shall give later. I point out to the House firstly that over 50 per cent, of the farms in Tasmania are smaller in area than 150 acres, which is considered the economic minimum area. In other words, Tasmania is a land of small farmers. At the present time, these farmers are producing 60 per cent, of Australia’s requirements of processed peas. This is borne out by the fact that last year more than half of the paddocks devoted to the production of peas ranged between 6 acres and 10 acres in area, and more than threequarters of the total Tasmanian production was grown in paddocks of less than 15 acres. I well remember describing these small farms in detail when making my maiden speech in this House. On that occasion I pointed out how the prosperity of the towns on the north-west coast of Tasmania depended on the economic wellbeing of the farmers in what we call the back country.

These farmers engage mainly in dairying and they supplement their income by growing cash crops. Up to recent years, potato growing has been their main sideline as the provider of additional cash to tide them over their other activities. When making my maiden speech, I emphasised the importance of these cash crops. I said I had been told by the proprietor of a large store at Burnie that if he had a barometer outside his store to show store takings it would surely rise and fall as the price of potatoes on the Sydney market rose and fell. Although potatoes are still grown in Tasmania and exported to the Sydney market, the quantity exported has diminished greatly because of the high freight cost of about £12 10s. a ton, which is a killer. The potato growers around Sydney and in southern Queensland use irrigation and by this means are able to produce up to 15 tons of potatoes to the acre twice a year. Without irrigation, of course, the Tasmanians cannot compete with this yield and they certainly cannot transport their product to the Sydney market as cheaply as can the mainland producers.

I speak on behalf of the small farmers because they are the ones who will suffer at the hands of the Country Party Minister for Trade and Industry (Mr. McEwen) and the Country Party generally in this country. There are 918 farmers affected in this instance. Fortunately they were able to turn to another cash crop to supplement their income from dairying. They are now growing peas, and the expansion that has taken place in this branch of primary production has been really remarkable. The area planted has risen from approximately 3,500 acres 10 years ago to 15,500 acres this year. In order to cope with this production and the consumer demand in Australia, our three processing plants at Quoiba, near Devonport, at Ulverstone and at Smithton have expanded. A great deal of money has been spent on plant and storage facilities, and this expansion is continuing. We do not require imports of peas from New Zealand, or from anywhere else for that matter. We produced 60 per cent, of Australia’s requirements on 15,500 acres last year. With further expansion of processing facilities, we can grow double that quantity.

An official survey by the Tasmanian Department of Agriculture in 1962 revealed that in north-western Tasmania there are 32,000 acres of land eminently suitable for the growing of peas, and I emphasise again that this is double the acreage that we planted last year. The free trade agreement signed with New Zealand this week makes provision for the phasing out of duties on peas and beans imported from New Zealand over a period of nine years and, irrespective of what the Minister for Trade and Industry says about New Zealand imports and the relatively small duty paid now, grave fears are held in Tasmania by responsible people and producer organisations for the future of the industry.

Protests and representations have been prepared and submitted to the Minister for Trade and Industry, and to members of Parliament, by the Canning Pea Growers Association, through its President, Mr. E. Roberts-Thomson, of Table Cape, and through its Secretary, Mr. B. R. Bonney of Moriarty. This Association speaks with some backing as it represents 97 per cent, of all growers. I repeat that 97 per cent, of the growers are members of this Association. Therefore, when it prepares a case and makes representations it certainly has the backing of the industry.

On 6th August, I received the following telegram from the Association -

New Zealand has listed processed peas for immediate reduction in free trade negotiations. Request your strongest protest against any alteration to present tariff protection for processed pea industry. Foresee dangerous implications to Tasmanian industry now producing 58 per cent, of total Australian production.

That is signed by the President of the Association. I made representations immediately to the Minister for Trade and Industry. Later, after the Minister had tabled the documents relating to the agreement, and after he had made a speech, in which he mentioned the phasing out of the duty on processed peas, I sent a copy of the speech to the Association. I received this reply -

We consider primary producers being sold down river Stop Full details requested of Minister Stop Meanwhile urge every endeavour by you and colleagues toward extension of present protection for processed pea industry.

Mr Kelly:

– Extension?


– I am pleased to hear the interjection because the House will have noted the word “ extension “ in the telegram. I feel that the industry has every right to be alarmed, and I will deal with the question of the need for extension of the present protection. We believe it is necessary, especially in view of the new process of dehydrating peas, with the product known as “ Surprise “ peas, that has been developed in New Zealand. This process is as yet unknown to us, but I can give my personal opinion - and I speak from some experience of these matters - that the process results in an excellent product. You must give credit where credit is due. The peas are done up in a cellophane package. They are of very good quality and are very light to handle. As I say, the process is patented and is carried out in New Zealand. The people in New Zealand have the technical know-how to deliver this product, while in this country as yet we have been unable to carry out the process. We do not have the know-how and, quite frankly, I think it will take us some time to acquire it, because the process is patented and naturally it is jealously guarded by the people in New Zealand.

For the benefit of the honorable member who interjected, let me now give the reason why we press for the extension of the duty and, if necessary, its increase. I understand that these dehydrated “ Surprise “ peas have been sold in Tasmania for less than 2s. for what is in effect a 10 oz. pack of fresh peas. This should be compared with the local price of 2s. 6d. for our 10 oz. can and also with our frozen packs that sell at 2s. 5d. for 10 oz. I am naturally curious as to how the imported product can undersell the local product. First, of course, wages are lower in New Zealand than in Australia. The wages of a general farm worker in New Zealand are, when converted to Australian currency, £13 5s. a week. In Tasmania the wage is £17 2s. 6d. a week. So we are at a disadvantage in respect of wages.

The Tasmanian farmer gets 5d. per lb. for his product. This return has remained practically the same over the past five years, and this in itself is a very high tribute to the efficiency of the small farmer who has been able to absorb the increased costs of fertilisers and wages and still keep the price of his product stable for so many years. Freight rates naturally come into the picture. It is interesting to note that the differential in favour of the Tasmanian grower is only 5s. a ton. One would expect that while we miss out on wages we could pick up in another direction because of our nearness to the mainland markets and so establish a decided advantage over New Zealand growers, but such is not the case. The charge for refrigerated freight of frozen peas and beans between northern Tasmanian ports and

Sydney is 217s. a ton. The freight rate for refrigerated cargo from New Zealand is 222s. 6d. a ton in Australian currency. From this it can be seen that Tasmania is virtually in the same position as New Zealand so far as freight charges are concerned. But New Zealand has a great advantage with the new dehydrated “ Surprise “ peas so far as freight rates are concerned. The shipping weight of this product is less than onequarter of the weight of the equivalent in quick frozen peas, and these “ Surprise “ peas are shipped at the lower freight rate charged for general cargo. Make no mistake about it, this new type of processed pea is a direct and serious threat to the Australian frozen pea industry, and both the Canning Pea Growers Association and the Tasmanian Farmers Federation consider that the protection being afforded the local product, far from being reduced, should be increased.

The new agreement, with provision for the elimination of duties, can bring nothing but chaos and instability to a valuable industry. Our growers have been able to negotiate satisfactory contracts with processors in the past. But who can say that they will be able to continue to do so? It is inevitable that processors will require growers to sign for lower prices or under some other undesirable contract conditions in order to meet the competition afforded by a free flow of the New Zealand product. Other representations have been made by the Tasmanian Farmers Federation from its headquarters in Launceston and from one of the very active branches at Ulverstone on the north-west coast. These protests are more than justified in view of the importance of this industry. The financial return to growers is about £li million of a total of £10 million for annual Tasmanian agricultural production, excluding returns from orchards and small fruits. I remind the House also that the financial return does not stop at the growers. Employment is provided for a period of three months annually for more than 1,000 factory workers who earn wages of more than £1 million. Apart from this valuable avenue of casual employment the industry also provides permanent employment for hundreds of workers in the factories, while similar numbers are employed in making up containers and in the transport services.

I have before me a telegram from the Tasmanian Farmers Federation which indicates clearly the concern felt by that body and its opposition to the New ZealandAustralia Free Trade Agreement. It reads - (We) consider implementation agreement inevitably result in disruption important Tasmanian rural industries haying regard to known economic and climatic advantages already possessed by New Zealand. Impact will be felt mainly by small Tasmanian farmers-

These are the people for whom I speak this afternoon - “ who even now are in economic difficulties. Tasmanian Farmers Federation strongly support protests and exclusion agricultural commodities from agreement.

The Federation publishes a weekly paper, the “Tasmanian Farmer”. The editorial in the issue of Thursday, 12th August, is headed “ Victimisation “, and includes one or two important and illuminating paragraphs which I think should be put on record -

The understanding all along has been that agricultural commodities would be excluded from this agreement, a very obvious one in view of the pre-eminent contribution of the agricultural industries towards the economic stability of this country. However, a bombshell was thrown into the discussions, last week with the announcement that the New Zealand Government had proposed that certain agricultural commodities - frozen peas, beans and lamb- should be included in this agreement. The decision on this proposal is one for the Australian Government and of the Federal Parliament who will ultimately have to ratify the agreement. ‘

Unfortunately the writer was wrong there, because the agreement has already been signed, sealed and delivered, and- all we can do in this Parliament now is debate the effects of it.

Mr Duthie:

– We have been treated with contempt.


– Quite right. As the honorable member for Wilmot has said, the Parliament, and the people whom we represent, have been treated with contempt mainly by the Country Party Minister for Trade and Industry who is prepared to sell down the river about 1,000 small farmers in my area. The editorial went on -

What they should know is that to admit frozen vegetables into this Free Trade Agreement will victimise the economy of this ‘one small State in a way that will do the maximum amount of damage and disruption and, if proceeded with, will take years to overcome and therefore must be opposed. These may be hard words, but the fact of the matter is that in the few short years of its existence the processed vegetable industry has become a big factor in the Tasmanian rural economy. It affects the northern part of the State and particularly has enabled many of the smaller farmers to remain economically afloat.

In the edition of Thursday, 26th August, the editorial is headed “ Guilty Conscience “ and is worth quoting in part. I hope this strikes home to some people who were in charge of the negotiations that resulted in this agreement. The editorial stated -

The fact that the Australia-New Zealand free trade pact was agreed with remarkable haste and without the Government informing or enabling any of the industries affected to put up any real argument against the introduction of such a far-reaching and dangerous proposal, is among the most noteworthy features of this development. The speed and suddenness with which the negotiations were concluded inevitably leads to a suspicion - that there is a great deal to hide in this whole sorry episode.

The lack of any reliable Information as to the scope and extent of the agreement, a fact which has been severely and trenchantly criticised, merely lends force to this thought, while the rather naive admission by the New Zealand Minister that he and his Australian counterpart had agreed on a process of gradual disclosure in the hope of avoiding violent reaction from Australian and New Zealand producers who may be affected, will only be interpreted as signs of a very guilty conscience.

The protest by the Tasmanian Farmers Federation directs attention to the plight of the small farmers, who, the Federation maintains, even now are in economic difficulties.

Let us look at the national aspect, Mr. Deputy Speaker. Farming costs have risen by 8 per cent. As the Budget Papers indicate, farm income in Australia fell from £744 million in 1963-64 to £658 million last financial year - a drop of some £86 million. We are faced with severe restrictions in our export markets, especially in the United States of America. At a time when we are becoming an increasingly important customer and a defence ally of the United States, that country has increased very rapidly indeed its discrimination against our major exports. It imposes strict quotas on imports of our lead, zinc, sugar, meat and butter, and a tariff of 2s. per lb. on our wool.

On the home front, the small Tasmanian farmer has his own problems, in addition to the instability certain to be caused by the phasing out of duties on his main cash crop under the New Zealand-Australia Free Trade Agreement. As I have pointed out, the main source of income of the small farmers in Tasmania is dairying. In this field, concern is being felt by the butter fat and processed milk industries because of the recent drop of 21/2d. per lb. in the factory price of butter fat, from 4s. 21/2d. to 4s. per lb. This is the lowest price the farmers have received for butter fat since 1951. In that year, the basic wage was £8 13s. a week, and the price received for butter fat was 3s. 2d. per lb. In 1952, the basic wage was £10 14s. a week and the price received for butter fat had risen to 4s. 21/2d. per lb. In 1964, 12 years later, the price received for butter fat was the same, at 4s. 21/2d. per lb. Yet the basic wage had risen £4 8s. a week or 41 per cent. The price that the farmer receives for his butter fat has now fallen to 4s. per lb. As I have pointed out, this is despite a substantial rise in costs because of increases in wages and the costs of fertilisers, plant and equipment and the like. For the staple product of many small farmers, the price received is even less than it was 13 years ago, despite the increases in costs.

This Budget will give no help to the man on the land. It will only add further to his costs. Excise on petroleum products has increased by 3d. a gallon. We all know how essential road transport is to the farmer for the transport of his products and for his personal travel to and from the nearest town or commercial centre and the places where his markets are. The additional charge of 3d. a gallon for petrol will add still further to his burdens. Is it any wonder that many farmers are selling out and drifting to the towns? The number of farmers in Tasmania has decreased by 50 per cent. in the past 15 years, and in the past 10 years by 25 per cent. We hear much talk of decentralisation and the need to develop country areas, and particularly of the need to move population away from the seaboard. But what encouragement is given to the small farmer who has settled in the country and who is the very backbone of the rural areas? He is given no incentive and receives no encouragement to stay on and develop his property. The Commonwealth Development Bank of Australia, which, as we all know, was established as a sop to the Australian

Country Party, merely represents pie in the sky to the small farmer. It is of no value to him. All honorable members know of many applications for assistance that have been turned down by that Bank. Even if an application succeeds, the interest rate of 6 per cent, is far too high. Indeed, it is almost extortionate.

Mr Luchetti:

– Nothing is being done to reverse the trend.


– That is so, as my friend, the honorable member for Macquarie, has just pointed out. The small farmer, of course, cannot pass on to anyone his increased costs. He is at the end of the road when it comes to absorbing increased costs. In this respect, many small farmers have reached saturation point and are unable further to absorb increased costs. So there is nothing left for them but to seek other employment in the nearby towns and cities. Those who stay on their properties face enough difficulties, as I have pointed out, without having now to compete with a flow of products that will come from New Zealand duty free. On behalf of about 1,000 small farmers, I ask the Minister for Trade and Industry to come straight out in the open in this Parliament and tell us whether these farmers, who produce some 60 per cent, of Australia’s requirements of processed peas, are expendable and whether they are to go by the board just so that in other fields this Government, on a national basis, can gain some advantage from this free trade agreement with New Zealand.

I should like, in the few moments that are left to me, Mr. Deputy Speaker, to turn to the question of trade between Tasmania and King Island, a matter that was raised this morning in a question asked by my friend, the honorable member for Bass (Mr. Barnard). I think it is important for me briefly to place on record the background and the need for reconsideration by this Government of a proposal that a grant be given to Tasmania for the restoration of trade between King Island and Tasmania. If this proposal is not reconsidered and if an adequate subsidy is not forthcoming, the shipping service between Tasmania and the Island will no doubt cease to exist. The history of the proposal dates back to 13th August 1964, when a deputation representing King Island interests waited on repre sentatives of this Government and requested that it either take over the “ King Islander “ through the Australian National Line or provide a subsidy to assist in meeting the high freight costs. The Government, after due consideration, decided on the second alternative and offered a subsidy of £2 10s. a ton on freight on goods shipped from King Island to Victoria. This was in the realm of interstate trade. King Island is part of Tasmania and the Commonwealth Government considered that the interstate trade aspect justified a subsidy on freight carried between. King Island and Victoria. The result is that the ship owner trading between King Island and Victoria now charges 83s. a ton for general cargo. Previously, the rate was 143s. a ton. That has been reduced by the State Government subsidy of 10s. a ton, which has been paid for many years, and by the Commonwealth subsidy of £2 10s. a ton, to 83s. a ton.

Let us now look at trade between the Island and Tasmania. The freight rate in this trade has been stabilised for many years at 118s. a ton. The State subsidy of 10s. a ton reduces the charge to 108s. a ton. The point is that there is now a differential of 25s. a ton between the rate on goods shipped between King Island and Victoria and that on goods shipped between the Island and Tasmania. Yet, as I have said, the Island is part of Tasmania. Naturally, this situation is seriously affecting shipping trade between the Island and Tasmania. Let me give an illustration. Tasmania used to supply half the phosphate used on the Island, lt now supplies none at all. The Commonwealth subsidy has resulted in such a lopsided arrangement that the farmers on the Island can get superphosphate from Victoria for £2 3s. 6d. a ton less than they can get it from Tasmania. As I said, before the granting of the subsidy that created this anomaly, Tasmania supplied half of the superphosphate used by King Island farmers. If the present trend continues, the Tasmanian service to the Island must disappear altogether. Though the Island belongs to Tasmania, Tasmania will not be able to send supplies by direct service to the hospital, school, government works and other activities on the Island. These supplies will then have to be sent by boat from Tasmania to Melbourne, transshipped and then sent from Melbourne to

King Island. We can all imagine how much extra this will cost.

Tasmanian representatives on both sides of this House and in the Senate and the Premier of Tasmania have made representations to the Treasurer (Mr. Harold Holt) asking that the Government make a grant to Tasmania under section 96 of the Constitution. If the Tasmanian Government has to give a further subsidy on freight to the island, in addition to the 10s. a ton it already gives, Tasmania could be penalised by the Commonwealth Grants Commission. We appeal to the Treasurer and to the Government to grant a subsidy to Tasmania specifically for this purpose. If it does, this excellent shipping service between our island and the Island in Bass Strait can be maintained. I pay tribute to the Kimberley King Island Trading Co. Pty. Ltd. and the other service that operates from ports in northern Tasmania to the island. A very fine service has been provided for many years, and it would be a great shame to see the company go out of existence simply as the result of an anomaly that was caused when the Government granted a subsidy on trade between Victoria and King Island. I hope that the Government will be interested, will examine the problem and will accede to our request. I support the amendment moved by the Leader of the Opposition.


.- Many honorable members who have spoken during this debate have mentioned northern development. To get the story on record, I have done some work and I thought that I would trace this development through from the beginning of Commonwealth aid for northern development so that the people of Australia, especially those in my State, will realise what the Commonwealth Government has done since it started its present scheme in 1961-62. I will first give the principal development projects for which the Commonwealth has provided finance in the Northern Territory and financial assistance to Queensland and Western Australia. In the Northern Territory, the projects are the Darwin power station, beef and other roads and wharf facilities at Darwin. In my own State of Queensland, they are the Townsville to Mount Isa railway, beef roads, coal loading facilities at Gladstone, brigalow land development and the Weipa development. In Western Australia they are beef roads, the Ord project, the Kimberley research station, Broome and Wyndham port facilities, the Derby jetty and the Exmouth township.

I shall give the Commonwealth expenditure on these projects. The Commonwealth Government spends a considerable amount of money in the Northern Territory. In 1961-62, it started with the power station and transmission line at Darwin. This project has now been completed at a cost of £2.2 million. Provision to the extent of £5.5 million has been made for beef roads and expenditure to the end of June is estimated to be £3 million. In a footnote to a table in the Budget papers, which is headed “Item No. 11. - Capital Works and Services “, the following comment is made -

Northern Territory.- The 1965-66 provision for the Northern Territory is £2,327,000 greater than the actual expenditure in 1964-65. This estimate includes increases of £445,000 for the Northern Territory Administration’s works programme, £271,000 for health services (principally development of the Darwin Hospital), £141,000 in the grant to the Darwin City Council for road and drainage reconstruction, and £200,000 for advances to the Northern Territory Housing Commission for rental housing. The provision (£1,150,000) for the beef cattle roads programme in the Territory is £651,000 greater. An increased provision of £778,000 has been made for advances to the Northern Territory Port Authority. The provision for plant and equipment for the Northern Territory Administration is £100,000 lower.

This shows how the Commonwealth Government is treating the Northern Territory; it is increasing the grants it makes.

I will deal now with payments made by the Commonwealth to Western Australia for development projects in northern Australia. The first of these is the encouragement of meat production by the provision of roads and stock routes. The grant was made under the State Grants (Encouragement of Meat Production) Act 1949-54. The first grant was made in 1950-51 and by 1964-65 amounted to £835,000. Under the Western Australia Grant (Beef Cattle Roads) Acts of 1961 and 1962, the Commonwealth made a matching grant of £3,450,000. Of this amount, £2,700,000 has already been spent and it is estimated that another £750,000 will be spent in 1965-66. Under the Western Australia Grant (Northern Development)

Act 1958-59, the Commonwealth made a straight out grant of £5 million and this has already been spent. The Commonwealth made a further grant of £2,762,000 and a loan of £738,000 under the Western Australia (Northern Development) Agreement Act 1963. Almost the whole of the total amount of £3,500,000 has been spent, but a further £1,000,000 will be spent during this financial year. The Commonwealth made a straight out grant ot £400,000 for the replacement of the Derby jetty and, under the Derby Jetty Agreement Act 1962, made a loan of £400,000. This is a total of £800,000 and the whole of this amount has been spent. The Commonwealth made a matching grant of £565,000 for the development of the Exmouth township. Of this amount £190,000 has been spent and we expect to spend another £375,000 in 1965-66. Commonwealth assistance has brought to Western Australia the sum of £11,042,000 in grants and £850,000 in loans, making a total of £11,892,000. That is what the Commonwealth has done for Western Australia. It is another aspect of the development of northern Australia.

