House of Representatives
30 November 1965

25th Parliament · 1st Session

  1. House of Representatives
  2. 25th Parliament
  3. 1965

Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 2.30 p.m., and read prayers.

page 3317

MINISTERIAL ARRANGEMENTS

Sir ROBERT MENZIES:
Prime Minister · KooyongPrime Minister · LP

– I wish to inform the House that the Minister for External Affairs (Mr. Hasluck) left Australia over the weekend on an official visit to countries in South East Asia. While away he will lead delegations to an Asian economic conference and a conference on the establishment of an Asian development bank and will also have discussions with Australian heads of missions. He will be absent for about four weeks and during this period, following the usual practice, I will act as Minister for External Affairs.

page 3317

QUESTION

POVERTY IN AUSTRALIA

Mr STEWART:
LANG, NEW SOUTH WALES

– I address a question to the Minister for Social Services. Is the honorable gentleman convinced that pockets of poverty exist in certain sections of our community? If so, is it true that families of three or more young children whose breadwinners are in receipt of wages of less than £22 per week are in grave danger of falling into the poverty stricken groups unless the parents are prepared to make great sacrifices for the sake of their children? Does he recommend that the mothers of these young families should seek full or part time employment to supplement the fathers’ earnings or is he prepared to recommend to the Government the immediate raising of child endowment and the introduction of additional family allowances? If not, what solutions are being considered by him and his Department?

Mr SINCLAIR:
Minister for Social Services · NEW ENGLAND, NEW SOUTH WALES · CP

– As I tried to explain during the course of a debate over the weekend, irrespective of the amount that a family earns poverty can exist within that family. Poverty is caused by very many things and, more often than not, by the act of the individual. In many family groups it would matter not at all what the total income was; it would still be found that members of that family group, because of various personal failings, could well cause a situation which many people would regard as poverty existing in that family. In the course of his question the honorable member suggested that in a family with a certain income there might well be a need for sacrifice in order to bring up the children. I suggest that in any family group there is a cause for sacrifice on the part of the parents. I think it is because of this sacrifice that the children grow up to be true and decent Australian citizens. I think that the making of sacrifices by parents is probably one of the most noble things in Australian family life.

page 3317

QUESTION

COMMONWEALTH MOTOR VEHICLES

Mr FOX:
HENTY, VICTORIA

– I ask the Minister for the Interior whether his attention has been drawn to an article which appeared in a Melbourne daily newspaper on Saturday last and which included these words: “ Common.monwealth cars are now used by those who have access to them for unlimited private purposes including shopping, social visits and even holidays tours.” As private members have access to cars for the purpose of travelling to and from airports while on parliamentary duties, will the Minister please inform the House of the conditions under which cars are made available to them? It is obvious that, if the report is accurate, at least 99 per cent, of private members are not aware of these privileges.

Mr ANTHONY:
Minister for the Interior · RICHMOND, NEW SOUTH WALES · CP

– I have seen the report in a Melbourne newspaper stating that certain members of Parliament were using Commonwealth cars for the purposes mentioned. This is not true. Private members of Parliament are allowed the use of Commonwealth cars only when going to and from Parliament. The cars are available only for journeying from members’ homes to the nearest airport or railway station and, on return, from the nearest airport or railway station to their homes. I think all members of Parliament accept it that one of our occupational hazards is to be criticised; but when wild accusations like this are made against all members of Parliament they do little credit to the journalist who writes them or to the newspaper which prints them.

page 3318

QUESTION

PRIME MINISTER

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– My gentle St. Andrew’s day question is addressed to the Prime Minister. I heard that the right honorable gentleman lamented in Melbourne yesterday that Australians call him Menzies. Does he really think that that is what they call him?

Sir ROBERT MENZIES:
LP

– The answer to that question, Sir, is: “No.” I am not unacquainted with what I am called. The other night, when I was arriving for a St. Andrew’s night dinner in Melbourne - it was a little out of time, but was being held on the nearest Saturday night - I was greeted in stentorian and familiar tones, by a group of gentlemen on the footpath, by the soubriquet, “ Pig-iron “. On the other hand, I am happy to report that as I am driven round in the cities I frequently find the driver of a truck pulling up alongside me, looking over at me and saying: “ Good on you, Bob.”

page 3318

QUESTION

DRAFTSMAN TO ASSIST MEMBERS

Mr WENTWORTH:
MACKELLAR, NEW SOUTH WALES

– I address to you, Mr. Speaker, a question relating to the extreme desirability of having a parliamentary draftsman, not under the control of the Attorney-General’s Department, available to honorable members in the performance of their duties in this House. Are you aware that the lack of an officer of this character is particularly acute at the moment when the Trade Practices Bill and the Income Tax Assessment Bill are before the House? Have you addressed your mind to this question? Are you able to foreshadow any action with regard to meeting this requirement for the proper performance of their duties by members of this House?

Mr SPEAKER:

– This question has never been raised with me directly. I have heard references made to it in various debates, particularly by members of the Opposition. I shall see just what power I have with relation to the suggestion the honorable member has made.

page 3318

QUESTION

EDUCATION

Mr LUCHETTI:
MACQUARIE, NEW SOUTH WALES

– I address a question to the Prime Minister. What was the nature of information furnished to the Government of New South Wales concerning the report of the Committee on the Future of Tertiary Education in Australia? Was the New South Wales Government consulted? Did the Australian Government indicate its willingness to provide matching grants for tertiary colleges at Bathurst and Wagga? Is it true that the New South Wales Government received very little information from the Commonwealth Government on the nature of the colleges which would attract matching grants? Did the New South Wales Government receive less information than the Government of Victoria, which accepted fi for £1 grants for colleges at Geelong, Ballarat and Bendigo, and the Queensland Government, which accepted similar grants for colleges at Toowoomba and Rockhampton? Finally, will the right honorable gentleman provide any further information required by the Government of New South Wales so that it may participate in grants for advanced education establishments at Bathurst and Wagga?

Sir ROBERT MENZIES:
LP

– The honorable member may take it that every State was treated in the same way on this matter. The same information was conveyed to each and my colleague in another place had discussions with each. Let me recall to the honorable member what I said in this House when I introduced the States Grants (Advanced Education) Bill 1965. Having set out a list of the colleges concerned I said -

No provision has been made for Commonwealth grants to new colleges at Bathurst and Wagga. The New South Wales Government has told us that it has no proposals for these colleges at present

I emphasize “ at present “. I continued -

Should such proposals be made in the future the Commonwealth Government would be prepared to give them favourable consideration.

page 3318

QUESTION

TRADE WITH SOUTH AMERICA

Mr BRIMBLECOMBE:
MARANOA, QUEENSLAND

– I direct a question to the Minister for Trade and Industry. Is it a fact, as has been stated, that the direct shipping service to South American ports, as opposed to other services involving trans-shipment, results in a saving of £18 10s. a ton in freight charges? Has the Minister been informed that there is a possibility of the discontinuance of this direct shipping service to South America by the Japan Australia Line? Will the Minister make investigations to ascertain whether this is correct and, if it is, will he do all he can to have the service continued in the interests of Australian exporters?

Mr McEWEN:
Minister for Trade and Industry · MURRAY, VICTORIA · CP

– The advantages of- in fact, the need for - a direct shipping service of regularity between Australia and South American ports has been apparent as I have mentioned in the Parliament before. In the drive for trade to South America the Government has entered into contractual arrangements with two different shipping lines, one to serve the east coast and the other the west coast of South America, and has agreed, in certain circumstances which I have recounted to the Parliament, to make good any losses incurred by these shipping services. I am sure that the honorable member is right when he says that the direct shipping service has resulted in a saving of £18 10s. a ton in freight on certain commodities. But this is not the standard saving; it varies between commodities. As the Government has regarded this as a worthwhile service, it would not lightly allow the service to fail. The time has come when there must be a renewal of negotiations to sustain the service. I think these negotiations are imminent and I hope to be able to make a statement in the not distant future about the future of the service.

page 3319

QUESTION

SALES TAX

Mr FULTON:
LEICHHARDT, QUEENSLAND

– I ask the Treasurer a question. Queensland electrical authorities consider that the rate of sales tax on air conditioning appliances in Queensland should be the same as that which applies to heating appliances in the southern States. Air conditioning appliances in Queensland carry a tax of 121 per cent, whereas heating appliances in the south are taxed at 2£ per cent. Does the Treasurer think this is fair and equal treatment?

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

– This is one of the many hundreds of requests for tax relief that come under the consideration of the Commonwealth Government when the Budget is being determined.

Mr Duthie:

– The Minister said this in 1960.

Mr HAROLD HOLT:

– Yes, and I will probably go on saying it until we decide the question one way or the other. If the honorable member wants this stricken from the ballot, I suppose that could be done. However, this matter is much more scientifically considered than those terms would suggest. Over recent years there have been many amendments to the sales tax law which have had the effect of benefiting householders and family members and, indeed, the community generally. It is a question of how far we can go at Budget time in foregoing revenue needed for the many purposes of government. I am not unsympathetic to the request that the honorable gentleman has put, but I repeat that there are many hundreds of requests which on the face of them have much to commend them. On the other hand there are obligations of government which must be financed. These things have to fall into their appropriate place in our consideration.

page 3319

QUESTION

POVERTY IN AUSTRALIA

Mr TURNER:
BRADFIELD, NEW SOUTH WALES

– My question to the Minister for Social Services follows the lines of the question asked by the honorable member for Lang. Are any inquiries afoot or contemplated with a view to determining the causes of poverty and, where possible, devising policies to alleviate it?

Mr SINCLAIR:
CP

– The Institute of Applied Economics within the University of Melbourne has instigated an inquiry into the needs of family groups. The research section of the Department of Social Services constantly keeps in touch with the needs of various sections of the community. Based on inquiries made by that section and having regard to the general budgetary situation, submissions and recommendations are made each year to the Government prior to budgetary discussions.

page 3319

QUESTION

MEASLES

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– I ask the Minister for Health whether his inquiries into the measles epidemic in the Northern Territory have yielded any further information about the success or otherwise of the all out campaign against the disease.

Mr SWARTZ:
Minister for Health · DARLING DOWNS, QUEENSLAND · LP

– Since I answered last week a question asked by the honorable member, another 47 cases of measles have been reported, making the total number now reported 1,438. There has been some abatement in the number of persons contracting the disease, but the disease has spread further afield throughout the Territory, particularly Arnhem Land. Because the disease is spreading we have decided to go ahead with a programme of vaccination. We have ordered vaccine to be flown in this week from the United States of America. It will be available in the Northern Territory during the coming weekend. We will immediately commence a vaccination programme with the objective of producing a barrier of immunity across the area where the disease appears to be spreading. I had arranged for some investigations to be made in Western Australia. I find that the authorities there have not at any time undertaken a mass vaccination programme, although in the past some doctors have arranged for the vaccine to be used in parts of the Kimberleys and elsewhere in the north-west. So far four Aboriginal children have died during the epidemic in the Northern Territory. Three of those children died from diseases resulting from or subsequent to the measles but I suppose their deaths could be directly attributable to the measles. With our programme of vaccination and bearing in mind that we have only about 730 remaining cases under direct treatment at the moment, we hope to contain the disease and gradually to eradicate it.

page 3320

QUESTION

DECIMAL CURRENCY

Mr BOSMAN:
ST GEORGE, NEW SOUTH WALES

– Is the Treasurer aware that plastic facsimiles of Australia’s decimal currency coins are being distributed with gay abandon by an oil company as a sales gimmick? Is he aware also of the widespread misuse of these facsimiles in automatic vending machines? Will the right honorable gentleman consider introducing legislation to prohibit the manufacture and importation of such facsimiles or, alternatively, will he consider providing more severe penalties for the misuse of such facsimiles?

Mr HAROLD HOLT:
LP

– It has come to my notice that representations of the decimal currency coins are being circulated. I use the word “ representations “ as distinct from the word “facsimiles”. I am not aware of facsimiles being circulated. The Commonwealth has power over the circulation of a facsimile. It does not have the same power as regards representations. In this case I am informed that it is unlikely that anybody could be misled into thinking that the representations were genuine decimal coins. They are used, I gather, in some vending machines and even in poker machines, but not to advantage or with success, as they tend to jam the machines. But this is a matter that falls outside our direct province. It is an offence to use these representations or facsimiles in vending and poker machines, but the question of penalty, or of more severe penalties than at present apply, would be a matter within the jurisdiction of the State Governments.

page 3320

QUESTION

DROUGHT RELIEF

Mr BEATON:
BENDIGO, VICTORIA

– I ask the Prime Minister a question. Several weeks ago the right honorable gentleman said that no estimate of losses due to the drought had been made up to that time. As the making of such an estimate, preliminary and approximate as it may be at this time, would seem a normal procedure for a national government, can the Prime Minister now give the House any idea of the direct or indirect costs of the drought? If not, will he arrange for such an estimate to be given to the House as soon as possible?

Sir ROBERT MENZIES:
LP

– The honorable gentleman must realize that it is very difficult for the Commonwealth to arrive at a firm estimate of these costs, because the ravages of the drought have been experienced to varying degrees within the boundaries of the individual States. I have no doubt that the State Governments themselves, in the course of making their provisions for drought relief, have been making their own calculations of losses and of what is needed in the way of relief. I am happy to say that we are in the closest contact with the Governments of both New South Wales and Queensland. I hope that as a result of the discussions we have had something more specific may be said before we are very much older. We have been looking at the kinds of things that the honorable member has in mind. The question, for example, of an interim payment would obviously depend largely upon assessments of the kind that the honorable member has referred to. Our discussions have been proceeding very well indeed in the Cabinet In fact we will be having some more discussions this afternoon so that we may equip ourselves for the next step to be taken.

page 3321

QUESTION

SOUTH EAST ASIA

Sir Wilfrid Kent Hughes:
CHISHOLM, VICTORIA · LP

– I wish to ask a question of the Prime Minister in his capacity of Acting Minister for External Affairs. Since the Deputy Leader of the Opposition has accused the Government of withholding information concerning Vietnam and the Malaysia-Singapore split, I ask: First, were the Deputy Leader of the Opposition and other members of the Opposition the guests of Mr. Lee Kuan Yew only a week or two before the split between Malaysia and Singapore occurred, and, if so, was the honorable gentleman not in a position as good as or even better than that of diplomats to obtain information on Singapore-Malaysia relations? Secondly, was this non-official party of Opposition members given the use of a Royal Australian Air Force aircraft to fly them wherever they wanted to go in South East Asia, while at the same time at least three Government members hitch-hiked or paid their own way? Did the Deputy Leader of the Opposition and the others of his party make a very brief stop at Ubon in north-east Thailand? If so, and if the Deputy Leader of the Opposition was so keen on learning about Vietnam, why did the party not go on to Saigon? Was it considered too dangerous or was the honorable gentleman in any way prevented from going?

Sir ROBERT MENZIES:
LP

– I know nothing about the travel arrangements that were followed but I will endeavour to find out what they were. I think I am right in saying, however, that the Prime Minister of Singapore first invited a delegation of Opposition members to go to Singapore.

Mr Calwell:

– That is right.

Sir ROBERT MENZIES:

– I then took the opportunity of speaking to the Leader of the Opposition and saying that I thought it would be unfortunate if the delegation went to only the one place and did not go to Kuala Lumpur. I think the Leader of the Opposition will recall this.

Mr Calwell:

– That is so.

Sir ROBERT MENZIES:

– I therefore sent word to Kuala Lumpur suggesting that the delegation be invited to go there, and I understand it did go there. I have not followed the journeyings but I have no doubt that the delegation took every opportunity of finding out what it could about developments in the area. Our diplomats are, of course, in touch with these matters daily. We get reports, practically daily, from both Kuala Lumpur and Singapore. So many of the problems that arise have psychological involvements that nobody can be very dogmatic about them. One has to try to read somebody’s mind. On the whole I think we are kept as well informed as possible. I have no doubt that Opposition members who went to South East Asia put themselves in possession of whatever information they could get.

page 3321

QUESTION

INTERNATIONAL AFFAIRS

Mr CALWELL:

– I ask the Prime Minister, in his position of Acting Minister for External Affairs, to make a statement to the House before we go into recess before Christmas - just how much before Christmas nobody knows - on the position in Indonesia, Malaysia, Singapore and Vietnam. I suggest with deference that if it is possible for the right honorable gentleman to do so he might make the statement on Tuesday night or Thursday night of next week.

Sir ROBERT MENZIES:
LP

– How far one can say something useful on all of these areas I would not undertake to say, but I share the honorable member’s desire to have something worked out that can be put before the House, and I will certainly do my best to achieve that result. The honorable gentleman suggested that a statement be made before the House rises. I wish I knew when the House will rise. I have been reminded by my friend the honorable member for Eden-Monaro that it is St. Andrew’s day. That reminds me of Burns and this means I can quote from “ To a Mouse “ - - “An’ forward tho’ I canna see, I guess an’ fear! “

page 3322

QUESTION

SHIPPING

Mr ROBINSON:
COWPER, NEW SOUTH WALES

– My question is directed to the Minister for Trade and Industry. Has progress been made with the Australian sponsored move for an international conference to study a proposed shipping rationalisation plan designed to save Australia more than £6 million a year in freight charges to Britain and Europe? Further, has the Australian plan envisaged by the Department of Trade and Industry - whereby major reorganisation of freight handling procedures would be encouraged - been outlined to shipping, commercial and governmental authorities in an attempt to offset rising freight costs to Australian exporters?

Mr McEWEN:
CP

– I think that tq describe the proposal that is in mind as a plan might connote too much of an atmosphere of finality and precision. What has happened is that senior officers of the Department of Trade and Industry, with the aid of other people, have conducted a quite extensive and meticulous study of the shipping services of the European and United Kingdom Conference Lines to and from Australia. From this study, and with the aid of computers and calculations, they have reached the conclusion that I have mentioned in this House, namely that a rationalisation of services would involve a quicker loading of ships through calling at fewer ports for the purposes of loading, with more voyages per annum resulting from each ship. This would need co-operation both of the ship owners and shippers at both ends. The calculated conclusion was that if this were done in a complete manner it could result in a saving of £6i million a year, a saving which would neither accrue in totality to the ship owners nor go entirely to the shippers in freight saving, but which ought to be divided in some equitable and proper manner. The shipping interests from London and the Continent have come to Australia. They were sufficiently persuaded that there was something in this proposal. They have conducted discussions with our people in Australia and discussions which might even be described as negotiations are proceeding in London at the present time. A very senior officer of the Department of Trade and Industry is in London at present on this mission. I am not confident of the outcome but I am hopeful. Nothing will be spared on the Government side to try to bring about a constructive result.

page 3322

QUESTION

SHIP BUILDING

Mr JONES:
NEWCASTLE, VICTORIA

– I direct a question to the Minister for Shipping and Transport. Has the Broken Hill Pty. Co. Ltd. Whyalla shipyard been given orders to build four 47,000 ton ore carriers? Has B.H.P. recently been granted permission to operate on the Australian coast two overseas-owned 33,000 ton ore carrying vessels? Did the Minister recently advise the Australian Shipbuilders Association that the tanker building programme is designed in such a way as to allow the Government to inject some stability into the ship building industry by placing orders for tankers with the ship builders when other orders for ships are not forthcoming? If this is correct, can the Minister give an assurance that orders for tankers will not be placed with B.H.P. while other Australian shipyards are finding difficulty in maintaining continuity of employment for their labour force due to shortage of orders?

Mr FREETH:
Minister for Shipping and Transport · FORREST, WESTERN AUSTRALIA · LP

– The answer to the first three parts of the honorable member’s question is: “ Yes “. The answer to the last part of the question is: “ It depends on the circumstances “.

page 3322

QUESTION

TRANSPORT COSTS

Mr WHITTORN:
BALACLAVA, VICTORIA

– I address my question to the Minister for National Development. As the Minister has appointed a committee of investigation into transport costs in northern Australia under the chairmanship of Sir Lewis Loder, I ask: Has this committee finalised its investigations? If so, has a report been produced and is it available for scrutiny by members of the Parliament?

Mr FAIRBAIRN:
Minister for National Development · FARRER, NEW SOUTH WALES · LP

– The report that the honorable member refers to was received by me some weeks ago. Whilst it is not in the class of the Vernon Committee report, it is still a fairly sizeable one. It is being considered by my Department and by myself, and also by interested Ministers and their Departments. The Government will consider it in due course.

page 3323

QUESTION

DC9 AIRCRAFT

Mr WEBB:
STIRLING, WESTERN AUSTRALIA

– My question is directed to the Minister representing the Minister for Civil Aviation. Has the Australian Airlines Flight Engineers Association strongly advocated that the technical crew of the new DC9 aircraft should include a flight engineer? Do they state that the present plan to provide a crew of two is inimical to air safety? Is it a fact that all serious air accidents in Australia have involved operations with crews of two? Will the Minister see that a crew of three is provided for these aircraft rather than a crew of two as recommended by the companies which are putting commercial interests ahead of the safety factor?

Mr FAIRBAIRN:
LP

– As the honorable member knows, this does not come under my responsibility. I will see that he gets an answer from the Minister for Civil Aviation who sits in another place. I am not aware, however, of many serious accidents in this country. I think there is no country in the world which has a better civil aviation record and this shows that our standard of safety for civil air transport is equal to or better than that of any other country in the world.

Mr BUCHANAN:
MCMILLAN, VICTORIA

– My question is supplementary to the last question which was addressed to the Minister representing the Minister for Civil Aviation. In view of the question regarding the safety factor inherent in the configuration of these DC9 aircraft, does this constitute good grounds for reconsidering the purchase of the British BACIII even at this late stage?

Mr FAIRBAIRN:

– Again I point out that I have to refer this question to my colleague in another place, but it is the airlines themselves who make this decision, not the Government. Both airlines decided that the DC9 was the aircraft that they required and it is for them to make that decision.

page 3323

QUESTION

SHIPPING

Mr BENSON:
BATMAN, VICTORIA

– My question is directed to the Minister for Trade and Industry. It refers to shipments of coal and the proposed shipments of iron ore to Japan. The Minister will recall that in the 1930’s a trade agreement existed between Australia and Japan for the sale of wheat to that country. One of the conditions of the agreement was that the wheat had to be carried in Japanese bottoms. I now ask the right honorable gentleman whether he will do all in his power to see that a reasonable proportion of coal and iron ore is carried to Japan in Australian bottoms?

Mr McEWEN:
CP

– It can be taken as being the desire of this Government that at least a substantial proportion of the cargo in coal or iron ore and maybe in bauxite or alumina should go to Japan and other major customers in Australian bottoms. The limiting factor, of course, is the availability of suitable shipping within the control of Australian companies. At this stage I cannot say more than that this is not merely the desire of the Government; the Government is also concerning itself with this matter at present.

page 3323

QUESTION

RIVER MURRAY WATERS

Mr TURNBULL:
MALLEE, VICTORIA

– My question is addressed to the Minister for National Development. Is he aware that last week in this House the honorable member for Riverina and I stressed the need for keeping the flow of the River Murray at its normal level? Does he know that primary producers who use the waters of the River Murray for irrigation have continually urged the building of more weirs and locks on the Murray with this object in view? What plans has the River Murray Commission in this regard?

Mr FAIRBAIRN:
LP

– I am aware that the honorable member for Mallee and the honorable member for Riverina have repeatedly made requests to me and to the River Murray Commission regarding the building of extra weirs and locks on the lower Murray. Some time ago the River Murray Commission decided that the highest priority in the development of the Murray should be given to providing storages. As the honorable member knows, we have had to place restrictions on the water flowing down the Murray because there is insufficient water in the Hume Weir. Therefore, the highest priority is given to additional storages and not to weirs which, while raising the level of the river hardly increase storage at all and require considerable expenditure. The River Murray Commission is now engaged in building the Chowilla Dam and within about four years the amount of water available in the River Murray will have risen from 2.5 million acre feet to 8 million acre feet. I think the honorable gentleman will agree with me that it is better to spend the available money in this way rather than on the construction of weirs. My own view as Chairman of the River Murray Commission is that, even when the Chowilla Dam is completed, we will do better to look at additional storages rather than at weirs, which can raise the height of the river only over a small area.

page 3324

QUESTION

MEDICAL BENEFITS FUNDS

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– I ask the Minister for Health a question. Has he been informed that the Medical Benefits Fund of Australia Ltd. invested very’ large sums in debentures issued by H. G. Palmer (Consolidated) Ltd. after that company was taken over by the M.L.C. Ltd.? Does the Commonwealth guarantee the stability of registered medical and hospital benefits funds anddoes it ever check the nature and soundness of their investments? If such checks are not made, will he now see that they are?

Mr SWARTZ:
LP

– I did read a report in the Press relating to this matter. I made some investigations and I understand that the report is quite correct. We have no control over the investment policy of the funds, but we suggest to them that it would be preferable for them to invest in gilt edged securities. In most instances they do so. Anyone looking at the investment programme of the Medical Benefits Fund of Australia Ltd. will find that it has generally followed a policy of investing in gilt edged securities, with some exceptions. I have already made some inquiries and I will certainly make further inquiries about its future investment policy.

Mr Whitlam:

– Does the Government guarantee the stability of the funds?

Mr SWARTZ:

– No, there is no guarantee, but we do have a very definite interest to ensure the soundness of the funds.

page 3324

QUESTION

SPACE RESEARCH

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– I address my question to the Minister for Supply. Has he noted statements by the Mayor of Toowoomba which relate to the installation of an American tracking station in that city and which have been published in the Queensland Press? Do these statements indicate that the Toowoomba City Council is in any way a party to the arrangement for the establishment of a tracking station in that area?

Mr FAIRHALL:
Minister for Supply · PATERSON, NEW SOUTH WALES · LP

– I have noticed one or two statements attributed to the Mayor of Toowoomba concerning a proposal to establish a tracking station. When the joint survey team representing the United States National Aeronautics and Space Administration and the Department of Supply was looking about the area for a site it called on the Mayor, was warmly welcomed and was given a good deal of help. In the event, of course, the station will be established in, I believe, a neighbouring municipality. In fact, there is no agreement to which the Toowoomba City Council is a party. Therefore, some of the statements attributed to the Mayor may not necessarily be accurate.

page 3324

QUESTION

DEPARTMENT OF EXTERNAL AFFAIRS

Mr JAMES:
HUNTER, NEW SOUTH WALES

– My question is directed to the Prime Minister. I ask: Has a senior officer of the Department of External Affairs resigned in protest against the Government’s foreign policy? In particular, did the officer concerned disagree with the Government’s policy on Vietnam?