I want to refer to my own particular State of Queensland. Honorable members opposite made some criticism of the Mount Isa Railway Agreement (Queensland) Act of 1961. They said that the people of my political philosophy in Queensland were also critical of it. They were not critical of the actual development scheme, they were only critical of what they thought was the delay at that particular time. When both parties went into the matter they were able to iron out their difficulties and there were no recriminations on either side. I have pleasure in saying that the Mount Isa-Townsville railway line has now been completed. It was estimated to cost £17.3 million and the actual cost was £17,267,000.

Regarding the encouragement of meat production, beef roads and stock roads, there were grants exclusive of the States Grants (Encouragement of Meat Production) Act 1949-54. Those grants by the Commonwealth to Queensland have been expended to the extent of £1,326,000. Under the Queensland Beef Cattle Roads Agreement Act of 1962 there was a further grant of £5 million and a loan of £3.3 million, bringing the total to £8.3 million. Out of that Queensland has spent £3,848,000 from the grant and £2,149,000 from the loan, making a total of £5,997,000- nearly £6 million - and £2 million is still to be spent in 1965-66. Of that sum £1 million is a grant and £1 million is a loan. That is what this Commonwealth Government is doing to help Queensland in its beef roads problem.

The other great scheme in Queenslandand it is a great scheme - involving a considerable amount of the Dawson electorate, is the development of the brigalow land which is dealt with under the Brigalow Lands Agreement Act 1962. This is being done under a loan of £7.25 million. Already £2,100,000 has been expended, lt is anticipated that another £1 million will be expended during 1965-66. There will be further expenditure as years go by. Under the Coal Loading Works Agreement (Queensland) Act 1962 which, as honorable members well know mostly concerns Gladstone and the coal coming from Callide and Moura, there was a straight out grant of £100,000 and a loan of £100,000, a total of £200,000, and that money has already been spent. Under the scheme for the development of Weipa, which is a private enterprise scheme, the Commonwealth has agreed to make loans available to the extent of £1.6 million. None of that money has been spent yet, but it is anticipated that £750,000 will be spent during 1965-66.

Adding together all those items, it means that the Commonwealth has given assistance to Queensland for what we call northern development, grants and loans to the extent of £26,890,000, of which £3,750,000 will be expended in the coming financial year. We do not anticipate that this aid will stop at that. We anticipate that the treatment meted out to Queensland in the past, which I consider to be reasonably generous, will continue from this Government in the future. I would like to add that payments by the Commonwealth to or for Queensland or northern Australia are set out in the Budget Papers in Statement No. 3, Item No. 2 - Payments to or for the States. This table is in very convenient form to enable honorable members to ascertain what has been done in Queensland and in Western Australia.

I think honorable members should note what beef roads in Queensland are covered by existing approvals from the Government as well as the amounts of money being expended. There is the Julia CreekNormanton road of 270 miles; the GeorgetownMount Surprise road, 92 miles; the Winton-Boulia road of 231 miles; the QuilpieWindoorah road of 153 miles; the Mount Isa-Dajarra road of 96 miles and the BouliaDajarra road of 92 miles. Honorable members will see that those figures add up to a very great mileage in Queensland. In Western Australia there is the Great Northern Highway, linking Anna Plains, Broome, Yeeda River, Derby. Halls Creek and Wyndham, which is 838 miles; the Duncan Highway, linking Wyndham with Halls Creek via Nicholson, which is 335 miles; and the road linking Derby, Mount House, Glenroy and Gibb River is 246 miles. In the great expanse of the Northern Territory there is the Barkly HighwayAnthony’s Lagoon Road, 140 miles; the Stuart High way- Yuendumu Road, 168 miles; the Stuart Highway-Plenty River road, 128 miles; the Dunmarra- Western Australia border road, 364 miles; and the Katherine-Willeroo-Top Springs road, 205 miles.

Those figures indicate the increase in the work to be carried out by the Commonwealth or with Commonwealth aid and loan assistance. Further to that I want to deal with the proposals to be carried out under the brigalow lands development scheme. First, the State will terminate the existing tenancies in the area. That was sought by the Commonwealth Government and was accepted by the State. Secondly, there is the development of blocks of land by clearing brigalow and associated -.erub, burning that scrub, and the sowing to pasture of the land so cleared, the provision of fencing, cattle tick units and permanent water facilities. Thirdly, there is the improvement to all-weather gravel standard of approximately 180 miles of roadway and the construction or improvement of not more than 410 miles of access roads dedicated by the Crown in the area.

I have seen the work going on in one particular area and it is a credit to both the State and Commonwealth Governments. I hope that the standards are kept up in order to help the producers when they finally begin production. A fairly large proportion of the brigalow land development scheme is within the Dawson electorate. The overall financial assistance for this scheme, provided under the Brigalow Lands Agreement

Act 1962, totals £7.25 million in the form of interest bearing advances to finance expenditure by Queensland during the five year period ending 30th June 1967. Queensland is to repay the capital, together with interest capitalised at 15th July 1967. Then it is to be repaid in equal half-yearly instalments over a period of 20 years commencing in 1968. I would venture to say that if many of the drought stricken farmers throughout Queensland and New South Wales could get the same treatment they would be very happy. It is not practicable at present to provide particulars of the precise allocations in the Dawson electorate, but I should like to quote from the Biloela “Central Telegraph” of 26th August 1965 when the Premier of Queensland, Mr. Frank Nicklin, was in the area to open the Calcap power station and Callide Dam just outside Biloela. The Premier’s remarks, I believe, are an approval of Commonwealth policy in Queensland. The article states -

*’ Central Queensland is definitely on the march “, said the Premier, Mr. Nicklin, making the major speech of the day. He acknowledged that for many years the central region had languished, though in natural resources it was one of Australias richest.

Referring to brigalow land development, he said that ultimately there would be SOO new families on the land in the Fitzroy basin alone,-

That is within my electorate - and declared that the demand for that type of virgin country would become very hard to satisfy.

That outline of what the Commonwealth is doing for northern development - I classify the whole of Queensland in my definition of northern development, and particularly the whole of the electorate of Dawson - is only a start. It should not be thought that 1 am completely satisfied because I am not. Much remains to be done and in fact must be done, but I have sufficient faith in this Government to know that much more will be done in the not too distant future.

The great big glamorous schemes attract public attention and will continue to progress, whatever may come. But in my opinion, the pressing need in Queensland is for irrigation, which should be given top priority by our planners. There is no use having good roads, such as beef roads, if finally we have nothing to cart over them. The whole of my electorate from Proserpine and Mackay in the northern part of Dawson down through the Dawson and Callide valleys, based on Biloela and Monto through to just north of Bundaberg is crying for planned irrigation. As mentioned by the honorable member for Wide Bay (Mr. Hansen) yesterday, the Bundaberg area has set up its own organisation to investigate irrigation in the lower Burnett. I have made extensive inspections of these areas and attended meetings called by the Bundaberg and District Irrigation Committee. As mentioned by the honorable member for Wide Bay, I was accompanied by him and Senator Dittmer on some of these inspections and to some meetings. The magnificent case got out by the Bundaberg committee is commended to all honorable members and to the Government in particular. It is an outstanding publication and shows that the local sugar interests were prepared to back their ideas with hard cash, it shows also the broad thinking and ingenuity of the people involved.

The effects of drought in cane growing areas are strongly emphasised by the plight of the Gin Gin mill, which is situated near Bundaberg in Queensland. In the Brisbane “Courier Mail” of 1st September 1965 there appeared an article on this subject. I should like to quote this article, because many people have the idea that the sugar industry is a great big wealthy industry which never needs aid, never has any problems and never has to face the difficulties experienced by other primary industries. So I want to tell honorable members about one mill area in my electorate. The article states -

An investigation is in progress into the affairs of t’he Gin Gin Co-operative Association sugar mill at Wallaville, one of the five mills in the Bundaberg district.

The investigator is Mr. Norman Bennett, a well-known sugar mill management expert from North Queensland.

It is understood the investigation is expected to take at least S weeks.

The appointment followed an “ ultimatum “ to the milling association by its bankers a few weeks ago.

The bank said unless certain action was taken including alteration to a rule to increase the levy on old Gin Gin suppliers from 2s. to 4s. a ton of cane its assistance to the Association would be withdrawn from August 31.

It is understood a payment due to cane suppliers on August 18 was not allowed by the bank which, however, sanctioned payment to about 220 mill employees to keep the mill operating.

A report to the annual meeting of shareholders early this year showed that the Association’s liabilities to the Bank of New South Wales totalled £403,000. Mill directors are known to have stated that the position has deteriorated considerably.

The Chairman, Mr. H. H. Innes, and another director, Mr. E. W. Deely, are at present in Brisbane negotiating’ for finance to keep the mill functioning.

In Gin Gin, Cr. D. R. N. Walker, at the Kolan Shire Council meeting, claimed that fears existed that Wallaville could become a ghost township.

Wallaville has 225 suppliers, some recently rezoned from Bingera.

The article goes on to state that the Wallaville mill also has many employees. I wish to impress upon the House that the tragic position into which the Gin Gin Cooperative Association’s sugar mill has fallen has been brought about entirely by two years of drought. This mill has built up its capacity based on the district’s potential to handle 300,000 tons of cane, but because of drought there has been only about 120,000 tons for harvest and much of this cane is of inferior quality which will make for difficulties in milling, and consequential uneconomic returns.

I had a lengthy submission to make on irrigation affecting the whole of Queensland and I proposed to make a comparison with New South Wales and Victoria, where irrigation has been developed further than in Queensland. I will have to make my remarks on that subject at some later date - probably in the debate on the Estimates. I now want to say something more about the Dawson electorate in north Queensland. I stress that in the concluding part of this phase of northern development I feel, as do many of my constituents, that northern development is poised only on the threshold of great events. I commend to the attention of the foresighted Government which at present rules this country the many jobs to be done, but in particular I place irrigation in Queensland as its first priority. I may say that a similar amount to that being expended on the Sydney Opera House - £25 million - would finance a good start on the irrigation problems of Queensland.

Mr Nixon:

– It is more like £27 million.


– And it could be £30 million or even £50 million by the time it is finished. Finally, as the representative of a northern electorate in Queensland, I should like to say that I and many of my constituents are particularly happy that the

Government has taken such a realistic attitude to our defence programme. We wholeheartedly support expenditure for the defence of Australia because nobody more than the people of the north realises the danger that faces us if Australia should ever again be at war. Nobody realises better than we do that the first part of Australia which would be open to attack is north Queensland. An enemy would attack Queensland because we have a great, long alluvial coastline. We have great ore deposits in Queensland and great reserves in oil deposits. If an enemy should take Queensland it would have a base for its operations against the rest of Australia. We feel, rightly or wrongly, that the defence programme does not have the same effect on people in the southern States as it does on us. We are fully in accord with the increased expenditure proposed in the Budget. I oppose the amendment and have great pleasure in supporting the Budget.

Port Adelaide

– I. support the amendment which was moved so ably by the Leader of the Opposition (Mr. Calwell). 1 do so because, apart from some long overdue concessions being granted to some recipients of social service benefits, this Budget offers nothing to improve our overseas balances, does not indicate any new major proposals for national development, denies justice to the aged and the sick and clearly is designed to make the distribution of the national income even worse. In other words, this Budget caters for the privileged at the expense of the great mass of workers in this country.

Let us look, first of all, at the . increased excise duty on liquor and cigarettes, from which the Treasurer (Mr. Harold Holt) expects to obtain an extra £32,650,000 this financial year. I have been waiting for a spokesman for the Government to explain why the whole burden of this increase has been placed on the consumers who, in the main, are the great mass of working people, instead of where it rightly belongs; that is, on the big tobacco combines, breweries and distillers, all of which receive far more than their share from the Australian economy at present and many of which are owned and controlled by foreign interests whose only concern in Australia is how much wealth they can extract from it.

Likewise, the big oil cartels should have had to bear the main brunt of the increased tax on petrol, instead of the whole burden again being placed on the consumers. In this field the consuming public will be hit twice because, as well as paying the increased tax on petrol for their own needs they will, most certainly, because of increased transport costs, have to pay more for other commodities as prices rise to cover the increased cost of fuel. In this regard, a statement by a spokesman for the Ansett empire already indicates a rise in fares and freights which, in the final analysis, will be paid for by the consumers as increased costs are passed on.

In order to show the House the pattern which I believe has been deliberately designed by the Government in favour of the privileged at the expense of the Australian work force, I desire to go back to the year 1961 - the year in which the first basic wage decision under the new consumer price index, an index which had the full approval of the Government, was handed down. In that case the Commonwealth Conciliation and Arbitration Commission, consisting of Mr. Justice Kirby, Mr. Justice Ashburner and Mr. Justice Moore, reached a unanimous decision. A brief summary of their findings, which is recorded in 97 Commonwealth Arbitration Reports of 1961, tells its own story.

The Commission, after acknowledging the fact that the new basic wage under the consumer price index was in fact - I emphasise the words “ was in fact “ - lower in money terms than it would have been under the old C series index, said -

In our view the material available demonstrates the superiority of the consumer price index over the C series retail price index.

The former is an index recently constructed by the Commonwealth Statistician in order ro give a proper and accurate up to date

I emphasise the words “ proper and accurate up to date” -

  1. . coverage of movements in retail prices. The latter regimen constructed many years ago can no longer, in our view, be considered reliable for wage fixing purposes. We find the consumer price index suitable under present circumstances for the maintenance of the basic wage we will now fix.

The Commission went on to say -

Having therefore considered the standards of the seven basic wages of the last decade, we regard as most appropriate for present adoption and for future maintenance . . .

I emphasise the words “ and for future maintenance “ - the standard of 1960.

The judgment clearly indicated that Their Honours were unanimously of the opinion that in future, except in exceptional circumstances, the basic wage should retain the 1960 standard as applicable to the consumer price index.

In order to get the picture in perspective, it is now necessary to turn to the Budgets that followed the 1961 basic wage case. The gross national product increased by 4 per cent, in 1962; by 8 per cent, in 1963; and by 9 per cent, each year in 1964 and 1965. Prices were stable during 1962 and 1963, but rose by 2 per cent, in 1964 and by 4 per cent, in 1965. The Treasurer, in presenting the Budgets for the years in question, made the following comments. In 1962 he said -

By most tests, this country is In a position of great strength today. . . . Externally, our position is as good as we hare known it for very many years. Capital is flowing in. Money foi investment and for current spending is abundant.

In 1963 he said- 1 am happy to be able to bring down a Budget under conditions so propitious as those which rule in the Australian economy today.

In 1964 his remark was -

Altogether, 1963-64 was a year of notable economic achievement for Australia.

In his Budget speech this year he said -

This year the predominant fact is that the Australian economy is already running at full pitch.

Now we come to the kernel of the situation - the 1965 basic wage case, in which, notwithstanding the Treasurer’s grandiose words in each Budget speech since the introduction of the consumer price index, telling of the wonderful position of the Australian economy, and notwithstanding the increase in the gross national product year after year and the rise in prices during the past two years, this Government, which has always preached to the Australian people that the Arbitration Commission should be unfettered in its determination of wage levels, blatantly went before the Commission and sabotaged the arbitration set-up of its own creation. I quote the following extracts from the Government’s submission to the Commission -

An increase in the basic wage at this juncture would be fraught with great danger for the economy.

It would be inadvisable to allow price increases indicated in the consumer price index to be reflected in the basic wage.

Those submissions and others like them are directly opposite to the confident and definite statements that have been made by the Treasurer in all his recent Budget speeches, in reporting the notable economic achievements of this country.

As a direct result of the Government’s dishonest action before the Commission, in four short years the basic wage has fallen to 16s. a week below the figure reflected in the consumer price index. In plain words, every adult male worker - whether factory hand, bank clerk, teacher or any other type of employee - is now 16s. a week worse off on his legal wage than he was in 1961, and every adult female worker is now 12s. worse off than she was in 1961. That is the position despite increased productivity and higher company profits.

The Government, having succeeded la reducing the living standards of all workers in Australia through the channels of its arbitration system, has now had a second bite of the cherry in this Budget by making sure that all of the new tax and excise measures are borne by the consumers, lt has thus completed phase 2 of its deliberate plan to worsen the living standards of the people who are least able to afford that. Phase 3 of the plan - a more subtle approach - is now being proceeded with. The Government, knowing full well that the trade union movement of this country will not sit idly by and watch the standards that it has built up over tha years being filched from the people it represents, has now commenced a brain washing campaign in an endeavour to portray to the Australian people that tha unions are unco-operative and unreasonable and that, if anything goes wrong with tha economy or if any further reductions in the standard of living occur, that will ba the fault of the unions. The Minister for Labour and National Service (Mr. McMahon) and the Treasurer are tha present leaders of this campaign. This is clear from the number of Dorothy Dix questions which are asked in the Parliament and are designed to show some section of the workers in a bad light. It is clear also from the recent speech delivered by . the Treasurer to the Executive Association of Australia, in which he is reported to have said that Australian management had improved noticeably over the last decade but that the Government was concerned about the lack of co-operation at the trade union level.

In view of this statement attributed to the Treasurer, which has had a good deal of publicity, I sought the opinion of an industrial relations expert outside politics, one who could express an expert opinion without political bias. I am happy to say that I found such an expert in the person of Sir Richard Kirby, President of the Commonwealth Conciliation and Arbitration Commission. On 17th August 1964 Sir Richard Kirby delivered to the annual meeting of the Industrial Relations Society of South Australia a paper entitled “Compulsory Arbitration and Collective BargainingCan They Go Hand in Hand?” Addressing the meeting he said -

A few years back the Commonwealth Statistician decided that the old “C” series index had gradually become unrepresentative and wished to abandon it in favour of the new consumer price index. The acceptance of the new index in place of the old meant that current and future union claims were and would be significantly reduced in money amount.

This is the salient point -

Yet the unions agreed that the new index should be used because they were satisfied by research that it was more appropriate than the old. Such a result and such responsibility on the part of a combatant in this disputations field would have been virtually impossible when I first came on te this bench a little less than two decades ago.

Surely Sir Richard Kirby’s opinion gives the lie direct to the reported statements of the Treasurer and the continual utterings of the Minister for Labour and National Service.

If the Government is really sincere in its oft stated desire to retain a system of arbitration and conciliation in Australia for the purpose of fixing fair and reasonable wages and working conditions, its first and most important task is to redraft its present legislation in terms that may be trusted and approved by the trade union movement. To do this it is imperative that the Government repeal its present legislation, which is based on threats and penalties; it must be re placed by legislation which is based on mutual trust and co-operation and which will ensure a fair and just result to workers and employers alike. The Government should indicate clearly that it will never again intervene in the court on major issues strongly on the side of one of the parties, as it did earlier this year. If the trade uinion movement feels that it cannot obtain justice for its members through the avenues of arbitration it will certainly pursue its claims through other channels. I warn the House that should this happen in a major way there is more than a possibility of industrial jungle warfare breaking out iri Australia, leaving in its wake bitterness, hatred and lack of co-operation on the part of all concerned.

Any fair minded person will concede that I have shown conclusively that this Government always legislates and uses systems that arise from its legislation, such as the Arbitration Court, to assist further the privileged at the expense of the many. I have always been interested in the views of the man in the street. Since the Budget was brought down the man in the street has become more outspoken on these issues. The general opinion seems to be that the Government helps the privileged at the expense of the majority of the people for the simple reason that the captains of industry and commerce are the main subscribers to the government parties’ election campaign expenses. Accordingly the Government is obliged to legislate in their favour. I do not think any honorable member will dispute the statement that the major part of the Government’s election funds comes from this source, just as the major part of the Opposition’s election funds comes from the trade unions and the workers. However, I do not think this is the main reason for the type of legislation that continually emanates from this Government. I suggest that anybody interested in this line of thought should do some research in company records. It is there that he will find the real answer. He will find that many high officials in the government parties, both in and out of parliaments in Australia, have extensive interests in many fields of private enterprise. It is because of these personal interests that the majority of this Government’s legislation is designed in the manner I have indicated.

J now wish to offer some criticism of the Repatriation Department. At the outset 1 wish to make it clear that 1 do not criticise in any way the medical, nursing or clerical staff of the Department. Most members will agree that these people are very co-operative and efficient. I wish to relate an incident that recently happened to me. When I was discharged from the Services in May 1960 I was given repatriation coverage for an injury to the right knee. In the recent parliamentary recess I visited Perth. While there the knee began to play up. Being a stranger in a strange place I could not obtain the services of a doctor, so I went to the offices of the Repatriation Department. Members of the staff there were courteous but the first thing they asked for was my temporary entitlement card. I did not know what they were talking about. They said that if I wished to obtain medical attention away from my home town for a repatriation condition I had to produce what is known as a temporary entitlement card. The result was that I could not obtain any assistance from the Department in Perth. Now, I am one of those peculiar fellows who hoards everything - except perhaps money. When I returned to Adelaide 1 went through the file that I have kept since 1946. I have in that file all the correspondence that has passed between me and the Repatriation Department. As I had expected, I had never been told by the Department that if 1 left Adelaide I would have to produce a temporary entitlement card in order to obtain treatment for my injury. A week or two later I was admitted to the Repatriation General Hospital, Springbank, South Australia. I thought that I would check this matter in the hospital, where there were a large number of repatriation patients. I checked with about 100 of the patients and found that only six knew that if they left their home town they had to get a temporary entitlement card from repatriation head-quarters, and those six knew only because on some previous occasion they had found themselves in the same boat, as it were, as I had found myself in. 1 suggest, with respect, to the Minister for Social Services (Mr. Sinclair), who is seated at the table, that he confer with his colleague the Minister for Repatriation (Senator McKellar) about this matter. It is quite appropriate that the Minister for Social Services should be here now, because he has some dealings with this matter. What is to stop the Repatriation Department from issuing cards to all the people receiving medical treatment, in a similar manner as the Department of Social Services issues medical cards to pensioners? If it is reasonable and efficient to carry out this practice with pensioners surely it is reasonable and efficient to do so in relation to people who, not many years ago - and we have soldiers overseas at present - were told what the Government was going to do for them when they came home.

The next matter in respect of the Repatriation Department which I want to raise would be almost laughable if it were not so serious. 1 refer to the outpatients’ department for specialist doctor attention at the Repatriation Hospital at Keswick in South Australia. That is the main part of the Repatriation outpatients’ facilities in the metropolitan area of Adelaide. In order to obtain an appointment to see a specialist one generally needs to be sicker than the average patient. The specialists are quartered upstairs in the building and to get to them a patient needs to walk up three awkward flights of brick stairs. On the few times I have visited this building I have seen people struggling up these stairs on crutches and sticks. I became curious and made it my business to speak to everyone I saw there. I should mention that there is no lift in the building. We get the farcical situation of patient’s with bad hips, bad legs - and also heart cases - who have received strict instructions from their doctors not to walk up steps having to walk up three flights of stairs to see the very doctors who gave them the instructions.

While I was in hospital for a few days a pamphlet called the “ Repatriation Bulletin “ was circulated throughout the hospital. All that was in it was a copy of a speech by the Minister for Repatriation at some Returned Servicemen’s League congress in Victoria. It was one of the most political things I have ever seen in my life. There were a few words in it that read quite well.

Mr Chipp:

– Was it a good speech?


– There were a few words in it that were all right, but the Minister implied that he was the best Minister in the world. He used these words -

In this matter -

He was talking about people in receipt of repatriation benefits -

I am dealing with human problems, not pounds shillings and pence or dollars and cents.

I suggest to the Minister that instead of talking in terms like that he give some thought to issuing a temporary medical card and to putting a lift in the outpatients’ department at Adelaide, or alternatively transferring the department to the ground floor of another building.

Before I conclude my remarks I desire to refer to the contribution of the Minister for Labour and National Service (Mr. McMahon) in this debate. I might say that I listened with great interest to him, hoping and expecting to hear what plan the Government had in mind to ensure the smooth entry of automation into industry in Australia. I should have known better, because to this Government, and to this Minister, the word “ plan “ is in the same category as the word “ peace. “. These are dirty words and should, not be used. However, as the Minister had nothing to offer on this important matter I suggest that he study the speech of my colleague the honorable member for Kingsford-Smith (Mr. Curtin) and give effect to the proposals that he made. I support the amendment.


.- Any honorable member from either side of the House who speaks on the last day of the third week of the Budget debate inevitably has some difficulty in finding anything new or constructive to say about the Budget itself. What one could say of the Budget could be any one of five different approaches. One could discuss the economy, but T suggest - and I think the Leader of the Opposition (Mr. Calwell) indicated this in his speech - that there is so little wrong with the economy of Australia today that, in this year anyway, there is not much profit to be had from a dissertation on the economy per se. On this side of the House one could at least support the Budget item by item, but this has already been done effectively over the past two weeks by my colleagues, and I have no wish to traverse the same ground. On this side of the House one could speak for 30 minutes attacking the Opposition. One could take the last speech for example, which I thought contained a threat to the Government. T do not know whether the threat was authorised by the trade union movement, but strong words were used by my friend, the honorable member for Port Adelaide (Mr. Birrell),who threatened the Government if it did not do certain things in relation to the basic wage. Then one could be justifiably parochial, I suppose, if one had an electorate in which there were some peculiar difficulties. One could also dwell on a particular aspect of the Budget in which one had a special interest, such as social services or repatriation.

I, Sir, would like to devote the time I have to talking about the philosophy of this Budget from a socio-economic point of view and not only talking of this one but of the several Budgets that this Government has brought down during the 15 years in which it has been in office. The first thing I should like to make perfectly clear is that I support this Budget. I think it is an extraordinarily clever Budget, and one in which the Leader of the Opposition found disappointment. The honorable gentleman said, in a disappointed tone, how mild it was after he had expected something into which he could get his teeth, as it were. I should like to make, briefly, one or two constructive criticisms of my own in dealing with the Budget while at the same time saying that I support it in general principle. My criticisms, needless to say, are entirely different from the criticisms that have been voiced by honorable members opposite.

I should have thought that the Budget would have given an opportunity to the Government to introduce some compulsory savings scheme for the young. Such a scheme, I believe, was first propounded by my friend the honorable member for Mackellar (Mr. Wentworth) some years ago, and the suggestion has been repeated in that rather provocative book “Taxation in Australia” by Professor Downing and others. It is a scheme which forces - if you like that word, but there is no better word for it- young people who are under 25 years of age, and who are not the main bread winners of their families, to save oneeighth of their income over £104 a year. In a country which is desperately short of savings, and in which we are dependent , on capital inflow to a great deal, it would seem to me that this is one area - the very young who are extremely well paid - where we could have encouraged savings. Downing estimates in his book that this would produce something between £10 million and £12 million a year by way of additional savings in the Australian economy. I would not have been too upset this year if income taxes had been raised by a little more than 2i per cent I would have thought that here we have an electorate that is prepared to pay more for defence, that is prepared to pay for bolder measures in some fields and, while nobody likes even for selfish reasons, advocating increased taxes, it would have seemed to me to have been an opportunity to put income tax up by perhaps 5 per cent, at least. I should have liked to see these increased taxes spent wisely, of course.

I was disappointed mat our foreign aid programme was not extended more than is proposed. This could have been tied foreign aid, if that is preferred, because, when advocating an increase in foreign aid, I am conscious that we do have balance of payments problems and that outgoings of this nature do represent a further drain on our overseas balances. But there are ways in which aid can be tied and thus serve two purposes. Tied aid would not affect our balance of payments position yet it would give enormous encouragement to the sophisticated industries in Australia which would supply this aid.

I was disappointed that the Budget did not allow as deductions for taxation purposes donations to such magnificent organisations as Community Aid Abroad, the Ryder-Cheshire Foundation, the Overseas Service Bureau and the Peace Corps. It does seem to me to be rather severe on those magnificent organisations, which all members of the Government concede are doing a splendid job for Australia in the under-developed countries, that they should be forced to tell prospective donors that donations will not be deductible for taxation purposes. There can be no doubt that this does inhibit their fund raising in Australia to a great extent.

I should have liked to see bolder steps taken in connection with oil subsidies. I know this would have brought the usual scream from members of the Opposition, but the position of our oil reserves and the volume of our oil imports are such that they must be worrying to anybody who is responsible. I think this is an area in which we could be even a little extravagant in offering subsidies to anybody, no matter where he may be, to come to Australia to find oil in order to save us this enormous pay-out each year in overseas exchange for our petroleum products, and to make us self sufficient in oil should we become involved in a war.

I would have liked higher taxes so that we could have increased the defence effort even further. I am not entirely persuaded that the present call up under the national service training scheme is straining the resources of the Army to any great extent. Perhaps the call up could be greater. I would have liked some long range plan, with particular emphasis on our Navy, but I have not the time to go into that at this juncture.

A substantial sum of money might have been devoted to the Aborigines of this country. Although at this point this is not a problem of international significance, unless something is done about it at an early opportunity, it will become a problem of some magnitude to Australia, not only internally but also so far as international relations are concerned.

Those are the kind of criticisms of some consequence which one might have expected to have come from a responsible Opposition. Unhappily, they did not come from it and I feel impelled to make the comments to the Government myself, at the same time saying in all sincerity that I do congratulate the Treasurer (Mr. Harold Holt) and the Government on the document which the Leader of the Opposition has described as being mild. In passing, it might be as well to say that there is little justice done in this House to the man, whoever he may be, who holds the position of Treasurer of this country. If he brings in a hard Budget, if there is any sort of unemployment running, if overseas balances are falling rapidly and catastrophically, then every member in this House, either consciously or subconsciously, blames the Treasurer. But when we have, as we do at the moment, full employment, strong internal demand and, to repeat the Treasurer’s words, an economy running at full pitch, there is hardly a word of praise or acknowledgment directed to the Treasurer, and I should like to offer that praise at this stage.

Before I develop my own theme, I should like to comment very briefly on two points raised by the Leader of the Opposition. The first few words of his censure motion - that is what it really is - are as follows -

This House condemns the Budget because -

  1. Such taxation increases as it contains add further burdens to wage and salary earners . . .

I presume that he is speaking of the 21/2 per cent. increase in income tax. This is inconsistency at its worst because we well remember that, only two years ago, when the Government made a 5 per cent., across the board, reduction of income tax, we were criticised because that reduction meant far more saving to the wealthy man than it did to the poor. Now we have the same argument used in reverse, but that does not seem to worry the honorable gentleman at all. Now, because we are having an increase across the board, he says that this is inequitable. If it is inequitable on the way down, it cannot possibly be inequitable on the way up.

The second point I -want to make about the censure motion is that once again the trauma in the Opposition’smind about economic planning is brought to the fore. In fact, it is illustrated in a special paragraph of the amendment which reads -

This House further declares that only by proper economic planning . . .

We are never told by our Socialist friends opposite exactly what this plan of theirs is, or how it can be a panaceaof the economic problems of the nation. The plan has never been defined in any detail. I have quoted before, and I make no apology for quoting again from the report of the Ridley Committee which was set up by the United Kingdom Government in 1950 to draw up an economic plan. This was a Socialist’s dream. The Committee dealt with the fuel industries of the United Kingdom, and as these industries were government-owned there was no inhibition on the Committee’s investigating. All the statistics were available. Let me compare the predictions made by the Committee in 1950 with the actual performances as disclosed ten years later, for it makes very interesting reading. In considering the comparison, we should bear in mind that the Leader of the Opposition and every other honorable member opposite is dedicated to Socialist planning - planning for everything that is going to happen. The Ridley Committee predicted in 195.0 that there would be a decline of 4 per cent. in the consumption of coal over 10 years. In fact, the actual decline was 28 per cent. I know that the honorable member for Hunter (Mr. James) will be interested in this. If the coal industry had been geared to a decline of 4 per cent. in consumption, whereas the decline was actually 28 per cent., one can imagine that this would have resulted in some trouble in the coal mines.

This Committee of experts - the best economic brains in the country - also predicted that there would be an increase of 41 per cent. in the consumption of coke. In fact, the consumption of coke declined by 1 per cent. over the 10 years. It further predicted - and this again will be of interest to the honorable member for Hunter - that there would be an increase of 27 per cent. in the consumption of gas, whereas it declined by 4 per cent. But the classic case was that of oil. One could well imagine that when this Committee predicted in 1950 there would be an 82 per cent. increase in oil consumption a socialist government would have ordered the equipment - this is under a policy of nationalisation - would have built the necessary buildings and would have geared up the whole economy for an 82 per cent. increase in consumption of oil over ten years. But events showed an increase in consumption of oil of 249 per cent.

One needs only to study these statistics to realise that the fuel industry would have been in utter chaos had the Socialists been in fullreign in 1950 and had formed a plan and geared up the whole economy accordingly. It is a profitable exercise to study the philosophies of the Socialist and antiSocialist parties in this country during the last 30 or 40 years.

Mr Barnard:

– Is the honorable member talking about the Tories?


– Yes, as a matter of fact, I am. Thirty years ago one would have reasonably expected to have a Socialist party in this country still smarting from a shocking economic depression - which we had. We could have expected the Socialist party to be still deeply conscious of a class battle that had been waged from the time of the Industrial Revolution until the early part of this century - and it was a vicious class battle, as I readily concede. We would have expected the Socialist party in this country 30 years ago to be still suffering from a justifiable sense of persecution because of inhuman and inequitable treatment from the so-called ruling class of the earlier, days, because such treatment was on record in the history books. We would have expected a Socialist party dedicated to the nationalisation of everything, because it had had enough of capitalism and ruling classes and so on. On the other hand we would have expected the anti-Socialist party to be a somewhat reactionary party, equally dedicated to preserving the status quo; and this is exactly what we found 30 years ago in Australia.

We live in a changing world. It is perhaps trite to say so, but it is true, and it is necessary to say it in the context of the point I am going to bring out. One would expect that in a changing world the political parties would change and adapt themselves to altered circumstances. But, I ask: Have we seen any change in the Socialist party in this country? I would say that the Labour Party today in its economic and socio-economic philosophy is in no significant way any different from the political animal that it was in the 1920’s and 1930’s.

Mr Wilson:

– It is 30 years behind the times.


– I would say, as my friend from Sturt has just said, that the Socialist party is 30 years behind the times, behind these dynamic and changing times.

Now let us look at the anti-Socialist parties in this country. These have undergone a remarkable change in their attitude. I have already conceded their philosophy in the 1930’s, but 1 must say that they have manifested a dynamism which is corresponding to the change in the social and economic life of this country. It is sometimes valuable to place on record, as I would now like to do, how the anti-Socialist parties who are represented on this side of the House have departed from the completely laisser-faire policies which were common with anti-Socialist parties 30 years ago. Such a departure from the laisser-faire philosophy is, to my mind, a good thing. However, I know that it will be of interest to some honorable members to hear illustrations of it. In the field of banking, for instance, we all know and all approve that if a person or a group of people wanted to open a bank in Australia he or they could not do so without permission from the Government. If you operate a bank you are not completely free to operate as you please. You are compelled to obey certain rules set down by the Reserve Bank with regard to special deposits. Again this is-

Mr Barnard:

– Socialism?


– Well, it is socialist if you like. This is the very point I am making - the parties on this side of the House have adapted themselves to changing times, whereas the Labour Party is, in its socioeconomic philosophies, exactly where it was 30 or even 50 years ago. I have just given an idea of our philosophy about banking. It is interesting to read what the Tory view of it might be. I have here an extract from “ The Economist “, which could be reasonably expected to put forward the Tory view, I imagine. This extract is from the issue of 3rd February 1962, and it reads -

If the authorities really believe that the banks can never be left to the play of market forces, even as influenced by the official hand, then there will in the end be little point in leaving the commercial banks as private institutions.

There we have a condemnation, from a Tory outlook, if you like, of any interference in the banking profession. As far as I am concerned, I support the present policy. One has only to look at the growth of the Commonwealth Bank in this Country - a Government bank - under the Menzies administration during the last 15 years to wonder whether it would have grown more rapidly or more slowly under a Socialist administration.

Then consider what has happened with our airlines under the free enterprise Government. The Government airline, Trans-Australia Airlines, has expanded dramatically. Since we took over in 1951 the capital of T.A.A. has almost doubled, from £4.3 million to £7.5 million. The profits have trebled, from £205,000 to £640,000, and the dividends have almost trebled as well. This is the performance of a Government-owned airline under a LiberalCountry Party government. If anyone wants to set up a television station in Australia today he cannot do so unless he goes through a formula of application for licence and so on. If you want to import something you cannot go and buy it in Japan at a certain price and just bring it in to Australia. You have to pay tariff duties. There are restrictions in that field. We have already a Bill before us to legislate against restrictive trade practices. We have a system of compulsory arbitration which, strangely, my friends on the other side of the House seem set on destroying. This Liberal-Country Party Government has introduced grants to home builders, and this surely shows a departure from the tory philosophy. Our social welfare expenditure in the present Budget is far above, proportionally and relatively, any expenditure in these directions ever attempted by any Socialist government in this country.

I am not against any of these things, but I think it is sometimes proper for us on this side of the House to reflect soberly on how far we are departing from the laisser-faire free enterprise system of government. We have gone a long way from it and in doing so I know that we have earned the commendation of the electorate. This has been demonstrated at various elections. But I repeat that it is a tragedy to observe the way in which our opponents opposite are still living in the 1920’s so far as their social and political philosophies are concerned. We still stand for private enterprise; the Socialists are dedicated to destroying it. If one wants an example of this one has only to consider their more moderate brothers in the British Labour Party who have recently come to power. They have introduced a capital gains tax without making any allowance for inflation; and I suggest this will mean the end of owners of small businesses. They now have a tax on what is called - lovely phrase - unearned income. The Labour Government in the United Kingdom has imposed restrictions on capital raising. All through the Finance Bill recently introduced in the House of Commons by Mr. Callaghan, we see evidence that it is designed to penalise success, curb ambition and ensure that enterprise will be stillborn.

Finally, Sir, I should like to make a suggestion to the Government. I have never been able to understand the equity of allowing interest paid by companies on fixed interest bearing capital such as debentures as a deduction from income for tax purposes, whereas dividends paid to shareholders are not deductible. This seems .to me, from the standpoint of equity at least, to be unreasonable. A company that raises a certain amount of money from shareholders and pays them a dividend is not allowed to deduct for tax purposes the sum that it pays in dividends. However, if a company adopts the alternative course and raises money by issuing debentures or other fixed interest bearing securities, the interest paid on the money raised is deductible from income before tax is levied.

I have never been persuaded that this system cannot be changed. I appreciate that if it were changed, the whole of the tax schedules applying to companies and businesses would have to be rewritten. But this does not seem to me to present an insuperable obstacle. I appreciate also that, for sound and legitimate business reasons, some companies may want to raise a proportion of their capital by issuing fixed interest bearing securities rather than obtain all their funds from equity capital. For sound and legitimate reasons, they may wish to have some sort of balance. This, again, I believe, does not present an insuperable obstacle. Some ratio of the relationship between the two forms of capital raising could be worked out, and once the prescribed ratio was exceeded, additional moneys paid out in interest need no longer be deductible for tax purposes.

I just wonder about the degree to which this incentive that we have built into the Income Tax and Social Services Contribution Assessment Act to encourage the raising of money by means other than equity capital contributed to the crashes of the Reid Murray and Korman companies. If a company has the prospect of raising money and deducting the cost of borrowing that money from income before tax is assessed, there is a pretty powerful incentive to adopt that course. Therefore, I wonder about the extent to which this was a contributing factor in the collapse of the companies that I have mentioned.

Obviously, if we no longer allow deductibility for tax purposes of interest paid on fixed interest bearing securities some exemptions will have to be made. For example, a bank can raise money only by loans. The fringe banking institutions raise almost all their money, apart from a little equity capital, on fixed interest bearing securities. Here, I examine my own mind to see whether I have an ulterior motive in making my suggestion to the Government. The point that I am getting at is that I am concerned about the fringe banking institutions. Three aspects of the activities of these institutions concern me. First, they operate on the open market, and their operations put enormous pressure on the bond rate, particularly at times when pressure on the bond rate is unhealthy. Secondly, the activities of the fringe banking institutions are completely outside the jurisdiction of the Federal Government, as we are told by many people who are more expert in constitutional law than I am. Thirdly, the interest rates at which the fringe banking institutions lend are far too high. They are high because those institutions, if they are to compete, must borrow at high rates of interest.