Sir ROBERT MENZIES:
LP

– As I came into the House, I was told that this somewhat mysteriously referred to gentleman had written an article for a newspaper called the “Australian”. As I do not happen to be a reader of that newspaper, I have not read his article. I inquired whether this gentleman had been an officer of the Department of External Affairs and found that he had been a first secretary in the service of the Department. He had never had any association with Vietnam matters or access to Vietnam information; his activities lay in other directions. He resigned some time ago. I do not know why, but I need hardly add that he is now with the Australian National University.

page 3325

QUESTION

BORDER RIVERS BETWEEN NEW SOUTH WALES AND QUEENSLAND

Mr IAN ALLAN:
GWYDIR, NEW SOUTH WALES

– I direct my question to the Minister for National Development. I ask: Has any approach been made by the present New South Wales Government, in association with the Queensland Government, for Commonwealth participation in a scheme to develop the water resources of the border rivers between Queensland and New South Wales?

Mr FAIRBAIRN:
LP

– At the time of the last Budget, the Government announced that it had received an approach on this matter but had decided not to agree to the request that had been made. So far as I am aware, no further approach has been received since that time.

page 3325

QUESTION

ABORIGINES

Mr BRYANT:
WILLS, VICTORIA

– I address my question to the Minister for Social Services, who is probably aware that there is still in the Social Services Act a section that discriminates against Aborigines. Would he care to step down to room L58 after question time to explain to the members of the delegation of Aborigines present this afternoon why he leaves this provision in the Act?

Mr SINCLAIR:
CP

– I do not consider that that question calls for a reply.

page 3325

QUESTION

NAVAL COMMUNICATION STATION AT NORTH WEST CAPE

Mr CLEAVER:
SWAN, WESTERN AUSTRALIA

– I address a question to the Acting Minister for Defence. I ask: Has the honorable gentleman been advised of the issuing yesterday of a liquor licence for a new motel at North West Cape and the cancellation of licences for the two camp accommodation areas some four miles away? Will he recognise the very real impact that this situation will have on the difficult problem of labour recruitment already existing at the site of the proposed naval communication station and, under Commonwealth defence regulations relating to the project, will he investigate the possibility of having these temporary camps exempted from the local licensing laws until the construction of the station has been completed?

Mr HULME:
Postmaster-General · PETRIE, QUEENSLAND · LP

– I do not know anything of the matters referred to. If the honorable member will take the trouble to put his question on the notice paper, I shall reply to it later.

page 3325

QUESTION

AUSTRALIAN ECONOMY

Mr DUTHIE:

– I should like to ask the Prime Minister a question concerning the report of the Committee of Economic Inquiry, which is known as the Vernon Committee. This report once reached first base in this House and then disappeared from sight. Has the right honorable gentleman, acting as both gravedigger and undertaker, buried this report, which cost more than £140,000 to produce, deep in the vaults of this building and erected a tombstone over it or will he, at some future date, make a genuine effort to use this report as the basis for vital reform of various sectors of the economy? Does the Prime Minister believe in reincarnation? If so, what chance does he give the Vernon report?

Sir ROBERT MENZIES:
LP

– I can answer two parts of that question. I am not by profession either an undertaker or a gravedigger, but I never look at the honorable member without wishing that I were. I have been discussing with my colleague, the Minister in charge of the House, the possibility and, indeed, the desirability of having some debate on the Vernon report. I am going to dp my best to see that we have one.

page 3326

PERTH AIRPORT

Approval of Work - Public Works Committee Act

Mr FREETH:
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: - Extension of the 02/20 Runway to 10,500 feet and associated Taxiway Works at Perth Airport.

The proposal involves the extension of the north-south runway by 2,600 feet, provision of 200 feet stopway paving at the end of the extension, widening of shoulders of the existing runway, strengthening and widening of the existing taxiway and construction of an additional taxiway. The estimated cost of the work is £440,000. The Public Works Committee, in reporting favorably on the proposal, has recommended that the estimated cost of the runway extensions should be re-examined in the light of relative costs at Tullamarine. This will be done when the detailed planning has been completed and prior to the invitation of public tenders. Upon the concurrence of this House in. the resolution, detailed planning can proceed in accordance with the recommendations of the Committee.

Mr CALWELL:
Leader of the Opposition · Melbourne

– It is obvious from this resolution that Perth is to become an international airport.

Mr Freeth:

– It is now.

Mr CALWELL:

– I accept the amendment. It is to be put in a position where it can become, in an effective way, an international airport.

Mr Freeth:

– It is now.

Mr CALWELL:

– It is not capable of taking these newer aeroplanes of the type that will be landed at Tullamarine, and it will have to be strengthened in order to take the aircraft that will be landing at Mascot when work at that airport is finished. I doubt whether Mascot is to be extended to the degree that Perth airport is to be extended. I think that much of the argument that is taking place around Mascot and Tullamarine is that Mascot is not being made equally usable as Tullamarine. It seems that Perth is to be made a first class airport. I think that is right. However, I want to raise with the Minister for Shipping and Transport (Mr. Freeth) the attitude of the Commonwealth Government in providing facilities in the various States when the State Governments do not co-operate in the way they should by providing proper ingress and egress roads. I think it vitally important that Commonwealth moneys should not be spent as has been suggested in the case of Tullamarine and Perth unless there is complete co-operation on the part of the State Governments in the matter. I believe that the only capital cities that have suitable airport roads are Adelaide and Hobart. Access to the Brisbane airport would be next in line. But in Sydney, Melbourne and Perth the roads are not satisfactory.

Mr Freeth:

– Mr. Speaker, I rise to order. When the House last considered a motion of this kind in relation to an approval for work at Melbourne (Tullamarine) Airport the honorable gentleman made some reference to roads of access to airports. On that occasion I pointed out that this was hardly relevant but you, Sir, gave him some special latitude in this respect. I must point out that if the honorable member is now given similar latitude somebody on this side of the chamber should be allowed to reply. The debate will then be wide open for honorable members to roam all over the Commonwealth. The proposal before the House is for one runway at Perth airport.

Mr SPEAKER:

– Order! I point out to the Minister that the Leader of the Opposition is entitled to some relaxation in respect of the scope of the debate. I point out to the Leader of the Opposition that if he allows the debate to go so wide as to bring in all the roads and State ancillary services the Chair will have great difficulty in stopping other honorable members from replying to his remarks.

Mr CALWELL:

– I respect your ruling, Sir. I am trying to point out that before the Parliament appropriates Commonwealth money for projects of this sort there should be agreements between the Commonwealth and the States so that when the facilities are provided they can be used to the maximum advantage and the provision of these facilities will not lead to congestion.

Mr Freeth:

– There is a very good road to the Perth airport.

Mr CALWELL:

– I do not think it is good enough, and I think that the Government of Western Australia should do better. I do not want to canvass that point any further. It is all very well for the Minister to come along and say that we should spend a certain sum of money; but just by spending that amount we do not solve a particular problem. If we spend that sum of money and do nothing else we create other problems. There should be cooperation between the Commonwealth and the States in all these things, but such cooperation is not in existence at the moment. The Minister keeps bringing up proposal after proposal, but he ignores the relationship between air transport and road transport which is needed in order that everything can be made to suit the best interests of the community for the benefit of the nation and in the interests of our economy.

Question resolved in the affirmative.

page 3327

TRADE PRACTICES BILL 1965

Second Reading

Debate resumed from 26th November (vide page 3312), on motion by Mr. Snedden -

That the Bill be now read a second time.

Upon which Mr. Whitlam 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 notes with approval that, in response to public pressure, the Government has introduced this limited Bill but deplores: -

the Government’s failure to hold,a referen dum, as unanimously recommended by the Joint Committee on Constitutional Review in its reports presented to the House on 1st October 1958’ and 26th November 19S9 to give the Parliament power to make comprehensive national laws with respect to restrictive trade practices; and

its abandonment of a substantial part of the proposals of the former Attorney-

General, for legislation on restrictive trade practices and monopolies, as outlined to the House on 6th December 1962 particularly with respect to resale price maintenance, persistent price cutting, monopolisation and mergers.”

Mr HAYDEN:
Oxley

.- The Bill now before the House is a proposal for legislation to control certain restrictive practices which have been developed in the trading activities of Australia over the years. We on this side of the House feel that the Bill is somewhat short of what we would have introduced had we been in a position to do so. Nevertheless, after quite a long and, at times, quite a hard struggle the Bill has been introduced. To the extent that it covers certain restrictive practices, I suppose we should be joyful. I shall come a little later to a discussion of what I feel are the deficiencies of the Bill. At this point I want to make some observations about the way in which the debate has been approached by some honorable members on the Government side. The defence of business interests, represented by well briefed and not distinguished advocates from some sections of the Government back benches proceeded on the basis that the proposed legislation will cause unwarranted interference with, and prying into and snooping about, the confidential affairs of business. In short, their argument postulates the cardinal sin against the capitalist system, as seen by these vigorous and professionally briefed advocates; that is, the doubting of the motives of business. If one accepts the handy homily, “What is good for business is good for you “, I dare say the arguments of these spokesmen are convincing. However, I am considerably doubtful of the success of their powers of persuasion in the community today.

There have been too many instances of the classical rags to riches progress of capitalist enterprises crashing from the heights of success and crushing a lot of little people who had invested with hope and honesty in these enterprises. Balzac has said - and the more I turn the sentence over in my mind when reading of the latest of many of multi-million pounds enterprises crashes the more I marvel at his perspicacity - that behind every large fortune there is a crime.

It used to be the crime of sweated labour and cruel exploitation of workers. It is now apparently more fashionable and eminently more successful to perpetrate the offence by way of a glossy, inflated, and not altogether honest prospectus, often coupled with a careless disregard for bad debts in the balance sheet. One need hardly mention the names of International Vending Machines, the Korman organisation, Reid Murray, and now the “ Five Million Furphy “ of H. G. Palmer Pty. Ltd. These are only the more notable of numerous progeny from wedlock in the “ get rick quick unscrupulously “ set. This kind of progeny seems to arrive too frequently in business circles to be ignored in this country today. Obviously, in these instances, what was good for business was not good for anyone else.

When one reads in the Press a plea, in a struggling, faint little voice, for a fair go in business competition, when one reads that the voice of protest is being snuffed out, not by competition but by trade associations which wield the power of life or death in a field of business endeavour, without accountability to the public in any democratic sense, can one be blamed for feeling that the so called “ fifth estate “ has arrived? The fifth estate of baronial economic power in the realm of capitalism has been created. When one sees the gobbling up of enterprises in empire building sorties by capitalist institutions and consequently the agglomeration of capitalist power in fewer and fewer hands, surely one is justified in wondering - as many do wonder today - whether these things are occurring in the public interest.

This is a good point at which to commence some detailed inspection of the Government’s trade practices law. The AttorneyGeneral’s recent address to the House is interesting for the way in which he emphasises two basic precepts - firstly, the promotion of competition; secondly, the protection of the public interest. The Minister has said, and his predecessor expressed a similar sentiment - the Government is conscious that the lessening of competition may, in some aspects of the economy, be unavoidable; indeed, it may be not only consistent with, but a proper ingredient of, a truly free enterprise system.

If, by this, the Minister means that it can be in the public interest for a lessening of competition to take place in some certain instances, I would agree that some justifiable instances could arise. For instance, this country with its small workforce of about four million persons is obliged to seek more efficient ways of using its resources for productive purposes. Hence, there is plenty of justification for industrial production in some spheres to be carried out by fewer, but larger, production units, even, in some cases, by monopoly, the purpose being to exploit the so-called internal, and, if there are any, external economies of scale. But this is a heavily qualified concept. Certainly it gives no carte blanche voucher for mergers and takeovers.

A case can be made for mergers and takeovers where economies of scale are to be beneficially exploited and the savings passed on to the community. But for the life of me I cannot agree to those vertical mergers or takeovers where a manufacturing and a retailing unit are combined in such a way that a situation of monopsony is presented in the factor market, and monopoly is created in the consumer market. I have grave concern for the public interest in such cases. In such a situation of virtual economic dictatorship, first I would be concerned about the effect on income distribution, and about profit margins and prices charged, as well as the disbursement of dividends by income groups in comparison with wages and salaries paid in the economy. The effect on resources allocation is most likely to be undesirable. Where the commodity is sold at prices about marginal cost and factors are purchased below marginal value there will not be a maximum use of resources, and output will be below the level which the industry is competent of achieving and which is desirable in the public interest in those cases where margins are high. Where margins are low the opposite result occurs.

This also applies to a market situation of oligopsoly and oligopoly. In point of fact, one of the undesirable features of our hop and crash economy is the unrestricted economic and social power of the monopolies and oligopolies bidding resources away from what should be priority investment into less important fields, thus distorting our economic growth pattern. In this way they contribute largely to the ingredients of our milk shake economy. Where the entrenchment of oligopoly or monopoly is to be allowed it can only be said to be in the public interest where efficiency is maintained and improvement of it sought and where the savings so gained are passed on to the public as reduced costs. The Broken Hill Proprietary Co. Ltd. is a notable illustration of a monopoly which has allowed its efficiency to deteriorate because of the complacency infective from the security of monopoly power. Oligopoly is no better. The so called understandings between the elements of such an economic situation can be as bad a brake to efficiency as occurs under pure monopoly. Similarly, under the head of efficiency we can consider technological progress. Established monopoly and oligopoly are notorious for their resistence to technological change. For instance, the Aluminium Company of America would not invest in a new and efficient type of ore carrier until the arrival of a newcomer, Reynolds Metals Company, proved its advantages. Neither the Bell telephone company nor General Electric Co. (U.S.A.) were interested in the then new phenomenon of radio. Yet in spite of the very real problems of considerable magnitude which economic concentration can present, and in many cases is presenting, the Attorney-General has eliminated any rereference to registration of mergers; something significantly mentioned by his predecessor. The query on this subject obviously is: Does monopoly occur on any significant scale in Australia to justify government interest? Let me quote authoritative sources to show that it does. In an analysis of this sort of thing in the Australian context, Mr. E. Wheelwright, an economist with Sydney University, discovered -

In manufacturing 20 large firms owned one third of the total assets, 75 firms owned 45 per cent. In particular industries, concentration was even higher in sugar, rubber, steel, paper and glass, one to three firms controlled 80 per cent, to 100 per cent, of assets in each industry. For large numbers of individual products, e.g. certain types of paper, textiles, gypsum, tile pipes, chemicals, there was only one firm in each group.

These estimates, made in 1956, were based on 1953-54 data. Since then there has been a tremendous spate of consolidations, takeovers, mer gers, and the like, so that industrial concentration is now undoubtedly much higher. It seems clear that it will go on, for so far there is nothing to stop it

Professor Hunter, writing in a work “The Australian Economy “ edited by Arndt and Corden, at page 281 displays dramatically a comparison of selected industries in this country and the United Kingdom and the United States of America by way of a table. Because of the difficulty involved I shall not ask that the table be incorporated in “ Hansard “, but I draw the attention of the House to it and commend a study of it to honorable members. The learned Professor is moved to say at page 282 of the same work -

The U.S.A. index in the table shows that industry has a higher concentration ratio for all of the listed industries except cement, cars and petroleum refining.

He also says of the Australian indices -

  1. . the indices considerably understate the degree of concentration in the industries in the upper half of the table.

That is, the position is worse than would appear from the tables - and they are dramatic enough as it is. Before leaving the Professor, let me quote one final word from him - . . concentration is in the oligopolised and monopolised industries in which we are primarily interested, on an average twice as great as in U.K.., and three times greater than in the U.S.A.

It seems that concentration in industry has gone very much further in Australia than in most countries. It has gone considerably further than in most countries that have found it desirable to institute legislative control of business. Further consolidation of the view that concentration is rampant in strategic sections of Australian industry is gleaned from Karmel and Brunt’s “The Structure of the Australian Economy “. At pages 58 and 59 and 84 and 85 the writers give details of some of Australia’s Goliaths in the realm of capital. With the concurrence of honorable members I incorporate in “ Hansard “ the table on pages 58 and 59 as an indication of the concentration of capital in monopolies.

That positions of economic power, referred to as monopoly and oligopoly, do arise from mergers can be gauged from the number of mergers which have occurred in this country of recent years. For the six years 1955-60 no fewer than 190 companies were delisted on the Melbourne Stock Exchange as a result of takeovers. In recent years mergers have occurred on a very large scale. Of 484 mergers in 1956-59, 45 were over £600,000 in value, and, according to Karmel and Brunt, two of the largest mergers in Australian history occurred in 1960 when two of the biggest retail firms made substantial acquisitions. Mergers involving amounts greater than £250,000 would have been registrable under Sir Garfield Barwick’s proposals. There is no concern about them under Mr. Snedden’s propositions. Admittedly there would be problems in investigating mergers, and the Minister has referred to some: But merely because there would be some machinery problems seems to be hardly sufficient reason to drop the idea completely, as the Minister has done. In fact when he speaks of the problems arising from a consideration of the proposal to make mergers and so on registrable under law, he quotes the differing attitudes between the British Conservatives and the British Labor Party. Having done this he seems to feel that he has presented sufficient evidence to justify no action from his own Government on mergers. What he conveniently neglects to face is the fact that in spite of the problems connected with supervising mergers in the public interest and certainly, regardless of the differing approaches, both parties in Great Britain are doing, or have done, something about the subject. Additionally, in spite of the problems connected with establishing such a regulatory law, both Canada and the United States of America have conducted such laws for some time. But, just as the Attorney-General has dropped registration of mergers, recommended by his predecessor, so too has he dropped other propositions put forward by his experienced predecessor.

I recollect how disappointed was the informed community with Sir Garfield Barwick’s anaemic creature. But, oh my goodness, compared with the frail midget conceived by the casuistry of business pressures and delivered by the present AttorneyGeneral, Sir Garfield Barwick’s creature was a Frankenstein. For instance, Sir Garfield Barwick made “ persistent price cutting at a loss to drive .a competitor out of business “ inexcusably unlawful. The new proposals do not specially define this practice. Perhaps, with some stretching, clauses 35 and 37 might get to the starting line, but there seems to be fairly formidable opinion that these sections will not last much of the course of challenge. If the Government is the keeper of free enterprise, which it claims to be, surely it would be specifically alert to this behaviour; for this is the behaviour symptomatic of concentration and accumulation of capital - a situation hardly in harmony with free enterprise. In this sort of situation we find big firms have an easier availability to capital than smaller ones. They are more likely to be successful in developing cost saving technological changes in production. Certainly their size, with their freer availability of capital, means they can afford technological change more easily than the small enterprise.

The growth of a firm and of an industry is determined, among other things, by the interaction of the rates of change of sales, profits, costs, technological progress and so on. This means that the bigger firms are institutionally more likely to succeed and grow larger than the smaller ones which are more likely to remain small at best, and quite possibly fail anyway. In other words the big firms will become richer by their greater capacity to accumulate capital. But like Alice, who could not stop growing once she ate the cake, the large units grow larger and larger on the inbuilt advantages derived from their size. In these cases the scale of enterprise grows faster than the rate of growth in the market. Consequently, marginal firms are squeezed out as the Goliaths seek outlets for their increased output. So economic concentration takes place.

Eventually the situation is reached where only a few large firms are left in the industry. Each has too much accumulated capital in reserve to allow another to attack its position by a price war, as was done against the small units. If any small units are left it is for business political reasons; perhaps the desire to deny the existence of restrictive trade practices, but in fact oligopoly can achieve equilibrium only through such practices - whether by price cutting wars snuffing out small competitors, or by restrictive agreement bringing about a mutually beneficial and satisfactory lull in price competition. Having reached the position where successful assault against the remaining large units of enterprise cannot be undertaken successfully by any of the other units, or in cases where there are no opponents left to conquer, diversification is sought to use up otherwise idle accumulated capital. Hence we see Colonial Sugar Refining Co. Ltd., as just one illustration, moving completely away from industries bearing any relation to sugar, and into fields like blue metal quarries, or bauxite extraction at Gove.

The full extent of capital accumulation and capital concentration, including diversification, by monopoly and oligopoly in Australia should have been established by the Government by a committee of inquiry as a necessary fundamental form of information from which to base its approach to a trade practices law. It is obvious, merely from reading the financial pages of the daily Press, that this concentration is quite large. What the Government needed was some form of concentration ratio index as a guideline for its deliberations. I have no objection to capital accumulation and concentration occuring if it does so fairly and not by wretchedly destroying embryo opposition by unfair means, as in the case of price slashing wars where price levels go below cost. Having achieved a dominant position by accumulation and concentration of capital, it is necessary that efficiency does not slip through indolent complacency. This would be against the public interest.

The responsibility of the Government is not towards business but towards the public interest. It is certainly not in the public interest for a monopoly or an oligopoly to retain dated, inefficient processes, confident in the knowledge that new competition can be destroyed by price cutting and falling back on accumulated reserves without introducing improved efficiency. Price cuts obtained in such a situation are short lived and do not come to the advantage of the consumer. I do not see where this legislation really bites into this sort of problem. There is no power to cause efficiency improvement. I can agree this would be a difficult instrument to operate, but the answer seems to be in the broader concept of a planned economy. Indeed, the endemic problems of our economy remain while the Government refuses to countenance this concept of a planned economy. Secondly, price cuts to defeat new competition may establish prices below cost for the new entrant, but include a profit for the established large units, notwithstanding their institutionalised inefficiency. I do not see where this sort of thing will be effectively prevented taking into consideration the sort of tactics that could be adopted.

Business interests have been maintaining that there is no need for this type of legislation. They seem to be saying that the laws of supply and demand always balance themselves by some miraculous cause - in some sort of perfect economy. This is rubbish. The equilibrium of the market is derived by determined interference with supply by business interests. Having discovered that if it can regulate supply it can manipulate demand, and thus determine price, and with it the return to the enterprise as profit, business does not want to relinquish its position as its own government of the economy of Australia. The 1 957 Western Australian Royal Commission identified 111 trade associations. It uncovered three forms of restrictive practices - first, price fixing arrangements and their enforcement; secondly, channeling and distribution through members of associations; and, thirdly, collusive or level tendering. Mr. R. D. Freeman has estimated that 58 per cent, of trade associations in Victoria support restrictive trade practices.

The Tasmanian Royal Commission this year uncovered 70 trade associations of which two-thirds practised restrictive activities. The report of the Royal Commission refers first to horizontal or multilateral arrangements. Under this heading are listed such arrangements as price fixing, uniform terms of dealing, market sharing and restrictions on entry to a trade or industry. The second matter referred to is vertical bilateral arrangements. Under this heading are listed such matters as resale price maintenance arrangements, discriminatory dealings, exclusive dealings, refusals to deal and price discrimination. The third matter referred to is vertical unilateral practices. Other matters referred to in the report are collusive tendering, mergers and monopolisation.

It is interesting to note the detrimental effect upon an enterprise where right to membership is withheld. In the case of sporting goods resellers operating in Tasmania, non-membership of the association meant that newcomers could not obtain supplies of goods to sell. The association rationalised trade rights for a zone on the basis of customer demand. I do not quibble with rationalisation to protect against what is virtually unnecessary and therefore wasteful capital investment, but I feel that it is manifestly wrong for a body, neither answerable nor responsible to the public, to make this form of decision, especially when the body is an interested party to the profit margins set. Sir Garfield Barwick especially dealt with trade association exclusion of membership as a registrable item. Professor Hunter has said, on the matter of restrictive practices -

However conservatively the position is stated, it is clear that Australia is well, even handsomely, endowed with trade associations and restrictive practices.

Professor Richardson, speaking on the same subject, has said -

The indicators are that there is more concentration of economic power in Australia than in most industrialised countries.

The professor also passed some comments recently on the quality of the legislation now before us. If the newspaper reports of his remarks were correct, he was hardly flattering to the legislation. The other point to which I refer is the Minister’s change of heart which allows part time appointments to the tribunal. With our small business community I do not think this practice is desirable. It is difficult to accept the presence of disinterest among business appointees to the tribunal where the appointees are still active in business. Indeed, the nurturing of generations of Australian businessmen on the virtues of restrictive practices would seem to make them of doubtful value on the tribunal. Anyway, why do they have to be part-time officers? Undoubtedly this is a concession to political pressures. If, on the one hand, the Minister argues that there will be too much work for a more inclusive form of registration and on the other hand argues that there will not be enough work for full time officers, one can hardly be blamed for being confused or suspicious. From its failure to conduct a searching inquiry into the structure of Australian business trade practices before proceeding with this legislation it is obvious that the Government moves about with blinkers on. I support the amendment moved by the Deputy Leader of the Opposition.

Mr KILLEN:
Moreton

.- Before I turn to the Bill I want to make some preliminary comments. First, all of my observations on this Bill this afternoon are based upon the assumption that the Bill, as an Act, will be found to be within power. That is an assumption that I make with some trepidation, because I believe there is a powerful and very respectable argument to be made out that this Bill, as an Act, will be found to be quite beyond power - in other words, not to be within the constitutional limits of the Commonwealth of Australia. Secondly, I wish to inform the House that last week it was my intention to move an amendment at the second reading stage of this Bill, but procedurally that is not a practical course for the simple reason that my amendment would have to be contingent upon the amendment moved by the Deputy Leader of the Opposition (Mr. Whitlam) being accepted, and that does not seem to offer much in the way of realism. So, instead, I will later circulate 38 amendments to the Bill.

Having said that, I now enter a protest against the method by which the Government has handled the timetable of this Bill. I speak as of now. It is my understanding as of now, subject to correction - objective correction, I hope, and not what some person may or may not have in his mind - that it is the intention of the Government to proceed after the second reading stage right through and to finish debate on the Bill as far as this House is concerned. Only on Wednesday of last week this House and the people of the country were told of the amendments which the Government proposed to the Bill. I remind the AttorneyGeneral (Mr. Snedden) that on 4th November I wrote to him, giving him a list of suggested amendments, couched very much in broad form. I have not as yet received an acknowledgment of my letter. I take a very poor view of the Attorney-General of this country treating a private member of Parliament in such an off-handed way. This is a very complex measure. It is one of tremendous philosophical and economic importance. Even though there may be some people disposed to shun philosophical inquiry and to dismiss it as being of no consequence, I yet hope to show before the debate is concluded that there still exists something of a passion to have regard for the philosophical bases on which political parties rest.

The third preliminary comment I make is this: All of us in this place have something of a trepidation that we will be misunderstood or misrepresented. I want to make it perfectly clear that for my part I believe that social, political and economic excesses should be fettered with all the rigor of the law. I believe that no person should be at liberty to put others in danger or in jeopardy. Having said that, I believe that it is no answer to economic or social excesses to resort to other economic and social excesses in order to curb them. I would have hoped that the Government would have found favour with the idea of stiffening the Australian Industries Preservation Act. That Act has been shown by recent decisions to have an efficacy that was hitherto not suspected. I believe that Act would be quite sufficient to meet most of the problems that this measure seeks to meet. So I hope that nobody, political foe or political friend, will level against me the charge that I am in any way seeking to speak for vested interests or business interests of any description. I have no wealth. I do not know whether I am particularly interested in acquiring it. But I am vitally concerned with preserving intact as near as possible the philosophy that gave rise to the creation of the party to which I belong.

I attack the Bill on five grounds. They are: First, the manifest discretions given to the tribunal and to the Commissioner; secondly, the requirement of registration of agreements; thirdly, the uncertainty and width of definition reposing in clause 37, which is the clause dealing with monopolisation; fourthly, the uncertainty and absence of explicit meaning of public interest as found in clause 50; and fifthly, the absence of a proper system of appeal.

I turn to the first ground upon which I attack this Bill. It would be impossible to describe adequately and accurately the proposed tribunal. It is not enough to describe it as an administrative tribunal. It would be manifestly wrong to describe it as a judicial tribunal. In many respects it has a legislative character, as one realises if one pauses to reflect upon what the meaning of “ public interest “ has to be under clause 50 of the Bill. I acknowledge at once the tremendous difficulties that any Commonwealth Government or Commonwealth Parliament must find in legislating in this field because of the necessity to divorce completely administrative from judicial functions, but I invite honorable members of this House and also those outside the House to consider earnestly the tremendous powers that are given to this tribunal. Clause 52 (7.) says -

Orders of the Tribunal have the force of law.

Admittedly the actual enforcement process cannot be carried out by the tribunal, but nevertheless there are enough aspects of the character of the tribunal to make out at least a prime facie case that it is quasijudicial in nature. That is a rather inelegant phrase and possibly inapt, but it meets some of the perceptions I have of the tribunal.

But it is merely an administrative tribunal? It gathers to itself tremendous powers. This is a tribunal the like of which no statute of this Parliament has hitherto sought to create in terms of power and in terms of strength. The Tariff Board by contrast with it is as nothing. At least the reports of the Tariff Board are considered by the Government and can be ultimately rejected by this Parliament. But let no person be under any misapprehension about this tribunal. No determination that is made by it can be interfered with in any way by the Government or the Parliament. Clause 37 provides that the tribunal shall determine what shall be a part of Australia, “ if it is satisfied that it is appropriate to do so “ - and this brings me to the singular objection I have to this entire measure. I had taken the view until now that it was a well regarded principle of our constitutional history that the law should be explicit and that no person should be in any doubt as to its meaning. But I invite my friends to go through this Bill and look at the tremendous discretions that are given. We find such phrases as “ if it is satisfied “ and “ as it considers appropriate “, and this means that the proposed body is given power that is not trammelled by law, and power that is not trammelled by law makes law irrelevant. If there are those who are eager to hand over to a tribunal not responsible to this Parliament power to order the affairs and lives of people throughout the community, I do not share their enthusiasm, and I can assure them that I will offer all resistance against it.

Clause 37 sets out the form of the inquiry and the form of the determination to be made by the tribunal. The tribunal shall determine its own jurisdiction - “ if it is satisfied “, “ as it considers appropriate “. When it comes to the issuing of orders, under clause 52 the tribunal shall issue such orders as it thinks appropriate. When it comes to a question of referral of a point of law to a court the tribunal may do so, or it may do so, if it thinks fit, on behalf of another party - a form of legislative insolence without parallel in the Commonwealth of Australia. We will find people throughout this country saying, in the language of “ Measure for Measure “ - . . is it a lawful trade?

The answer given is -

If the law would allow it, Sir. . . . But the law will not allow it.

One finds that Shakespeare gave an almost phophetic and certainly an unerringly accurate account of this Bill and of the tribunal in particular when he wrote -

Bidding the law make curt’sy to their will.

That describes precisely the character of this tribunal. It makes the law and it makes the Jaw according to its own will, not according to objective criteria but to subjective criteria - “ as it thinks fit “, “ as it is satisfied “, “ as it considers appropriate “.

Some may say: “ This is a system of convenience; let it be so regarded “. But if we are to allow convenience to become the basis on which we order our society, let there by no complaint when liberty completely dries up. Convenience has always been the battle cry of governments, and now we are combined to amend that battlecry so that it shall be “ convenience with discretion “ - and these discretions that are given to the tribunal are discretions very difficult to be convovled. We have never bad, and our people have never had, any system of administrative courts. The droit administratif has been rejected by our people. The courts of law have always sought to control administrative tribunals, but the insertion of such phrases throughout the Bill as “if it is satisfied”, “as it considers appropriate “, “ m its opinion “ means in effect that when prerogative writs, clumsy as they may be, are resorted to for controlling the tribunal the possibility of a successful prosecution is reduced. Looking at the clause which makes provision for the retention of the prerogative writs of certiorari, prohibition and mandamus, I find rather an ugly piece of cynicism. It means that unless there is a manifest error in jurisdiction or law the courts cannot control it. The courts cannot replace the discretion of the tribunal with their own discretion. If an individual finds himself in the position in which he challenges a determination made by the tribunal and seeks to challenge that by way of proceedings by prerogative writ, his prospects are dim.

At least I think we should be grateful for the opportunity of being here to say hail and farewell to a sizeable portion of the legislative power and authority of this Parliament, of seeing that power and authority handed over to an administrative, quasi-judicial, in some respects legislative body not responsible to the Parliament.

I turn to the second ground on which I attack the Bill. I refer to the requirement that agreements should be registered. I submit that this is completely unnecessary. I submit that experience elsewhere in the world has shown that there are no gains, spectacular or otherwise, to be won by governments or administrations requiring agreements to be registered. I submit that the requirement of registration will mean the creation of a tremendous bureaucracy to administer it. Beyond that, however, I point to what I regard as a fundamental weakness in the requirement of registration, and that is the complete absence of certainty as to what should be required. I invite the House to look carefully at subclause (2.) of clause 91 which deals with the definition of “ agreement “. It says -

An arrangement or understanding, whether formal or informal and whether express or implied, shall be deemed to be an agreement.

I am looking forward to the Committee stages and to wringing from the AttorneyGeneral (Mr. Snedden) some examples of an informal, implied understanding - a collocation of words which seems to me at least to have a dominant quality of vagueness. It may be said that registration is a fact-finding process. That, in my submission, is of no help at all. If a man fails to register he faces a penalty. He has committed an offence. Again I say that I had believed until the advent of this Bill that when any question arose of the infliction of penalties under a statute there should at least be complete certainty as to what the statute meant. I propose to test the bona fides of the Government in the Committee stages by moving among my amendments an amendment to clause 43 of the Bill. This is the provision that requires registration and creates the offence of failure to register. I shall move an amendment to provide that it shall be a defence to a prosecution that the individual believed that on reasonable grounds there was no need for him to register. To point up the utter absurdity of this position I ask the House to look at the defences already available under clause 43. An individual may take the view that he did not know whether something was a registrable agreement or an examinable practice. He may go away and get legal advice on the matter. His legal advice might lead him to believe that it is not a registrable agreement, but that does not provide him with a defence if he is prosecuted under the Act. It puts the individual in a virtually impossible position. As I say, Sir, I will seek to modify the defences as far as clause 43 is concerned.

I turn to the third objection I have to this Bill. It relates to clause 37. With the greatest respect I submit that the Government does not quite understand all of the implications of clause 37, and I invite the AttorneyGeneral to lay on the table of this House his opinion as to its meaning, and also to lay on the table opinions prepared by counsel from the New South Wales bar, the Victorian bar and the Queensland bar as to the full implications of this clause. The honorable gentleman has never referred at any stage, and neither has any spokesman for the Government anywhere in Australia, to price control in relation to clause 37. 1 leave aside the question of monopoly. That is of the utmost significance but my time is rather short. I am concerned with the possibility of using clause 37 for price control. Before the Attorney-General gave notice of his amendments, the House will recall that the tribunal could, if it were satisfied, deal with any part of Australia in relation to any person who lay, stood or sat - whatever the appropriate word may be - in a dominant position in a line of trade. This again is determined by the tribunal if it is satisfied. The AttorneyGeneral has given notice that this part of the clause, or section as it will be, is not to be regarded otherwise than as applying to a State or a Territory inasmuch as the tribunal is satisfied or considers it appropriate. At first blush it might appear that “part of

Australia “ was projected out into meaning a State. I submit that that is not so, and that the ultimate discretion for this comes back to the tribunal. I propose to give the House some illustrations.

There can be no argument that the Broken Hill Pty. Co. Ltd. is in a dominant position in a line of trade in Australia. Suppose that the Commissioner took that company before the tribunal after having had consultations with it under clause 48. The tribunal could take the view that B.H.P. in selling 16-gauge steel for £70 a ton, was taking advantage of its dominant position in a line of trade, and it could make an order - again as it thought fit - under clause 52 that the company should sell its steel for £50 a ton. Admittedly you cannot do indirectly what you cannot do directly, but if there is anything which seems to my mind to be beyond Commonwealth power it is the reference made in clause 37.

Let me take an illustration affecting a State. I refer to the Toowoomba foundry which produces agricultural and irrigation equipment. In terms of a substantial area of the market, which is the requirement of clause 37 (1a.), there can be no argument at all because the Toowoomba foundry is the largest producer of windmills in the whole world. If the tribunal adjudged the those items should be sold not for £125 but for £75, again it could make an order under clause 52. That again is an example of price control. It is of no avail for anybody to protest that that is not likely to happen. I am interested in what can happen; likelihood is another irrelevancy. One should be concerned with the possibility that this clause may be used by people who have access to this sort of machinery.

Let me give the House another illustration of a “ part of Australia “ in terms of this provision. It so happens that the little town of Ilfracombe, in central western Queensland, which has no more than 300 people has a wool scour. In terms of a substantial market that wool scour would handle virtually the whole of -.he wool scouring business for central western Queensland. It would be intelligible for the tribunal to come along and say in effect: “ We propose to make a determination that whereas hitherto you have scoured wool for 6id. per lb., you will in future scour it for 5d. a lb.”. What if the tribunal turned its attention to the advertising rates of the “ Sydney Morning Herald “ or the Brisbane “ Courier-Mail “? It could say to one of these newspapers: “You will reduce your advertising rate from 20s., or whatever it may be, a square inch to X shillings “. That would be quite within its power. For the life of me I have not been encouraged by anything that has been said or written by the AttorneyGeneral or anybody else to persuade me to conclude that clause 37, as it is presently formed, could not be used for a form of price control. I submit that it comes within that power.

I turn to the fourth ground on which I attack this Bill and that is the vagueness and uncertainty of the definition of public interest as it is found in clause 50. Honorable gentlemen will remember that clause 50 recites what could quite properly be described as a collection of political and economic slogans, and even the corporate wisdom of the Cabinet would not suffice to secure unanimity as to what the various phrases and slogans mean. If those of us in this House were to sit down and write in one paragraph what we understood as being the requirements of new business, of capital or labour, or one of the multitude of other things that are set out there, we would find no similarity whatsoever. Yet this is to be, in effect, delegation to the tribunal of what may not unreasonably be described as the legislative powers of this Parliament. We are in a very real sense putting the entire economic structure of this country into the hands of a tribunal which is not responsible to this Parliament. I leave the matter at that, but in the Committee stages I shall endeavour to excite a little more interest in clause 50 than has been shown so far.

Fifthly and finally I turn to the question of appeals. I had thought until this Bill was introduced that as far as administrative tribunals were concerned it was always right and proper that there should be an appellate system at least to another tribunal. As far as the question of law is concerned certainly there should be power to refer such questions to a court of law. These were conclusions reached as far back as 1932 by the Donoughmore Committee reporting in the United Kingdom. These conclusions were reached also by the Franks Committee reporting in 1957 on administrative decisions. There was on those Committees a galaxy of legal and administrative talent that would dwarf anything we have to offer in this country. Their reports set out in plain, simple, straightforward language the necessity to provide for an appeal to another tribunal. Certainly on a question involving a point of law provision should be made for an appeal to a court of law. What is in this Bill? We find an utter caricature of the system of appeal. If the review division wants to make any variation of a determination that has been made, it cannot do so. If it wants to reverse a determination that has been made then it cannot. It means, in effect, that an individual can go before the tribunal, win, at first instance, and the Commissioner has the right of appeal, so called. He can take the individual to the review division. If you happen to be the party concerned in the first instance then I do not think you will be very amused by the prospects of facing additional costs. Prohibition, in my opinion, would not lie. This is nothing more nor less than an advisory body. When it comes to a question of law the tribunal may have gone completely haywire, but can the party affected by that point of law have it referred to a court? No, it cannot. That party can only have it referred if the tribunal thinks fit. Why is that discretion given to the tribunal? I think that the appeal provisions within the Bill are completely unsatisfactory and at least the provisions for an appeal on a point of law to a court of law should be modified. For my part I will endeavour to see that they are modified.

Finally, may I say that there are those who take the view that this Bill is lacking in force. I do not share that view. I want to give an illustration of what can happen. The Commissioner, under clause 47, by virtue of information obtained from the register or any other source - it can come from anywhere at all and can be hearsay on hearsay - can go along to an individual and say: “You have a registrable agreement.” The individual may protest and say that that is not the case and that he is engaged in an examinable practice. But he is fined. He has committed an offence under section 43.

Then the tribunal steps in and says: “We propose to make an order that you shall do so and so.” Bear in mind the tremendous reservoirs of power given to the Commissioner under clauses 103 and 104 of this Bill which enable the Commissioner to go along, seize documents, impound documents, and do what he will with them. Such action is not excluded by the provisions of clause 48 relating to consultations. That is another condition I shall seek to remedy.

I regret that the Government, in trying to meet what I might describe as a political, economical and social weakness in the Australian community, has fallen on this form of legislation. I despise it heartily because it seems to me to represent the very quintessence of discretional power given to a tribunal not responsible to this Parliament. I have always taken the view that at least we should not seek to put people in peril of uncertainty of our statutes but that every individual, whether he agrees or disagrees with the law, should be put in a position to know what the law is, even though there may be some who would not agree. I think the following words of Kipling still hold good; -

Ancient right unnoticed as the breath we draw-

Leave to live by no man’s leave,

Underneath the law.

If the tendency today is to take us away from that principle, then I say to the Attorney-General and to the Government that there is yet spirit abroad in the community to bring us back to it.

Mr DALY:
Grayndler

.- Mr. Deputy Speaker, I support the amendment to the Trade Practices Bill and I propose to reserve my remarks on the speech of the honorable member for Moreton (Mr. Killen) until later in the course of my address. Speeches made so far by Government supporters in this debate clearly indicate that on this legislation they are following the theory that open confession is good for the soul. We on this side of the House have been almost bewildered by the variety, velocity and fear with which Government members have opposed the legislation which we were given to believe is Government policy, introduced after five years deliberation with the full support of honorable members opposite. With this introduction to the Bill in mind, I propose to be completely frank with the House and deal with the political implications of this measure, and with the reasons why the reluctant heroes of free enterprise opposite show such concern at its provisions. As a matter of fact, I feel a little sorry for the Attorney-General (Mr. Snedden) today. He has put up with so much from people who are supposed to be supporters of the Government that I thought I would recall, not in a nasty way, but from my files of the past, a statement made by the present Prime Minister (Sir Robert Menzies) as reported in the Sydney “Daily Telegraph” of 18th October 1945 in an address to the New South Wales division of the Liberal Party. He said - the Liberal Party’s greatest undertaking was to get candidates of the highest qualifications. The Liberal Party was still handicapped by “ doubtful supporters” and “appalling half-wits”, who thought they would make better leaders of the Party than those at present in office.

Well, honorable members can take their choice today. There are certainly a lot of very doubtful Government supporters all of whom, from reports I have heard today, feel that they could improve on the efforts of the Attorney-General, particularly with this measure.

The Government has brought down this legislation following the Governor-General’s Speech of 1960 when he said that restrictive trade practices legislation would be introduced. As the Deputy Leader of the Opposition (Mr. Whitlam) said in a very fine speech, the Government was forced into this action by the recommendations of the Joint Committee for Constitutional Review in 1958 and 1959. Since that date the Government has had this Bill smouldering, as it were, because it was not prepared, evidently, to do anything to offend the wealthy supporters behind it. Now that it has been introduced one would think that the Government has brought in some new nation shattering legislation - the only bill of its kind that has ever been introduced in a democratic parliament. I am indebted to the honorable member for Cunningham (Mr. Connor) who showed that nothing is further from the truth than the statement that this is revolutionary legislation. The honorable member for Cunningham said -

The earliest records of restrictive trade practices - that is, price rigging - date back to the year 3,000 B.C. In Egypt, in India, in order to control price rigging, decrees existed prior to the Christian era, and in Rome legislation was introduced in the Fifth Century A.D.

So the Government is moving slowly aloto what they did in those days. As the honorable member for Cunningham also pointed out, the earliest’ English legislation was in the Statute of Monopolies of 1624 and the Canadian 1899 Combines Investigation Act. In the United States of America in 1890 there was the Sherman Act and the Clayton Act, the Federal Trade Commission Act and the Robertson Patman Act. Restrictive trade practices legislation has been enacted in Denmark, France, Holland, Japan, Norway, Sweden and West Germany. In 1948 the United Kingdom passed the Monopolies Restrictive Practices Inquiry and Control Act. In 1956 it passed the Restrictive Practices Act. In 1959 New Zealand followed suit. In 1964 there was the Resale Prices Act and in 1965 there was the Mergers Act. Even in Australia in 1906 there was the Australian Industries Preservation Act which placed certain limitations on restrictive practices but the strong points of which have been repealed by this Government in this legislation. So the Government is 50 years behind the times. To hear the honorable member for Moreton and other honorable members one would think it was one of the most revolutionary pieces of legislation introduced in our time.

There may be doubts in the minds of some people as to how the sections of this Bill which give it force will operate. It is significant that the Government has proposed the repeal of section 4 of the Australian Industries Preservation Act. It has truly been stated that that may be regarded as a false move until such time as the Government is sure that this Bill will stand the test in the Courts and other places and is shown to serve the purposes for which it was intended. Briefly, we can say that belatedly, reluctantly and in the face of severe opposition from its own supporters who realised the threat to those who adopt methods of malpractice and restrictive trade practice in industry, the Government has introduced this measure. But what has happened, even after five years of deliberation? The Attorney-General has circulated 49 amendments and the honorable member for Moreton, who has just sat down, said that he had written out 38 amendments of his own in order to make certain that everything that had to be covered was ng covered. Even at this stage, the Government is only reluctantly introducing this legislation because it feels that there is no way of escaping its responsibilities.

I want to ask a few important national questions about the attitude of the Government towards this legislation. People are entitled to ask: Is the Government as united as Press reports suggest it is? The debate on the legislation now before us has highlighted the bitter internal dissension and differences that exist between Government supporters on policy matters of national significance. Only a few moments ago, when a member of the Liberal Party was discussing the legislation, I noticed that members of the Australian Country Party kept out of the chamber, although the Australian Country Party seems to be strongly in favour of the legislation. It is significant that during the course of the debate one of the few Government supporters to give unqualified support to the legislation was the Minister for Social Services (Mr. Sinclair), who is a member of the Australian Country Party. He realises the dangers of restrictive trade practices, particularly to people who engage in primary production. The people of Australia might well ask whether the Government parties are united in their approach to great national problems. In order to refresh the memories of honorable members I make a brief and passing reference to the debate on the wool reserve prices referendum legislation. We then- had the undignified spectacle of a parliamentary dogfight between those honorable members opposite who support the scheme and those who oppose it. It really hurt me to see such an attitude adopted by members of so-called united parties. We saw members of the-

Mr DEPUTY SPEAKER (Mr Drury:
RYAN, QUEENSLAND

– Order! The honorable member cannot refer to legislation that has already been through the House during this session.

Mr DALY:

– I bow to your ruling, Mr. Deputy Speaker. I was making a passing reference to an incident that I know must have hurt you as it hurt other honorable members. They were unpleasant events to occur in this Parliament amongst members of a united party. I make this passing reference to show that what is happening in this debate is not a new occurrence. In another place we have what we might call the twelve apostles who have rebelled against the Government and who have said they will reject legislation. This is the united party that asks the people to support it.

I will now come to the legislation before the House. Is it Government policy to introduce this legislation or is it not? The honorable member for Parkes (Mr. Hughes) says it is, and for once I would say he is right. But I find it difficult to make a decision about the legislation on the basis of speeches that have been made by honorable members on the Government side. Let us look briefly at the views of honorable members opposite who have spoken in this debate. Until today, 11 Government speakers had taken part in the debate. Only five supported the measure, two had grave reservations about it and four expressed outright opposition to it. In other words, at this stage the Government has been unable to present a majority of speakers who will support the legislation in the Parliament. I looked at the title of the Bill and wondered why honorable members opposite would not support it. The title of the Bill is -

A Bill for an Act to preserve Competition in Australian Trade and Commerce to the extent required by the Public Interest.

Phraseology of that kind ought to gladden the heart of every Liberal in the country. The Bill is supposed to support free enterprise and open competition, and may the best man win. That should appeal to every member of the Liberal Party, but we find that Government supporters apparently are not behind the legislation. Everyone here knows that the Prime Minister (Sir Robert Menzies) has bulldozed the legislation through the party room and the honorable members opposite who want to introduce so many amendments probably did not know what was in the Bill before it came to the Parliament. So we have disunity on a measure that is meant to do no more than give justice to people all over the country. Why will not members of the Government parties support the policy of the Liberal Party on this matter? Why will not members of the Government parties unitedly speak in support of the Bill? This is evidently the policy of the Liberal Party.

I can remember the speech of the honorable member for Henty (Mr. Fox), because he is about the only member of the Liberal Party who fully supported the Bill. He said -

It is obvious to anyone who has listened to the speeches made last night and this morning, particularly the speech of the honorable member for Balaclava, . . . that any objection to the introduction of restrictive practices legislation comes from this side of the House. I am aware that quite a number of my colleagues hold the view that legislation of this nature is in conflict with the principles for which the Government parties stand.

Then, in a most effective way, the honorable member for Henty went on -

The official platform of the Liberal Party includes the following planks -

The preservation of a competitive free enterprise economy.

The prevention of injury to Australian industries through unfair trading methods.

The encouragement, fostering and protection of small businessmen.

Those principles have been embodied in the platform of the Liberal Party since its foundation just over 21 years ago, and for the last 16 of those 21 years the Liberal Party has been elected to office on those very principles.

He then went on to say that the Prime Minister, in the policy speech that he delivered prior to the last general election, gave an understanding that this legislation would be introduced. He said -

On that policy speech, this Government was returned to office with a greatly increased majority.

So this is the policy of the Liberal Party, but only half the members of that party in the Parliament are now prepared to support it. If ever a member of the Ministry has been subjected to a bitter attack by members of his own party for introducing legislation to support the policy of his party, it is the Attorney-General. I mention these matters so that the House will know that disunity exists in the Government parties.

Honorable members must have been amazed at the speech of the honorable member for Balaclava (Mr. Whittorn). Probably no more bitter attack has ever been levelled at the Government by one of its own supporters than was levelled by the honorable member in his speech. He said -

Let me tell the House, in terms as strong as I can use, that I object to this legislation. I object to it because, in my view, it opens up the way for unjustifiable intrusion into the normal business affairs of secondary industry . . ,

He added - by introducing this oppressive legislation which will serve no good purpose for the economy of Australia.

He also said -

They want us to use a sledgehammer to frighten industry and commerce into submission.

I say that this Bill will serve no useful purpose in protecting the public interest.

He continued -

This measure, I feel, is an intrusion into the affairs of private enterprise . . .

He also said -

I share the doubts of all the doubters.

Not one word of support of this legislation, even in passing, can be found in his speech. He made this point -

Businesses know best what is good for themselves and for the community at large.

What a strange contribution that was. He went on to say -

From the point of view of public benefit, the working man has never had it better than he has as a result of private enterprise on the one hand and the business activity of private enterprise on the other hand.

He added -

I object to the legislation because of its high costs to the community, because of its high cost to the little man, and because it will inflict high cost on the Australian worker

That was an unapologetic pronouncement in favour of the exploitation by industry, of high prices, monopoly control and restrictive practices of the worst kind. He said that the working man has never had it better. He seems to forget that 750,000 workers today have an income of less than £20 a week and that 1.9 million taxpayers have less than the basic wage. If he had watched “ Four Corners “, last weekend a television programme produced by the Australian Broadcasting Commission, he would have seen that many people are living in abject poverty at this time. But the honorable member says that they have never had it better. Perhaps the honorable member would suggest that the pensioners who receive £7 a wek have never had it better than they have under this Government, which seeks to support the people who exploit pensioners. Basic wage earners all over the country, who receive only £15 8s. a week, may take little solace from the fact that the honorable member for Balaclava, who represents huge interests, says that they have never had it better.

The honorable member for Isaacs (Mr. Haworth), who is now in the Chair, said -

I oppose the amendment moved by the Deputy Leader of the Opposition . . . but I lake a critical view of the Bill.

Let me read the opinion that the honorable member for Isaacs publicly expresses about the Attorney-General. We are expected to respect the Attorney-General, because he is supposed to be a man of capacity. The honorable member for Isaacs said -

The Attorney-General will forgive me when I say I believe that in his opening remarks, when establishing the grounds for this new field of law that he is creating, he did this House less than justice. If he seriously believes that he can bustle Australia into a kind of legal straitjacket by offering the type of analysis that he placed before this House, he must hold us in contempt. In fact, it seems to me that he has put Australian business and industry into the dock in a very rough type of court and is prepared to call them guilty before he can even say “monopoly”.

In other words, the honorable member accused the Attorney-General of using this legislation to create a kangaroo court. What a shocking state of affairs we have when a Government supporter makes that kind of criticism of this measure. The honorable member went on to say -

There is too much deception involved - too much by far, if I may stress the point.

I remember you, Sir, in your dignified way saying that. You said also -

I believe that this will be cumbersome, unwieldy, over elaborate and, to say the least, over expensive.

You made a very strong speech, Mr. Deputy Speaker. You stated also -

This approach, Sir, I find rather impertinent and obnoxious, for three reasons - one of principle, one of administration and one pragmatic.

This was the attitude of the honorable member to the Attorney-General, who brought down this measure. It is hardly very complimentary to the spirit of unity that is supposed to prevail. I mention these matters to show the great lack of unity that exists in the ranks of Government supporters with respect to this Bill. The honorable member for McMillan (Mr. Buchanan) said -

I completely fail to see any justification for the proposals now before the House.