I have not time to develop my argument fully, but I understand that there is a way round the constitutional impediment which could be taken by exempting banks from the application of the principle of nondeductibility. By adopting this device, we could coerce - “encourage” would be a better word - fringe banking institutions to register as banks. I understand that, as with a bank, the consent of the GovernorGeneral is necessary for an application by a fringe banking institution to engage in operations on the financial market to be approved. If a fringe banking institution were to register as a bank, it would come under the direct jurisdiction of the Federal Government. This would give the Commonwealth power to resort to exactly the same methods of control over fringe banking institutions as may now be exercised in respect of banks. It would be simple to institute some form of special deposit system under which deposits with a central authority could be increased in times of boom or decreased when there was a need to inject more money into the economy. In this manner, the ratio between deposits and available funds could be varied.

I am sometimes disturbed, Sir, by the knowledge that fringe banking institutions are at present completely outside the scope of any action that we may take. This Government, or any other, including a government composed of honorable members opposite, if Labour were to take office, could have the best of intentions and could control the banks, but the fringe banking institutions operate completely outside the jurisdiction of, and the scope of any control that may be imposed by, this Parliament. It seems to me completely incongruous that the Commonwealth, although it may take measures related to banking, cannot take any measures against other institutions that are able to engage in activities directly contrary to those of the banks. The result, in my view, is that, in times of economic boom, we have, as it were, to use a steam hammer to drive a tack.

Sirring suspended from 6.1 to 8 p.m.


.- Despite all the praise that the honorable member for Higinbotham (Mr. Chipp) heaped on the Treasurer (Mr. Harold Holt) for the quality of the Budget he presented this year, in my view this Budget is one of the most unpalatable financial documents the Treasurer has ever dished out to the Australian people. It illustrates that he will continue to sock the poor and endow the wealthy. It is a direct frontal attack on the living standards of every wage and salary earner. It would affect the wealthy, too, were it not for the fact that the graziers, the industrialists, the company directors and the business men are allowed by the Government, in various ways, to recoup a lot of their outgoings.

In dilating upon the excellence of his Budget proposals, the Treasurer dwelt on its important social and economic effects on the community. He said that the economy is bounding ahead and the Government is completely satisfied with the national expansion that is taking place. He said that the Government had achieved a stabilised economy. Having said this, the Treasurer set out to tell the general public that there were economic dangers ahead for the nation. He said that in an economy that was already running along at full pitch with overfull employment, the need to plan and to provide the sinews of national defence would of necessity drain away resources usually required for the normal expansion of Australia’s industrial and commercial undertakings. To justify his Budget of £2,600 million and the Government’s failure to do anything of a tangible nature for the pensioners, the right honorable gentleman dwelt at length on the need to continue the Government’s international aid programme, including additional assistance to Papua and New Guinea, and to continue the expansion of the Government’s defence policy in Asia and at home. I am sure that every resident of Australia would support the Government to the limit on its defence commitments in Malaysia and New Guinea. But in my view nothing that has been said by the Treasurer or any other Minister about the Government’s defence commitments in Vietnam can convince pensioners or others on fixed income that the huge amount now being spent on defence can be justified in the light of the Government’s refusal to help them attain a better standard of living.

The Treasurer went out of his way to convince the House of the need in this year’s Budget to increase the defence appropriation by £81,430,000 to a total of £385,921,000. He took pride in revealing that the defence vote was not the largest appropriation in this year’s Budget. I think it is only right that the Australian taxpayer should know something more about the way his money is being spent. If we add to the current defence vote the total amount spent by this Government on defence over the past 14 years, we find that about £3,500,000,000 has been virtually wasted on defence since 1951 in one way or another; yet the nation still screams out for a uniform system of roads and bridges to allow for the movement of military equipment in time of war and to bolster our rural and economic expansion.

The increase of £275 million in this year’s Budget is more than 2i times the total revenue appropriated in the whole of the Budget for 1939-40. In that year, gross expenditure stood at £108,985,409, and it should be remembered that in that period the nation had been at war for 12 months. The Consolidated Revenue Fund this year is expected to yield from a population of about 11,250,000 people an amount of £2,667,000,000 or almost 25 times as much as it yielded in 1939-40, just 25 years ago, when the population was about 7,250,000. What an amazing spectacle? We can look about our country and see the marvellous expansion in our economy that has been achieved; yet, in the face of this achievement, we are told year in and year out that we must be cautious, that we cannot allow ourselves to expand or develop the Australian economy too quickly, for if we do we might suffer the consequences of our actions.

The Treasurer said that there is a price to pay for the success that the nation has achieved and that it must be met by increased taxation. In my view, the Treasurer is tax happy. This nation is not only rich in resources; it is also rich in assets. As long as we can work and produce a surplus of goods and services, we have nothing to fear. The right honorable gentleman appears to be concerned only with devising means by which he can extract revenue from all and sundry. He has no respect for persons in his hunt for revenue, except that he always flogs the lower income bracket of taxpayers the most. In last year’s Budget, he reimposed the 5 per cent, rebate of income tax that the Government had allowed during the preceding year. This year, the wily gentleman, for good measure, has added another 2i per cent, to the 5 per cent., making an increase in taxation of 1 per cent, in two years.

The Treasurer has, in addition, increased the tax on petrol by 3d. a gallon. A worker who drives his car 10,000 miles a year and is able to get 25 miles to the gallon will pay an additional £5 a year in tax. During last year, contributions to medical benefit funds and doctors’ consultation’ fees were increased. Sick people are being called upon to pay more and more for prescriptions that are outside the Commonwealth’s list of lifesaving drugs. Premiums for comprehensive car insurance and third party insurance are rising continually. To cap it all, the Treasurer has helped himself to additional excise on beer, other liquor, cigarettes and tobacco. In many parts of Australia, land and water rates have increased tremendously. My own rates for this year are about £12 more than they were last year.

One newspaper, in commenting on the Budget, said: “Well, it was a black week all right for the average man who, accordingly to investigators, earns £26 14s. a week.” I agree wholeheartedly with the newspaper; it certainly was a black week even for those who regularly earn £26 14s. a week. However, at this juncture I would like the newspaper to say how its investigators arrived at the figure of £26 14s. a week. If the figure was obtained from the Treasurer, it is just as unreliable as the right honorable gentleman is. I therefore invite the representatives of the newspaper, the “Daily Mirror”, to visit the Department of Railways in Sydney and ask what are the actual award wages for fettlers, station assistants, boilermakers, labourers, strikers, machinists, or the thousands employed in the other semi-skilled trades. In fact I invite the newspaper to ascertain how many of the 56,000 employees actually receive £26 14s. a week in award salaries. I think it will be found that there are, in fact, no daily paid labourers receiving that amount. That is why railway men are striking at the present time - to try to get some of the £26 14s. which the Treasurer and others gloat about. Railway men are about the worst paid employees in the Commonwealth yet there are no better workers to be found anywhere. They are more loyal to their employer than any other worker in the world.

Taxation statistics show that, at the present time, there are about 2,250,000 taxpayers whose award wages are less than £1,000 a year. They comprise the breadwinners of- the families who are really copping the cane from this Government in the field of excessive taxation, both direct and indirect. Industries all over Australia have many employees who never see £20 a week. In fact, there are many people working in this House who do not get more than £20 a week. I appeal to the Treasurer to lay aside the bogus average figures of income from which he compiled the fantastic statement on personal exertion income. I ask him to seek from the Commonwealth Statistician figures for averaging purposes; to put together groups of earnings, such as the earnings of employees receiving from £109 to £600 a year, those receiving from £601 to £999 a year, and those receiving from £1,000 to £1,300 a year. I ask him to do that if the right honorable gentleman really wants to get down to economic realities. I assure him that there are almost 3 million salary and wage earners in Australia whose incomes do not exceed £26 a week.

I remind the Treasurer that he has deliberately refused, year in and year out, to do anything which would give financial relief from taxation to wage and salary earners receiving incomes of less than £26 a week. I particularly refer to the bracket of workers whose incomes are equal to or less than the basic wage of £15 15s. a week and whom the Government, by its intervention in the basic wage cass, hit well and truly below the belt. The Commonwealth Conciliation and Arbitration Commission, in refusing to give an increase in wages to basic wage earners, or workers receiving below that amount, failed to acknowledge that low wage earners have to buy in the same shops as do other income earners. Of course, that did not deter the Treasurer from compelling those taxpayers to pay the extra 2i per cent, income tax. The punishment handed out to low wage earners has been going on ever since this Government took office in 1949, for it has almost persistently refused to increase the concessional reductions allowable for dependent wives and children.

The Treasurer’s thinking in this manner is embryonic in every way for his concern is always for the tall poppies, especially in taxation concessions. For instance, Mr. Deputy Speaker, in 1950, with a basic wage of £8 5s., the concessional deduction for a wife was £104 and for the first child it was £78. In 1957, with a basic wage of £13 3s., the deduction was lifted to £130 for the wife and there was no alteration in respect of children. At the present time, and for some years now, the concessional deduction has remained at £143 for a wife and £91 for the first child while the basic wage is £15 15s. a week. I interpolate at this point to remind the House that under the Chifley Labour Government married basic wage workers did not pay income tax at all. This year the basic wage worker who has a wife and two children to support is being compelled to pay at least £27 in income tax, plus contributions to hospital and medical benefit funds and numerous other forms of indirect taxation.

Apparently, Mr. Deputy Speaker, on the basis of a taxable assessment of £500 a year the wife and two children of a basic wage earner are only worth to him in taxation deductions, ls. Id. in each £1 of £309, or about £16 5s. 9d. a year. The wife and same number of children of a tall poppy earning a taxable income of £5,000 a year are worth to him 10s. 4d. in each £1 of £309, or about £160 a year. Even better than that, the wife and two children of a taxpayer with an income in excess of £16,000 are worth 13s. 4d. in each £1 of £309, or about £205 10s. Honorable members will see the great difference in the value of dependants from this Government’s point of view. Any worker who continues to support this Government, in view of his treatment by it, is a glutton for punishment. It is the 1,250,000 people in the top salary bracket and the recipients of company and investment income who really strike the jackpot in this Budget as compared with the treatment given to lower wage earners.

I now turn to the social service proposals of the Budget. There are approximately 50 different categories of recipients to share in the Budget’s increased appropriation of £25,649,000. In this’ Budget, base rate pensioners get absolutely nothing. Even those who might be entitled to increased supplementary assistance will have lost it long since in increased living costs. In many instances, house rentals have risen astronomically and those pensioners who own their own homes have had to meet higher fuel charges and higher municipal and water rates in addition to increased living costs. That puts them well behind the standard of living of previous years. The only real gain I can see for pensioners is for those who have been denied pensioner medical benefit cards since October 1955. At that time the pensioner who was in receipt of an income of over £2 a week was excluded from entitlement. The Government is to be complimented on this reform. Yet the ominous clouds of disillusionment are already appearing for those persons who become pensioners from next May should the Government grant an increase in the means test after the next election. As I see the position as far as many of these pensioners are concerned, it is a case of too little too late for they have already been denied their entitlement for up to ten years.

It appears to me that the proposed new guardian’s allowance of £2 a week for widowers and other single pensioners with dependant children which is estimated to cost £340,000 could prove to be a mythical benefit. On the other hand, perhaps the Treasurer has been doing a little wishful thinking in that he hopes that some of our old widowers may indulge in the use of the new fertility hormones whereby some of them might become prospective fathers again. I suggest that if the Government has any real desire to help the people, whether pensioners or not, who have the care and responsibility of young children it should introduce immediately legislation to include unemployable persons in its social service benefits. I mean those people who are unable to qualify for an invalid pension because they cannot be certified as being 85 per cent, incapacitated but who are too ill to work, and single women who fall by the wayside and have’ children depending on them. Those people should come within the scope of the benefits.

Another weakness in the structure of our social service benefits is the failure to provide assistance to the wife of an aged pensioner who is not certified as being permanently incapacitated. There are many other workers who are sometimes compelled to retire and go on to superannuation because they are unable to continue in employment. Specific cases I have in mind are sufferers from arthritis, hypertension, pulmonary disease, arteriosclerosis and deformed limbs. The wives of those persons who are themselves under the age of 60 receive no help at all. Many women in their fifties are affected by change of life and could not get a job under any circumstances. They, too, should have their case considered when their husbands are pensioners.

I hold the opinion that Department of Social Services regional officers in country centres, or directors in capital cities, should be granted a discretionary power to grant pensions and allowances to applicants who are unable to follow regular employment and are certified by their own local doctor and by the Commonwealth Medical Officer to be more than 55 per cent, incapacitated for work. Are we in this enlightened age to demand that such people as these to whom I have referred should continue to work until the day they die, simply because a doctor is unable to diagnose their complaint? Case after case has been brought to my notice of people whose medical practitioner had said they were not sick enough to cease work and obtain a pension. I remember two such cases within the last IS months. One was my brother-in-law, who was kept at work until he collapsed. The doctor had contended that he was suffering from a nervous condition, but he was dead within a matter of hours of his admission to hospitial

In the other case, which was only a few months ago, a 48 years old widow whose health had deteriorated since her husband’s death a few years earlier came to my home and pleaded with me to help her get an invalid pension. I asked her to obtain a certificate from her doctor setting out her state of health and indicating that she was permanently incapacitated for work. The doctor refused to give a certificate, saying that the woman was not suffering from anything that could not be cured. That same person was dead in less than a month. In my view, Blind Freddie could have seen that the woman did not have long to live and had long since been pensionable. I suggest to the Minister for Social Services (Mr. Sinclair) that in the field of social service there is still plenty of room for improvement in the handling of these types of cases.

There is another kind of citizen who requires assistance from the Department of Social Services, and I regret to say that the Government has so far ignored the claims of this group. I refer to the migrants who have come to Australia rather late in life, in some cases sponsored by their children when the children were single and had no family responsibilities. Later the children have married and in due course have commenced to have their own families. In cases where the parent or parents become incapacitated for work but have no pension entitlement it is my view that the Government should allow them a special benefit, instead of it being necessary for the son or daughter to have to keep them. There is a truism that a person who loses his independence also loses his self respect. I ask the Minister to look at this type of case when future consideration is being given to social service benefits, because people who have been cut off from their own income do, in reality, lose their independence.

While dealing with appropriations to the National Welfare Fund I wish to touch on grants made under the Homes Savings Grant Act. To say the least of it, I am amazed and disillusioned at the way that the Act is being administered. I did not think for one minute that after the Government had been returned at the 1963 election the Prime Minister (Sir Robert Menzies) would do otherwise than see that the legislation was liberally and sympathetically interpreted and applied in the interests of all young people who might have been setting out to establish their own homes and rear good Australian families. But that has not been the case. Hundreds of applicants have either been refused the grant or the amount received has been considerably less than the maximum grant. I believe that the Government was helped into office by scores of young folk on the promise that it would help them to obtain a deposit for a home. Initially the Prime Minister said that grants of up to £250 would be paid to eligible persons on the basis of £1 for every £3 they had saved, to an amount of £750, but apparently because of the ruthless, narrow and parochial interpretation that the Minister for Housing (Mr. Bury) has placed on the various sections of the legislation many applicants have had their applications rejected. They feel that they have been betrayed by the Government.

The point that I make is classically illustrated in the Budget in one sentence which says that expenditure on the new homes savings grant scheme was £4,325,000 less than had been estimated. That shows conclusively that hundreds of young men and women have been hoodwinked by the Government’s false promises of November 1963. I hope very much that a future Labour government will, on taking office after the next election, grant in its entirety the home savings subsidy of £250 to every young couple who had commenced building or buying their home after 30th November 1963. I hope also that savings in any form whatever will be eligible to attract the grant, whether the savings are represented by the value of a woman’s glory box, household furnishings, land, joint or trustee banking accounts or any other asset that represents money and is applied for the purpose of establishing a home after marriage. 1 hope to deal more specifically with this subject when the Estimates are under discussion, as the question of savings over a three year period and the Government’s rejection of savings held in joint accounts - especially those accounts held between a parent and child - are matters which must ultimately be resolved in favour of those young people whose applications for the subsidy are now being rejected. lt must be obvious to everyone who has studied the Budget figures that the Budge this year has been designed as a window dressing spectacle for next year’s election. ] think that in the face of the 16 per cent, increase in wages and the rising cost of living, together with the lifting of the means test for pensioner medical service entitlement, the Government’s decision not to increase pensions is proof of what I have said. I make this early prediction: In next year’s Budget the Government will give pension increases. It will possibly ease the means test for supplementary allowances and it will probably return - temporarily, at least - the 21 per cent, increase in taxation which it now proposes to apply. The abolition of the means test for pensioner medical services has been made for no other reason than to attract votes. In short, it will mean that after 1st January next year a pensioner and his wife who have a tax free income of £18 a week and who are in receipt of all entitlement’s, such as the transport and rate concessions that pensioners receive, will be ever so much better off in every way than a married basic wage earner who has children to support. The basic wage earner will be on the same income level as the pensioner couple, will be fully taxed and will have to pay full fares, municipal rates and hospital and medical fund contributions, which will cost him about £80 or £100 a year. Yet honorable members opposite applaud this Budget. It certainly contains many interesting contrasts.

As I have said in other years, the Treasurer is certainly a master in the manipulation of figures. He can make them balance to suit any occasion. This year’s revenue is expected to raise £2,611,455,000 and of that amount £2,134 million will come from various types of taxation. The balance will come from the earnings of Government business undertakings. The Treasurer has estimated that the expenditure will be £2,667 million, which means that £55,545,000 will have to be found to bring the accounts into balance. But the right honorable gentleman is not satisfied to have a balanced Budget, so he will seek a loan of £75 million which will give him a surplus over expenditure of £19,455,000. I would like to know why it is necessary to have a surplus of almost £20 million when at the same time, in a country bursting at the seams with production, nothing can be done to increase the living standards of pensioners or to grant employees receiving low wages the 11 per cent, wage increase. I support the amendment moved by the Leader of the Opposition (Mr. Calwell).

Minister for Housing · Wentworth · LP

.- One can sympathise with the somewhat pathetic plight of the honorable member for Shortland (Mr. Griffiths). He is pathetic when he is dealing with matters as complex as these and, after all, his colleagues have not done very much better. However, I would like to assure him on one point: Whatever he may think of the homes savings grants scheme, nearly 30,000 young couples have enjoyed its benefits in varying amounts, mainly near the £250 end of the scale. One thing which must necessarily disappoint the Opposition is the very success of the scheme.

So far in this debate the Leader of the Opposition (Mr. Calwell) and the Deputy Leader of the Opposition (Mr. Whitlam) have spoken. They made speeches which were not unentertaining; but they found nothing really substantial upon which to criticise the Budget. I can well believe that the honorable member for Eden-Monaro (Mr. Allan Fraser), who I understand will follow me, with a richer imagination may find something serious to criticise. However, tonight I have no intention of being controversial in any way because, in fact, very little of a controversial nature has been dragged up in the course of this debate, except phoney arguments that have been advanced by the Opposition.

In a discussion of the Budget it is highly appropriate to take note of developments in the field of housing. Housing, apart from its intrinsic human importance, plays a major role in our economic life. Towards the end of December last year 75,600 people were employed in the construction of dwellings. The total number of employees in industries whose products are closely associated with the construction and equipping of dwellings is of the order of 100,000, or not too far short of 10 per cent, of the total number of factory employees. The expansion or contraction of the housing industry is therefore a matter for widespread concern.

The key strategic role in housing in Australia is played by the Commonwealth. The details of construction and location do not, of course, fall within Federal jurisdiction; but the Commonwealth, through the banking system, largely determines, albeit within rather wide limits and subject to considerable time lags, the volume of housing construction. A considerable part of the funds used in the acquisition of dwellings does not accrue from loans made by the banking system or the major financial institutions. However, the housing loans extended through the banking system do largely determine the upper limits of construction and do finance a massive proportion of the total number of houses constructed.

Honorable members who follow these matters closely, such as my friend the honorable member for Deakin (Mr. Davis), will be very conscious that hitherto, although the role of the banking system has been so critical to the housing sector, housing as such has never been a specific responsibility of any Commonwealth agency. The task of our monetary authorities in keeping the economy on an even keel so that orderly and rapid expansion of the Australian economy can proceed without interruption is one of extraordinary complexity and difficulty. It is subject to so many forces beyond prediction or even domestic control that it requires skill, experience and judgment of the highest order. In such circumstances it is natural that in the past housing has been regarded as one piece of an economic jigsaw puzzle rather than as something of supreme national importance in itself. That is not to imply in any way that those whose function it has been to guide the monetary situation lack an acute sense of social responsibility or are in any way unaware of housing needs. Quite the contrary is so, as the record under successive governments will show. But they, like other people, are products of their circumstances.

With an ebullient economy, such as we have been enjoying in recent times, the tools at the disposal of authority to influence our overall economic situation are limited. One of these is housing, because its ramifications are so widespread and its activity is so dependent upon the flow of bank finance. Therefore, when it is desirable to take some heat out of the forces of expansion, housing presents a readily available means of doing so. The building of shops, hotels, offices, clubs and factories may boom and absorb huge resources including skilled and precious labour, as in fact it is now doing; but that lies largely beyond the compass of Commonwealth control Therefore, in this matter, as in so many other matters with which financial authority has to deal, there is an inbuilt conflict between the forces which are so necessary for growth and expansion and upon which our ultimate survival may well depend, and the requirements of stability without which a high rate of national growth will not occur. However, the deficiency in using housing to dampen demand is that is impedes the achievement of some of our most fundamental national objectives.

Let us take immigration first. We, as a people and as a government, are committed to promoting immigration to Australia at the greatest rate at which we can reasonably absorb newcomers into the social and economic fabric of our national life. This is not a matter for party controversy; it is the goal upon which all major sectors of political opinion are agreed. The absorption of large numbers of immigrants depends on many factors, but on none more directly than the provision of plentiful and adequate housing. The people to whom we wish to be a magnet enjoy high and rising standards of living. Understandably, they will expect and demand higher standards and greater availability of housing than Australia has enjoyed in the past. If we seek and desire expansion in order to retain our place in the sun, it is imprudent for us to neglect the means of achieving that goal.

Against that background, the natural question that arises is: What should our housing targets be? Clearly, resources absorbed in building and equipping houses will not be available for other purposes. We live in a fully employed economy without any appreciable reservoir of labour and resources which are not already actively employed. However, we do know now from practical experience that we already have the labour and resources to construct upwards of 110,000 dwelling units per annum without undue strain on the rest of the economy. In view of our wider national objectives, therefore, it would seem to be imprudent for us. to allow our output to sink below that figure, if we can avoid it. Dampening down housing because of undue expansion in other sectors of the economy could well distort the ultimate priorities that are necessary for our survival.

In past years the building industry has been sorely plagued by fluctuations. When our need for housing is so great there is much to be said for ensuring that, as far as possible, the present labour force engaged in bousing construction is kept intact and fully employed. If this industry, together with the industries immediately concerned with building construction, can be kept on an even keel, that in itself should make a very big contribution to general economic stability. One can sometimes hear it argued, even by competent people, that even now we are building houses at a rate faster than we will require in the long run. There are, however, no convincing theoretical yardsticks to support this view except on statistical assumptions of projections based on hypotheses which are themselves only general assumptions. There are, however, a number of important things of which we are aware as a matter of hard common practical experience. We know, for instance, that at no time since the huge post-war expansion in our population and economy got under way have our financial institutions been in a position to meet anything like the full requirements of credit-worthy seekers of home loans. We know that in the current financial year about 170,000 persons are likely to marry. Thus 85,000 couples will come together with benefit of clergy to form new family units and most of. them will want to establish a household of their own as quickly as possible.

Mr Cope:

– Why not tell that to Bill McMahon?


– I would counsel the honorable member for Watson to do that. He is a much better expert than 1 in all matters matrimonial.

Mr Cope:

– I am President of the Redfern Lonely Hearts Club.


– I know that, and in the past I am sure your position has given you great opportunities. We know that our net immigration intake could well be more than 100,000 this year. A considerable number of these people will need and want homes at the earliest possible moment. We know also that the waiting lists for State housing commission homes have recently been growing, whatever the limitations of those lists may be. On the other hand, we do not know how many homes are likely to be vacated, demolished or declared unfit for habitation. Nor do we know how many holiday homes are being built. As my Department gathers strength and experience we hope, with the aid of others, to throw increasing light on this situation, but it is never one which is likely to be satisfactorily projected or resolved on the basis of cold statistics.

Ideas, standards and incomes are in a constant state of flux. Nobody can predict fashions and taste. All of these things play a part in the demand for housing. Similarly, there are other problems connected with housing which are difficult to measure precisely but which demand our attention. It is a matter of common observation amongst those prepared to look for themselves that many thousands of our aged people, whom time has bereft of the strength and capacity to determine their own fate, live in appalling accommodation and wretched surroundings which are a sorry reflection upon any modern society. This is true, of course, of any country - even the richest - but it is something which should increasingly engage our compassion and energies. Apart from any specific measures undertaken, an improvement in the general stock of housing makes possible a substantial degree of uplift all round. Against our Australian background it looks almost impossible to build too many houses for our ultimate requirements. The more accommodation we have the more readily can we add to our immigration programme, obtain the labour for our growing industries, and create the market necessary to sustain an interesting and varied Australian civilisation.

I turn now to recent events in the housing sphere. In the last two years we have enjoyed a remarkable upsurge in dwelling construction. In 1963-64 about 95,700 dwellings were completed. In 1964-65 the number was about 112,500. During 1964- 65 an estimated 116,700 dwellings were commenced. The peak of commencements was reached in the September quarter of last year. The rate of new dwelling constructions has declined during the past six months. A number of factors suggest that unless some mild corrective measures are taken the decline will continue. There could be a sharp decline early in 1966. However, I should like to emphasise that the position is under close scrutiny by the Government. Corrective measures will be considered as and when they seem to be required.

The decline in commencements of both houses and flats has been in the private sector. The number of dwellings built by Governments has remained relatively constant over the past two or three years. The figures of approvals indicate a similar trend. The July figures reveal a decline of 850 - about 9 per cent. - in the number of new private houses and fiats approved during the month compared with approvals in July last year. Since March there has been an increasing percentage decline each month in these approvals compared with the corresponding month last year.

There are a number of factors at work that suggest that a further decline in commencement could be in prospect. In 1965-66 governments probably will spend a little more on dwelling construction than they did in 1964-65, but this expenditure will produce approximately the same number of dwelling units. The future movement in commencements is likely to be in private houses and flats. There is evidence of a reduction in the rate of approvals for new dwellings by major institutions in the June quarter. This will affect commencements in the September quarter. Between December 1963 and December 1964 the number of persons working on jobs carried out by builders of new dwellings increased from 66,100 to 75,620. In the March quarter of this year there was a decline of about 200 in the numbers engaged on new home building, although total employment in the building industry continued to rise by nearly 1,700 persons. The June employment figures will not be available for a month or two, but I expect that they will confirm the trends already established. Over the three months to the end of July there was an increase of 130 in the number of skilled building tradesmen registered for employment and a decline of 150 in the vacancies registered for skilled building tradesmen. These figures are trivial and are probably not much indication of the trend, but perhaps they are a straw in the wind.

As reported by the Reserve Bank, the number of loans approved for new dwellings by all major lending institutions, including the War Service Homes Division, increased from 47,000 in 1962-63 to almost 51,000 in 1963-64. This was followed by a fall of more than 1,500 to 49,300 approvals in 1964-65, although their gross lending of £164 million for new dwellings in the past financial year was almost the same as in the preceding financial year. What is significant in forecasting the future rate of home building activity is what has been happening in the past few months. The rate of increase in deposits in the savings banks - the largest institutional lenders for housing - fell away sharply from £85 million in the September quarter last year to £45 million in the December quarter and £24 million in the March quarter this year. If the amount of interest added to accounts in the June quarter had been excluded there would have been a net fall in savings bank deposits in that quarter. These movements go far to explain why gross new lending for housing by savings banks has fallen progressively over the past 15 months. It fell quarter by quarter from £40.8 million in the June quarter 1964 to £37 million in the March quarter this year. This was followed by quite a sharp fall to £34.8 million in the June quarter, and it seems likely that there will be a further decline in savings bank lending for housing in the present quarter - that is, the September quarter. Moreover, especially in the June quarter a higher proportion of this gross new lending was for the acquisition of existing homes. However, the proceeds of sales of existing dwellings frequently provide the finance to purchase new flats.

The rise of £207 million in savings bank deposits in 1964-65 was well below the rise of £270 million in the preceding financial year. The rise in 1965-66 seems certain to be far below this figure. This slowing down in the rate of increase of savings bank deposits will undoubtedly have some effect upon both the willingness and ability of the savings banks to lend for housing purposes. Many of them, of course, have relatively firm understandings with a number of semigovernment and local government authorities to subscribe to their borrowing programme. The increase in their holdings of Commonwealth Government securities last year was some £36 million less than in the previous year. As far as savings banks deposits are concerned housing is, of course, in direct competition for funds with Government securities. Given the current outlook, therefore, it is patently important to attempt to expand housing finance from other quarters.

The main institutional sources outside of what might be termed the “ captive “ cheap money of savings banks and Government institutions which lend in the 5 per cent, to 5i per cent, field are the trading banks, insurance companies and permanent building societies which lend at 6 per cent, to 7i per cent. There are, of course, many others to which a great number of home seekers are obliged to resort for second mortgage and bridging finance at up to double these rates.

Well before the end of the year the new Housing Loans Insurance Corporation should begin business. One of its important aims will be gradually to obviate the need to resort to high priced second mortgage money by taking away the risk to lenders of providing money for housing. Its success will depend vitally, however, on attracting funds, and to do this it will be necessary to ensure loans at rates which compete with those offering for other purposes. The facts of life dictate that the Corporation will operate not in Utopia but in the market place. The potential scope for lifting the dear money burden off many home makers, however, is very considerable.

Any downturn in housing which may occur in the near future will be, of course, from record high levels, and as far as the economy as a whole is concerned it is likely to be more than compensated for by developments elsewhere. Whilst over the past 12 months the value of new houses and flats approved rose and then fell, the value of other building operations approved during the past six months has been very much higher than approvals for similar operations during any six months period. The value of all other building approved, except houses and flats, rose from £101 million in the three months ended July 1964 to £124 million in the three months ended July this year. Approvals for Government building accounted for almost half this increase. Added to this will be the impact of the defence programme and the new development schemes in various parts of the country, all of which will impose increasing strain on the construction industry.

The basic problem in housing is to obtain a sufficient, share of the national income for the purpose. Housing is, and is likely to remain, in strong competition with other pressing demands on our resources. On one final point I should like to reassure the House. It is: Whatever our deficiencies may be at the end of this financial year for which the Budget provides, the people of Australia will be better and more amply housed than ever before in their history.

Mr Allan Fraser:

– I shall not dwell upon the long and wordy apology which the Minister for Housing (Mr. Bury) has felt it necessary to deliver for the operations of his Department, because it would be too sad. This gentleman was kicked out of the Cabinet for showing some independence.

Mr King:

– This is a personal attack.

Mr Allan Fraser:

– He was kicked out of the Cabinet for showing some independence. I am not attacking him, I am praising him for that. What I am about to say now might be considered a personal attack. He has been allowed to creep back with his tail between his legs, and I think his performance tonight shows that he has learnt the hard way what so many of his colleagues found so easy to digest. Judging by his speech tonight, never again may we expect to hear a spark of independence in his utterances. However, this Minister is an object lesson of the way of this Government. He distributes £250 to every eligible young couple to acquire a home.

Mr Bury:

– Would not the honorable member like to bc doing that?

Mr Allan Fraser:

– Not in these circumstances. In the 12 months in which he has been doing this, due to the operations of the Government the cost of erecting a house in Australia has gone up by more than £300.

Mr Opperman:

– Not through that.

Mr Allan Fraser:

– Yes, through the policy of this Government. A young couple who get £250 are only £50 better off than they would have been if this Government had not introduced the scheme. Other couples are, of course, more than £300 worse off because of the Government’s policy.

Mr Bury:

– That is a curious idea of relative influences.

Mr Allan Fraser:

– The Government is the government of the country, lt surely must take responsibility for the effect of its policy on the national economy. Let the Minister sit back and take things quietly, and I shall quote to him from the Commonwealth Statistician. The Statistician said that Commonwealth building in the July quarter of the year was 4 per cent, below that of the three months ended July 1964. The Government’s operations designed to increase the flow of houses brought about the reduction. The Statistician also said that the rate of approvals for new government and semi-governmental houses and flats during the three months -

Mr Bury:

– I just gave those figures.

Mr Allan Fraser:

– Not this figure - was 4 per cent, below that for the same quarter of last year.

Did the Minister give that figure from the Commonwealth Statistician? If he did, I did not hear him do so. Let me quote just one more thing before I leave this unhappy essay of the Minister for Housing. I shall quote from the statement of the Treasurer (Mr. Harold Holt) on “National Income and Expenditure 1964-65”. The Treasurer says -

The consumer price index, whose components relate to a substantial portion of total personal consumption expenditure, rose by 3.7 per cent, in 1964-65 compared with 1 per cent, in 1963-64. Analysis of building statistics for the first three quarters of the year and of other relevant data suggests that prices applicable to expenditure on dwellings and other buildings may have increased by nearly 4 per cent, in 1964-65 compared with just under 2 per cent, in 1963-64.

Mr L R Johnson:

– £200 to £300 on every house.

Mr Allan Fraser:

– More than £300 on every house. That alone has been the result of this Government’s much proclaimed policy to bring down housing costs for young couples in this community. The result, of course, was predictable. In his independent days, the Minister could have predicted very well the consequence of this electoral bribe. But the Government does not mind. After all, it was only an election gimmick and it had served its purpose once the Government was re-elected. It was a joke - a rich political joke. Of course, this housing joke which has defrauded many young people and ruined their hopes that they would get their housing a little cheaper, does not compare in richness with the petrol joke which is highlighted in this Budget. I now leave the operations of the Minister for Housing.

Honorable members will remember that at the last election the Government used not only the housing gimmick but also a cheaper-petrol-for-the-country gimmick. Does the Minister remember that? In return for votes, the Government promised to reduce the price of country petrol to not more than 4d. a gallon above the price of city petrol. It got the votes. That was nearly two years ago, but the Government has not yet reduced by one penny the price of country petrol. On the contrary, it has increased the prices of both city and country petrol by 3d. a gallon.

Mr Curtin:

– A confidence trick.

Mr Allan Fraser:

– Exactly. Now that it has increased the price everywhere, the Government can conveniently reduce it in some places, which is what it is going to do, and still make a handsome profit on the deal. The cost of reducing country petrol prices to not more than 4d. a gallon above the price of city petrol is shown by the Treasurer in his Budget speech to be £4 million this year, while he also shows in his Budget speech that the increase in the price of petrol as a result of increased petrol tax will bring £22 million, or five times as much, into the Treasury.


– Put and take.

Mr Allan Fraser:

– Yes, put out a little and take back a lot. This, again, was an election gimmick, lt was designed for only one purpose - to gain votes and to secure the re-election of the Government. It did that, and Country Party members sit there like dumb, driven brutes and accept what is done to them.

Mr Chipp:

– Oh!

Mr Allan Fraser:

– Has the honorable member never heard the term, “ dumb, driven brutes”?

Mr Chipp:

– Only from creatures like you.

Mr Allan Fraser:

– Then the honorable member has not read very much. It is a term constantly used for the Australian Country Party. The fact that the Australian public has been fooled on these two counts does not matter so much, for there is a better joke yet - the joke of the pensioner medical service. The Treasurer proudly announced -

First, we propose to remove the existing means test governing eligibility for enrolment in the Pensioner Medical Service . . . Some 120,000 pensioners and their dependents will benefit . . .

Mr James:

– How generous.

Mr Allan Fraser:

– How generous indeed. What wonderful words. But what the Treasurer omitted to explain was that the only reason why these 120,000 pensioners are not eligible now is that this Government deprived them of their entitlement in 1955. For 10 years the Opposition has vainly endeavoured to persuade the Government to give this benefit back to the pensioners, and when the Government does give it back it does so in the loud exultant tones of people who are providing a new benefit for the pensioners of Australia. There are many things that the public of Australia will swallow, but I do not think they will swallow the story that the Government is, in 1965, giving a new and magnificent increase in benefits to pensioners. Of course, a cheapjack does not mind fooling his public as long as he makes a profit out of it, and this Government is simply that - a cheapjack government.

The Budget provides some very good further examples of this technique. The

Treasurer announced eight separate new social service increases. First, the rent allowance is to be increased by 10s. to £1. Without going into details, the proposal is that if the pensioner has means greater than 10s. a week he will lose out on the rent allowance. In other words, the rent allowance is now to be paid until the means, as assessed, reach £1 10s. a week. So, if the poor old pensioner has managed to obtain £1 8s. a week in addition to his pension of £6, thus giving him a total of £6 8s. a week on which to live, he will get a rent allowance of 2s. a week. If his means are assessed as £1 6s. a week, he will get a rent allowance of 4s. a week.

Mr Cope:

– That ought to help.

Mr Allan Fraser:

– Exactly. It ought to help a good deal. The Government has announced that eligibility for the rent allowance is to be extended. But look at how it is to be extended. The only people who will get the benefit of the extension are a married couple where the husband is a pensioner and the wife receives a wife’s allowance. So, there has to be a pensioner husband and a non pensioner wife who is in receipt of the wife’s allowance. Then and only then can a couple get some help towards paying the rent. They have no other income whatever to assist them because the wife’s allowance is not paid if the pensioner husband is capable of earning even a shilling or a couple of shillings a week. It is paid only if the pensioner is judged to be totally and permanently incapacitated. Then we have the pensi’Oner on £6 a week and the wife on £3 a week, giving the couple a total of £9 a week. If they have not one penny more, the Government will now kindly consent to pay them a rent allowance.

Then there is the Government’s magnificent proposal that in future the wife’s allowance will be granted where an aged pensioner’s wife has the care of a child. It is a fairly safe bet that this will not cost the Government a tremendous amount of money.

Mr Daly:

– They are really letting their heads go.

Mr Allan Fraser:

– Yes. The Government is really letting its head go. The payment to pensioners for children undergoing full time education is to be extended until the student child reaches the age of 21 years. I have not very many age pensioners in my electorate who have children of 20 or 21 years now completing their university courses. If other honorable members have such pensioners in their electorates, they should congratulate them because they are going to get something from the Government.

Then we have this wretched thing, this almost stinking thing, this fraud of all frauds, this loudly announced increase of the funeral benefit from £10 to £20. It was £10 in 1943. In equivalent money terms today, it would have to be at least £40, and possibly more. But it is to remain at £10 except that there is to be an increase to £20 where a pensioner is responsible for the funeral costs of his wife or his child, or of another pensioner.

Mr James:

– More strings.

Mr Allan Fraser:

– Exactly. But if the pensioner himself dies and it falls to his family to bury him, the funeral benefit is to be restricted to the £10 which was considered adequate as a benefit way back in 1943.

There is a final benefit which the Government has loudly announced and trumpeted. There is going to be a guardian’s allowance of £2 a week. But that will not cost the Government very much when we come to look at it because it is to be payable only to widowers and unmarried pensioners who have the care of one child or more. That is a good example of hedging a bet as much as possible to ensure that not much will have to be paid by way of guardian’s allowance.

What I want to emphasise to the House is that apart from the alteration in the pensioner medical service, the eight pension adjustments which the Government has so loudly trumpeted will cost the Government less than £5 million a year, as is shown quite clearly in the Budget Papers. Yet a general increase of 5s. a week in the basie rate, which is more than justified on official figures of price rises in the past 12 months, would have cost the Government £10 million. Every ls. increase in the pension today costs £2 million in total expenditure. So if it had done the barest justice that needed to be done to the pensioners as a whole, by declaring a general increase of at least 5s. a week, the Government would have had to spend twice as much as it now will have to spend on these widely and loudly advertised but in fact almost meaningless increases.

Mr Cope:

– Does the honorable member think they are waiting for election time to come around?

Mr Allan Fraser:

– Yes, I think exactly that. If you judge the Government on form you must conclude that it is waiting until election time next year, and by dodges more suitable to a confidence man they expect in the meantime to maintain a modicum of pensioner support. The Govern-; ment is perpetuating, Mr. Deputy Speaker, the miserable system established in 1963 under which married couples become substandard citizens when they reach pensionable age and receive what is officially called a sub-standard pension rate of £5 1 0s. This has not been increased by Id., and none of the new benefits mentioned in the Budget is applicable to such married couples living on the pension alone.

The child endowment rate for the first and second children has now been unchanged for 15 years. It remains at 5s. for the first child, and this rate was fixed in 1950. For the second child it remains at 10s., this rate having been fixed in 1948. Of course the Government can afford to be generous with minor expenditure, such as that for student children and others, because if it was required to adjust the child endowment rates for the first and second children so that the purchasing power of the endowment would be equal to its purchasing power when the rates were originally established, the cost to the Government would be £70 million a year. The actual changes provided in the Budget in respect of student children will cost the Government less than £1 million. So the Government saves £70 million and gives back £1 million. In other words it is withholding at least £69 million from the mothers of Australia. This is money that in justice belongs to those mothers, money that they need with which to raise their families, money that was guaranteed to them by the Leader of this Government in 1949 when he pledged himself and every man who sat behind him to maintain the true value - and indeed to increase the value - of every social service payment that was made in this country.