He stated that certain people, having read the literature available, having studied the Bill and having listened to the AttorneyGeneral addressing meetings, still were unable to understand what this Bill was about. The honorable member went on to make this observation - the Australian Industries Preservation Act should be strengthened to meet such contingencies and particular practices could be examined by a court in a proper manner.

He said also -

I submit that a young, progressive and growing country just cannot afford the luxury of this legislation.

Those are pretty tough words coming from Government supporters who have had five years to think over the matter.

I turn now to the views expressed by the honorable member for Sturt (Mr. Wilson). He stated -

When the former Attorney-General delivered a statement in this House on the proposed legislation dealing with restrictive trade practices, as they were then called, I had to inform him that I could not support the legislation because it was too comprehensive.

The honorable gentleman who proposed that comprehensive legislation has now been elevated to a higher place as Chief Justice of the High Court of Australia. He spoke with the best of motives and ideals, but he was removed from this Parliament to that distinguished office because the legislation that he proposed to introduce would have been effective. The honorable member for Sturt went on to say -

Therefore, I support the Bill, but I urge the Attorney-General to give consideration to what I believe is its great weakness - the compulsory registration of all agreements whether or not they are contrary to the public interest.

What a statement for the honorable member to make. He has reservations. Then we come to the honorable member for Mackellar (Mr. Wentworth), who knows everything about everything generally. He said - . though I support this legislation I have grave disquiet about it … I think the objective of the legislation is good and, in fact, that the introduction of some legislation is necessary, but I an not prepared to say that I have no doubts. I am not happy about the framework or the details of the Bill . . .

He may find a Communist plot somewhere before the Bill passes the Committee stage. The honorable member added -

I sympathise with the Government in its difficulties-

He is one, of course - without being altogether happy about the solution that it has placed before us.

I ask you, Mr. Deputy Speaker: In view of these comments by Government supporters, where did this legislation come from? Was it ever debated in the party room or the caucus of the Government parties? Did those honorable members whose comments I have read to the House express their views in the party room? In view of the fact that a minority of the Government supporters who have spoken support the Bill, we are led to ask: Was it approved by a majority in the party room? If there is majority rule in the ranks of the Government parties, the statements made by these honorable members in this House show either that they are disloyal to party decisions or at least that they did not know what the measure was about. From where does the opposition to it come? It comes mainly from Victoria where the citadel of big business stands, with financial and monopoly control. With the exception of the honorable member for Moreton (Mr. Killen) and the honorable member for Sturt, the Government supporters who have opposed the Bill represent Victorian electorates. The honorable member for Moreton, in a bitter attack on the measure, said that he took a very poor view of the Attorney-General’s treatment of members of the Parliament in what he described as “this offhand way”. The honorable member stated that he proposed to test the bona fides of the Government on certain matters in Committee. In his unrestrained language, he said that he was frightened by the possibilities of this Bill. He added his views to those of his colleagues which I have already outlined.

Government supporters have attempted to put up a facade. They claim that they are independent and may vote and talk as they like. They will have plenty of opportunity to do so in the consideration of this measure in this chamber. They can support the Opposition’s amendment if they really wish to establish that they expressed what was in their hearts and minds by speaking as they have done. Honorable members opposite, in speaking against this Bill, have responded to the demands of their political masters. In 1949, with the assistance of all the money that the private banks could muster, they were put into office. They came here under false colours to advance false doctrines. They have now been forced, after five years of delay, to put the views of those who control them. The public knows now, without doubt, where the control of this Government lies. Many honorable members opposite are opposed to even minor amendments of this measure, as they were opposed to the proposals of the former Attorney-General. They do not speak in this Parliament for the people who elected them as their representatives and for the shopkeepers and small businessmen. Instead they speak for the big business interests. Mr. Deputy Speaker, how can we expect a party that represents monopoly, big business and the financial interests to introduce effective control of money and wealth even though the Government implies that this will be done? I say again: How will honorable members opposite vote? Do they stand on the side of the Attorney-General who seeks to control only in a very limited way malpractices and exploitation of the poor, the sick, the needy, the wage earners and others or do they stand for big business interests that back them? I suggest that Government supporters should speak on this issue and vote for what is right when this measure is ultimately put to the test.

This measure fails in many ways. I see in it nothing for big business to be fearful about. This is just a half baked measure. For example, it will not control the strange form of competition - or lack of it - that exists between Trans-Australia Airlines and Ansett-A.N.A. One is a government airline, but both are actually financed by this Government and we are told that they are in competition. They operate to the same timetables, use the same types of planes and charge the same fares. Everything about them is similar. This Bill specifically excludes that area of operations. My good friends who sit in the Australian Country Party corner will not have margarine in competition with butter under this free enterprise Government. This Bill specifically exempts from control that type of monopoly activity. Members of the Country Party smile and support this elimination of competition between T.A.A. and Ansett-A.N.A. and between margarine and butter. They support the elimination of competition in all kinds of other fields. These people who claim that they support free enterprise and free competition will not interfere with the trade associations which exist and which restrict the entry of people into certain industries. They deny men and women the opportunity to go into various sections of industry from which they are at present excluded by a variety of means. Had this legislation followed in its entirety the pattern set by Sir Garfield Barwick, who was prompted by the highest motives in moving against exploitation of the people, a much more effective measure would have been introduced.

Mr Stewart:

– Does the honorable member think that this was why the former Attorney-General was sacked?

Mr DALY:

-I believe that there are more than passing reasons why he was disposed of. One can see this if one reads the speech made on Sir Garfield Barwick’s behalf by the present Minister for Shipping and Transport (Mr. Freeth) at a time when the former Attorney-General was absent from Australia and when the Prime Minister torpedoed the former Attorney-General’s proposals. The Minister for Shipping and Transport, in that speech, outlined proposals which, had they been given effect, would have been of tremendous importance in this field of restrictive trade practices. But those proposals have now gone by the board.

One could go further and mention the field of shipping. No section of the Australian community is more exploited than primary producers and exporters are exploited by the overseas shipping companies. Yet this measure excludes thatfield of activity from control. There is to be no control over the overseas shipping companies. I have here a copy of a form of agreement between shippers and overseas shipowners. It is in these terms -

On behalf of each of the following companies and firms (hereinafter referred to as the Shipowners) namely: -

Peninsular & Oriental Steam Navigation Co.

  1. & O. Branch Service.

British India Steam Navigation Co. Ltd.

Federal Steam Navigation Co. Ltd.

Orient Steam Navigation Co. Ltd.

Australind Steam Shipping Co. Ltd.

Shaw Savill & Albion Co. Ltd.

The Aberdeen & Commonwealth Line Ltd. (Geo. Thompson & Co. Ltd., Managers).

Port Line Ltd.

Alfred Holt & Co.

Clan Line Steamers Ltd.

Scottish Shire Line Ltd.

Ellerman & Bucknall Steamship Co. Ltd.

Blue Star Line Limited.

Holland Australie Lijn

Wilh. Wilhemsen (Norwegian Australia Line).

Rederiaktiebolaget Transatlantic.

Compagnie Des Messageries Maritimes.

East Asiatic Co. Ltd.

Lloyd Triestino Societa Per Azioni Di Navigazione.

Norddeutscher Lloyd.

Hamburg Amerika Linie. being companies and firms loading vessels from ports in the Commonwealth of Australia to the United Kingdom and/ or Continent of Europe on the one part . . .

The shippers are the other party to the agreement, which ties them body and soul to these firms that control the world’s shipping services. This legislation, if anything, allows them to escape their responsibility. I suggest to the Minister that by that provision alone the Government is throwing overboard the protection that should be given to the Australian primary producers and exporters. The situation is so grave that even the Treasurer (Mr. Harold Holt), antiSocialist as he says he is, has advocated the establishment of an Australian shipping line. If that is not scraping the bottom of the old Liberal free enterprise barrel, I do not know what is. But the people to whom I have referred escape this legislation because they are powerful enterprises and powerful combines.

Having outlined to the House the differences that exist between this and the other legislation and the complete failure of the Government to give effect to the full programme that we should have had in respect of restrictive trade practices, I express my regret that Government supporters, even on this minor Bill, could not show a united front in the face of the fierce opposition to the general welfare of the people of Australia. After five long years the Government has ultimately introduced to the House this doubtful legislation which was promised so long ago by the former Attorney-General who has now been elevated to a higher place. The legislation is far from satisfactory. It represents only a very timid and fearful approach to the problem. It has little support or enthusiasm on the Government side because it conflicts with the interests of the huge financial concerns that send honorable members opposite to government. It might be termed legislation that appears to be ruthless yet is toothless and may well prove to be useless. The criticism by the Opposition is soundly based and the amendment moved is an endeavour to give some substance to this creaky legislation. I support the amendment.

Mr KELLY:
Wakefield

.- In order to set the little mind of the honorable member for Grayndler (Mr. Daly) at rest I shall state immediately that I wholeheartedly support the Bill. This has been a queer kind of debate. It is true that most of the criticism has come from this side of the House. The Opposition has given the Bill what might be termed lukewarm support, but most of the vocal opposition has come from this side of the chamber. An interesting point has been brought up. Liberal members who have spoken against the measure have said that it is an interference with our liberty, particularly in its provision related to registration. I suppose that it is an interference, in a way. I have a shotgun at home and I have not used it or abused it - I have not shot anybody - for some considerable time, but I still have to register it. I suppose that is an interference with my liberty. Although I have to register the gun, I think it is a perfectly proper way to behave. I suppose that traffic laws are an interference with our liberty. Those who feel strongly about it are at liberty to go onto the streets of Canberra and refuse to give way to people on their right. They will have liberty while they have life, which would probably be for an hour or two. Surely we must accept the general principle that we must have this kind of law if it is in the public interest. This is what the registration of shotguns means, and it is also what the traffic laws mean.

Another criticism of the legislation was that we have primary industry orderly marketing schemes. People say that if we have orderly marketing schemes for primary industry we should have them also for secondary industry. I repeat what so many other speakers have said, that the keystone of this legislation is surely that the practices must be against the public good. I have been in this House for many years and I have never heard a proponent of this proposition put forward the idea that orderly marketing legislation is against the public good. Obviously, if they were not cowardly people and they thought it was against the public good they would have said so. If they have not said so, we must assume that they thought the legislation was for the public good and, therefore, should have the support of the Parliament.

One of the disturbing features about the need for this legislation is the absence of public clamour for it. It is true that there have not been indignation meetings throughout the country, although I will admit that primary industry groups have been very assiduous and vocal in pressing for the legislation. But generally we must accept that there has not been general public clamour for it. Why is this? In my opinion, there are two reasons. The first is that the general public does not know what is going on. The other reason is that a great many people who do know what is going on are frightened to say so for reasons which I shall spell out a little later. Do we have restrictive trade practices? If so, are they worth worrying about. Have we a problem on our plates? Some people say we have, and some honorable members on this side of the chamber say we have not. Let us spell out some of the practices that we know exist. They were spelt out in Sir Garfield Barwick’s publication “ Australian Proposals for Legislation for the Control of Restrictive Trade Practices and Monopolies “, and in rather admirable detail in the 1965 report of the Royal Commissioner on Prices and Restrictive Trade Practices in Tasmania, known as the Grant Commission.

With the usual morbid interest that I have in Tariff Board reports, I have been interested to get some quotations from the reports to show definitely that these practices exist. It has been said that we should have a public inquiry to find out whether the practices do exist. We all know that they exist. There has been plenty of documentation to show that the practices exist and I intend to bring out a bit more. The report of the Tariff Board on rubber belting in May 1964 stated at page 6 -

At the previous inquiry on belting, the Board’s attention was invited to the lack of competition between Australian belting manufacturers. The practice of submitting identical prices has continued and it is apparent that Australian manufacturers are determined to maintain a system of price fixing that prima facie is at a level which would be profitable for the least efficient manufacturer.

At page 14 of the same report the Board said -

In addition, manufacturers have persisted with level tendering and maintained local prices at a level generally higher than would result if prices tendered were related to the costs of individual manufacturers.

There does not seem to be any doubt in the view of the Tariff Board that this kind of practice exists. We want to know whether it is in the public interest. If anyone can say that it is a good thing to have collusive tendering and level prices on rubber belting and essential tools of trade I would be interested to hear him say so. Does this happen? This is the kind of thing in which I am interested. Do we have a problem? I refer next to the Tariff Board report on pipe fittings in October 1963 in which the Board said -

Locally manufactured fittings are sold through Malleable Pipe Fittings1 Associations in each State. Major member distributors purchase at fixed list prices less 30 per cent. British fittings are also sold at local list prices less 30 per cent. Japanese fittings are supplied to State distributors at Australian list prices less SO per cent., but there is no evidence that this has resulted in cheaper prices to the ultimate consumers.

I repeat that it is not my finding that the restrictive practice exists; it is a finding of the Tariff Board. We have been told by implication that this practice is in the public interest. I buy an alarming number of pipe fittings each year. I find it difficult to assess the advantage of having to pay increased prices for pipe fittings. I turn next to the Tariff Board report of June 1964 on ball bearings. The Board said at page 9 of this report -

The member companies of the “Bearing Distributors’’ Association” said that they had an informal agreement on list prices and discounts off list prices to be given to the several categories of bearing customers . . .

So the Tariff Board thinks that these practices exist. I am not in a position to argue with the Board. I take its word for it. We know that the Wholesale Automotive Suppliers and Parts Association merchants admit quite freely that they have an association which restricts entry. They say that this is a good thing, that they have got to have orderly marketing. I do. not know whether they mention it in quotation marks, but they do say it is justifiable because it makes for orderly marketing. All I know is that this is the kind of thing that leads them, I presume, to ask for a 45 per cent, duty on bearings in order that they may may jack the price up higher. If they can eliminate outside competition they are indeed on the pig’s back, as it were.

I am glad to see the Minister for the Army (Dr. Forbes) in the House, because when he adorned the back bench he made a speech in this House which I think should be read by everybody. It related to paper. On 14th August 1963, he spelt out very clearly indeed the practice adopted by Australian Paper Manufacturers Limited with relation to paperboard used for making cartons. That company promised a discount of Ti per cent, to all carton manufacturers who would guarantee to buy only A.M.P. paperboard for their cartons. That does not seem very much. We also know that if a manufacturer’s cartons are exported for packing export goods he can obtain a drawback of duty on imported carton board. I understand that the duty is about £34 a ton. That drawback is a considerable advantage, and I could not understand why the carton manufacturers were not making use of it. This was also exercising the mind of the honorable member for Barker. It is an interesting picture. Based on 1963 figures, it would seem that the value of paperboard used in the manufacture of a carton which cold at 2s. was ls. 8d. This left the manufacturer a margin of 4d. If he lost 7i per cent, on every 4d. worth of board, he in fact lost Hd. of his 4d. margin. It was quite clear, therefore, that most of the carton manufacturers were interested mainly in producing for the local market, and as only a comparatively small amount of their production went overseas, they just could not use this drawback provision. If they did, they would lose a discount of 7i per cent, on all the cartons produced for the local market and this would put them in an impossible position.

Let me go on with the paper story. On 14th August I, too, spelled out the practice being adopted by A.P.M. with relation to sack craft and paper bag agreements. The company did not deny what I had said. Indeed, in my case I quoted from the evidence given by Mr. Wilson, the General

Manager of A.P.M. I pointed out that he said to the Chairman of the Tariff Board: “ Yes, this happens. We do not deny that it happens.” I pointed out to the House, too, that paper which is used for wrapping is sold for £155 a ton, yet exactly the same quality paper, if used for marking large paper bags, is sold for £143 a ton. This means, in effect, that A.P.M. is controlling the end use of its product. It does not deny that. This company says that that is in the public interest. I just do not think it is.

Let me refer to other Tariff Board reports. For example, in its reports on dentist chairs, motor vehicle propellor shaft assemblies and ceramic tiles, all of which were submitted in 1963, the Tariff Board spells out clearly the kind of problem we have on our plate. It also mentioned it in its report with relation to weedicides, but I am not sure of the year in which that report was submitted. In September 1964, I myself spelt out the restrictive trade practice which was operating in the baling twine field. I told of a battling merchant in my area who was selling about 50 tons of baling twine a year. I do not think he will sell that much this year, due to drought. He was selling it at £8 a bale. He was told by the Association which controls baling twine that he had to charge £8 17s. 6d. a bale. He replied: “ That is a funny way to go on. I want my farmer clients to get it cheaply. I will see whether I can import it.” The Association said: “ It is not so easy as that. As soon as. you start that kind of thing we will be round to have it stopped.” The Association does not say that this does not go on. It quite openly admits the practice, but says that it has to be done because it makes for orderly marketing. When I saw the Association last there was still no denial of the practice. There may have been some alteration since this legislation appeared over the hill, or round the corner, but it was certainly in existence at the time when I spoke to the association. I repeat, the association says that it is desirable to behave in that way.

Let me spell it out a bit more clearly. Sometimes it is better to get down from general principles to one particular case. I shall follow this case through, using it as an example of the kind of thing that goes on and which is not denied. When I have concluded my story I shall ask the House whether such a practice is in the public interest. I refer to the case of a young friend of mine named John Robertson. He appeared recently in the “ Four Corners “ television programme. I shall spell out the position as clearly as I can. I have checked everything as far as I possibly could and I shall spell it out as an example of how enterprising, efficient manufacturers, particularly if they are small, can be - I shall not say “ ruined “-

Mr Cope:

– Swallowed up.

Mr KELLY:

– Yes, swallowed. That is the word. This man John Robertson contracted to buy instant start ballasts. When he came to me I did not know what instant start ballasts were. Evidently they are little gadgets which are placed in fluorescent lights to make them light instantly when the power is switched on. I do not know why he wanted to buy them, but he was encouraged by Philips Electrical Industries Pty. Ltd. to do so. This company said: “ You buy them. We will sell you a number of them at a very good price.” He went to considerable trouble and expense and set to work making up his fluorescent lights. He contracted with Philips Electrical Industries Pty. Ltd. to buy a number of these instant start ballasts. Then a ballast ring was formed and all prices were increased by 45 per cent, in one day. Indeed, Robertson got four letters from different companies on the same day telling him that the price was increased. I do not ask honorable members to take my word for this. I shall quote from the judgment given by Mr. Justice Travers in the case “John Robertson & Company Ltd. v. Philips Electrical Industries Pty. Ltd.”. Amongst other things, His Honour said -

On about 17th November 1961 Mr. Robertson was on a trip interstate, and he learned of an impending price ring agreement between manufacturers of ballasts.

Later in his judgment, Mr. Justice Travers said -

Defendant from then on did not supply plaintiff with ballasts at the prices agreed, and defendant refused to do so. It would appear that they were pressed by a price ring into this situation.

I repeat that I am not asking the House to accept my word for it that there was a price ring. Mr. Justice Travers evidently thought there was one. I had confirmation of the fact that there was a price ring only yesterday when 1 rang Mr. B. C. Josephs of

Soltra Pty. Ltd. in Melbourne. Mr. Josephs confirmed what I had learned from other sources. He confirmed that he was advised first to join the ballast ring and then he was more or less ordered to do so, that he had been threatened that if he did not join the ring then the ring would fix him. Four months later, in a completely indirect and irregular way, he found out that, by some queer quirk of fate, the standard imposed by the electrical authorities and the Victorian Branch of the Standards Association of Australia were to be altered in such a way as to make his product illegal. He went to his member of Parliament and to his solicitor and was able to get it stopped. I recount this as his experience of what would have happened to him - and it nearly did - if he had stood out against the ring. Let us examine the Robertson case further. It may be suggested that he ought to have imported the goods if he could not get them locally, but this is not easy. Mr. Robertson wrote to the Matsushita Electric Trading Co. Ltd. of Japan seeking its fluorescent tubes. He received the following reply-

We, however, regret to inform you that as you know probably, we have a technical collaboration with Messrs. N. V. Philips, Holland and besides have an agreement of sales region with them. Therefore, we are not in a position to supply our fluorescent tubes at moment, please lake note.

The reply was signed by the Manager of the Export Department of that firm. So it is not easy to obtain goods from other countries. Mr. Robertson was certainly having difficulties. He decided to pioneer the manufacture of electric globes that he thought had peculiar but good qualities. I do not say that they did have, but he started to sell them like steam. He was making an impact on the market and he was pleased that he had gone into this business, but then the ring closed in again. Whether there is a glass ring is not open to doubt. I am sick of reading and quoting Tariff Board reports, but if honorable members want to check on this they can read the Tariff Board’s report on globes published in 1963. However, as I said, the ring closed in again. He was told that he was not to sell the globes and the merchants returned the globes. I checked on this yesterday. He asked what was wrong and the merchants told him: “Philips told us we are not allowed to sell these globes.”

At this stage Robertson was finding the going tough and getting nowhere: Everyone seemed to be sitting on his wheel. He said: “ I will sell them another way “. It was not easy. He was not a rich person. He was a battler with the technical knowhow - and Mr. Justice Travers agrees with this opinion.

Mr. Robertson decided to persevere with his globe selling business and he started to sell the globes in Queensland through agents, I. D. and E. J. Foote. The globes were sold to the wholesalers and then his agents apparently thought that there was an opening for them to sell to the retailers, too, and they foolishly did so. The agents should have known better, as they soon found out. They had circularised the trade stating what they intended to do. A letter was subsequently received from the Electrical and Radio Federation (Queensland) containing the following statement -

The change of merchandising policy, as indicated above, came somewhat as a surprise to the wholesale electrical merchants in this State, and following meetings convened to discuss the matter, I have been requested to convey to you their objection to this change, and indicate that they will not, in future, merchandise “Roulf” and “Nitelife “ products.

These were the products Robertson was selling. Apparently the attitude was that it was mean of Robertson to try to get off the ground in this free economy. He was then reported to the Federal Association of Wholesale Electrical Merchants - the Australiawide Federation - and a week later he received a letter that I think is worth quoting as indicative of the type of coercion to which he was subjected. It stated -

We have been advised by our Queensland affiliate Association of the action taken by your company in instructing its Queensland representative, Messrs. I. D. & E. J. Foote, that as from July 2nd, 1962, direct sales are to be negotiated with retail outlets.

I cannot convey too strongly the concern which is felt by electrical wholesalers at the establishment of such policy, this having been expressed in no uncertain terms in numerous references to this office.

The position is regarded in such serious light as to warrant special listing on the Agenda of the Federal Executive meeting scheduled to be held in Melbourne early in August. At this meeting moves will undoubtedly be initiated to register emphatic protest at this encroachment into the wholesaler’s traditional field of operation.

I will not quote the rest of the letter. Robertson is now bankrupt. I suggest to those people who say that this kind of practice is good that they go and explain it to

Mr. Robertson. I can give them his address. Let them try to explain it to a man who has the technical ability and the sense of adventure that we need in Australia to do these unusual things - a man who has been held back by this naked use of power. Let them go to explain it to him, and see how they get on.

I am not enough of a lawyer to know whether this legislation will be perfect. I am surrounded on all sides by lawyers of more than usual eminence and brilliance, and they have opinions on this. However, I have an intense belief in the ability of the AttorneyGeneral to put good legislation forward. I know that from his backbench days onwards he has had a lively interest in ensuring that this should be effective legislation. I remember when he used to spell out from the back bench that this kind of legislation was necessary. As I said, I do not know whether this legislation will be perfect, but I do know that he thinks it will be effective, and I have no reason to doubt him. I know he has an awareness of the problem. No-one can be associated with the commercial world without knowing what is going on, and there are many features of which we should be ashamed. This legislation represents an opportunity to do something. I regard it as an honest and effective attempt at tackling a problem that desperately needs tackling, and I am proud to give it my support.

Mr CLYDE CAMERON:
Hindmarsh

– I begin by paying a tribute to Sir Garfield Barwick for pioneering the field of thought in legislation of this kind. I am sorry, and it is with great regret that a lot of people have found that the far reaching and carefully drawn proposals Sir Garfield Barwick prepared have been emasculated in the way they have been. Sir Garfield Barwick is, if not the greatest constitutional lawyer Australia has ever seen - many would say Dr. Evatt holds that position - certainly one of the greatest lawyers Australia has ever seen. One is not boasting when one says, and one has every right to say, that this means that he is one of the greatest lawyers in the English speaking world today.

Mr Snedden:

– Hear, heart

Mr CLYDE CAMERON:

– I am pleased to hear the Attorney-General agree with me because this is the view of most lawyers [and other people in a position to express a view. Sir Garfield Barwick understood fully the machinations of private enterprise and the effects of trade collusion. He was aware of all the restrictive practices that occur in Australia. He made it his business to understand them. Sir Garfield Barwick has a keen and analytical mind. Having studied the way business is conducted in Australia today he was convinced that nothing short of drastic legislation would cure the evils that flow from restrictive trade practices.

It was Sir Garfield’s common practice to lay proposed legislation before the public for a period of time so that it could be discussed and obvious errors or ways of improving it could be brought to attention. This was one of the great features of anything that Sir Garfield Barwick did in this Parliament. His handling of the Matrimonial Causes Bill and the bill relating to uniform marriage laws were two examples of the way he thought legislation should be hammered out in Australia.

Sir Garfield Barwick was such a skilful lawyer and had such a thorough grip of logic that, while he was prepared to listen to all manner of criticism of his proposals, he would not easily be swayed from what he originally thought was right unless he was satisfied in his keen analytical mind that the proposals put to him were valid. Although the Matrimonial Causes Bill was before the public for a long time before it was eventually dealt with ki the Parliament, Sir Garfield Barwick did not accept many amendments to his original proposal. He accepted some amendments and explained in that clear and precise manner which he almost alone is able to bring to bear why he did so and why he rejected others. His reasons were so compelling that one could easily see why they were accepted.

I do not wish to be unkind towards the present Attorney-General (Mr. Snedden). He would be the last to want to assume Sir Garfield Barwick’s mantle as a lawyer. I do not think anybody could say that the Attorney-General is deliberately slothful, lazy, gullible or easily led astray. He is very young. He has had quite a deal of parliamentary and legal experience but, like most of us, he cannot claim to have been able to master the things that flow from the kind of political intrigue that occurs when powerful interests in the community are likely to be adversely affected by a proposal brought into the House, especially when those powerful interests are also powerful influences within the organisation of his own party. The Attorney-General is not a member of the Cabinet. He has always been at a disadvantage whenever matters pertaining to his administration have been the subject of discussion in the Cabinet. I have never been able to understand the attitude of the Prime Minister (Sir Robert Menzies) in not having the Attorney-General a member of the Cabinet. If the Attorney-General had been a member of the Cabinet I am certain that whenever proposals were before the Cabinet to alter the restrictive practices legislation the results would have been different to those that we now have before us.