But if the Government has used a fine tooth comb to make the most skinflint increases in social services, it has, of course, used a blunt instrument to levy its tax increases. While it has withheld social service payments from the low income groups it has imposed upon those low income groups the greater part of the new tax burden. It has done this by levying a flat rate of increase on personal income tax, by exempting companies from payment of increased taxes and by imposing indirect taxes as the main source of new revenue, taxes which bear just as heavily on the man on a moderate or low income as on the man on a very high income. All this, of course, is done in the name of defence. It is all part of the policy of involving Australian forces in the quarrels of Asia. We are to sow the wind and reap the whirlwind. I constantly hear Government members declaring that the struggle in Vietnam is a fight for Australia’s survival, and sometimes I begin to have some doubts about it. If this struggle in Vietnam is as crucial for Australia as Government members declare, then their conduct astonishes me. On the one hand they state that it is imperative that Australian forces should be engaged in this truly horrible conflict, and on the other hand not one of them enlists. The essential difference between the Opposition and the Government on the question of Vietnam was well expressed by one of my colleagues last night, when he said that we want to lift them up while the Government wants to shoot them up.

The Opposition contends that military victory is imposible and that peace will come only through talks leading to a negotiated settlement. Government members assert that it is necessary to fight by military means to obtain victory and that talking will get us nowhere in a war against Communists. Yet those same members stay here and talk instead of going out and fighting. It seems to me that we on this side of the House accord Government members the same right that their leader claimed 50 years ago when he said that this question of going out and fighting was one for the individual decision of each person having regard to all the circumstances. We accord that right to

Government members and they take advantage of it. We do not wish to compel any man to go outside Australia and fight, but Government members do. They all insist on taking this individual right away from other men and forcing those other men to go out and fight before they are even old enough to vote. I suppose it is a case. Mr. Deputy Speaker, of “Do as I say and not as I do “.

This Budget is a reminder that another year has gone by without constitutional reform. One of the Government’s greatest failures has been its failure to implement the recommendations of the all-party Constitutional Review Committee concerning necessary constitutional changes. Australia’s progress is woefully held back by the present system, or lack of it, under which the Federal Government controls the major sources of revenue and the State Governments are still responsible for the major bread and butter governmental functions. I am very concerned about this because I see the effects of it all over my own electorate. Federal waste and extravagance are apparent on every hand while State Governments, Liberal and Labour alike, are acutely short of funds to build and maintain schools, hospitals and roads.

The Askin Government was elected in New South Wales recently on a long series of promises which it now acknowledges that it cannot fulfil simply because of lack of money. The things that the Askin Government promised to do were not minor or unnecessary things. Many of them were very urgent and important things, a number of them being in my own electorate. The Askin Government promised to do these things and I give it full credit for good intentions.

Mr Robinson:

– The Askin. Government has been in power for 100 days; give it a chance.

Mr Allan Fraser:

– It has had 100 days, I agree, and let me tell the honorable member for Cowper what the new Liberal Minister for Health in New South Wales, Mr. Jago, said in Newcastle even before the expiration of those 100 days. He said that New South Wales is facing a crisis in its public hospitals. The promises that were made cannot possibly be fulfilled. His Department, be said had only £6 million to spend on its 260 hospitals, that this amount had already been spent in full and that the Government was in fact overdrawn in respect of this expenditure to the tune of ?1.5 million on the current year’s estimates. Mr. Jago said that no new hospitals can now be built in New South Wales for several years. The money was simply not there no matter how great the need. That is the position that the Liberal Government in New South Wales has inherited.

Mr Hughes:

– From whom?

Mr Allan Fraser:

– From the Renshaw Labour Government which itself had found it impossible for sheer lack of funds, which must come from the Federal Government, to provide these necessaries of life in New South Wales.

Mr Robinson:

– What about the Sydney Opera House?

Mr Allan Fraser:

– The honorable member exclaims, “What about the Opera House? “ I am not here to defend expenditure on the Opera House but I remind the honorable member for Cowper that the Askin Liberal Government has pledged itself to complete the Opera House at the cost of another ?16 million. About ?9 million has been spent already, and the Askin Government has now announced that it will spend at least another ?16 million on the Sydney Opera House. So the honorable member ought to be a. little careful about making interjections on that subject.

In the few minutes that I have left, Mr. Deputy Speaker, I want to make a very important point, on which I hope every member of the Australian Country Party in this chamber will agree with me. I know that all my colleagues on this side of the House who represent country electorates will agree with me. There is no need to emphasise the obvious, there is no need to bring evidence, and there is no need to be dramatic in simply stating the fact that everybody knows that decentralisation is not proceeding successfully in Australia, that the drift from the country to the metropolitan areas continues and that the position of small communities throughout Australia is more tragic today than it ever was. In many of them, only old people, young children and the parents of those young children are left. Everyone else has gone away. I believe that the Governments of New South Wales, Victoria and the other States have done practically everything in their power to decentralise industry within the respective State boundaries. The one Government that has not yet done what it should do is the Federal Government. I quote now from a report by Mr. W. A. Butterfield, Director of the New South Wales Department of Industrial Development and Decentralisation. Hs stated - . . Mr. Curtin, when Prime Minister in 1944, set out in five resolutions a policy for decentralisation and defined Commonwealth and State responsibilities in promoting it. … It is fair to say that both New South Wales and Victoria, the States most concerned with this problem, have instituted a system of freight concessions, a selective and liberalised financial policy in respect of country industry, preferential housing policies and have done their best in the provision of essential services.

Mr. Butterfield continued

And how has the Commonwealth measured up? There is little evidence of any collaboration on the Commonwealth’s part in analysing the effect of industrial or financial policies on country manufacturing industries; nor is there any evidence at all of investigations designed to reveal disadvantages experienced by such industry; nor is there any guidance in the definition of industries providing defence needs; nor is there any evidence of financial assistance towards capital or operating costs of particular undertakings where the projects required substantial funds.

Mr Robinson:

– Was not that a fairly political comment?

Mr Allan Fraser:

– No. This is a desperate situation that far exceeds the bounds of party politics. This Government has a magnificent scheme of export incentives to encourage the development of industry. Where industry will engage in export development, this Government gives it very well worth while tax and other concessions, particularly in respect of payroll tax.

Mr Nixon:

– Hear, hear!

Mr Allan Fraser:

– I am glad to hear the honorable member saying; “Hear, hear! “ I think he will agree with me when I now say that in the situation that confronts the rural districts of Australia today, it is essential that the Federal Government adopt some similar scheme of incentives to encourage the establishment of industries away from the great metropolitan areas.

Mr Kevin Cairns:

.- Mr. Deputy Speaker, it is, of course, a great honour to follow the honorable member for Eden-Monaro (Mr. Allan Fraser). Those of us who are new in this place realise that he is well known as a talented and very experienced practitioner in the art of debate in this Parliament. I, as a new member, have admired his debating ability. This evening, I admired his capacity to skip from one to another of the multitude of subjects that he found it pertinent to mention in this debate. In the short period of 29 minutes, he mentioned a few aspects of social services about which he knew something and on which, I believe, he has even written. He then diverged to foreign affairs. 1 shall deal with that later. Then he had a short go at decentralisation.

At one stage, feeling rather peeved about the attitude of the Australian people in their support of the present Government’s policy on the Vietnam war, the honorable member posed the question: Where do the people on the Government benches stand in this war? He suggested that we only talk about it and that we should be taking part in the conflict. This was the sort of proposition that is a little inappropriate for him to put forward in view of the record of the last war when the leader of the Labour Government was trying to get men to fight overseas. The attitude adopted then by some honorable members who now sit opposite was not as commendable as it might have been. The honorable member, if he reads some of the speeches that have been made by the present Minister for the Navy (Mr. Chaney), may understand what I mean. The Minister has mentioned certain statements made during the last war by the present Leader of the Opposition (Mr. Calwell), under whom the honorable member for Eden-Monaro is proud to serve. During the last war, when Mr. Curtin was trying to get men to go overseas to defend this country, the present Leader of the Opposition did his very best to undermine his leader.

The honorable member for Eden-Monaro, as I have said, referred to events in South Vietnam. At this point in his speech, he made an interesting statement. He said that honorable members on the Opposition side of the chamber want to lift up the people of South Vietnam, but that the Government wants to shoot them up. Since he has made that assertion, I should like to see him volunteer for service in South Vietnam in some kind of capacity. Here is the sort of tender felicitation that he has exhibited from time to time in his histrionics about social service benefits. Of course, the presumption is that the Australian Government, by its commitment of Australian troops in South Vietnam, and possibly the United States Government, by its commitment of troops there, are shooting up the Vietnamese, and that the Opposition, on the other hand, wants to lift up the people of South Vietnam. I suggest that, if the honorable member really wishes to help the people of South Vietnam without the protection of military commitments, he go to South Vietnam and volunter his services as a social worker. If he were to do so, his career there would be far shorter than his career in this place has been.

The honorable member dealt with various aspects of social services which appeal to him and on which he has previously written in one of the big Sydney daily newspapers. I cannot present a case in the way in which he presented his. I have not the skill or the experience. I can only look dispassionately, objectively and with disinterest at certain details of the Government’s commitments in the field of social services. I shall not go through the whole field of new benefits introduced by this Government. But I should like to mention one or two details in an objective way and to put them in their correct perspective, for the facts are absolutely irrefutable. We know that the present Government has been responsible for expanding endowments and raising pensions in certain ways. It has applied its energies to the fields in which the need is greatest. We know that the present Budget underwrites certain commitments into which the Government has entered in the field of social services.

We could have endless arguments on matters of detail. We could have endless arguments about citizens who are on the border line of each of the various fields of social services. But let us make a fair comparison of the effort made by this Government in the field of social services and the effort made by the Labour Government, of which the honorable member for EdenMonaro was a supporter, in the period prior to 1949. The Labour Government, in its last year of office, devoted 5 per cent, of the gross national product to the payment of cash social service benefits. These are the benefits about which the honorable member was principally concerned. The present Government proposes this financial year to devote nearly 5.7 per cent, of the gross national product to this purpose. I point out that not only has the gross national product risen since Labour was in office but also a bigger proportion of it is being devoted to this field. In the field of health and social welfare, there has been a similar increase. So what the Government has been doing over the years, and what it proposes in this Budget, is to devote an increasing proportion of the rising gross national product to the welfare of the people who most need assistance. It will continue to do so.

This debate has proceeded for some three weeks. Various Opposition members made what -they obviously thought were pretty sophisticated cases, following their line. I will deal first with the case made by the honorable member for Melbourne Ports (Mr. Crean), who is the shadow Treasurer. He went through the national income accounts. He does this sort of thing. He had a look at a few figures and thought: “These figures look good. If I can I will build a case on them.” He made a case about the amount of the national product that goes in the matter of wages and supplements. It was obviously thought to be a pretty substantial case, because it was parrotted repeatedly during the subsequent two weeks by other Opposition members. When he made this case, he obviously thought he had something good. He said that last year in Australia only 51 per cent, of the national product went in the form of wages and supplements. He had a look around and saw figures for the United States of America, the United Kingdom and New Zealand. He saw that in the appropriate year, in the United States 60 per cent., in the United Kingdom 69 per cent, and in New Zealand 59 per cent, went in wages and supplements.

I do not want to bore the House by giving too many figures, but I think honorable members will see the purpose of his argument. We in Australia give our working people who earn wages only 51 per cent, of the gross national product Unfortunately, this is the kind of argument that leads nowhere. If there is anything that is not strictly comparable between these nations, it is the national product. Particularly is this so with a country like Australia, in which a high and variable proportion of the national product goes in farm income and in which company incomes are variable. The figure is absolutely meaningless. Of course, in quoting figures, I can only, refer to work that has been done by people like Professor Karmel. Opposition members may not think he has sufficient talent in these fields, but I am humble enough to think he has. If we want to quote a figure that is appropriate, we would need to look at the proportion of wages and supplements and compare it with non-farm income-. This is far more pertinent to the case. Non-farm incomes are not 5 1 per cent, or a low figure such as that. During the whole period of office of the Menzies Government, the figure has been in the vicinity of 66 per cent, and 67 per cent. I do not think the honorable member for Melbourne Ports managed to get very far with his argument. Not only did he not understand his figures; he drew an incorrect case from them.


– I will argue that with you at some length at some other time. You should pull a few teeth instead of arguing in this way.

Mr Kevin Cairns:

– I am pulling a few of your teeth. Let us go back a few years and compare the figures as a proportion of the national income. This would be more appropriate.

Mr Crean:

– It should be the gross national product.

Mr Kevin Cairns:

– Let us look at the period his own party was in government in the years after the Second World War. We will not be be unfair; we will not go to the Second World War. Let us take the years from 1946 to 1950. During that period, wages and salaries represented an average of about 53 per cent, of national income. The percentage of the national income in 1961-62, the last year of our regime, was 61.4.

Mr Crean:

– The comparison was with the gross national product. Be honest in the comparison.

Mr Kevin Cairns:

– You realise as well as I do that the case you made is completely inappropriate.

Mr Crean:

– You do not know what you are talking about.

Mr Kevin Cairns:

– I understand that the honorable gentleman opposite is the shadow Treasurer of the Opposition.

Mr Crean:

Mr. Deputy Speaker, I am being grossly misrepresented.


– Order! The honorable member does not have the right to offer his explanation now.

Mr Crean:

– My comparison was with the gross national product, not the national income.


– Order! The honorable member will resume his seat.

Mr Kevin Cairns:

– I understand the honorable gentleman opposite is the shadow Treasurer of the Opposition. I suggest in all humility that he lies in the deepest and darkest recesses of that shadow. I would also suggest that when the positions in the shadow Cabinet are being allotted by the Leader of the Opposition the shadow Treasurer should obtain the assistance of the honorable member for Yarra (Dr. J. F. Cairns), who could possibly be the assistant shadow Treasurer.

The Leader of the Opposition had one or two points to make about the Budget. The point he was at some pains to make was that this was not in fact a defence Budget. This assertion was repeated ad nauseam during his speech. Then he presented the table that was prepared by his friends. It is a very useful table. He referred to parts of the Budget as proportions of the national product. But I would suggest that, when one looks at the Budget, which is an annual document, one should not look so much at the figures at a particular time but at the direction in which the changes are moving. This is what a Budget really does, as an annual document. It determines the direction in which the changes are moving. Looked at in that way, it is clear that this Budget makes the greatest single contribution to defence that has been made by any budget for very many years. But let us look at the rise in expenditure, for this is a pertinent detail. We were told last year that the Budget then introduced was not a defence Budget. This appears to be a repetitive argument. Last year, 15 per cent, of the extra expenditure was spent on defence. We were moving up to a cumu lative higher total to be spent in this field. This year, between 33 per cent, and 35 per cent, of the extra expenditure is to be spent on defence. This surely is the way in which budgets should be examined. We should be able to see the direction in which the Government is attempting to move the economy, and it is very clear that the Government has tried to move the economy in a direction that will keep the country free, despite the Opposition and, I would say. even despite the honorable member for Eden-Monaro.

The Deputy Leader of the Opposition (Mr. Whitlam) gave us his usual series of slogans. He has about six of them, including “ balance of payments “, “ long term planning “ and “ liquidity “. I think he sits on these slogans through the winter and produces them in the spring when we are here to consider the Budget. Of course, one of the advantages that an Opposition member has is that his words are often lost from year to year. The words, of course, especially if one is in perpetual Opposition, never become translated into action. I took the trouble to look at some of the remarks the Deputy Leader of the Opposition made about the Budget in 1964 and to consider the action he would have taken this year had he been in a position of power. In 1964, he forecast that the Budget would be deflationary. In other words, he forecast that economic growth would slow down during the year that has just passed and we would have some severe troubles. He went on to say that, if the deflationary effects of the Budget misfired and if, as seemed likely, imports flowed in rather too freely and prices rose, next year - that is now - “the Budget to bc brought down would not only be a horror budget but would be a Frankenstein’s budget”.

This would be the judgment apparently of the Deputy Leader of the Opposition. He would contemplate a Frankenstein type of Budget. Which one of the conditions he proposed, in fact, came to fruition during the year? We did not have a deflationary Budget. We had growth during the year. In fact we did experience growth; imports flooded in rather too freely, prices had a small rise and yet, of course, we did not oblige him by bringing in a Frankenstein

Budget. The Deputy Leader of the Opposition also inserted one or two other principles of his own party in the tariff policies he produced in the Budget debate. I suspect that the policy he read out was not his. There were stories about feather bedding. These words were very strange on the lips of Opposition members.

There is an underlying and important reason why the Budget this year is one which has been able to push on to a fair rate of expansion during 1965-66. Expansion will not be as quick as last year or in the year before, but it will be substantial and will be a fair rate of expansion. Every honorable member in this House realises that. There is an important question we can ask: That is, why should this be so? Had the type of economic conditions which we are experiencing now been experienced in the period from 1957-58 the chances are that we would have had to have had rather a deflationary Budget. We have not had one of that nature. I suggest the underlying reason for the difference is the manpower which determines the way in which a Government looks at the figures and details presented to it

In the years 1957-58 and 1958-59 we knew that the economy from year to year could not expand particularly quickly because of the increase in numbers of men who were coming on to the work force. Those numbers were not high enough. This was substantially because of the low birth rate during war years. In that type of situation we had to have a deflationary Budget But in 1965-66 we know that there has been a further increase. There will be one third more people coming in to the work force in this period. We know there is an extra one coming in this year for every three previously. I refer to the school leavers. So we have an expansionary Budget.

In other words, the birth rate during the period after the Second World War, the thing which determines a man power Budget- and I refer to the births from 1946 to 1950 - is coming to our rescue in these days when we want to push ahead with the rate of expansion of the economy. If I may take this analogy a little further, I would say that a problem which is going to face this country in twelve or thirteen years time, not now or in ten years time but in the late 1970’s, is the present low and lowering birth rate. From 1962 until the present time the birth rate in Australia has dropped by about 10 per cent in crude figures. The more we refine these figures, however, the greater the birth rate drop appears to have been. This is a most serious matter because this is the greatest impediment to long term economic growth in Australia. Certain European nations experienced this but in a nation such as Australia where there is no fundamental pressure on resources I would say that it is something which we cannot ignore. It is something about which we cannot be completely negative because also involved in this matter is the defence of Australia. In 1953 Mr. Churchill, as he then was, foresaw that the great problems which would face the United Kingdom in the years to come were the low and lowering birth rates then present in that country. In a speech in March 1943 he said this-

One of our most sombre anxieties 30, 40 or 50 years ahead - and in this field one can see ahead only too clearly- is the declining birth rate.

He went on to say -

If this country is to keep its high place in the leadership of the world and to survive as a great power that can hold its own against external pressure, our people must be encouraged by every means to have larger families.

Mr Daly:

– What is the honorable member doing about it?

Mr Kevin Cairns:

– I could very well say that to the honorable member for Grayndler and get a most disappointing answer. Let rae bring a touch of seriousness to the the debate again, because this is a serious situation. One of the truths which Marshal Petain uttered at the fall of France was that he blamed the lack of children during the preceding 50 years for that country’s long term decline. At that time of her history France was probably at the bottom of the trough - the lowest depth she had experienced for very many years.

Mr. Deputy Speaker, this matter of birth rate is something which does need to be considered. I do not think that th: Government can be completely negative in respect to these matters. I do not think we can completely ignore them. We know of course that it is a matter of highly personal relationships. A lot of the arguments put out to the effect that the situation is not as serious as it really is are not appropriate. Arguments for this proposal include one that it is only a temporary drop. A study of the statistics shows that this drop is occurring in all the appropriate age groups. We can see that it has none of the marks of being temporary. Another argument put forward is that it only represents a postponement. But the long term decline in the age at which the last children are born - and there has been a decline in Australia in the last 40 or 50 years - means that it is not a postponement. Another argument is that it is related to the increasing propensity referred to by the Minister for Labour and National Service (Mr. McMahon) today for married women to enter the work force. I think that this would be correct if one could establish that the drop was greater in the big cities, where women are able to enter the work force, in comparison with country centres and provincial towns where they cannot do so. But, in fact, the drop has occurred in all centres. Therefore I suggest that the situation we are faced with is a long term, chronic, and persistent one. It is certainly a situation to the existence of which we cannot and ought not to be blind. 1 have stated these things in rather a serious vein because I think the situation they represent is serious.