I do not blame the Attorney-General for what has happened. He is in the same position as are other Ministers. If Cabinet decides by a majority decision that certain amendments will be made to legislation, he must accept that decision. I am convinced that the watering down of this Bill compared with the original proposal of Sir Garfield Barwick is the result, not so much of gullibility on the part of the AttorneyGeneral and certainly not gullibility on the part of that very astute lawyer-politician, the Prime Minister, but the result of deliberate pressures brought to bear upon a receptive party machine which is ever willing to listen to the voice of privilege and wealth. This is why the Bill now before us has been weakened. There is no other valid reason.

I sympathise with the Attorney-General in the position in which he finds himself because I recall, as did the honorable member for Wakefield (Mr. Kelly), the very fine speeches which the Attorney-General made against restrictive trade practices when he was a backbencher. He was one of the most outspoken backbenchers on the Government side against the collusion, conniving and public theft allowed by this Government through its failure to take action. He made good speeches on the subject. He knows, and I know that he knows, what is going on. When I listened a moment ago to the honorable member for Wakefield I could not help but think that a person would need to have a heart of stone not to be moved by the touching plea the honorable member made to the Parliament on behalf of this poor devil Robertson, who had plenty of know-how and a spirit of adventure, but who was driven into the ground and sent bankrupt because he found it impossible to compete against the restrictive practices of those who were engaged in the same field as he.

I thought the honorable member for Wakefield made a speech that every member on the Government side should read. Those who heard the speech had the full benefit of the emotion with which the honorable member delivered his speech. Those who did not hear it should read what he said and see whether they are prepared to go to Robertson and tell him that there should not be any restrictive trade practices legislation. I am pleased that my learned friend, the honorable member for Parkes (Mr. Hughes), is indicating that he agrees with me because he, too, is a lawyer with a keen analytical mind. He knows what is going on. He knows, as does the honorable member for Wakefield, that today restrictive trade practices are permitted which should be outlawed as being near criminal. I am staggered that Government supporters should claim that this Bill is monstrous, that it should never have been introduced and that the Government should be condemned for its action. The Opposition welcomes this legislation but condemns the Government for not acting quickly enough and with sufficient severity to meet the trouble that exists. We approve the legislation and we say so in our amendment. We say there is public demand for this legislation. We deny categorically the statements of some honorable members opposite that there is no public demand for the legislation. Perhaps members of the public are not very articulate in their demands. It may be true that members of the public are not fully aware of the restrictive trade practices that exist and of their full effect, but no member of the public could have listened to the honorable member for Wakefield without feeling that this legislation was long overdue.

I regret, however, that I cannot share the honorable member’s optimism regarding the outcome of this legislation. I cannot share his optimism that everything will work out all right. I cannot share his belief that, although the Bill is weaker than Sir Garfield Barwick’s proposal and although most of the teeth of that proposal have been drawn, it still will be an effective piece of legislation. Frankly I do not think it will be an effective piece of legislation. I think it represents nothing more than a kind of compromise, the compromise of doing something to meet public demand for a bill something like this in character while at the same time hoping to placate the wealthy and tremendously influential friends of the Liberal Party machine, because they are the people who finance the Liberal Party machine. They are in the position of being able to go to the administrators of the Liberal Party machine and lay down their terms. They can say: “ Unless you do as we say there will be no more funds for your campaigns “. The members of the Liberal Party know very well that in an election campaign the case they can make out is so weak that unless they have plenty of funds to dress it up well enough to deceive the people they will have no chance of winning. This is why the Government is ever receptive to the point of view of big business.

Let me give one example of the kind of nonsense we heard from speakers on the Government side. Let me interrupt myself at this point to remind the House that very few members who have spoken on the Government side have given full support to the Government. Of those who have spoken so far on the Bill, on the Government side, I think far more have expressed either complete or partial opposition to it than have wholeheartedly supported it.

Mr Duthie:

– The ratio has been two to one.

Mr CLYDE CAMERON:

– The honorable member for Wilmot says that the ratio has been two to one. I had not gone into the figures and I had not thought that those on the Government side expressing opposition to the Bill were in quite such a majority. 1 would have thought, however, that there were more than 50 per cent, of them who opposed the Government’s proposal. I know that the honorable member for Parkes supports the Government. I think the honorable member for Henty (Mr. Fox) supported it. Naturally our friend from Moreton (Mr. Killen) would be opposed to the Government because it has gone too far in dealing with the very wealthy people, and the honorable ‘member would not like any intrusion at all into the right of private enterprise to make up its own mind as to what the public shall pay. I did not hear all his speech; I heard some of it while coming here in a motor car.

Mr Killen:

– The honorable member has given a complete misrepresentation.

Mr CLYDE CAMERON:

– Have I? I was travelling in the motor car when the driver directed my attention to the broadcast, saying: “ Listen to this utter nonsense.” He did not say “ nonsense “ but used some other word. He said something like this: “ Listen to this balderdash that this fellow is talking. Who is it? “ I said: “ Let’s listen.” I could not pick the voice but I could pick the logic or lack of it. I said: “ It sounds like Killen.” Sure enough, as time went on I was able to identify the cultured voice of the honorable member for Moreton. However, the driver could not put up with it for very long and he switched it off. It seemed to me from what I heard that the honorable member was not supporting the Government as enthusiastically as we might have expected an honorable member on the Government side to do.

Let me quote a few words of wisdom from the honorable member for Balaclava (Mr. Whittorn). The honorable member for Balaclava is not a violent man. He is a nice, gentle little person. But listen to the tenor of the speech that he made in dealing with a measure that might interfere with his wealthy friends. He roared -

Let me tell the House, in terms as strong as I can use, that I object to this legislation. I object to it because, in my view, it opens up the way for unjustifiable intrusion into the normal business affairs of secondary industry and tertiary industry and intrusion by the Government and its officers into the affairs of free enterprise about which they know very little.

There is not a person in this country who does not know a lot about private enterprise, because everyone has been hit by it. It would be impossible to appoint a government servant - “bureaucrat” is the term usually used, but in this case it has been reduced to “government servant” - to administer this legislation who has not had some experience of trying to obtain, for instance, a load of bricks from a certain brickyard at one half penny less than the price being charged at another brickyard. Of course it is impossible to do so. There would not be one person in this country able to get a load of quarry stone from one quarry at one halfpenny a yard less than the price charged by another quarry. There would not be one person in Australia who has been able to go to an insurance company, other than the two or three companies that are not in the cartel, and negotiate an insurance policy at a premium lower than that fixed by all the other companies. No one can tell me that this is healthy competition.

Mr Turnbull:

– Does the honorable gentleman include car insurance?

Mr CLYDE CAMERON:

– Of course I do - car insurance, workmen’s compensation insurance, house insurance, every kind of insurance. It is all governed by the cartel. Although there is no known agreement fixing premium rates everyone knows that an agreement exists.

Mr Luchetti:

– Local government bodies have had experience of such agreements when they have encountered collusive tendering.

Mr CLYDE CAMERON:

– My friend from Macquarie directs attention to the problem of collusive tendering that faces local government bodies. These authorities call tenders for the supply of, say, petrol and oil, and they find that the same price is quoted by every supplier. I admit that sometimes the suppliers take turn about. On a particular occasion the Shell company may say: “ It is the turn of the Vacuum oil company to have this contract, so that company can quote one halfpenny a gallon less than all the others “. This is the kind of practice that is constantly indulged in, and no one can deny it.

Mr Buchanan:

– Does the honorable member want utter chaos?

Mr CLYDE CAMERON:

– I know that there are circumstances in which some form of agreement is necessary. We have an example in the dry cleaning business. Occasionally a price war will break out among dry cleaning firms, and the price of dry cleaning a suit will drop from 10s. to 9s. and then to 8s., 7s. and 6s. It has reached the stage in Adelaide at the moment that various dry cleaning establishments are displaying signs “ 2s. 6d. a garment.” It is not possible, as we all know - and this is in answer to the interjection of the honorable member for McMillan and following my statement that there are circumstances in which agreements are justified - to dry clean and press a garment properly for 2s. 6d. and at the same time pay award rates of wages, overhead and other expenses. Of course the honorable member is right in implying that some agreements are justified. We can never have everything completely black or white; there are always shades in between the two extremes. All I am trying to point out is that it is idle for people to pretend, as some Government supporters seem to do, that there is no collusion going on, or that there are no restrictive trade practices.

Consider the selling of motor tyres as an example. Let any retailer try selling any brand of motor tyre below the price fixed by the wholesaler and see how many tyres he is supplied with afterwards. If we have the free enterprise society that honorable members opposite claim to believe in, should we not welcome healthy competition as a manifestation of free enterprise? At one time “ healthy competition “ was the term that was always used, but now it has been changed to “ free enterprise “. It is a long time since I heard a member on the Government side talk about healthy competition. Perhaps the agreement between Ansett-A.N.A. and Trans-Australia Airlines has made honorable members opposite ashamed to use the term “ healthy competition”. Healthy competition used to be a recognised manifestation of private enterprise. No longer is this so, because no longer is there competition. The aim of private enterprise today is to prevent competition. The honorable member for Balaclava sees nothing wrong with this. He said that the owners of industry and of businesses ought to be allowed to conduct their affairs in the way they consider proper. Then he sent on to spread the theory a little by saying -

How can a public servant talk to a businessman and say: “Thou shalt do this in this way; thou shalt do that in some other way”? The businessman has been trained to use the way he knows best.

Of course he has, and the way he knows best is to get on the telephone and tell all his competitors to club together and charge a rate outrageously higher than a correct, decent and proper rate, and to call upon the suppliers of raw materials and upon wholesalers to make sure that anybody who sells below that rate is cut off the supply list. Bank interest is another example. Can anybody really tell me that this nonsense we see on television every night about private enterprise banks and about healthy competition between banks has in fact an atom of truth in it? Of course it has not. I invite anybody present, by way of interjection to name one single private bank which will lend money at a rate of interest lower than that charged by any other bank.

Mr Buchanan:

– The Bank of New South Wales and the English, Scottish and Australian Bank do so.

Mr CLYDE CAMERON:

– This is news to me.

Mr Buchanan:

– The Government itself has given the banks the opportunity to charge varying rates.

Mr CLYDE CAMERON:

– The Government has given them the opportunity to do so. They therefore cannot make the excuse that they are not allowed to do so, but the plain fact is that they do not do so. The honorable member who has interjected is the first person I have ever met in my life who has been able to find a bank manager who will lend money at a lower rate than the manager of another bank.

Mr Buchanan:

– It does occur.

Mr CLYDE CAMERON:

– I do not say the honorable member is telling lies but I just do not think it happens. It has never happened in my experience and it has never happened in the experience of anybody I know.

I want now to speak about another kind of collusion. I refer to the practice of firms to split up a State into spheres of influence or of control and for each firm to sell its particular goods in one sphere. In South Australia there are two cement companies, the Adelaide Cement Co. Ltd. and the South Australian Portland Cement Co. Ltd., both of which are making Portland cement. These two firms have entered into an agreement under which the State is divided into sections. One company will not send any of its cement into the section of the State that has been allocated to the other. This allocation has not been made by a Government authority or by a zoning authority; it has been done by an agreement between the firms. It is utterly impossible to have competition between the firms because you just cannot find a storekeeper in Burra, Port Augusta, Port Lincoln or Mount Gambier who would stock the two brands of cement. The cement a storekeeper was selling could be inferior in quality or higher in price but it would be utterly impossible for any person in those towns to buy better quality or cheaper cement by asking for the other brand. The other manufacturer just will not send his product to the town. This is something which in my view is outrageous. It cuts right across the principle of healthy competition and the kind of thing that we believe personifies all that is good in private enterprise.

Tobacco is another commodity in respect of which this kind of thing happens. All the tobacco firms have an unofficial agreement as to price. There is no gre,at competition so far as the price of tobacco is concerned. My friend opposite who is smiling will recall that recently W. D. & H. O. Wills (Aust.) Ltd. sent to each member of the Parliament a packet of cigarettes made from tobacco which it claimed to be unusable leaf. I do not smoke but I sent the cigarettes to some of my friends and they rather liked them, especially the price. I wrote to the firm and said: “If you have any free samples left over will you send me a few cartons so that I can supply my friends with Christmas presents? “ I said that most people thought that the cigarettes were not much different from other cigarettes. I received a very nice letter saying that it was obvious that I was not a smoker. The company thought that a man of my culture would not appreciate cigarettes of that type and that only people who were of a low grade would not notice the difference. The company said that in order that any relations with my friends would not be strained at Christmas time it would send me a large carton of Benson and Hedges’ cigarettes. It arrived this morning and I am very grateful. That is the lighter side of things, but no one can get away from the fact that collusive trading does go on.

One thing I regret is that the Bill provides no control over mergers and takeovers. There has been a lot in the newspapers lately about what is happening with Cresco Fertilisers Ltd. Something crook is going on somewhere because if suddenly the shares of Cresco Fertilisers Ltd. are worth what it is now claimed that <they are worth it is apparent that somebody has been hiding very successfully some of the assets. It appears that all of a sudden somebody else has found this out and has decided to offer to the shareholders of this firm a price commensurate with this new value. This brings to my mind another case which was brought to my notice three years ago. A private company in Sydney was engaged in some kind of trading. Many years before it had bought what was regarded as a rather cheap and inefficient hotel in Pitt Street. It bought the hotel for a relatively small figure. The value of the hotel was being written off instead of being written up to keep pace with the increased unimproved land values until in the end its value appeared on the books at something like £15,000. Some smart person searching the records discovered that tucked away amongst the assets of this private company, that appeared to be chiefly interested in trading, was this hotel which was worth something like £175,000. He quickly offered the shareholders, or the private people who owned this company, twice the price that they thought it was worth. They accepted the price because they thought it represented twice the value of the assets of the company. The person who bought the hotel was able to sell it for the price I have just mentioned. He made an enormous profit and still owned the company. That is the type of thing that is happening in relation to takeovers.

Mr Turner:

– There is nothing crook about it.

Mr CLYDE CAMERON:

– It is crook. The Adelaide Steamship Company Ltd. directors had been hiding away the real assets of the company for years and years in order mainly to avoid taxation until somebody discovered that the real value of the assets was ever so much greater than the value shown in the books. This person made a takeover bid on the basis of the high value of the assets of the Adelaide Steamship Company Ltd. Suddenly the directors decided to make a bonus issue so that the value would be eaten up and the attraction for a takeover would disappear. That is what happened.

Prices can be fixed without formal agreement. It is not necessary to have a written agreement drawn up by lawyers in order to fix prices. We know what has happened in America. This was pointed out by a member on the Opposition side. Some companies have a very complicated and complex system of fixing prices. Mention was made of false letter heads, code names being used, and telephone calls being made from public telephone boxes to talk about prices. All these things were being done in order to circumvent the effect of the Sherman Act The Sherman Act in America has not destroyed industrial expansion in that country as somebody tried to pretend this legislation could do in Australia. In America, in spite of the Sherman Act, the country has gone ahead and is the greatest and most highly industrialised country in the world. Can anyone stand up and say that this legislation is going to stifle industrial expansion? Of course it will not. The only thing it will stifle, and which it should stifle, is the wholesale exploitation of the ordinary people and the ordinary consumers of goods who have no other way to protect themselves than by legislation of this kind.

Mr SPEAKER (Hon Sir John McLeay:
BOOTHBY, SOUTH AUSTRALIA
Mr SNEDDEN:
AttorneyGeneral · Bruce · LP

– The contributions of honorable members in this debate have been most interesting. They have covered the full range of possible views in relation to the subject of the control of restriction in practices of trade. On one side of the scale certain members of the Opposition have said that the Bill does not go far enough and that they would like to construct a bill which would so interfere with the freedom of business that it would depart completely from the philosophical basis of this piece of legislation. The philosophical base for this piece of legislation is as set out in the long title to the Bill: “An Act to preserve Competition in Australian Trade and Commerce to the extent required by the Public Interest “. That is what I believe the Bill does. Most of the views which have been put forward were tendered, largely, for the purpose of being constructive. I am sure that all honorable members who have played some part in the debate did so for that purpose. Certainly it was the way in which I received their views, and I am sure it is the way in which they were received by other honorable members who were listening to the debate. I have enjoyed sitting here throughout this debate.

This Bill deals with completely new ground. Therefore, the legislation, very properly, is not designed to be extreme. Extreme legislation would not be the correct type of legislation in this situation. Nor would it be proper, in the Government’s view, to be content to do nothing. So this Bill is really standing, in a broad sense, in the middle of the spectrums revealed in this debate. I believe that the view expressed in the legislation is the view of the great majority of my colleagues in the Liberal Party and of my friends in the Australian Country Party, whether they be parliamentary members or members of the great political organisations to which we belong and the colours of which we fly in this Parliament.

To suggest that this Bill has been affected by the pressures of so-called big business is nonsense - complete nonsense. To make that allegation is a mere slanging technique. It forgets the reality that these political parties have been in government for 16 years, and the portents indicate that they are likely to remain in government here for a great many years to come. It overlooks this reality completely because these parties are vigorous parties with vigorous policies and are subject to no sectional force whatsoever. On the other hand - and I say this just as a passing reference, as my honorable friend is so fond of saying - the Australian Labour Party is captive to a very big sectional force and it is that which prevents the Labour Party from being a true national party. I say that because at all times that sectional force or sectional view must dominate the views of that party.

This Bill is the collective decision of Cabinet. It is a Bill to which I wholly contributed my own views. It is a Bill which represents a very sound decision by the collective wisdom of the Cabinet of this Government. I believe it will be an effective Bill in the way it operates and achieves its purposes. Let me take this opportunity to reiterate some of the essentials of the Bill. First, as expressed in the long title of the

Bill, it is a bill to preserve competition in Australian trade and commerce to the extent required by the public interest. It is not appropriate, in the view of the Government, to leave to private regulation the arrangement of such things as prices, the identity of new entrants to business, or the persons who may supply or receive the supply of goods. It is not appropriate to leave that to private regulation unless private regulation is capable of being examined to see whether it is in fact compatible with the public interest. The Bill, therefore, proceeds on the basis that those things which, by agreement between competitors, have as their purpose a restriction in relation to five categories which are set out in the Bill must be capable of examination by the tribunal. It does not proceed on the basis that they are likely to be held incompatible, nor on the basts that they are likely to be held compatible. It proceeds on the basis that examination is necessary to determine this point

The next step in the procedure, if I may reiterate it, is that in a bill such as this there ought to be, in the Government’s view, at all times the desire for certainty. This is a point which was made with great clarity by my friend, the honorable member for Sturt (Mr. Wilson), in connection with these matters of trade and commerce in the community. Contrast that, if you will, with the United States of America and with Canada where there is not certainty. In the United States it is a decision of choice. In Canada it is a constitutional necessity for there, the power to legislate in this field depends upon the criminal power. But to have certainty, which is most desirable, I believe, in the legislation, means that you must have an administrative as distinct from a criminal process. It is the criminal process which leads to the uncertainty because people engaged in trade and commerce act in trade and commerce in such a way and then have to run the risk that at a later point in time they will be prosecuted for an offence and perhaps found guilty when at the time they committed the offence they did not know, and sometimes could not have known, whether it was likely to be against the law. If you have a criminal process you have uncertainty. On the other hand, if you have an administrative process you have, at all times, certainty. So in the desire to have certainty the Bill proceeds upon the basis of an administrative or sub-legislative process. Certainty of lawfulness was thereby achieved. The certainty of lawfulness is this: putting aside, if I may, for the moment, collusive tendering and collusive bidding which are prohibited, and regarding everything else as excluding them, it means that nothing is unlawful until such time as a tribunal, having examined it from the point of view of public interest, says that from that point of time that practice is unlawful. So the certainty is that it is certainly lawful up until that time, but after that time it is certainly unlawful. Having opted for this certainty it means an administrative process instead of the criminal process.

If we come back to the constitutional reality, in our Commonwealth Constitution, there is a separation of offences, made clear in the boilermakers’ case, as it is colloquially called, so that the judicial power has to be in a body which is created, according to the Constitution, as a court; but the administrative power cannot be exercised by a body which is invested with judicial power! Nor can judicial power be exercised by a body which is invested with administrative power and which does not have the tenure of life occupancy of the office required by judicial office. That being so, we could not have a court to make the administrative decision. It has to be an administrative body. So at that point of time the logic develops and you go to an administrative body for this purpose. We cannot use a court; therefore, we erect a tribunal specifically for the purpose.

Let me come to the next point in the process, and that is the need for fact for the tribunal to consider in reaching its decision. At the point of fact, there is a choice. The first possibility is an investigatory process, which we all know and understand in relation to criminal matters and which, of course, is part of the procedures under the Sherman Act, the Canadian Combines Investigations Act, and indeed our own Australian Industries Preservation Act, where the investigation is carried out by the police, because an offence against the law is involved. This procedure seems most inappropriate where the criminal process is rejected. We then have to find facts in a different form, and the fact-finding method on which the

Government determined was that of a register. The register is the system adopted in England. The English system is not inhibited by our constitutional restriction of the separation of the judiciary and the administrative process, so England has a court which in fact exercises the administrative process. That is not available to us, so we have a register which is similar to the British system of registration.

The British register is open and the New Zealand register was open. But the reports from the Registrar of Trade Practices in England indicate that a mere handful of people look at the register. New Zealand abandoned registration and the reason given for abandoning registration was the very absence of public interest in the register. When we come to the register, we want it as a fact-finding process. The next question is: Will it be costly? Will it be an intolerable burden on business? Is it something which, as a means of obtaining fact, will have a consequence too great for business reasonably to endure? I have here photostat copies of four documents which constitute the registration of a typical practice in the United Kingdom register. These four documents are not even drawn specially for the purpose. They are just picked up, they are in existence, they are given to the register, and the act of registration is thereby completed. I think it is also relevant for me to point out that the agreements registered in the United Kingdom total approximately 2,700.

If this is a fact-finding process, should it be an open or a closed register? The Government came to the conclusion that it should be closed, because an open register has not proved successful where it has been available. It is a fact-finding process for an individual person who has the responsibility of taking matters before the tribunal. So, for these reasons, the Government decided that it should be a closed register. Another reason was that, if it were an open register, we would perforce need to have two registers - one the open register and the other the closed register which contained within it matters which in the public interest and in the private interest ought not to be disclosed to the general public. The Bill reflects the Government’s decision that this should be a closed register.

Sitting suspended from 5.59 to 8 p.m.

Mr SNEDDEN:

– Mr. Speaker, before the suspension of the sitting I had reiterated some of the essential features of this Bill. I pointed out that this is new legislation covering new ground and that therefore it ought not to be extreme. Nor is this measure extreme. It ought not to be extreme, and the corollary is that we ought not to be content to do nothing in this field. So this Bill has come in. It has been the product of most intensive consideration by the Cabinet and I wholeheartedly concur in the decisions of the Cabinet and the Government. I believe that this Bill will provide effective machinery and will achieve what it is intended to do.

I had pointed out that the need for certainty in relation to activities in trade and commerce impelled the decision by the Goverment that this measure should be noncriminal in form and, on the contrary, should be administrative or sub-legislative in its approach. It has been drafted in a way that will ensure this. The conclusion that the Bill should be administrative in its approach having been reached, the realities of the constitutional separation of powers come fully into force. The result is that the proposed Trade Practices Tribunal is and must be an administrative tribunal and is not and cannot be a court. I had mentioned registration before the suspension of the sitting and had pointed out that this will be a fact finding procedure appropriate to this approach. The contrary type of procedure would be the investigatory process that would be appropriate to a form of control based on criminal procedures.

I now proceed to point out that the Commissioner of Trade Practices will have certain powers, but they will be limited powers and will be consistent with a limited approach. If there were a criminal procedure, there would be no need for any limitation of powers. In a criminal approach, we would have an investigatory process applicable to breaches of the law. We would have a police investigation process. But honorable members will find that under the terms of this Bill the powers of the Commissioner will be limited. He will have power to require answers to written questions. He will have power to require the production of documents. But it is a far cry from the Commissioner’s issuing a request for answers to written questions to his receiving answers in writing through the police investigatory process under which a crossexamination procedure is adopted. So the Commissioner will have limited powers. What I must point out to the House, of course, is that he will have no role in enforcement. His role will be exclusively that of maintaining the proposed Register of Trade Agreements, of engaging in consultations with parties and of taking matters to the Trade Practices Tribunal. Neither the Commissioner nor the Tribunal will have any part in the enforcement procedures. Those procedures will be taken only before a court.

My friends, the honorable member for Isaacs (Mr. Haworth) and particularly the honorable member for Sturt, have asked me to reconsider the provision for compulsory registration of agreements. I have given the closest scrutiny to the point since the honorable member for Sturt raised it and I have come to the conclusion that the approach in the Bill is correct and that compulsory registration would be proper. I understand very well the reasons why the honorable gentleman put his proposal. I have looked at it in the light of those reasons, but I cannot bring myself to the conclusion that any procedure other than compulsory registration would be appropriate.

I pointed out, Mr. Speaker, that the Register of Trade Agreements will be a closed register, and this raises the issue of private proceedings. If there were to be private proceedings before the Tribunal, the Register would need to be open to access by private parties. But the Government adopted the attitude that if there were a private complaint that private complaint would be about a personal manifestation of a collective agreement. This would relate, for instance, to a discrimination against an individual or a refusal to deal with an individual. A refusal to deal with an individual except on terms disadvantageous to that individual would be an individual manifestation of a collective arrangement. If there were a situation in which 10 people, for example, had a private complaint, it might be that all 10 would have the complaint against all the parties to an agreement. The consequence is that there could be a multiplicity of complaints and if the individual making a complaint required his individual complaint to be dealt with we would not get down to the essentials of the matter - the agreement standing behind the individual manifestation. So, if an agreement is examined by the Tribunal, which finds it to be contrary to the public interest, and then, in the process of the certainty of approach, says that it must cease, the individual manifestations themselves will atrophy because the agreement that propped them up has been determined to be contrary to the public interest.

The next point that I make relates to the question: Who determines this question of consistency with the public interest? The answer is that it is determined by an independent tribunal. Let me emphasise that it will not be a court and it cannot be a court. It cannot be clothed with judicial powers. The Trade Practices Tribunal will be an administrative tribunal of a sub-legislative kind. It will be an independent tribunal dominated by lay members. The two lay members will outnumber the judicial member. The judicial member will be President of the Tribunal and, as such, will conduct its proceedings. This will not be a court of law. There may be criticism levelled against it on the ground that the strict rules in relation to courts will be absent. The reason for the absence of the strict rules applying to courts is that this will not be a court. Nor can it be one. Any attempt to make this Tribunal a court would be unconstitutional unless we scrapped the idea of certainty and came back to the criminal process. I do not think that the House would want us to do that. I do not believe that even those honorable gentlemen who sit on the other side of the chamber would want that, except, as they say, in relation to some particular things.