The Opposition, of course, will give us its usual gratuitous and quite unreal child endowment programme and say that that is the answer. I hope that the shadow Treasurer did make some calculations on this. But that programme was quite impossible of implementation. As a matter of fact, last year when the Government did increase child endowment for third and later children it had £12 million or £13 million to distribute. It gave 5s. to third and later children. The Opposition’s proposal, as put forward by some of the interjectors on the front bench, was to distribute that sum over all families and all children. That would have meant giving something like half a crown in respect of each child and it would have been completely meaningless. So the very large policies which the Opposition proposes, and the present maximum wage policy for which there is some campaign, means that those people who have extra . family responsibilities and who are concerned in this field would be forgotten. After all, the type of leadership which existed in Labour’s period in 1940 and which enabled our Government, with the co-operation of the trade union movement, to bring in child endowment, does not exist today in that party or in people friendly to it.

So all these matters are, I think, appropriate to the situation. An increase in the work force in the late 1970’s and early 1980’s can be and ought to be considered now in the middle 1960’s. But above all, if we are to retain our significance or our cutting edge in the councils of South East Asia, ignorance of these facts is wholly inappropriate, and I would suggest that inaction is even worse. A depleted country cannot survive, and the existence of an increasing immigration rate in a country with a decreasing birthrate is the kind of paradox that leads us nowhere. I would sincerely hope that this kind of paradox does not in 20, 30 or 40 years time lead this country nowhere.

Debate interrupted.

page 789



- Mr. Deputy Speaker, I wish to make a personal explanation.


– Does the honorable member claim to have been misrepresented?


– I have been misrepresented by an honorable gentleman opposite.


– The honorable member will confine his remarks to what he claims to be the misrepresentation.


– I will confine my remarks to what I said last week when I made a comparison between a figure which is understood by people in the statistical field - I do not rank the honorable member for Lilley (Mr. Kevin Cairns) in that category-

Mr Malcolm Fraser:

– The honorable member is getting away from the personal explanation.


– Order! The honorable member will confine his remarks in the way I have stated.


– I was making a comparison between the gross national products of certain countries. I made the comparison that in Australia, the component of wages and salaries in the gross national product represented 51 per cent.; that in the United States of America it was 60 per cent.; in the United Kingdom, 69 per cent.; and in New Zealand, 58 per cent.

Mr Malcolm Fraser:

– On the honorable member’s own figures as shown in “ Hansard “ it was not 60 per cent.


– Surely I do not have to proceed while interjections come from the honorable gentleman, who probably knows less than the honorable member for Lilley. All I am suggesting is that an answer has not been given by the honorable member for Lilley who based his comparison on the national income, which is an entirely different concept. In my speech I asked - and no answer has been given by any honorable member opposite - why there was a lower proportion of wages to the total gross national product in Australia than in the comparable cases of the United Kingdom, the United States and New Zealand. I gave as my opinion that the total of wages in Australia is a smaller component in the gross national product. I still hold that opinion, and my statement has not been rebutted by any honorable member opposite, and certainly not by the honorable gentleman who has just spoken. In my view, that indicates that the work force in Australia is grossly underpaid.

page 790


Second Reading. (Budget Debate.)

Debate resumed.

Dr J F Cairns:

.- After a Budget debate has been in progress for three weeks I think it is quite impossible to say anything that is original. I think that at this stage in the debate the most important thing to do is to try to sum up what has been said already. The honorable member for Melbourne Ports (Mr. Crean) began his contribution to the debate nearly two weeks ago by pointing out that the Treasurer (Mr. Harold Holt), on behalf of the Government had set out to state the fundamental propositions that a Budget was expected to meet.

The honorable member for Melbourne Ports quoted the Treasurer who had said -

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 pricesand a strong external balance of payments.

These were the tests that the Treasurer chose to apply to the Budget. The honorable member for Melbourne Ports said about that statement -

I suggest that the policy has been deficient in several of those ingredients. It is deficient also in that it fails to include what ought to be included in the economic policy of any enlightened democratic community - some concern to see that the national income is fairly shared among all sections of the community.

Is it not a striking fact that after 16 years of Liberal rule - liberal rule? - in this country, we have no mention, as one of the purposes that a Budget has to meet, of any attempt to bring about, in an enlightened community, a somewhat more equitable distribution of income. That has not even been mentioned or recorded by the Treasurer as something that it is necessary to include as one of the purposes that a Budget is expected to meet. The honorable member for Melbourne Ports went on to say -

It is the view of the Australian Labour Party that the economy has become grossly distorted, that growth is stunted, that the existing distribution of income is inequitable and that, above all, wages are being made the sole foundation of price stability in the Australian economy.

During the course of the debate over the last two weeks a great deal has been submitted by Opposition speakers which has dealt with each and every one of those points outlined at the beginning of the remarks made by the honorable member for Melbourne Ports, andI do not think that any rebuttal of the points has been made out by the other side.

Let me sum up briefly what these propositions are. First, that growth has been stunted. I think that at the present time we are undergoing an experience in Australia in which it is the deliberate policy, not only of the Government but also of the banks and other financial institutions of this nation, to create an atmosphere which is unfavorable to growth. The recent stock exchange losses over a period of weeks have exhibited this characteristic. It is a deliberate policy of the Government and its supporters in the large financial companies in Australia at the moment to bring about a state of affairs which will discourage economic growth. This is done deliberately because the Government knows that its balance of payments - one of the things that the Treasurer said the Budget should be directed to look after - will not support an expanding economy. We have had a very poor record in recent years. This very poor record began in I960. Until then the Government had taken advantage of inflation in a number of years to increase the rate of growth in the economy. If one is dedicated to increasing the rate of growth then relative inflation is much more in the interests of increasing the rate of growth than what has happened since 1960. The end of this period of satisfactory - on the Government’s standards - rate of growth came in 1960. In that year a very severe and general credit squeeze brought about the most severe setback of national production that this country has experienced since the world depression. Professor H. F. Lydall of the University of Western Australia said about that year -

Broadly, it appears that in the slump of 1961 Australian gross national product fell by about 5 per cent., industrial production by 11 per cent., retail sales by 5 per cent., new vehicle registrations by 30 per cent., houses and flats commenced by 20 per cent., and gross private fixed investment in plant and equipment by 15 per cent.

That was a pretty poor performance for a single year. Professor Lydall went on to say as to the next year -

  1. . in the case of gross national product (at 1960-61 prices) there appears to be scope for a rise of about £700 million- or nearly 10 per cent, (for 1962).

What did we get in 1962? We had an increase in growth of 1.87 per cent. In that year Australia lost another £500 million of national production. The economy has never recovered from that setback. The other night the honorable member for Oxley (Mr. Hayden) provided us with a very useful table, which appears at page 612 of “Hansard”. The table was provided by the Library statistical service. If honorable members look at the money increase in gross national product, which Government supporters are so much in the habit of doing, and look at the percentages, they will see figures like these since 1959-60: 10.68 per cent., 5.37 per cent., 1.87 per cent., 7.94 per cent., 9.46 per cent, and 9 per cent, this year. On the face of it, these figures are very dramatic. For people who think only in terms of Menzies’ pounds perhaps they appear to be dramatic. However, the table provided by the honorable member for Oxley shows that if the increase in prices and the increase in the work force each year are taken into account the situation is very different. The actual rates of growth are then: In 1957-58 nil: in 1958-59 4 per cent.; in 1959-60 4 per cent.; in 1960-61 1 per cent.; in 1961-62 minus 1 per cent.; in 1962-63 5 per cent.; in 1963-64 4 per cent.; and in 1964-65 1 per cent.

Mr Chaney:

– How does that table tie up with the figures given by the professor from the University of Western Australia?

Dr J F Cairns:

– His figures were for a particular year, 1961-62. His figures are nearly the same as, or perhaps a little worse than, those that I have just quoted from the table.

In the world today there are about 23 or 24 countries which are comparable with Australia in respect of their industrial development and their rates of growth.

Mr Nixon:

– Name them.

Dr J F Cairns:

– Only three or four of those 23 or 24 countries have a worse record than Australia over the period to which I have referred. Australia is down in about 18th or 19th position in a group of countries that includes West Germany, Belgium, France, Great Britain, Norway, Sweden, Denmark, Japan and Yugoslavia. I am not surprised that I had to inform members of the Country Party of the names of those countries. Australia is down towards the end of the list. There are astonishing variations in our rates of growth - minus 1 per cent, one year, 5 per cent, the next year, 4 per cent, the next year and 1 per cent, the next year. There is not one country with which Australia can be compared and which has a greater variation in its rates of growth, or in which the rate of growth is more uncertain. There is not one country which is similarly developed industrially and in which it would be more difficult for private investors to calculate for the coming six or 12 months than it is in Australia.

Mr Robinson:

– You are a great Australian.

Dr J F Cairns:

– 1 am criticising the Government. Perhaps that point escaped my friend. For him to identify himself with Australia is to give an exhibition of the kind of egotism that we have seen from him ever since he came into this House.

But I do not identify him with Australia. I happen to be criticising the Government which he has supported consistently, despite its record in the rural economy.

I believe that the Opposition has demonstrated fairly clearly in the course of this debate that there has been an increase in the inequity of income distribution. At no stage has the Treasurer or any other speaker on behalf of the Government ever said that it is an objective of the Liberal Party to make Australia a little more equitable. At no stage has that ever been suggested as an objective of the Government. Earlier this evening the honorable member for Eden-Monaro (Mr. Allan Fraser) dealt exhaustively with social services. He showed how most of the significant social service benefits, insofar as they affect the majority of pensioners - the more than 500,000 people who receive the basic pension and have no other income - have been almost completely neglected; whereas the Government has been giving a few shillings here and there, amounting to a total of just one or two million pounds, to a few more or less privileged groups in the social services field because of the marginal votes that it believes such a policy will achieve for it. The great majority of the people whose income is almost exclusively social services benefit have been neglected.

The honorable member for Eden-Monaro pointed out that if child endowment had been kept at relatively the same level as it was 16 years ago another £59 million would be paid to children. I cannot understand the attitude of the honorable member for Lilley (Mr. Kevin Cairns), who is an expert on teeth. Actually, I do not know whether he is an expert on teeth. If his performance as a dentist is similar to his performance as a member of the Parliament or as a budding economist, I would rather have toothache than go near him. In fact, he gave me a touch of toothache this evening when I was listening to him.

Let me state the position in respect of cash social service benefits. In 1961-62, 6.1 per cent, of the gross national product was paid in cash social service benefits. Ever since that year and until this year there has been a decline in the percentage. In 1962-63 it was 5.87 per cent.; in 1963-64 it was 5.85 per cent.; in 1964-65 it was 5.66 per cent.; and this year it will rise by .02 per cent, and become 5.68 per cent. Of course, that is the estimate. That percentage may not be achieved. So, there has been nothing better than a decline in the proportion of gross national product paid in cash social service benefits. The significant point about health and welfare expenditure is that the percentage of gross national product that the Government helps to direct into this field is insignificant. In 1965-66 it will be .16 per cent.

Another indication of the way in which the Government could do something to produce a little less inequity in this country is its failure to provide sufficient funds under the Commonwealth and State Housing Agreement. In 1961-62, .64 per cent, of the gross national product was provided under that Agreement. In 1962-63 the figure fell to .56 per cent. In 1963-64 it fell to .52 per cent. In 1964-65 it fell to .49 per cent. It is estimated that in 1965-66 the figure will be 45 per cent. There has been a continued decline which represents £10 million or £15 million. Tonight we heard an apology from the Minister for Housing (Mr. Bury), who has occupied that portfolio for a couple of years, for the poor performance, on the whole. He said that his aggregate figures showed a stability or some improvement; but the significant point is that the lower end of the housing scale has been substantially neglected. That is shown by the decline in the proportion of gross national product provided under the Commonwealth and State Housing Agreement.

The result is that the housing position of the poorer people in the community - the elderly people and the married people with two, three or four children and an average income - has become far worse over the last six or seven years. Today hardly one of those families can find accommodation at rentals less than £8 or £10 a week. Their income is £20 to £23 a week. So rents are now taking up half the income of many families. If a family happens to be able to save enough money to put a deposit on a house, it finds that the weekly payments are as high as the rentals that I have quoted.

Therefore, in a country that prides itself on its economic capacity and prosperity, this Government has let H million Australian people become continuously worse off over the last five or six years. It is quite impossible to talk about aggregates and to believe that because there has been an increase of £700 million in the gross national product in ohe year there is not hidden in that total a great deal of injustice and a great deal of actual poverty. In fact, those things exist.

The next thing that has been demonstrated is that there is a serious lag in essentials. In respect of State works it is only too obvious that the lags in the provision of essential services are becoming serious. The statistics and the facts show that that is true. In 1960-61 the proportion of the gross national product provided for State works was 2.26 per cent.; in 1961-62 it was 2.23 per cent.; in 1962-63 it was 2.17 per cent.; in 1963-64 it was 2.11 per cent.; in 1964-65 it was 2.09 per cent.; and in 1965-66 it will be 1.99 per cent. There has been a continuous decline in the proportion of gross national product being provided for State works from 1960-61 to the present day of from 2.66 per cent, to 1.99 per cent. This decline in the percentage of gross national product devoted to State works is one of the reasons why local government - this most important instrument of government for the welfare of the people - is so deficient, lt is one reason why local government rates have had to be increased so much. It is one reason why there is a lag in the provision of water and sewerage services by local government authorities. If this is the kind of Australia you want, this is the kind of Government you vote for - a government that is unwilling to use the Budget - the most important instrument under its command - to provide more resources in the essential field.

In the field of education a great deal of pressure has been brought to bear on the Government and to some extent it has responded to this pressure. It could hardly do otherwise. We find that the proportion of gross national product provided for education has increased from 2.35 per cent, in 1960-61 to 2.78 per cent, in 1964-65, but it is estimated that in 1965-66 the propor tion will decline to about 2.68 per cent. So in the 12 months ahead there will be a decline in the proportion of resources going towards education. This is something we cannot afford to have, because for some time we have been familiar with the figures provided by Professor Karmel who has shown that of the 23 or 24 relatively advanced industrialised countries with which comparisons are legitimate, Australia is well down the list as regards enrolments of the various age groups in educational institutions. The following table indicates the percentage of people in the 15 to 19 years age group undergoing education in various countries -

It will be seen that in the 15 to 19 years age group the percentage of people undergoing education is only one-third the percentage in the United States. The comparison in the 20 to 24 years age group is even worse. In the United States 12 per cent, of people in this age group are undergoing education, but in Australia the figure is only 1.9 per cent. If we look at the current and total expenditure on education in relation to gross national product we find that Australia is even lower on the list. In the case of current expenditure, this year the United States is spending 3.6 per cent, of its gross national product on education. Australia comes after the United States, the Netherlands, Canada, Sweden, Italy, the Soviet Union, the United Kingdom, Norway, Austria. France, Belgium, Denmark, Ireland and Switzerland. We are spending only 2.4 per cent, of our gross national product in this way. The Budget should and could do much to correct these trends, as the Treasurer recognised in his speech. But this Budget and the others since 1960 have done very little to correct or improve these trends. This Budget makes little difference to the way the economy runs. It is a trivial Budget. This is one reason why so little notice has been taken of it. Government supporters, one after the other, have prided themselves on the fact that nobody is interested in the Budget, that nobody has criticised it. I have never heard it approved except by Government supporters. The Budget has passed almost unnoticed. This is because it is a trivial Budget. It has done nothing but change things at the margin.

Let me turn now to a matter which the honorable member for Melbourne Ports (Mr. Crean) pointed to as being one of the important things with which the Budget should be concerned. I refer to our overseas financial position. The Government and its financial backers in the economy have taken such a negative attitude to things as they are today because they want to depress and discourage the economy and create an atmosphere of relative gloom so that the economy will not expand in the next 12 months and thus endanger perhaps the balance of payments position, making it necessary for the Government to introduce a severe credit squeeze towards the end of next year. Why is the Government worried about this? It is worried because there will be an election at the end of next year, and unless it depresses the economy now the Government will be caught at the end of next year as it was in 1961. If the economy grew naturally during the course of the next 12 months it is quite possible that our level of overseas funds would fall by between £250 million and £300 million to a point which the financial organisations in the community would not accept and there would have to be a credit squeeze towards the end of next year. Imagine a Government led by Sir Robert)- Menzies going to an election after a fairly serious credit squeeze. This experience was undergone in 1961 and the Government does not want to go through it again.

So we must have a dismal dull year so that we can have a bright election. Overseas funds, which are the key to this situation, stood at about £870 million in June 1964. They stand at less than £690 million today, representing a decline of almost £200 million in the course of a year. The reason for the decline, as the White Paper shows, is not any new dramatic feature. Exports have increased considerably during the last 12 months and imports have not increased at all. This situation is likely to get worse during the next 12 months. Exports will not increase. The prices of most of the basic commodities are falling and it will not be possible to redress the balance by exporting larger quantities of wheat to Communist countries. I imagine that there is no more scope in this direction. The capacity of the Government to rely upon selling wheat to Communist countries in order to save its electoral prospects has reached the point of diminishing returns.

Of course, the situation has been saved by overseas investment in this country during this time. Capital inflow has been the significant factor. But it is quite apparent that capital inflow will not continue to save the Government as it has done to such an extent in the last 10 or 15 years. Capital inflow for the current year will be about £214 million, but that figure is not all that it seems. There are two components in that figure of £214 million. The amount is considerably less than last year. It is considerably less than it has been in the past. One of the two components that are important is undistributed income - money earned in the Australian economy by overseas companies and not withdrawn. The other item is other investment. It is this other investment that counts. In the past 15 years we have had a net increase of new capital inflow of almost £3,000 million and it is upon that inflow that the Government has survived. But this is not any longer helping the economy. For instance, in 1963-64 there was £149 million of new investment and £136 million of outflow in servicing - not much of a gain in balance. In 1962-63 new investment amounted to £168 million and outflow amounted to £126 million. In 1961-62 there was £115 million of new money and £97 million of outflow. In 1 960- 61 there was £177 million of new money and £117 million of outflow. These figures are coming closer together. The difference between the two in favour of an excess of inflow is diminishing in trend and inevitably it is not going to be possible for the Australian economy to depend upon the inflow.

The contemporary economic policy that this Government relies upon, its monetary policy, and to some extent its fiscal policy, are not enough. These things have been widely recognised, for instance, in the United States. I have directed the attention of the House to this matter before. In the United States, there are economists such as Gardner Ackerley, who is at present the Chairman of the President’s committee of economic advisers. He is not just any economist, but is in fact the top advising economist in the United States. He says that this approach to the analysis of inflation - shortages of commodities and shortages of services, which are the fundamental things with which we are wrestling in the economic field - has significant implications for policy. He says that one such implication is the limited usefulness of the instruments of monetary and fiscal policy in combating inflation. J. K. Galbraith, who is even better known than Ackerley, says -

The analysis means that both monetary and fiscal policy must have a markedly different Impact on different parts of the economy.

Galbraith’s real significance is not that he demonstrated that the modern capitalist economy is affluent, but that he demonstrated that it is unbalanced. There is private affluence and public squalor. The friends of the Government, the friends of the newspapers and the friends of the bankers have not suffered from any shortages over the last 10 years, but a great many friends and relatives of members on this side of the House know what it is to be without money and what it is to have to scrape and save, lt is not what is happening in aggregate, it is what is happening inside the economy that is important. It is not that inflation is too much money for everybody; it is too much for some and not enough for others. The surpluses are hardly touched under the policy that this Government has adopted. We have an economy that is stunted in growth, lagging in essentials, characterised by increasing inequality of income and by weaknesses in its external position.

The suggestion coming today from the most up to date economists in the world is that these problems cannot be handled by conventional monetary and fiscal policies. If contemporary policies will not solve the problems, what must we do? First, a government setting out to govern in the interests of the nation has to revise completely its taxation programme. There is a limit to what taxation can do in the present situation because there is a limit to the way in which the small man can be taxed. The Government, in fact, has tried to tax the small man as much as it can. It is taxing petrol, beer, cigarettes and income and is taking as much from the small man as it can get. But it refuses to tax the big man.

There are 1.7 per cent, of companies today that earn over 60 per cent, of company income. These companies have not been touched in this Budget. There are 3.14 per cent, of firms - 1,800 of them - that employ more than 50 per cent, of the people employed in this country. Hardly one of those firms has been touched directly by taxation in this Budget. There must be a revision of taxation in a more equitable direction so that funds can be obtained for national purposes from where, in fact, they exist. The Commissioner of Taxation will have to be directed to that purpose.


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


.- I am not an economist, and I am therefore not competent to give the House the type of economic treatise that has been given to it by my friend and colleague the honorable member for Yarra (Dr. J. F. Cairns). I would, however, in more modest terms, like to support the amendment moved by the Leader of the Opposition (Mr. Calwell). I think that the Leader of the Opposition was very truthful when he described this Budget as a bookkeeper’s Budget, an accountant’s Budget, a Budget which tends to be merely a national accounting without any great purpose. In truth, this is a Budget without any purpose. Every State Treasurer in Australia, and every shire clerk who has among his other responsibilities the task of preparing a local authority Budget, would sell his eye teeth to have the opportunity to introduce a flexible financial policy that the Federal Treasurer of this country (Mr. Harold Holt) has. Every person in such a position would be very grateful indeed to have the fiscal powers, the taxation powers and the control of exports and imports that the Commonwealth Treasurer has.