It would be a mistake to think of the procedures of this Tribunal as the procedures of a court. If it were a court, I would not wish - and the Government would not wish - to part from the strict rule of law. But this will not be a court: Where enforcement takes place in a court - that is, for failure to register, for collusive tendering or collusive bidding or for contempt - proceedings will be before a court of law and there the strict rules of law will apply. They should be required there. So it is that before the proposed Tribunal there will not be strict rules of evidence. The reason is that many of the matters involved will need to be provable by way of the record of some particular activity. This may be academic or by way of an article in a journal of economic record. On the other hand, it could be by way of the minutes of a meeting that had been held. Things of that kind, if put to strict proof before an administrative tribunal that is not a court, would only make the procedures long and more costly to parties and would, I think, tend to prevent that tribunal from reaching the essential decision - the determination whether a particular activity was consistent with or contrary to the public interest.

This brings me to the question of appeals, Mr. Speaker. We have heard the criticism that what is provided for will not amount to a true appeal. I believe I should say that this is not an unfair criticism. Indeed, it is one that I expected. Of course, it is not a true appeal, nor can it be a true appeal because, unlike the courts, there is no hierarchy. In the courts one can go from the Court of Petty Sessions to the County Court, or can start at the Supreme Court and appeal to the Full Supreme Court and then the High Court of Australia. But that hierarchy is not contemplated in the Bill. We propose to have “an administrative tribunal. If there is to be an appeal from that tribunal, to whom does one appeal? If greater quality is needed it will mean setting up another tribunal, but we are looking for the best quality for the Tribunal established under the Bill.

What leads anyone to believe that better quality will be found in a superimposed tribunal which is an appeals tribunal? The answer is that ‘it will not be found. Therefore, we are driven back to the situation that if the initial tribunal has three members, the appeals tribunal would have a multiplicity of members. If the initial tribunal has two lay members and there is a dominance of lay members, the appeals tribunal would need to have four lay members and three judicial members, so the appeal would be to a tribunal of seven members. I should think that this is really taking the matter too far. What the Government contrived - I say “ contrived “ with no hesitation at all, because I think it is a wonderful resolution of the problem - was a provision for an appeals tribunal of three judicial members who cannot substitute a determina tion for that in which the lay members dominated. The appeals tribunal can point out an error in law, an inconsistency or an absence of consideration of a matter of public importance. Having identified it and having pointed it out, it can then send the matter back to the Tribunal which is composed with a dominance of lay members of the best quality that it is possible to appoint to the Tribunal.

The next point that I come to is the amendment which has been moved by the Opposition. I regret that I do not have more, time to deal with the amendment in detail, but an opportunity may present itself at the committee stage. The first point made by the Opposition was that there should be a referendum. The point about this suggestion is that we do not know the full extent of the Commonwealth legislative power in rela-tion to interstate matters. The Deputy Leader of the Opposition (Mr. Whitlam) made a small error on Thursday night in speaking of the decision of the High Court last year. He said that the High Court upheld the validity of section 4 of the Australian Industries Preservation Act. The essence of the decision was not as to the validity of that section but as to the extent of the interstate power of the Commonwealth and what constituted an interstate transaction. In that case the High Court made it perfectly clear, by unanimous judgment, that the legislative power of the Commonwealth was far more extensive than was ever thought prior to that decision. For this reason I think it inappropriate at this stage to launch out on a referendum proposal. At this point of time I think the Commonwealth Parliament should exercise its legislative power. In due course, no doubt, the extent of that legislative power will be defined. If I may express the situation graphically, in concentric circles the outer circle is the entire area of trade and commerce and the inner circle is the interstate element of that trade and commerce. How close that inner concentric circle is to the outer boundary has not yet been determined, but the result of the decision last year showed that it was much closer to the outer boundary than we had ever thought.

I should mention also that there is a question of State complementary legislation. Clause 8 of the Bill has been drawn to enable States to pass complementary legislation and to use the machinery accorded by this Bill. We think that is a matter for each individual State. No doubt the States will not made a decision on this point until they see the Bill passed by this House. I expect that to be the next step in this process.

Another point made by the Deputy Leader of the Opposition in his proposed amendment was that resale price maintenance has not been covered. In its collective sense it is covered. What is not covered is the individual will of a particular person who says: “ I want all my articles to be sold at a certain price.” That individual is not assisted by the legislation to enforce that price, but if the price is not observed he has the capacity to withhold supplies from the person who is selling at the lesser price. 1 think this is consistent with the philosophy of the Bill. As to consistent price cutting and monopolisation, these are included in the Bill, but are included as being examinable rather than as offences. They are examinable simply because this is an area where there should be certainty. This is not an area in which people should be led to the stage where they take action and subsequently find they can be prosecuted for an offence.

The final point was that of mergers. I think I should say emphatically that the Government’s view of this matter is that at this stage such a control is not desirable. Whether or not such a control is desirable at any point of time must be judged by the contemporary conditions of the day. The Government has reached the conclusion in relation to mergers that that is not the situation today.

Question put -

That the words proposed to be left out (Mr. Whitlam’s amendment) stand part of the question.

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

AYES: 60

NOES: 43

Majority 17

AYES

NOES

Question so resolved in the affirmative.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

In Committee.

Progress reported.

page 3359

NATIONAL HEALTH BILL 1965

Bill returned from the Senate without amendment.

page 3360

INCOME TAX ASSESSMENT BILL 1965

Second Reading

Debate resumed from 25th November (vide page 3223), on motion by Mr. Harold Holt-

That the Bill be now read a second time.

Mr HAROLD HOLT:
Treasurer · Higgins · LP

– in reply - I take this opportunity to say a few words at the conclusion of the debate. I thank both sides of the House for the thoughtful consideration which they have given to a very complex piece of legislation. This is another chapter in a story which began when, some years ago, the Prime Minister (Sir Robert Menzies) announced that the Government would be setting up a committee in order to bring some more orderly presentation into the income tax legislation. Out of that undertaking came the appointment of the Ligertwood Committee, long months of deliberation by that very able body of men and, finally, the consideration by the then Commissioner of Taxation who, as a result of his own labours, produced a report that was just about double the dimensions of the report of the Ligertwood Committee itself. From then on there was a process of close examination by the appropriate officers of the Taxation Branch, officers of the Treasury and a Committee of the Cabinet, reporting in turn to Cabinet. Finally came a legislation which was introduced last year. It came towards the end of the sessional period. There was - the Government acknowledged this at the time - inadequate opportunity for a thorough consideration of the legislation by the Committee of the Whole. We said then that we would consider the representations subsequently reaching us and make such amendments as might appear to be necessary.

Mr SPEAKER:

– Order! There is far too much noise in the chamber.

Mr HAROLD HOLT:

– I know this is not a very appetising subject, Mr. Speaker. I just wish to place on record some comments which derive from the contributions made by those honorable members who devoted themselves to a study of this complex legislation, which was no easy task for them. The Government introduced a bill - and we have had it before us - which did take account of representations which reached us and which set out to effect some improvements in the existing legislation. In the course of the second reading debate notice has been given to us of amendments which will be moved in Committee. 1 have had an opportunity of discussing several of them with their prospective movers, and I expect to be in a position to indicate the Government’s approval of them.

Most of the debate has been on the provisions affecting superannuation funds for employees. It has been suggested that none of the superannuation funds of the traditional type in Australia will meet the tests prescribed before exemption of income from tax is available. This, I venture to suggest, is a quite exaggerated view of the matter and could be fallacious in its reasoning. The position that the Government faced following the report of the Ligertwood Committee was that superannuation funds were being used in a number of instances to avoid taxation. The Ligertwood Committee estimated this avoidance at about £4 million a year in cost to the revenue. The use of superannuation funds for tax avoidance purposes was growing, and there was an imperative need to stop that growth.

Before the 1964 legislation any superannuation fund for employees was exempt from income tax even though it was being used primarily for the purposes of avoiding tax. It would have been quite impossible to prevent the loss of revenue arising from such a position without imposing tests to be satisfied before a fund would qualify for exemption. What the Government did was to take the tests recommended by the Ligertwood Committee. It added one more test to ensure that employers contributed to a fund before the fund became entitled to exemption.

The Government took care to see that the tests written into the law were capable of being met by the bona fide employeeemployer superannuation fund. The Ligertwood Committee, which recommended eight of the nine tests adopted, stated its opinion that the tests it proposed could readily be satisfied by normal bona fide superannuation funds. It is true that in many cases superannuation funds will need to alter their deeds or rely upon the exercise of a discretion by the Commissioner. With very few exceptions, alterations to the deeds of traditional type funds will not need to be either complex or extensive. There have, of course, been many approaches to the Commissioner of Taxation regarding the implementation of the new legislation and the Commissioner has given advice affecting literally thousands of superannuation funds. In some cases the advice has been given directly to the trustees; in other cases it has been given to the sponsors and advisers of the funds. This does not mean, as the honorable member for Sturt (Mr. Wilson) has said, that the Commissioner is directing the conduct of funds. He is merely assisting them to comply with the law. The experience so far - and it is already quite extensive experience - shows that the vast majority of employer-employee funds of the traditional type will not face major difficulties in meeting the tests of the law. From the knowledge already gained, it is extravagant to suggest that many bona fide funds in Australia cannot qualify for exemption from tax. On the contrary, any fund that does not qualify will have features that, at the very least, throw grave doubts on whether there is an equitable case for exemption.

I regret that funds that have, in the past, been conducted in the most praiseworthy manner should be put to even the slightest inconvenience through legislation aimed at defeating tax avoidance arrangements. None of the representations received has suggested how this could be avoided without leaving open the very wide gaps that have been used by skilled tax consultants to advise their clients. The Ligertwood Committee made it quite clear that it considered it impracticable to devise legislation that would be both precise and exhaustive while at the same time protecting bona fide funds and preventing exploitation of the law by others. It could see no way out apart from stating strict tests and giving the Commissioner discretions and authorities. This is the Government’s view, which it came to rather reluctantly, because it has no love for discretions if precise requirements can be stated in legislation. The Government, through the Cabinet, came to the conclusion that this was the only practicable way in which what was intended by the legislation could be carried out. I think I can confidently say that nothing has been done by the legislation that will prevent the genuine fund from maintaining an exemption that it has enjoyed in the past. It will always be open to it to meet the tests. Alternatively, it will be open to it to seek the Commissioner’s discretion if that should become necessary.

The Commissioner has given considerable guidance on how he will exercise discretions. There have been for many years discretions in the law relating to employer’s contributions to superannuation funds. Those discretions have been administered wisely and have not been the subject of criticism. Before this legislation was passed in my term as Treasurer, I do not recall a complaint about the way in which the Commissioner exercised his duty. I am confident that the new discretions will, wherever necessary, be exercised with equally good common sense and justice. From my remarks it will readily be seen that I am quite unable to accept the view that a rate of 10s. in the £1 will, in fact, fall upon superannuation funds set up to provide benefits for employees generally. These funds, I am confident, will have no difficulty at all in meeting the tests of the law. We have the example of two large enterprises in Australia announcing recently that they are establishing new funds for thousands of employees. They have done this since the 1964 legislation was enacted. Hundreds of smaller funds also have become established since that time. They have established themselves without complaint about the legislation and, so far as I am aware, without any difficulty arising with the Commissioner of Taxation. When we look at these examples of new funds entering into new superannuation fields it becomes unreal to suggest that penalties are being imposed upon genuine funds or that the income tax law is operating contrary to the Government’s general aim of encouraging superannuation funds.

In his speech during the debate the honorable member for Sturt asked me particularly to explain a point regarding the test that requires that the rights of a member of a fund to receive benefits from it must be fully secured. He referred to the circumstances where the rights of a member can be taken away if he embezzles the funds of his employer. I can put the honorable member’s mind at rest. A provision of this kind in a deed of a superannuation fund has been held by the High Court not to affect the security of the rights of the member under deed. On the other hand, if the right’s can be taken away at the mere whim of the trustee or the employer, the member would not be considered to have fully secured rights. I do not think the honorable member would have it otherwise.

The honorable members for Parramatta (Mr. Bowen) and Henty (Mr. Fox) have foreshadowed some amendments to the Bill which have arisen out of the consideration of it by the Government Members Committee on Taxation and Finance. I thank these honorable members and other honorable members who served on the Committee for the considerable amount of time and thought they have given to the Bill. I can say now that the amendments that have been foreshadowed by the two honorable members, and which they have been good enough to permit me to examine and to discuss with them, are acceptable to the Government. They will resolve some possible technical ambiguities and generally tend to improve the legislation without reverting to the situation that the Ligertwood Committee set out to overcome.

Question resolved in the affirmative.

Bill read a second time.

Mr TURNER:
Bradfield

.- I move -

That this Bill be referred to a select committee.

This is the first time in, I think, almost 20 years that this procedure has been used, but I hope to place before honorable members on both sides of the Parliament the reason why this is the appropriate machinery for dealing with this kind of bill, not only on account of this Bill but on account of other bills of a similar character that I believe Parliament is failing to deal with through the appropriate machinery and as the public would have them dealt with. I am restricted in what I may say. I may not go back to the second reading debate nor may I go forward and refer to the amendments that are proposed to be dealt with at the Committee stage, so I content myself with setting out as clearly as I can the reasons why what I have proposed is the appropriate machinery for Parliament in dealing with this Bill, remembering that it will have many counter parts - bills of a similar nature - as time goes on. It is for this reason that I am raising the matter now.

This is a highly complex and technical Bill. As the Treasurer (Mr. Harold Holt) has mentioned, it stems from a report by the Ligertwood Committee - a lengthy, complex and highly technical report. The Bill consists of 33 pages. The explanatory notes prepared by the Treasury occupy 92 pages. To give some notion of the complexity of the Bill I should like to quote merely as an example, without dealing with it - one section of the principal Act that it proposes to repeal. I refer to section 82AAG of the Income Tax and Social Services Contribution Assessment Act (No. 3) of 1964. It reads -

The deduction, or the sum of the deductions, allowable under this Sub-division in an assessment of a taxpayer in respect of income of the year of income in respect of an amount or amounts set apart or paid by him as or to a funds or funds for the purpose of making provision for superannuation benefits for, or for dependants of, employees is the amount of that deduction or the sum of the amounts of those deductions, as ascertained in accordance with the preceding provisions of this Sub-division, reduced by the value of the previous deductions, if any, in respect of benefits the rights to receive which have been lost or forfeited by employees after the commencement of the year of income that commences on the first day of July, One thousand nine hundred and sixty-five, but before the end of the first-mentioned year of income, other than any part of that value thathas been taken into account by virture of this section in reducing the deduction, or the sum of the deductions, allowed or allowable under this Sub-division in assessments of the taxpayer in respect of income of years of income preceding the first-mentioned year of income.

I have quoted the section simply as an indication that this is a complex Bill. I believe that if I ‘had recited the first 50 lines of the Iliad in the original Greek it would have been as comprehensible to honorable members as the section I have just quoted, and in saying that I do not cast aspersions on the intelligence and understanding of honorable members.

I have said that this is a complex Bill. It is complex, not only because of its length, but also because of its nature. It follows upon equally complex amendments made at the end of last year, when the Bill ran into 62 pages with explanatory notes covering 115 pages. The Bill now before us is a rehash of what was contained in the legislation that we dealt with at the end of last year. I say therefore that because this Bill is lengthy and because it is complex it is not intelligible to honorable members and it is not a measure proper for consideration by the Committee of the Whole. It is however, a bill proper to be considered by a select committee.

My second reason for saying that the Bill should be referred to a select committee - I will stay strictly within the Standing Orders - is that it does not deal with all of the matters raised in the corresponding legislation at the end of last year. It deals, of course, with superannuation funds. Having listened to the debate in the House on the second reading of the Bill and having heard discussions outside the chamber, I am convinced that even so far as this legislation relates to superannuation funds it does not cover all of the matters and difficulties that have been raised in the minds of honorable members. But, of course, the Bill in 1964 dealt with other matters as well. These are not covered in the present Bill, although it is quite possible under the title of the Bill now before the House - “ a Bill for an Act Relating to Income Tax “ - technically to deal with those other matters not dealt with in this Bill but which relate to the amendments introduced last year.

Thirdly the Bill does not in any way cover matters that were raised, for instance, by the honorable member for Melbourne Ports (Mr. Crean), namely the creation of some more permanent machinery for keeping taxation law up to date. Various suggestions have been made in the course of the debate but this matter has not been resolved. It is obviously an important matter that would be within the terms of the Bill before the House, but it has not been dealt with.

I gave as my second reason the fact that the Bill simply does not deal fully even with the one field of superannuation funds, let alone the other fields covered in the Bill of 1964. Nor does the present Bill deal with the matter of permanent machinery for the review of taxation law. In other words, the Bill is incomplete and therefore should be referred to a select committee. The short title of the Bill would permit a select committee to go into other matters which are not covered in the Bill and which should be covered. I remind honorable members that the Treasurer gave an assurance in 1964 when amendments were pushed through the House - ‘bull-dozed through with scarcely even the pretence of debate - that members would be afforded an opportunity to go into this matter in detail. In my opinion this Bill does not afford that opportunity, but a select committee would.

I pass on, still strictly within the Standing Orders, to discuss my third reason. A Committee of the Whole is completely inappropriate machinery for dealing with this Bill or with any bill of this nature. May I remind honorable members of the nature of a Committee of the Whole? The Committee of the Whole is very like the House as we see it now. First of all, it sits in this chamber. You, Mr. Speaker, with the dignity of your wig would have departed and the Chairman of Committees would be in the chair at the head of the table without a wig. But often he presides in your seat, still without a wig, so the difference is not very remarkable. The mace, instead of being on the table, would be decorously hidden at the foot of the table. Honorable members would be seated as they are now at great intervals from one another. Australia’s great empty spaces may always be observed in this chamber. It is not exactly an intimate chamber designed for intimate discussion. In fact, we do not look at all like a committee. The Minister, naturally, sits at the table. His departmental officers sit about eight yards away from him. To consult with them is not very easy.

Contrast on the other hand proceedings of a select committee. It would not be meeting in this chamber. It would meet in one of the committee rooms of the Parliament. Members of the select committee would sit around a table without the vast open spaces between them. If the Treasurer presided - he would not have to, but he could participate in such a committee if he chose to do so - he would have his officers at his elbow and not yards away. Witnesses could be summoned before the committee. It might be possible to invite a Treasury official to explain in more simple terms the meaning of the section I quoted. This might be advantageous so that honorable members might know more precisely what was meant by such a section, which is typical of the clauses of the Bill. In short, in a select committee it would be possible for honorable members to know what the Bill is about. I submit that as the Bill stands, here in the Committee of the Whole honorable members have neither the opportunity, the facility nor the surroundings to enable a proper consideration and scrutiny by the Parliament of this kind of Bill.

I believe that the people expect Parliament to perform its duty. One of its duties is to scrutinise carefully legislation coming before the House. I am convinced that the machinery of the Committee of the Whole is inappropriate to enable Parliament to carry out its plain duty to scrutinise legislation. A select committee is the way to do it. Some reference was made, I think by the honorable member for Melbourne Ports - perhaps I should not refer to such matters at this stage - to the writings of a financial editor in London who said that a bill of this kind should surely go to a committee, whether a select committee or a standing committee, of the House of Commons. But we do not have standing committees and I do not suggest that, with our small numbers, we should have them. However, when a bill is appropriate for consideration in committee on account of its complexity, then I say that so far as we are concerned it would be appropriate, having regard to the nature of the bill, to refer it in our circumstances to a select committee.

In support of my argument may I say that the mere fact that this Bill has received very careful consideration by a Government members’ committee, presided over by the honorable member for Parramatta (Mr. Bowen), indicates that this is the kind of bill that should be dealt with in committee? This is precisely how it was dealt with by honorable members on this side and, for all I know, there could be an Opposition members’ taxation committee which also has considered the Bill. This Government members’ committee had the opportunity of hearing the officers who could give some explanation of these rather obscure matters. If it is appropriate for consideration - and, indeed, it has been given consideration - by a committee of members on this side of the House, and possibly by a committee on the other side, with the aid of the technical officers to explain it, why should it not be dealt with by a select committee of the Parliament? The best argument in favour of committee consideration is that in fact this is how it has been considered, although only by a Party committee.

My next reason for advocating this procedure is that it so happens that the Parliament has available to it personnel who are peculiarly well qualified to consider the Bill. The honorable member for Parramatta, for instance, is a distinguished Queen’s Counsel and not without knowledge in the field of taxation law. I might mention other honorable members in passing. The honorable member for Parkes (Mr. Hughes) is not unacquainted with the law. There are other lawyers not only on both sides of this House but also in another place. This matter could well be the subject of consideration by a joint committee. But we are not confined to lawyers. They are most valuable people particularly in dealing with a Bill of this kind, but we also have here, for example, the Chairman of the Public Accounts Committee and the former Chairman of that Committee. We have members of the Government members’ taxation committee and no doubt there are members of the Opposition’s taxation committee. We have people who are skilled in this field and who could make up a select committee to deal with this matter. The work that has already been done on it would shorten the proceedings of the select committee.

I am one of perhaps half a dozen members on this side of the House who has been in Opposition. I find that because most of my fellow members have been on the Government side only they are inclined to think in terms of the one-party state and to ask: “What does the Opposition matter? We have a committee of members on the Government side and that committee can deal with these matters.” Having been on the Opposition side myself - not in this House but in another Parliament - I realise that the Parliament consists of two sides and not one. I would not like to see the emergence of the one-party state. The wheel could turn full circle and honorable members who are now sitting opposite could be on this side of the House. We would then have the other-party state. If they then did as we do - as well they might by parity of reasoning - they would be inclined to say to us: “ We are now in office and we can look after this matter. There is no need for you to participate.” To exclude half the Parliament from performing its proper duty would be, to my mind, intolerable. I suppose it does not matter very much that it is intolerable to me; I do not matter. However, so far as I am concerned it is simply totally wrong. I believe, therefore, that the Opposition should participate in an exercise of this kind.

Now I pass on to another aspect of the matter. I know that not all bills are suitable for reference to a select committee of both sides of the House. Mere complexity is not a sufficient reason for such reference. But in this case there is another reason. A bill that is highly political in content might not be a suitable subject for a select committee because that committee might spend the whole of its time playing politics, and I know of nothing that wastes the time of the House more than playing politics in this fashion. We have members on both sides who enjoy the game, but I do not think it is very fruitful for the public or very useful in advancing the interests of the various parties. But this is not a bill involving great political differences. We are agreed about the need; the need is to prevent people from avoiding taxation by a variety of devices. We are all agreed about this on both sides of the House. The question remaining is purely one of means, and of course the Government with a majority of members on the select committee, could ensure that its objective was carried into effect. But in carrying out the objective, or in looking to the means of doing so, we should be concerned not only that the objective is achieved but also that in the course of achieving the objective there should not be introduced byproducts in the form of injustices that might have been avoided if more thought and consideration had been given to the matter, such as could be given by a select committee.

There are, of course, people who will say. “ But there are matters in this Bill that will brook no delay. A select committee would take time. We are moving towards the end of the sessional period and a delay in respect of some of these matters would be intolerable “. Well, let us look more closely at that proposition. Of course this step could have been taken weeks ago, but the Government did not choose to do so, although I raised the point elsewhere two or three weeks ago. But let us forget about the past and look to the future. Suppose the select committee were to report by 31st March next year. This would not be impossible. The House will be sitting again in February in ordinary session. A good deal of the spadework has been done, thanks to the labours, to which I pay full tribute, of my honorable friend from Parramatta, thanks to the consideration given to this measure by members of the Opposition, no doubt under the inspiration of the honorable member for Melbourne Ports (Mr. Crean), and thanks also to the considerable thought given to it by many others. So, in view of the spadework already done, it should not be impossible for a select committee to report by 31st March.

Again it will be said: “ Yes, but there are some matters that are more urgent than others. There is the question of exempting the pay of members of the forces in Vietnam and Malaysia from taxation liability.” I would agree that this is not only important but also urgent. Is there any reason why part of the Bill should not be detached and why the Treasurer should not bring down another bill to deal purely with that aspect? I should imagine that there is such conformity of view in the House on this matter that if he brought down such a bill tomorrow it would be passed by tomorrow night. We could put on one side all the technicalities in this Bill which require further examination, going back to the corresponding legislation of 1964, and deal with the urgent matters very expeditiously. So the suggestion that there would be a great delay is not really a good argument for saying that there should be no select committee.

As I mentioned earlier, we do not have many standing committees in this Parliament, and with our numbers it would not be possible to have them. I think we have to examine any particular bill having regard to its nature and its suitability to be dealt with by some machinery other than a Committee of the Whole. For too long have bills been bulldozed through this Parliament in a Committee of the Whole. The process has become simply a farce. In my early days in Parliament - if I may be forgiven for some slight reminiscence - bills were amended, I recall, on the floor of the House. Often a Minister would consult his officials and amend a bill more or less on the spur of the moment. I do not advocate this. But very frequently a clause was postponed until later in the day so that consideration could be given to it quietly by the officials and by the Minister. Then the Minister would later state his attitude to the suggested amendment. On other occasions assurances have been given by a Minister that proposed amendment would be considered. Then after there had been time for it to be weighed the amendment was sometimes inserted in the other House.

I have not seen this sort of thing happen here and I do not believe that with a Committee of the Whole such as we have, without an opportunity to summon officers to explain clauses like the one I mentioned earlier, it would be possible to adopt such procedures with advantage. So I have taken the opportunity of suggesting this rather unusual machinery that has not been used for almost 20 years, not in the hope that the Government will agree now and not in the hope that the Opposition will understand its interest in this matter, but simply because I want to direct attention to a procedure that we have not been using and that we ought to use in appropriate cases. I do no more than hope that honorable members on both sides will realise that this is machinery that they could use and that they ought to use, and that they ought to be vigilant to look for opportunities of giving the Parliament the correct machinery with which to do its job as the people expect the job to be done, that is, after a proper scrutiny of measures brought before it by the Government.

Mr SPEAKER:

– Is the motion seconded?

Mr Wentworth:

– I second the motion and reserve my right to speak.