This is a Budget which merely serves not to rock the boat. It makes an assessment of our national financial position at this point of time. It seeks to make some modest improvements but without offending any section of the community to any great extent. We were told that this was a defence Budget. We were warned by the Press of this country that we were due for a hard Budget. No doubt over a period of time the Government itself leaked certain information to the Press to this effect. Then when people found that there was only a 2i per cent, increase in income tax, and that otherwise the increased taxation was going to be taken from them through modest increases in the prices of beer, cigarettes, Scotch and the like, it seemed to the ordinary person in the street not to be such a terrible Budget. As to the income tax increase, he would pay as he earned in small quantities.

This nation needs leadership and the Budget introduced at this time every year by the Treasurer of the nation is the Government’s principal opportunity to provide leadership in terms of national development, national security, full employment and the well being of all the people in the Commonwealth. I think that in the present Budget the Treasurer has failed. The Prime Minister (Sir Robert Menzies) some 28 years ago made a celebrated speech on leadership which was not very well received by his colleagues in the Country Party section of the coalition at that time. There is very little element of leadership in this Budget, in this Government or in members generally on the Government side of this Parliament at the present time. The Government wants to meet such needs as defence and financial assistance to the States without making any material endeavour to solve the basic problems of the Australian economy. The Treasurer has asked Australians to make certain sacrifices in the cause of defence. Let me quote from the speech of the Leader of the Opposition. He said -

In 1953-54 nearly 3) per cent, of our available resources were being devoted to defence. In the following nine years of neglect and apathy this was cut by one-third to a little over 2i per cent. - 6d. in the £1. In the last three years, during which this Government has had the effrontry to depict itself as defence minded, we have seen defence expenditure raised to a little over 3i per cent. - still significantly lower than 12 years ago.

This is not a defence Budget. What is it? The Budget provides for an increase in Commonwealth expenditure of £275 million, of which £81,430,000 is the increased appropriation for defence. There are some things in the Budget to applaud. The Labour Party supports the increase of £81 million in defence expenditure. It hopes that this money will be spent with much greater care, and to much greater advantage, than the Government’s defence expenditure has been spent in the past. The Labour Party supports the increase of £61,402,000 in payments made to or for the States. It supports the increased votes for Territories and international aid. I am personally happy at all of the improvements which have been made in the social services field. The establishment of a guardian’s allowance to age and invalid pensioners who have the care of children, and the payment of a wife’s allowance to the wife of any age pensioner who has the care of a child, will prove particularly valuable.

There is a need, with the Treasurer claiming an increase of 9 per cent, in the gross national product in the last year - and I refer to the table included in the speech of my friend and colleague the honorable member for Oxley (Mr. Hayden) which sets out the position - for an increase in the amount of the pension itself. An increase of 10s. per week in age, invalid, service and widow’s pensions would make a charge of something like £25 million upon the Budget. It would be £25 million well spent, but members of the Government tend to regard such expenditure as money wasted. The truth is that money paid out by way of pensions goes straight back into circulation almost immediately and is a direct subsidy to industry and to the primary producers of this country - the best market of all.

I have two further appeals to make in the vitally important field of social services. The first is that there should be an increase in allowable earnings. No change has been made to the figure of £3 10s. a week since 1954. I should have thought that £4 10s. or perhaps £5 a week would be an appropriate figure at the present time. The Government should have made such an alteration in this Budget. It certainly ought to make it as soon as possible in the future.

The second appeal I make to the Minister for Social Services is that he take up with the Attornies-General and the relevant Ministers in the various States the question of the payment of at least some part of the invalid pension to patients in special hospitals which, in less happy days, were known as mental hospitals. We all recognise that this is a rather complex question. In some States, perhaps in most States, the Public Curator or an equivalent public officer takes charge of the accounts of people who are unfortunate enough to be placed in special hospitals. It is true that many of the people in special hospitals would derive no direct benefit from the payment of an invalid pension to them; but it is equally true that there are many patients who have been cured, and who in the last few months of convalescence, would benefit very greatly from the payment of an invalid pension, or at least part of an invalid pension.

Let me refer to one case that I have in mind. It is the case of a young aboriginal girl who was an orphan and who was in a special hospital. She had no relations and she had no income at all. If she had been able, in the last few months of her time in the hospital, to spend perhaps £1 a week on having something done to her hair or on the purchase of fundamentals like toothpaste or cosmetics, this would have made the whole world of difference to her recovery and to her later life. It is a difficult problem. It is one which I was not able to convince the previous Minister for Social Services to tackle but I feel that if the present Minister would look at it he would be able to do a great deal of good for many people.

I should like to refer now to expenditure for the Northern Division of the Department of National Development. The sum of £68,500 is appropriated for salaries and payments in the nature of salary, £35,500 for administrative expenses, and £65,500 for other services such as the Kimberley Research Station and Ord River gauging, making a total of £174,000. A great number of furphies have been spread around on this question of northern development. This afternoon, we had the honorable member for Dawson (Mr. Shaw) telling us what a great job the Government had done in the field of northern development. The Labour Party has always supported the cause of northern development, but I do not believe that we should spend any money at all uneconomically in the northern part of Australia. We have a Northern Division of the Department of National Development which has no initiative in its own right. This Division has a very modest appropriation in the Budget. It takes the cases put up by the States and does some little research in its own right. We all know there are some very competent officers in the division. We know too that the division makes decisions which are referred to the Government, where they rest for a great period of time.

I would have liked to see in the Budget enough finance appropriated for the carrying out of a crash programme of data collection.

We do not believe that money should be spent wastefully in the north of Australia. We want projects to be soundly investigated. We know there is a great potential for the development of mineral resources there. We also know there is a great potential for the development of beef production. But we need a properly integrated survey. If we look at the north of Australia at the moment we will see that in one area the Bureau of Mineral Resources is carrying out a survey; in another, perhaps, the Soils Division of the Commonwealth Scientific and Industrial Research Organisation is working; and somewhere else a State Government department is doing something; but nowhere have we the sort of coordinated survey that we have in some areas of southern Australia, of which, perhaps, the Hunter Valley might be the best example. This is what we ought to be doing in the north of Australia, but we cannot do it without money and we cannot do it without competent staff. If the Government is sincere in this question of northern development - I very much doubt it - and if northern development is not just an election gimmick that the Government resorts to when it thinks it is going to lose a few seats in Queensland or Western Australia, then the Government ought to show its sincerity by making such appropriation in its Budget as will allow the Northern Division or, better still, a department of northern development to get on with the job.

I have canvassed certain avenues in which I believe improved Budget appropriations could be made with great advantage to all Australians. No doubt honorable members opposite and honorable members generally might well ask: “ Where is all the money to come from? “ This brings me back to the first proposition which I introduced - that this is a Budget without a purpose. May I suggest a purpose which will help remove Australia from dependence on the terms of trade for primary industry? First let me quote from the 1965 report of the Reserve Bank of Australia. At page 9 the report states -

The Import Price Index showed an increase of l1/2 per cent. over the year, while export prices continued the downward trend which began in the June quarter of 1964, to show a drop of 9 per cent, from June to June and 8 per cent, on average between the two financial years. . . .

Wheat exports were down 16 per cent, in value, due to smaller quantities being available for shipment in the first half of the year and somewhat lower prices in the second half.

I am passing over some of the padding in the report, but I am not destroying any of its significance. The report continues -

Total exports, however, were still nearly 5 per cent, lower than in the previous year.

The next paragraph reads - .

At the same time, imports rose by 23 per cent. . . With lower exports and higher imports and net payments for freight and other services, there was a deficit on current overseas transactions of £375 million, compared with only £25 million in 1963-64. . . . There was some build up of stocks in 1964-65, and any further increase in 1965-66 will probably be smaller, but there seems little reason to expect imports to fail appreciably from the 1964-65 rates.

This matter has already been dealt with by other speakers on this side of the Parliament. I suggest that the Treasurer and his officers ought to study the figures relating to Australia’s imports as published in the Commonwealth Year Book. The last volume of the Commonwealth Year Book which I have been able to locate in the Library is that for 1964 which contains figures relating to the year 1962-63, and I remind you, Mr. Deputy Speaker, that imports have increased substantially since then. The figures disclose that we imported chemicals, drugs, and fertilisers to the value of £70 million. I am giving round figures now. The cost of electrical machinery and appliances imported was £59 million. We imported metal working machines to the value of £19 million, tractors and parts to the value of £22 million, motor vehicles to the value of £98 million, tobacco to the value of £10 million, and iron and steel to the value of £23 million.

We all know that the Department of Trade and Industry has from time to time prepared attractive brochures showing the fields in which private capital could be invested in this country to manufacture the goods we need and which are not now made in Australia. We would all applaud this initiative on the part of the Department of Trade and Industry, but, in this field, the Government is the victim of its own political philosophy. It is prepared to allow Australia to continue from year to year to be at the mercy of fluctuations in prices for primary products. It is prepared to allow imports to come in unrestricted. So far as the Government is concerned the sky is the limit. The figure for imports is up this year, and there is no indication that it will be any lower in the year ahead.

I suggest that the Treasurer and the Government ought to take the initiative in some of these fields. It ought to look first at those areas in which our imports are substantial in order to establish whether Australian industry, either private industry or government industry, or private industry with government assistance, could manufacture some of these things so that our balance of payments problem might be solved in the only effective way in which it can be solved - by expanding Australia’s secondary industries, indeed by increasing Australia’s industries generally.

I should like now to examine some of these fields and I take first chemicals, drugs and fertilisers. We all know that the man on the land complains rather bitterly about the prices that he pays for fertilisers. The Bureau of Mineral Resources has recently discovered substantial deposits of phosphate in this country. For a great number of years we have had access, on the island of Nauru and elsewhere, to great deposits of phosphate. We have a sulphate production capacity as a result of activities at Mount Morgan and elsewhere. Surely there is no reason why this Budget should not have sought to make Australia self-reliant in terms of production of fertiliser.

Then let me turn to the next item, electrical machinery and appliances, of which we imported £59 million worth in 1962-63. This is a country with a great capacity for secondary industry. This was proved during the Second World War. Am 1 to be led to believe that Australia cannot make electrical machinery and appliances to the value of £59 million in a year, or metal working machines to the value of £19 million? It is an insult to the capacity of Australian engineers and workmen to suggest that this is so. We imported also tractors and parts and motor vehicles to the value of £22 million and £98 million respectively. Australia ought to be able to make more tractors at lower prices. Evidence is not lacking that motor cars can be made in Australia at highly competitive prices. Certainly in the field of six cylinder cars the Australian made cars sell best, because they are designed and built for Australian purposes and conditions and parts are easily replaceable. Why should there not be a similar position in respect of tractors? Yet we find that £22 million has been spent in one year on imports.

We also imported £10 million worth of tobacco. I do not think anybody would doubt that there is a great deal of dissatisfaction among tobacco growers at present. This is because there is no stability in the industry; there is no certainty that leaf will be sold after if is grown, no matter what its quality may be. The Government ought to be able to stabilise this industry. In times gone by tobacco growers in Australia were encouraged to grow neutral leaf, that is leaf without any great aromatic content which was used as fill-in for the higher quality tobacco imported from overseas. It was said 20 years ago that in Australia we did not grow high quality tobacco. Achievements at Mareeba and other places have proved that this is not true. We imported tobacco to the value of £10 million which we could have grown in Australia. It could be grown in Queensland, and I think every honorable member will agree that this is so.

The last of the items in the table to which I referred was iron and steel, of which we imported £23 million worth. No doubt this is tied up with the other figures for electrical machinery and metal working machinery. However, there is a total of £78 million involved in these items. A nation’s economic capacity and defence capacity is determined in no small measure by its production of steel, and this is a field in which Australia should surely be self-sufficient. We have the iron ore deposits. We are among the most fortunate countries in the world in this regard. We have extensive iron ore deposits in the Hammersley Range in Western Australia and in the Constance Range on the border of Queensland and the Northern Territory. We have the coking coal at Moura and Kianga and elsewhere in Queensland and New South Wales. We have vast deposits of Permian coal, yet we are sending both the iron ore and the coal to Japan and buying steel from that country.

I am not in any way opposing trade with Japan. It is a good customer of ours, and this being so it behoves us to be a good customer of Japan in return. But this is one field in which Australia ought to make itself self-sufficient. We have one company, the Broken Hill Pty. Co. Ltd., which dominates steel production in Australia. The Government ought to tell that company that if it wants to enjoy the advantages of a monopoly in steel production it ought to accept the responsibility of producing enough steel to meet Australia’s needs. I would agree that there are probably some special types of steel that we may always have to import; but leaving those out of consideration, if the steel industry is not prepared to accept the responsibility of producing sufficient steel to meet Australia’s needs then we should, either through private enterprise, or preferably from Labour’s viewpoint, through public enterprise, establish another steel industry. It is ridiculous that we should be producing the iron ore and the coal, exporting both those products and then importing the steel as the final product.

Mr. Speaker, I commenced my remarks by saying that this was a Budget without a purpose. If tha Treasurer had said, “This is a Budget which has defence commitments or commitments in other directions “ - “This will make a contribution to Australia’s defence security and well being and will ensure full employment for our people in the future “ - or “ This is the first Budget in the Government’s programme to make Australia self sufficient in steel “ - I would say that at least the Budget has some purpose. But it has no purpose. As I said earlier the Government is the victim of its own political philosophy. We need in this country a government with a purpose. We need a Treasurer who can produce a Budget that has purpose and initiative and indicates to Australian industry the plans of the Government for the years ahead. We need a Budget which inspires confidence in industry. Many of the problems reflected in the Budget, such as the shortage of skilled tradesmen, have been brought about by the Government’s past budgetary policies. We know of the credit squeeze and its unhappy economic consequences. We know that there was a sharp decline in apprenticeships, employment fell, and young people who in other circumstances would have been able to take on a trade missed an opportunity that will never come to them again.

The Government needs a sense of purpose. It needs to show this not only in its Budget but also in the economic papers associated with the Budget and in the various White Papers that it publishes from time to time when it endeavours to indicate the path ahead. We all hope that when the Vernon Committee’s report has received full consideration the Government will come out with such a purpose. At this time we can judge the Government only on its Budget. We have a Government without a purpose and a Budget without a purpose. And I would say that the Treasurer, who is aspiring to leadership in a wider field, ought to be judged in that respect on his record at the Treasury. Perhaps in those circumstances he ought to resign. I support the amendment.

Question put -

That the words proposed to be omitted (Mr. Calwell’s amendment) stand part of the question.

The House divided. (Mr. Speaker- Hon. Sir John McLeay.)

AYES: 63

NOES: 44

Majority .. ..19



Question so resolved in the affirmative.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

In Committee.

The CHAIRMAN (Mr Lucock:

– In accordance with Standing Order No. 226, the Committee will first consider the Second Schedule of the Bill.

Mr Harold Holt:

Mr. Chairman, may I suggest that it might suit the convenience of the Committee to consider the items of proposed expenditure in the groupings shown in the schedule which has been circulated to honorable members. The consideration of the items in groups of departments which have a functional association with one another has met the convenience of the Committee in past years. The schedule reads as follows -


– Is it the wish of the Committee to consider the items of proposed expenditure in the order suggested by the Treasurer?

There being no objection, the right honorable gentleman’s suggestion will be adopted. The question now before the Committee is: “ That the proposed expenditure for the Parliament, £1,706,000, be agreed to “.

Second Schedule.


Proposed expenditure, £1,706,000.

Progress reported.

page 801



– I present the eighth report of the Printing Committee.

Report - by leave - adopted.

House adjourned at 10.57 p.m. until Tuesday, 14th September 1965.

page 802


The following answers to questions upon notice were circulated -

Employment. (Question No. 1123.)

Mr Webb:

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

Of those persons who were registered with his department for employment at the end of each month to date during 1965, how many were registered for light work?

Mr McMahon:

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

The information is not available. Although . employment officers of the Commonwealth Employment Service give due regard to a registrant’s physical capacity for work when referring him to a vacancy, no separate statistics are collected classifying registered persons according to their physical capacity for work.

Overseas Students in Australia. (Question No. 1147.)

Mr Reynolds:

s asked the Minister for Immigration, upon notice -

  1. Mas his attention been drawn to the statements of Mr. Sivakumar, President of the Overseas Students’ Council of New South Wales, reported in the Sydney “ Sun “ of 17th August, that overseas students in Australia are being treated like a bunch of criminals by the Department oi Immigration and that actions by the Department were undoing the excellent job being done by the Department of External Affairs to improve the image of Australia in Asia?
  2. To what extent are these allegations justified?
  3. Does his department rigidly reject applications by these students to proceed with advanced or other studies beyond courses approved at the time of their permitted entry into Australia?
  4. If not, what consideration is given to these applications?
Mr Opperman:

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

  1. Yes.
  2. The statements are unwarranted. Both the President of the Australian and New Zealand Graduates Association of Malaya and the “Straits Times” have criticised Mr. Sivakumar for having spoken in the manner reported.

The great majority of the 11,000 private students in Australia pursue their studies as they should, and require no questioning by the Department. Some, however, by failure to attend lectures or otherwise, show that they are not genuine students and are interested only in prolonging their stay. These need to be interviewed and reminded of the conditions of their admission.

  1. No.
  2. The basic aim has been to help young people from overseas countries to gain education or training which is not readily available there and which will assist not only the advancement of the individuals concerned but the progress of their homelands upon their return home. Extensions of stay to gain advanced knowledge or practical experience, after completion of initial courses, are granted when it is established that such extensions will clearly serve the basic aim.

Medical Benefits. (Question No. 1146.)

Mr Daly:

y asked the Minister for Health, upon notice -

  1. How many increases in the Commonwealth benefit for medical services have been made since the commencement of the national health scheme?
  2. What was the (a) date and (b) amount of each increase?
Mr Swartz:

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

  1. Commonwealth benefits’ for medical services have been increased on three occasions since the commencement of the National Health Scheme. 2. (a) 1st January 1958; 1st January 1960; 1st January 1964.

    1. The increases which took effect on 1st January 1958, related to some 40 medical services, mainly in the radiological and pathological group, and cost the Commonwealth an estimated £105,000 per annum. The second group of increases, on 1st January 1960, applied mainly in the field of major surgery. The Commonwealth benefits for approximately 140 services were increased, at an estimated cost of £475,000 per annum. On 1st January 1964, major increases in Commonwealth benefits took effect, when a new schedule of benefits was introduced. The general effect was to increase Commonwealth benefits for all services by 33) per cent., but in a number of cases the increases were considerably greater. The cost to the Commonwealth of these increases was over £4,000,000 per annum.

Radio-Active Substances: Committees. (Question No. 1184.)

Mr Whitlam:

m asked the Minister for Health, upon notice -

  1. Who are the persons comprising the committees established under the radio-active substances laws in the States and territories?
  2. What are their qualifications and experience)
Mr Swartz:

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

There are no radio-active substances ordinances and regulations yet in force in the Australian Capital Territory or Northern Territory. The information the honorable member is seeking in regard to the State committees is not readilyavailable and 1 suggest that he contact the individual State authorities.

Pensioner Medical Service. (Question No. 1198.)

Mr Whitlam:

m asked the Minister for Health, upon notice -

What are the new Pensioner Medical Service conditions to which he referred in his answer to me on the 25th August 1965 (“ Hansard “, page 399) and to which the Federal Council of the Australian Medical Association has agreed?

Mr Swartz:

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

The new conditions of the Pensioner Medical Service to which the Australian Medical Association has agreed have enabled the present Pensioner Medical Service means test to be relaxed. The Association has agreed to accept as eligible for treatment under the Service those persons who have qualified, or who subsequently qualify, for a full or partial age, invalid, widow’s or service pension, or a tuberculosis allowance, under the means test applicable as at 1st May 1965. In addition, the Association has agreed to accept the dependants of such persons for treatment under the Service, including student children up to the age of 21 years.

National Health Scheme. (Question No. 1205.)

Mr Daly:

y asked the Minister for Health, upon notice -

  1. What was the average cost of prescriptions supplied under the national health scheme during the year 1964-65?
  2. What was the comparable cost in the year 1963-64?
Mr Swartz:

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

  1. 18s. 4d.
  2. 18s 7d.

Both figures include the patient contribution of 5s. per prescription.

Cite as: Australia, House of Representatives, Debates, 2 September 1965, viewed 22 October 2017, <>.