Mr CREAN:
Melbourne Ports

.- I should like to say a few words about the motion that has been moved. The Opposition does not intend to support the motion in the form in which it has been moved. As the honorable member for Bradfield (Mr. Turner) implied, during the second reading stage I offered some criticism, not the first time, about the way that legislation of this kind is handled, and at least I would agree with the honorable member for Bradfield that the present machinery is not satisfactory. I would not agree with his suggestion that one piece of machinery rather than another is the ideal way of overcoming the difficulties that are before us. I think that one reason why legislation of this complexity comes before us at all in the income tax law is that in essence the income tax legislation, is being asked to do what taxation legislation was never really intended to do. The matter of provisions relating to superannuation is one example. There is what is called the 30/20 rule - the requirement that life insurance companies have to invest a certain proportion of their funds in Commonwealth securities and other securities. Then there are other sections in the Act dealing with petroleum research which again is not a fundamental matter of income tax law at all. Other sections were introduced some time ago dealing with the allowance of interest on debentures. That again has nothing to do with income tax as such, but has relation to the overall fiscal and monetary controls that occasionally have to be applied. I think that is one reason why this legislation is as complex as it is on some occasions.

There are also, within the legitimate scope of the law, plenty of occasions when matters of technical difficulty are involved. I would think that the Treasurer (Mr. Harold Holt) having heard the discussion at this stage, and also at the second reading stage, might consider in the next few months doing something about this matter. I should not like to be precise as to the nature of the committee that is required but I believe that it should be some kind of committee of the House. It could be either a select committee or a permanent committee. In Victoria we had a body that was called the Statute Law Revision Committee. I suggest that there is a good case for having a taxation law revision committee - a permanent body to which matters of taxation could be referred.

Many of the matters in these bills do not reach to the root of policy; they are matters that deal with the endless battle that goes on, and will go on, between a government trying to secure as much revenue as is legitimate and individuals in a community trying to pay as little tax as is legally necessary. Between these two poles there is considerable ground for manoeuvre. The honorable member for Bradfield this evening quoted section 82 and referred to the fact that we have had to go not only into single letters of the alphabet but also into three letters of the alphabet. He quoted section 82AAG. The section I find the most intriguing I have ever seen is section 115 of the Income Tax and Social Services Assessment Act which deals with this question of the 20/30 rule and with the taxing of life insurance companies. 1 refer to section 115 (I.) (a) (ii). It provides that something has to be decided in accordance with the formula 3ab(1 + d + e - f) over 100c, or the formula 3ab over 100c, whichever produces the greater amount. As I see it, whether the formula produces a greater or lesser amount, depends upon whether the sum of 1-f-d-J-e - f is a positive or negative quantity. What that has to do with the business of this House is a little bit beyond me. It takes another two pages of formulas to define what some of these variables, as distinct from constants, might be. We passed that section in 1961 according to the footnote to the section. I could refer to a number of other sections in the Act.

One has only to look at some of the amendments we are going to contemplate in a moment to realise the complexity of this legislation. What the honorable gentleman who are moving the amendments are endeavouring to do is to correct anomalies that they think have been overlooked. Each of these amendments takes nearly four pages to encompass. I received a copy of the amendments at about 4 o’clock this afternoon. I have not had an opportunity to consult with my party, but nevertheless the point I make is that the amendments are quite complex in themselves. In a few moments we are going to be asked to debate the matter. Certainly the Treasurer has made our task a little easier by suggesting that he is prepared to accept these amendments.

I think that the honorable member for Bradfield has done a good service in pointing out the way that we handle these matters. During the second reading stage I said that at least in my view if we were honest with ourselves we would have to say that there are very few people in this House of 124 who really know what is being done. What is worse is that there are many more people who apparently do not care. Yet this income tax law is responsible for the collection of some £1,300 million - £900 million from individuals and some £400 million from com panies. Surely such legislation is worthy of a much more detailed approach than we give it. At least if we had a committee of some kind the approach might be different. I do not need to be dogmatic or pragmatic at this stage as to the kind of committee that ought to be formed. In a matter of this kind we can agree that the existing way of doing a thing is wrong. What the precise remedial machinery should be I do not think should be sprung on us at such short notice. On a previous occasion when we debated this matter across the table the Treasurer asked me if I was in favour of a committee of the House rather than an outside committee. I certainly am in favour of a committee of the House. I think that the committee ought to be inside the House and not outside it. One suggestion was that a body like the Tariff Board should consider these matters. I do not favour that suggestion. This House above all has to be responsible for financial measures and therefore it has to be responsible for the tax Jaw. Nevertheless there are some matters in which we are dealing more with the intricacies of the principle of assessment than with the details of rates of tax and I think there is room for across-the-table discussion between members on such matters.

While not supporting the amendment moved by the honorable member for Bradfield at this stage I think that the Treasurer might perhaps consider what the honorable member for Bradfield has suggested and also the other suggestions which have been made during this debate and during debates on income tax amendments on previous occasions. These matters could perhaps be thought over during the next few months. Before we come to deal with matters affecting the next financial year the Treasurer might perhaps bring to the House a proposal for a better way of doing our business.

Mr WENTWORTH:
MacKellar

– Mr. Speaker, I suppose that by this time I should cease to be surprised at anything that happens or does not happen in this House. I must say that I was surprised - shocked would be the wrong word - to find that the Opposition was not prepared to support the motion moved so cogently and ably by the honorable member for Bradfield (Mr. Turner). The honorable member for Melbourne Ports (Mr. Crean), who has just resumed his seat, gave us many reasons why this motion should be supported. He told us he had not had time to consider the amendments which were before the House. He said the motion was a good one but then said that he was not going to support it. 1 can understand some honorable members on the Government side of the chamber who may feel, and may reasonably feel, that calls of party loyalty are very strong. I can even imagine their voting against their consciences for the sake of party loyalty. But the honorable member for Bradfield has put forward an argument which was cogent and, I thought unanswerable. Perhaps my friends on this side of the House would feel reluctant to buck the Government. But what is wrong with the Opposition? Is it just a sham Opposition? How can it be that the honorable member for Melbourne Ports, who in his speech, gave every reason for supporting the proposition put forward by the honorable member for Bradfield, now says: “ We are not going to support it.”? As I say, I am not shocked by this. I am, perhaps, a little surprised.

The honorable member for Bradfield put before the House a form of action by means of which honorable members could better perform their proper duties. He has also put before the House, generously, I thought, a form of action by means of which the Opposition could play its legitimate and proper part in the business of this House; not by obstructing and not by opposing for the sake of opposition, but by finding a forum in which it could put forward constructive criticism in a proper and reasoned way. The Government’s measures are good. But cannot they be improved? As the honorable member for Bradfield said, are there not aspects of this case which are not dealt with in the Bill before the House? Are we always going to say that exigencies of time, our desire to get home to our electorates - if you put it like that - must always inhibit proper and reasoned discussion of things in this House? I would hesitate to believe that honorable members put their own function in this House so low or thought so little of this House.

The form suggested by the honorable member for Bradfield is one which has not been used in recent times but it is a form of this House which has a long and reputable history. Why should not we be invoking it in a matter like this - in a matter which is complex, which requires constructive discussion and which requires, during that discussion, that there should be at our elbows the technical advice which officers of the Treasury can give? Earlier today, Mr. Speaker, we were talking about the lack of a parliamentary draftsman being available to honorable members in order to put their desires and suggestions into proper legislative form, because we all recognised that this was a technical matter. Now, in this Bill, we are dealing with matters which are, in their very essence, technical. There may be members like the honorable member for Parramatta (Mr. Bowen), for example, who have lived in this sphere for a long time and who would be as competent, probably, as any Treasury officer to draft or to decide the meaning of a draft. Most honorable members do not share these advantages. We know something of what we want in the Bill but we are not always articulate as to how we should get it.

I believe that our system of only considering bills in the Committee of the whole is tending to turn Parliament into a farce. If Parliament is not to be a farce, then surely we should accept gratefully suggestions of the kind which the honorable member for Bradfield has put forward. I have said that there may be a loyalty - perhaps a mistaken, obstinate loyalty - on the part of Government supporters which might forbid them to support the honorable member for Bradfield even though they know he is right. But where is the Opposition? The Opposition is not inhibited by such feelings or motives. The Opposition has full liberty of action in this matter. Yet apparently the Opposition wants to have a sham fight on these things. It is not really constructive. It is trying only to gain political advantage. When a suggestion is put forward which, if adopted, would enable this House or a committee of this House to consider the Bill in a constructive way the Opposition shies away from it. I admit that I am still a little surprised, even if I am no longer shocked.

Mr WILSON:
Sturt

.- Mr. Speaker, there is a very strong reason why we should support this motion put forward by the honorable member for Bradfield (Mr.

Turner). However, there is one reason - which I shall refer to later - why his motion cannot be supported. The reason why it is necessary, either now or at some time, for a competent committee to examine this legislation is that last November it was rushed through without proper consideration. During the last few weeks the matter has been forced on in a manner which has meant that interested parties have not had the opportunity to put their views, nor to have their views considered by the Treasurer (Mr. Harold Holt) or the Government. Today I received a letter dated 26th November 1965 - last Friday - from The Association of Superannuation and Provident Funds of Australia which represents £300 million of the superannuation funds of salary and wage earners. This letter describes this legislation as “ iniquitous legislation “. The letter says-

Mr SPEAKER:

– Order! I point out to the honorable member for Sturt that the second reading debate cannot be revived. He may deal only with the motion before the Chair, which is of a very limited nature. No reference to the amendments or to the debate which followed would be in order.

Mr WILSON:

– I am not referring to the debate. I am referring to the-

Mr SPEAKER:

– Order! The honorable member is not referring to the subject matter before the Chair.

Mr WILSON:

– I am saying that sufficient time is not being given for the consideration of representations by persons who are vitally interested in this matter. The letter to which I referred said -

We are at present preparing a further letter to the Treasurer submitting our comments on the present amendments which are being discussed in the House and we shall send you a copy of this letter as soon as possible.

Whether or not the Treasurer has received this letter I do not know but it is quite clear that there are many points of view and many considerations which time has not permitted to be discussed and which have not been investigated by the Government. That is a very strong and cogent reason why this matter should be referred to a committee. On 19th November, I asked the Treasurer a series of questions. I have not yet received replies to them. If I may be permitted to read the questions-

Mr SPEAKER:

– Order! The honorable member would not be in order if he did so.

Mr WILSON:

– Very well, Sir. All I can say is that I asked the Treasurer a series of questions and in this House he stated that he would endeavour to supply me with answers. Those answers have not been forthcoming, and here the Bill is being proceeded with tonight without those answers. Today I handed another list of questions to the Treasurer. They have a vital bearing on this matter and on the motion of the honorable member for Bradfield. I realise that there has been little time to answer them but that, I think, makes it very clear that this matter is being pushed on without proper and mature consideration. This is a very significant reason why the whole subject should be referred to a committee. The Bill has 47 pages. We are given explanatory notes of 92 pages, which clearly need explanatory notes to explain them. The reason why I cannot support the motion of the honorable member for Bradfield is that, against my wish and my will and without my vote, the House last week imposed a penalty tax of 10s. in the £1 on all superannuation funds. The Bill now before the House provides the escape from that vicious penalty imposed upon employees - white collar and blue collar workers - who have for years contributed to superannuation funds. I want to say with everything that I command that the Bill passed last week, imposing the penalty tax, coupled with this Bill will be the death knell of private superannuation funds and the country will suffer irreparable losses in respect of getting the capital it needs for the development of this great land.

Mr HAROLD HOLT:
Treasurer · Higgins · LP

– Before I deal specifically with the motion that is before the House I think I should comment very briefly, with your indulgence, Sir, on the concluding remarks of the honorable member for Sturt (Mr. Wilson) while they are fresh in our minds. I do not intend to spread myself, as one might in other circumstances in the course of another type of debate. What I want to say briefly is that in no period of Australia’s history has there been a greater growth of savings in insurance policies and superannuation funds than there has been during the period of office of the Government of which I have the honour to be a member. More than seven million life policies are in force in this country and benefits worth more than £6,000 million are assured under those policies. If we examine the history of growth of these benefits we will see the phenomenal growth that has occurred during the period in which this Government has been in office. To brand the Government as the enemy of the superannuation funds, bent on their destruction, is not only a gross misrepresentation but also a quite unwarranted, unfair and unjust charge from the honorable member for Sturt, whom I have always respected and who on reflection will, I think, at least not attribute any motive of that sort to the Government. To imply that the Government would take its action without motive carries with it the imputation that we are so unaware or unmindful of the consequences that we allow these results to happen without knowing what is going on. Sir, this legislation has received the most careful scrutiny, first by the Ligertwood Committee, then by succeeding Commissioners of Taxation, by the expert officers of the Treasury, from the Secretary of the Treasury downwards, by a committee of the Cabinet and finally by the Cabinet itself. To argue that it is slipshod legislation is quite an unwarranted charge.

The honorable member for Bradfield (Mr. Turner) is always listened to with respect in this place. His thoughtful, sincere and constructive contributions invariably command our respect and the same consideration which, I assure him, has been given to this particular matter. My first argument against the proposal that he puts is this: I question whether, on the merits, the situation now before us could appropriately be dealt with by a joint select committee of the Parliament. There are situations in which it is appropriate that a joint select committee should meet and discuss matters and bring their recommendations to their fellows. We had such a case with the committee that examined the operations of our Constitution. We could consider as being apposite a case where the Parliament wished to report upon the most appropriate site, say, for a new Parliament House. Usually these are large, broad questions which invite some study and some research, but on which large answers are called for. A select committee is able to assist the rest of the Parliament by the answers that it gives. But is it appropriate for a joint select committee, which itself has a certain formality of procedure about it, to sit on the present matters, which are admittedly complex and which are, for the general run of members of the Parliament, admittedly almost incomprehensible if our objective is to achieve some result within a measurable time?

I am well aware that many honorable members - they have spoken their minds in the Parliament and outside it - feel that they have not had the opportunity that they would wish to give as much attention to elements of this Bill as they would hope to do. But we are also aware that the general interest of the country requires that devices which were costing the revenue, in the judgment of the Ligertwood Committee, £14 million a year and which, once they had been disclosed, would certainly cost the revenue a very much larger sum than that, should not go unchecked while our more leisurely processes take their course. Let me look for a moment at the sort of terms of reference that would be appropriate if we were to set up a select committee of the Parliament. I do not think the mover or seconder of the motion would challenge substantially what I am putting on this point. If we were to set up a select committee and if we were to ask ourselves what the terms of reference should be, I imagine we would think that they should run something like this - . to examine and inquire into the existing laws of the Commonwealth relating to taxation of income, and the operation of those laws, for the purpose of ascertaining any anomalies, inconsistencies, unnecessary complexities and other similar defects that exist in, or arise out of the operation of those laws, and to formulate proposals for remedying those anomalies, inconsistencies, complexities and other defects and for simplifying those laws;

That would be, I think, a fair statement of the kind of terms of reference that such a committee would have. If not, what sort of terms of reference has the proposer of the motion in mind for the committee that he envisages? I put this as a fair representation of suitable terms of reference. What I have read is the most substantial of the terms of reference that this Government gave to the Ligertwood Committee. That was a committee appointed for the purpose of making a specific inquiry. It was composed of able men who were well qualified by their experience to discharge the task that they were set. The Chairman of that Committee was qualified by his- experience in a judicial capacity and the other members were qualified by experience in either accountancy or commerce which had developed in them some specialist knowledge in these matters. No-one either then or now has challenged the qualifications of the members of the Committee. They applied themselves as industriously to the job as any member of the Parliament, I imagine, with his quite absorbing parliamentary duties, would be able to do. The Ligertwood Committee was appointed on 3rd December 1959 and it presented its report in June 1961.

Just what length pf time would be required by a select committee of both Houses of this Parliament to deal with these complex matters in the detail that would be required? I may be asked: If a matter such as this is capable of being dealt with by a committee of Government supporters, as has been the case in recent weeks, why can it not be dealt with by a joint select committee of the Parliament? Theoretically, there is no reason why the subject cannot be dealt with by a joint select committee. However, we are practical men with some knowledge of how matters proceed in this Parliament. I believe we all would agree that a committee of members of the Parliament, sitting privately and, in this instance, coming from the one side of the Parliament, can deal very much more rapidly and, I suggest, much more effectively with a matter such as this than a joint select committee could. We on this side of the Parliament have had a very able committee led by the honorable member for Parramatta (Mr. Bowen), to whom the honorable member for Bradfield has rightly paid tribute for the special knowledge and expertise that he has in these matters. I understand from the honorable member for Melbourne Ports (Mr. Crean) - the shadow Treasurer of the Opposition - that he chairs a committee of somewhat similar composition in the Opposition ranks.

Having regard to the kind of task that has to be performed by a committee inquiring into the matter with which we are now dealing, I suggest to honorable members that an inquiry can be made much more effectively and speedily by this process than by the protracted processes that would flow from the appointment of a joint select committee of the Parliament. We have committees such as the Public Accounts Committee and the Public Works Committee which are composed of members from both sides of the Parliament and from both Houses. They are able to perform their work speedily and well in dealing with specific matters which either they are asked to investigate or they themselves resolve to investigate. But I believe that the handing over to a joint select committee of the task of going over the field of income tax legislation as a whole, or even the area that is dealt with in the legislation now before us, and of discharging the task within the time necessary in order to achieve the purposes of this legislation would defeat the wishes of the Parliament as a whole.

This is a case in which I claim that the best would be the enemy of the good. I do not foresee the dire consequences that the honorable member for Sturt predicts for this legislation. I would be distressed and would feel that great damage had been done if one tithe of what he has predicted came to pass. I say that in the light of all my experience of the way in which the Commissioner of Taxation has gone about his work, the contacts he has had with superannuation funds, the arrangements that have been entered into and the formation, subsequent to the enactment of and with knowledge of the 1964 legislation, of hundreds of new funds, some of them of very great dimensions. All these factors confirm my view that, given some commonsense and some co-operation, the purposes of the Government will be achieved and the objective that we have, in common with the funds, of seeing them develop and make prosperous growth also will be accomplished.

I genuinely do not believe that the motion proposed by the honorable member for Bradfield would in this instance advance the purposes of the Parliament in either the time or the manner that honorable members would wish, and certainly not as effectively as would other methods that we can employ. In the rapidly growing Australia of today, with the enormous increase in the burdens of government that fall on Ministers and members of the Parliament, there is a need for some overhaul of our procedures. I believe that all of us here recognise that. I for one would willingly join in the kind of joint study and analysis that might produce more satisfactory procedures for us. But I do not see in the motion that we are now discussing a solution to the problem immediately before us. I have already said in other places that between now and the autumn sessional period study of the tax laws can proceed, not merely in relation to superannuation funds, but in relation to all the matters dealt with at the end of 1964. If as a result of the work of committees, on either the Government or the Opposition side of the Parliament, it can be shown that the Government’s objectives can be more effectively achieved and that simplicity of the law can be promoted by any measures recommended, every consideration will be given to the recommendations made by such committees. That, I believe, is the best practical course for us to follow at present. I suggest that if this is in accord with the view of the Parliament generally we reject the motion.

Mr TURNER:
Bradfield

.- in reply - Mr. Speaker, with the utmost respect I find it difficult - indeed, impossible - to accept the arguments adduced by the Treasurer (Mr. Harold Holt). He said, so far as I understood him, two things: First, that Parliament is not really qualified to do this kind of job. I hope that I do not put it too bluntly, but he referred to the distinguished composition of the Commonwealth Committee on Taxation, known as the Ligertwood Committee, and said, directly or by implication, that it would not be possible for Parliament to bring to bear on this kind of problem the technical knowledge that the Ligertwood Committee had. This is to carry things a long way. If it is true that Parliament is not qualified technically to consider this matter, there would be many other matters that Parliament could not consider. For example, there would be questions of defence expenditure. Can the Parliament say whether this or that kind of ship that might be proposed should be acquired by expenditure under one of the votes to come before the House? Can Parliament really express a view on this? Pursue the thing further and further and you come to the conclusion that Parliament might as well go out of business as it is not technically qualified to deal with all the expenditure which it authorises. This argument takes us so far that it takes us to the end of Parliament, My argument is a kind of reductio ad absurdum.

Mr Harold Holt:

– The straw man? That is not what I said.

Mr TURNER:

– A straw man. I am sorry if I misunderstood the right honorable gentleman, but perhaps I put it too strongly. I thought his emphasis upon the qualifications of the Ligertwood Committee was set in contradistinction to the lack of qualifications that a Parliamentary committee might have.

Mr Harold Holt:

– I do not want to be misunderstood, nor would the honorable gentleman wish to misrepresent me, but I said that even with those qualifications, which I do not think anyone would challenge, it took the Ligertwood Committee the best part of 18 months to produce a report for us to consider.

Mr TURNER:

– I am not quite clear that I fully understood what I thought was the honorable gentleman’s first argument; but now we come to the second argument which, perhaps, I did understand more clearly. This argument related to the time involved in going through a matter of this complexity. The Ligertwood Committee took many months to consider these matters. Therefore, says the right honorable gentleman, Parliament would take many months. But even conceding - I am not sure that he did concede - Parliament would have the capacity to deal with these matters, the fact remains, and perhaps this is the best answer, that the committee of the honorable member for Parramatta (Mr. Bowen) did give consideration to quite a large part of the field and came up with amendments which I understand the right honorable gentleman is prepared to accept. It did this in a very short time - I believe in eight meetings. In the course of the eight meetings this untechnical body - although I do not accept that it is - was able to come up with a number of amendments. I am not sure how many amendments were brought forward, but there would have been a score or more, and the Government has been prepared to accept them.

This does not suggest to me, therefore, that a Parliamentary committee would take either a great deal of time or be unable to come up with amendments which would be acceptable, because this has happened. The right honorable gentleman may say that this is true of only a limited part of the field. I do not think he has been quite fair about this. If I have not been fair, perhaps he has not been fair either. One does become carried away in the heat of one’s argument, one way or the other; but he has read out the terms of reference of the Ligertwood Committee - the whole field of income tax evasion. I am not suggesting anything as far reaching as this. In fact, last year the right honorable gentleman came forward with certain amendments which I do not suppose covered the whole field of the Ligertwood Report. If they did cover the whole field, they did so in certain ways by means of certain sections that were introduced in the amending act. I am glad that the right honorable gentleman gave an undertaking that those matters would be brought before the Parliament at a later date for careful and detailed consideration. This is that later date, but this Bill docs not cover all those matters; it covers only some of them. So it appears to me that he has not carried out the whole of his assurance to the House.

Although it is true that in relation to the short title of the Bill it would be possible to go back to those matters, I do not seek to do more than go back to those matters in relation to which he promised that there would be detailed consideration. I argue because of what has been done in respect of amendments to part of the field that this can be done in respect of the somewhat larger field. I think he exaggerated when he quoted the terms of reference of the Ligertwood Committee as if the Parliament were being invited to consider all those matters all over again. But even if it did consider them again, the ground has all been broken. Not only has the Ligertwood Committee reported but its report has been reduced into the terms of an act of Parliament. So we do not really start right from the beginning as the Ligertwood Committee did. In any event, I do not admit that we have to go back to the whole subject matter of the Ligertwood Committee. I fear that I am not convinced by what the right honorable gentleman has said.

I should like to say a final word about the argument of my friend, the honorable member for Sturt (Mr. Wilson). He said that because a bill was passed last week imposing a penalty rate of 10s. in the £1 on all superannuation funds, unless they can escape through certain gateways that are provided in this legislation, he is unable to support my amendment. The Bill now before the House deals with the nature of those gateways. I presume that this tax will not be imposed today or tomorrow; the payment of this tax will happen at some time after the end of the financial year. I suggest that a select committee would report by, say, 31st March. I pluck that date out of the air, but that seems fairly reasonable. The honorable member for Sturt surely should consider, looking at this Bill, whether the gateways which he considers are inadequate should be enlarged. I should have thought my honorable friend would have scrutinised this legislation with a view to seeing whether those gateways could be enlarged in conformity with his ideas. I do not necessarily support his ideas.

The best means of scrutinising the legislation would be through a select committee. He certainly will not have the opportunity in a Committee of the Whole which, as I said earlier, is something of a farce. I should have thought that he would have grasped the opportunity of machinery which would give him the opportunity to see whether the gateways could be enlarged. Indeed, he has given every reason why this should happen. He has quoted a letter that he has received from representatives of the reputable superannuation funds in which they say that they wish to make further representations. A select committee would have the opportunity to hear evidence and to hear what those representations are, and perhaps to question Treasury officials as to precisely what would be the effect of doing what the superannuation funds wish to be done, whether they would make the gateways too wide, and so forth. So I should think that my honorable friend could have supported me.

However, as I said at the outset, 1 aim concerned rather with pointing the way to machinery that can be used not only on this but also on other occasions. I can understand that this has been sprung upon the Treasurer at short notice. He has had only 10 days notice of this. I understand that we are getting towards the end of a session and that he is anxious to press this matter through the House to finality. This is all understandable. Nor, perhaps, has the Opposition, despite what the honorable member for Mackellar (Mr. Wentworth) has said, had an opportunity to put this matter before its caucus. It may be that the Opposition is bound by rules of this kind. If so, I regret it because I believe that this would be a great opportunity for the Opposition to decide that it would like to participate in the work of legislation, the scrutiny of difficult and complex bills by means of machinery which would be apt for the purpose. I should have hoped that perhaps the honorable member for Melbourne Ports (Mr. Crean) might have said: “ Never mind the Party caucus” - that is, if any member of his party can ever say that - “This is so obviously a thing that ought to be supported by this side of the House and I will support it.” However, he has not said this. I do not want to delay the House. I am not talking for the sake of talking. I am speaking because I think this is a matter of great principle. I have said all thatI can usefully say upon it at this stage, but I hope to give the House opportunities later on other occasions of having another look at this matter when all members on both sides have had an opportunity to see the force that is in it.

Question resolved in the negative.

In Committee.

Clauses 1 to4 - by leave - taken together, and agreed to.

Clause 5.

After section 6 of the Principal Act the following section is inserted: - “ 6a. - (I.) For the purposes of this Act-

  1. a right of a person or of his dependants to receive superannuation benefits from a fund shall be deemed to have ceased at a particular time (whether before or after the commencement of this section) if, by virtue of the terms and conditions applicable to the fund at that time, a right (including a contingent right) of the person, or of his dependants, as the case may be, to an amount that has accrued or could accrue from the fund ceased at that time otherwise than by payment of that amount to the person or his dependants; and
  2. where a right of a person or of his depen- dants to receive superannuation benefits from a fund has ceased at any time (whether before or after the commencement of this section)-the amount of those benefits shall be deemed to have been so much of the amount that was included in the fund at that time for the purpose of making provision for superannuation benefits for the person or his dependants as was not required for the purpose of providing for the person or his dependants superannuation benefits (including benefits payable at that time) the right to receive which had not ceased at or before that time.
Mr BOWEN:
Parramatta

.- I move -

Omit “to the person or his dependants”, insert “ to, or for the benefit of, the person or his dependants or by the transfer of that amount to another fund in which, as a result of the transfer, the person acquires, or his dependants acquire, as the case may be, a fully-secured right (including a contingent right) to receive superannuation benefits, being a right that is not less valuable than the first-mentioned right “.

Clause 5 proposes to insert a new section 6a into the principal Act. That proposed new section provides that the right of a person or of his dependants to receive superannuation benefits from a fund shall be deemed to have ceased at a particular time. The significance of it depends upon the fact that clauses 9, 17 and 23 of the Bill propose to insert new provisions in the principal Act relating to superannuation funds. Each of these provisions make certain consequences flow where the right of a member ceases during the year of income. For example, the new section 23f which is proposed in clause 9 requires, to state the position broadly, that where the right of an employee to benefits has ceased, then his benefits must be allocated amongst the remaining employees in the fund. Proposed new section 6a provides that the right of a person or his dependants to receive superannuation benefits shall be deemed to have ceased if, by virtue of the terms and conditions applicable to the fund at that time, the right of the person or his dependants to an amount that has accrued or that could accrue from the fund ceased at that time otherwise than by payment of that amount to the person or his dependants.

This proposed new section overlooks the case where an employee has transferred to other employment and where the trustees of the original fund have transferred the assets covering his benefit to the trustees of the superannuation fund connected with his new employment. It is an increasingly common procedure in modern times to provide in superannuation deeds that trustees may transfer assets to another fund if the trustees of the other fund have power to accept them, so that where an employee accrued from the old fund may accrue transfers, all of the benefits that would have from the new fund. Where a transfer of this kind occurs it should not be treated as a cesser. Indeed, the trustees of the original fund would not be in a position to allocate the assets among the other employees remaining in the old fund, because they would not retain the assets.

So I put forward my proposal, which - provides that there should be excluded from cesser not only the cases where there has been payment to the person or his dependants but also those cases where, as a result of the transfer of the amount to another fund, the person or his dependants acquires a right to superannuation benefits not less valuable than the previous benefits. I commend the amendment to the Committee.

Mr HAROLD HOLT:
HigginsTreasurer · LP

– It may assist the Committee in its consideration of the series of amendments which will come forward in the name of my colleague, the honorable member for Parramatta (Mr. Bowden), if I say at this point that these have been discussed by me with him in consultation with the appropriate officers of the Taxation Branch to ensure that they have the effect that is desired of them. The Government is disposed to accept all the amendments in the list which the honorable gentleman will put forward as we proceed with the Bill.

Mr CREAN:
Melbourne Ports

.- I should like to say one or two words about this rather intricate matter. What I have to say flows to some extent from remarks that I made during my second reading speech on the Bill. It is a matter to which the Treasurer (Mr. Harold Holt) or the Government should give some consideration. In my view, superannuation funds have got to such a stage now that I doubt whether the Com missioner of Taxation in particular, or our income tax laws, would be the appropriate means of solving the difficulty. The question before us arises out of the fact that difficulties occur when one individual transfers his employment. When there are, I think, half a million people involved it is not unlikely that considerable numbers of people in various funds will transfer to other funds. I think Mr. Parsons of the Association of Superannuation and Provident Funds of Australia suggested that there were not fewer than 40,000 funds. In fact, he thought there would be as many as 70,000 funds, although he went on to say that 200 of the larger funds had by far the great majority of assets and numbers of people covered. With that proliferation of funds it is certainly likely that people in funds will be moving from one place of employment to another.

During my second reading speech 1 drew attention to the 19th annual report of the Insurance Commissioner for the year ended 31st December 1964. On page 8 of that report the first thing he noted was the frequent absence of any provision in the rules of one superannuation scheme for the acceptance of life insurance policies issued for the purposes of another superannuation scheme. Then he went on to refer to the probability that the rules of some schemes which include occupations subject to a high rate of labour turnover may not have sufficient regard for the circumstances of those occupations.

I suggest that the time has come when there should be drawn up something like a model set of rules, agreed-upon provisions governing these funds where a person moves to other employment, as inevitably will happen. I discussed this matter with the honorable member for Parramatta (Mr. Bowen) this afternoon. He said that he knew of one scheme where the labour turnover was as high as 600 persons in the course of 12 months. Presumably he meant that 600 people move out and something like that number come in. He was speaking of a scheme in which a labour aggregate of some 7,000 or 8,000 people was involved. Therefore, at least these things are significant enough to have the future attention of the Government.

In my second reading speech I referred to a suggestion made in the “ Economist “ of July of this year that there might even be appointed a person to be called a registrar of superannuation schemes who would be a sort of holder of the rights of people who left one fund to go to another. After all, the older a man is the greater is the purchase price when he wants to join a new scheme, and the greater also is his vested right when he leaves. Perhaps there ought to be some residual kind of trustee to handle this business of transfers. One of the difficulties of the Act is that apparently annually one is supposed to make some assessment, when people leave the fund, of the rights of the residual members of the fund to any sums that were left in respect of his contribution and the employer’s part over and above what he took out. This is a rather messy business and beyond the compass of what might be called amateur trustees. In the Treasury where superannuation for hundreds of thousands of people is handled there is the advantage of actuaries and computers, but in some funds with only a few hundred members calculations still have to be made and the trustees have not the mathematical skill or technical assistance that the Treasury has.

The Treasurer might consider looking at this rather complex problem. It may be possible to provide a more simplified formula as to what should happen when this transfer process takes place. I offer no objection to the amendment. The Treasurer has indicated that he is willing to accept it, but I think the large numbers of transfers should be noted. It is because transfers take place that these rather complicated amendments are inserted in the Act.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 6 agreed to.

Clause 7.

Section 23 of the Principal Act is amended -

  1. by omitting from paragraph (s) the words “full-time duty” and inserting in their stead the words “ continuous full time service”; and
  2. by inserting after paragraph (s) the following paragraph - “(sa) in the case of a member of Naval Emergency Reserve Forces, the Regular Army Emergency Reserve or the Air Force Emergency Force, the pay and allowances paid to him as such a member (other than pay and allowances in respect of continuous full time service and any gratuity paid to him by reason of a calling out for continuous service of, or a part of, the Forces or Force of which he is a member;”.

Section proposed to be amended -

  1. The following income shall be exempt from income tax -

    1. in the case of a member of the Citizen Naval Forces, the Citizen Military Forces or the Citizen Air Force, the pay and allowances paid to him as such a member, other than pay and allowances in respect of full-time duty;
Mr BOWEN:
Parramatta

.- I move -

Before paragraph (a), insert the following paragraph - “ (aa) by omitting from sub-paragraph (i) of paragraph(ja) the words ‘ dependants of members’ and inserting in their stead the words ‘ a spouse, child or dependant of a member’.”.

This clause seeks to amend section 23 of the principal Act. As honorable members will recall, section 23 is the provision which exempts various types of income, and para- graph (jaa) exempts the income of certain superannuation funds. The purpose of my amendment is to make it clear that, when reference is made to the dependants of employees, a wife or child will fall within the class of dependants whether or not they are in fact and in law dependent. That is to say, anyone other than the wife or child would have to prove that they were in fact dependent upon the employee if they were taking his benefits from the fund, but in the case of a wife or child this should not be necessary. The amendment incorporates a provision that makes it clear. It uses the word “spouse” to cover, in effect, a widow or widower. It makes it clear that the spouse or child is within the ambit of the Act and is the dependant of an employee. I commend the amendment.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 8 agreed to.

Clause 9.

Section 23f of the Principal Act is repealed and the following section inserted in its stead - “23f.- (1.) In this section- employee ‘, in relation to a company, includes a director of the company; person’ includes a partnership; superannuation fund’ means a provident, benefit, superannuation or retirement fund; transaction ‘ includes a series of transactions. “ (2.) Subject to the succeeding provisions of this section, this section applies, in relation to a year of income, to a superannuation fund, not being a fund of a kind referred to in paragraph (jaa) of section twenty-three of this Act, if the Commissioner is satisfied that -

  1. the fund is an indefinitely continuing fund established and maintained solely for either or both of the following purposes: -

    1. the provision of superannuation benefits for employees in the event of their retirement or in other circumstances of a kind approved by the Commissioner; and
    2. the provision of superannuation benefits for dependants of employees in the event of the death of the employees;
  2. an employer of each employee who has, or whose dependants have, a right to receive benefits from the fund contributed to the fund during theyear of income in respect of that employee;
  3. the right of each employee and his dependants to receive benefits from the fund is defined by the terms and conditions applicable to the fund and was communicated in writing to the employee either before, or at the time when, contributions were first paid to the fund in respect of the employee or of his dependants or before such later date as the Commissioner approves in relation to the employee;

  4. where a right of an employee or of the dependants of an employee to receive benefits from the fund has ceased during the year of income and, at the time of the cessation of the right, a specific part of the amount of the fund was appropriated for the provision of benefits for the employee or his dependants - the amount of the benefits the right to receive which has so ceased is applied in the year of income or in the period of two months after the year of income, or will be applied after the year of income in accordance with an undertaking by the trustee of the fund given to, and approved by, the Commissioner, being an undertaking that has effect in relation to the year of income. for all or any of the following purposes: -

    1. the provision of the benefits that other employees or their dependants have rights to receive from the fund;
    2. the provision for other employees or their dependants who have rights to receive benefits from the fund of additional benefits on a basis that is reasonable, having regard to all the circumstances; and
    3. any other purposes approved by the Commissioner;
  5. where a right of an employee or of the dependants of an employee to receive benefits from the fund has ceased during the year of income and, at the time of the cessation of the right, a specific part of the amount of the fund was not appropriated for the provision of benefits for the employee or his dependants - any additional benefits that have been, or will be, provided from the fund for other employees or their dependants by reason of the cessation of the right have been, or will be, provided on a basis that is reasonable, having regard to all the circumstances;

  6. the benefits that any employee has, or the dependants of any employee have, the right to receive from the fund are not excessive in amount having regard to -

    1. the remuneration paid to the employee for services rendered by him to his employer;
    2. the period of the service rendered by the employee to his employer;
    3. the benefits, pensions and allowances that have been, are being or may be provided from any other fund for the employee or his dependants; and
    4. any other matters that the Commissioner considers relevant; and
  7. the amount of the fund is not substantially in excess of the amount that is necessary for the purpose of providing benefits that employees and their dependants have rights to receive from the fund having regard to the contributions that are expected to be made to the fund in succeeding years of income in relation to those employees and their dependants and to the income that is expected to be derived by the fund in succeeding years of income. “ (6.) Where, in relation to a superannuation fund, the Commissioner is not satisfied as to a matter referred to in sub-section (2.) of this section but the trustee of the fund satisfies the Commissioner that, by reason of special circumstances that existed in relation to the fund during the year of income, it would be reasonable for this section to have effect as if the Commissioner were satisfied as to that matter, this section has effect as if the Commissioner were satisfied as to that matter. “ (10.) Subject to the next succeeding sub-section, where the Commissioner is not satisfied that an undertaking approved by him in relation to a superannuation fund for the purposes of paragraph (f) of sub-section (2.) of this section was complied with during a year of income of the fund in relation to which it had effect -
  8. the Commissioner shall inform the trustee of the fund, by notice in writing given for the purposes of this sub-section, that he is not so satisfied;
  9. for the purposes of sub-section (13.) of this section and of this Act other than this section, this section shall be deemed not to have applied to the fund in relation to that year of income of the fund; and
  10. the undertaking does not have effect, and shall be deemed not to have had effect, in relation to any succeeding year of income of the fund. “ (14.) A dividend paid to a superannuation fund by a company that is a private company in relation to the year of income of the company in which the dividend was paid is not exempt from income tax by virtue of the last preceding sub-section unless the Commissioner is of the opinion that it would be reasonable to exempt the dividend from income tax, having regard to-
  11. whether any shares have been issued by the company to the fund in satisfaction of, or of a part of, a dividend paid by the company and, if so, the circumstances of the issue of those shares; and (0 any other matters that the Commissioner considers relevant. “ (15.) For the purposes of the last preceding sub-section, income that, in the opinion of the Commissioner, was derived by a superannuation fund indirectly from a dividend paid by a company, being a private company in relation to the year of income of the company in which the dividend was paid, shall be deemed to have been a dividend paid to the fund by the company. “(16.) Income (other than a dividend to which sub-section (14.) of this section applies) derived by a superannuation fund from a transaction is not exempt from income tax by virtue of sub-section (13.) of this section if the Commissioner is satisfied that the parties to the transaction were not dealing with each other al arm’s length in relation to the transaction and that that income is greater than the income that might have been expected to have been derived by the fund from the transaction if those parties had been dealing with each other at arm’s length in relation to the transaction.”.
Mr BOWEN:
Parramatta

.- by leave - I move -

  1. Before the definition of ‘ employee ‘ in subsection (1.) of proposed section 23p, insert the following definition: - “ ‘ dependant ‘, in relation to an employee, includes the spouse and any child of the employee;”.
  2. In sub-section (2.) of proposed section 23p, omit “ the Commissioner is satisfied that”.
  3. In sub-section (2.), paragraph (b), of proposed section 23p, omit “in respect of that employee “.
  4. In sub-section (2.), paragraph (e), of proposed section 23 p, omit “and was communicated in writing to the employee either before, or at the time when, contributions were first paid to the fund in respect of the employee or of his dependants”, insert “and notice in writing of the existence of that right was given to the employee not later than the time when contributions were first paid to the fund in respect of the employee or of his dependants or the thirty-first day of March, One thousand nine hundred and sixty-six, whichever is the later,”.
  5. In sub-section (2.), paragraph (f), of proposed section 23f, omit “ will be “, insert “ is to be”.
  6. In sub-section (2.), paragraph (g), of proposed section 23p, omit “ will be “ first occurring, insert “ are to be “.
  7. In sub-section (2.), paragraph (g), of proposed section 23f, omit “ will be “ second occurring, insert “are to be”.
  8. Omit sub-paragraph (Hi) of paragraph (h) of sub-section (2.) of proposed section 23f, insert the following sub-paragraph: - “ (iii) the benefits, pensions and allowances that have been, are being or may be provided for the employee or his dependants from any other fund to which this section applies in relation to the year of income or has applied in relation to a previous year of income; and”.
  9. After sub-section (2.) of proposed section 23f, insert the following sub-section: - “ ‘ (2a.) Where a deed or instrument relating to a superannuation fund contains a provision the purpose of which is to avoid a breach of a rule of law relating to perpetuities, the provision does not prevent the fund from being treated as an indefinitely continuing fund for the purposes of paragraph (a) of the last preceding sub-section.”.
  10. Omit sub-section (6.) of proposed section 23f, insert the following sub-section: - “‘(6.) Where a requirement specified in subsection (2.) of this section has not been complied with in relation to a superannuation fund in relation to a year of income but the trustee of the fund satisfies the Commissioner that, by reason of special circumstances that existed in relation to the fund during that year of income, it would be reasonable for this section to have effect as if that requirement had been complied with, this section has effect as if that requirement had been complied with.”.
  11. In sub-section (10.) of proposed section 23f, omit “ the Commissioner is not satisfied that an undertaking approved by him in relation to a superannuation fund for the purposes of paragraph (f) of sub-section (2.) of this section was complied with “, insert “ an undertaking approved by the Commissioner in relation to a superannuation fund for the purposes of paragraph (f) of subsection (2.) of this section was not complied with “.
  12. Omit paragraph (a) of sub-section (10.) of proposed section 23f.
  13. After sub-section (10.) of proposed section 23f insert the following sub-section: - “ ‘ (10a.) Where it appears to the Commissioner that an undertaking referred to in the last preceding sub-section was not complied with during a year of income, he shall inform the trustee of the fund in writing of the respect in which, in the opinion of the Commissioner, the undertaking was not complied with.”.
  14. In sub-section (16.) of proposed section 23F., omit “the Commissioner is satisfied that”.
  15. In sub-section (16.) of proposed section 23f., omit “ that “ second occurring.

This clause deletes section 23f which was inserted in theAct in November 1964 and inserts a new section 23f. The old section provided for a tax of 10s. in the £1 on superannuation funds of employer-employee type unless they could pass each of nine tests that were set out in subsection (2.). If they could not pass these tests a discretion was vested, by subsection (6.), in the Commissioner of Taxation under which he could treat them in special circumstances as though they had passed, although they had not passed. It was thought that some of these nine conditions were unduly stringent and that genuine and old established superannuation funds might, in many cases, have difficulty in passing all the tests.

The Government has recognised this fact by the amendment it has brought forward in the Bill. For example, in paragraph (e) of these tests there is provision for the allocation of rights to benefits which have ceased. These have to be allocated to employees who remain in the fund. Because of the burden of administration placed on trustees in giving effect to this, the amending provision brought in by the Government now provides that this condition is complied with if an undertaking is given to the satisfaction of the Commissioner to make an allocation in future, even though this is not immediately made in the year of income or two months thereafter as the earlier provision provided. The Government Members’ Committee on Taxation and Finance, of which I am

Chairman, was concerned that some of the other conditions in section 23f(2.) as proposed in the Bill were still too stringent to be met by many genuine superannuation funds. The Committee was also concerned at the extent to which matters were made to depend not on what the facts were but upon what opinion the Comm issioner might form about the facts. It gavemuch consideration to these matters and conferred with senior officers of the Taxation Branch to see what could be done to remove what were felt to be real points of criticism. The amendments I propose are the result of that consideration and those conferences with senior officers of the Branch.

Perhaps I might comment on them. Amendment No. 1 makes a similar change in the definition of dependant as was made by my amendment to clause 7. It makes it clear that dependant includes the spouse or any child of the employee. Amendment No. 2 omits the words “the Commissioner is satisfied that “ which govern all the nine conditions. If the words relating to the Commissioner’s satisfaction are deleted then the exemption from tax will depend upon the actual satisfaction of those conditions. Suppose that a dispute arises with trustees of a particular superannuation fund and they disagree with the Commissioner as to whether or not they have complied with these nine tests. If the Bill be amended as suggested they will have a right to appeal not only to a board of review as they have in the provision introduced by the Government, but, alternatively, a right to appeal to the Supreme Court of the State or, if they choose, to the High Court of Australia. As I have said, they still will be able to go before a board of review. Even if it is held that they cannot comply with conditions as laid down, under the Bill the Commissioner has discretion to waive compliance in special circumstances.

Amendment No. 3 relates to one of the conditions which has presented some difficulty to superannuation funds. I refer to the condition laid down in paragraph (b), which requires that an employer should make a contribution in each year of income in respect of each employee. This was designed to ensure, particularly where there were employees either coming in or leaving over a period immediately before or after the end of the accounting period, that contributions were in fact made in respect of each employee. The amendment seeks to mitigate the stringency of that condition as it affected genuine superannuation funds, by deleting the words “in respect of that employee”. If the amendment be adopted, there will not be a breach of the condition simply because contributions have not been made in respect of every employee.

Amendment No. 4 concerns another condition relating to a communication in writing to employees of their rights. In the Bill as drawn there is no direction as to the time within which this communication has to be made by existing funds. One purpose of the amendment is to provide a date for this notification. The date chosen is 31st March 1966, on the assumption that the Bill will be passed before the end of this year. If the Bill is delayed that date will need to be altered. The amendment provides also that it is sufficient to give notice of the existence of the right rather than requiring notice of details of the terms and conditions of the right to be given to the employee. Amendments Nos. 5, 6 and 7 are consequential verbal amendments, and I do not take any time on them.

Amendment No. 8 is of some significance. It relates to paragraph (h) which provides that if the aggregate of the benefits to which an employee is entitled under a fund which may be under consideration and the benefits to which he is entitled under another fund would give him an excessive benefit, the whole of the income of the fund under consideration loses the exemption. This seems to be a harsh provision. The amendment suggests that this provision should apply only where employer-employee funds are aggregated. They are described as funds to which proposed new section 23F. applies. Amendment No. 9 refers to the requirement that a fund should be of indefinite duration. This requirement presents a difficulty where there is a duration related to human life. One life may be of uncertain but definite duration. There are provisions in many deeds designed to prevent the application of the rule against perpetuities which make them depend on the duration of a multiplicity of lives. The provision set out in amendment No. 9 is designed to ensure that such deeds will not be brought into conflict with the condition in paragraph (a). Amend ment No. 10 simply relates to the discretion of the Commissioner to grant exemption to a fund notwithstanding he is not satisfied that the conditions have been complied with. The amendment retains the discretion but relates it to factual compliance. Amendment No. 11 carries through the notion of making the matter depend on actual fact, not on the opinion of the Commissioner. Amendments Nos. 12, 13, 14 and IS are consequential on the other amendments I discussed. They are essentially of a recasting and verbal character. I commend the amendments to the Committee.

Mr CLEAVER:
Swan

.- Nine tests have been established under proposed new section 23f. These are a source of great embarrassment to genuine superannuation funds. As the amending legislation has been drafted, these tests fall on those funds, as well as funds which the Government intended to embrace in the legislation because they were the funds which the Ligertwood Committee said were avoiding or evading tax. Some honorable members have said in the course of the debate that these nine tests should not have fallen on the well established, traditionally known and genuine superannuation funds. I remind the Treasurer (Mr. Harold Holt) that the Ligertwood Committee pointed out that as the doors were closed on evasion every step should be taken not to affect the genuine funds. I firmly believe that the honorable member for Sturt (Mr. Wilson) is to a large extent justified in claiming that injustice has been done. There are some of us who would support him when he refers to the damage that can be done to those funds handling amounts in excess of £300 million and representing thousand of employees.

The indecision that trustees of funds have faced and will continue to face is most considerable. The administrative costs that fall upon these funds will be quite unfair. What will happen to those funds which do not attract the discretion of the Commissioner because the presentation of their case is not as complete as it might be and which do not go before a board of review? The penal tax of 10s. in the £1 will fall on the very funds that Mr. Justice Ligertwood and the members of that estimable Committee sought to protect. I submit that it should have been possible to draft a proposal to give effect to the Committee’s suggestions in this direction. It should have been possible to aim this legislation at the culprit funds, not at those whose representation is sound. We should have avoided touching the well established and genuine funds. This is the situation which gives us concern at the present time.

As a Government supporter I appreciate the fact that the Treasurer was prepared at least to advocate an amendment which, as the honorable member for Parramatta (Mr. Bowen) has said, deletes the words “the Commissioner is satisfied that” and provides that where a fund is not satisfied with the decision of a board of review it may take its case to the supreme court of a State or even to the High Court. But we all know the cost and time involved in such procedures. Notwithstanding that the honorable member for Sturt may be accused by the Treasurer or anybody else of being extreme on this issue, I thick we must pay heed to his claim that superannuation funds could be severely damaged by this legislation. We are not the types, being members of the Government team, to come back later and say; “ We told you so “, but we have a paramount responsibility, when we feel as some of us do in a situation like this, to make our case as strong as possible. We would remind our right honorable colleague that early in the New Year of 1966, when time will be on our side, there will be members on the Government side who will have done more research and who will be pressing for yet further amendments, trying to rectify the damage done by the amendments of last year and now by the insufficient amendments that might be accepted on this occasion. I will support the amendments -

Mr Harold Holt:

– What damage does the honorable member say has been done up to this point of time?

Mr CLEAVER:

– The damage that has been done up to this point of time is the indecision for a period of 12 months and the impression gained by so many commercial interests that the advantages previously seen in having their own superannuation funds similar to the traditional funds is not worthwhile. These funds have been put to a colossal amount of expense over the last 12 months in trying to clarify a most complex piece of legislation. While I did not intervene in the previous discussion I feel, as I said in an earlier speech, that the complexity of the law is beyond my colleagues and I if we are to be called upon in any committee that is established for other than one specific task. But when I talk about a standing committee I believe we need a standing committee to take not only one aspect like superannuation funds and submit it to research and come up with some recommended answers, butto embrace the whole field of taxation. I hope that my right honorable friend, although he has rejected the idea of joint parliamentary committees might later on think again about recommendations put forward concerning a standing committee of experts.

Mr Irwin:

– Why take it outside the Parliament?

Mr CLEAVER:

– We have a precedent for this with the Ligertwood Committee.

Mr Irwin:

– But we do not want to take the matter outside the Parliament.

Mr CLEAVER:

– If my friend can give sufficient time to the complexities of the whole of income tax law as it now stands he is a better man than I think he is. I appreciate that some amendment is to be accepted so that the full discretion regarding these genuine funds and their operation does not fall upon the highly esteemed Commissioner of Taxation alone, that a Board of Review may be approached and that there is now to be recourse, if necessary, to higher authority. I did want to go on record as saying that I am by no means satisfied that justice is being done when the full effects of these nine tests arc to be felt not just by the funds that were culprits but by all funds.

Mr CREAN:
Melbourne Ports

– I find some difficulty in comprehending the arguments coming from one or two honorable members opposite when they say that some embarrassment will be caused to funds because they have to submit to the tests prescribed. There seems to be an impression in some minds that all these funds are set up by good employers to control bad employees. After all, there are two sides to these funds. They are made up of joint contributions of employees and employers. In fact there is a third aspect of the matter, because the contributions are allowed as deductions for taxation purposes, and the statistics given in the report of the Commissioner of Taxation for the year ended June 1962 show that about £33 million of contributions were allowed as deductions under the income tax legislation. This probably resulted in a loss to the revenue, if one likes to consider it in that light, of some millions of pounds.

I cannot see anything unreasonable about these nine bases of scrutiny of the funds. A point that does intrigue me a little is that of the total assets of about £311 million of these funds at June 1962, £204 million was held in assets other than those that are called gilt-edged securities. I was a little disturbed to read in the Press this morning that certain so-called reputable insurance companies had recently made what have turned out to be rather bad investments. The Australian Mutual Provident Society, I think, and one other company as well as M.L.C. Ltd. invested in the rather notorious concern, H. G. Palmer (Consolidated) Ltd. I think it is time that a little consideration was given to the holdings of some of these funds. What sort of assets are represented by this £204 million that is in other than gilt-edged securities? To my mind these funds are attaining such a magnitude that they can no longer be regarded simply as the preserves of small bodies, however well intentioned. The honorable member for Parramatta described these bodies, perhaps rather colourfully, as amateur trustees. Well, they may be amateur in their trusteeship, but at least the magnitude of these undertakings is now such that I believe there should be a little more scrutiny given to them than has been given in the past. It is easy enough to say that some funds have behaved well and some badly. Even those which have behaved well apparently are capable of making mistakes, and when the mistakes are made it is not the trustees who suffer, it is the so-called beneficiaries of the funds.

In my view there is still too little serious consideration given to what happens when a person who has been persuaded to join a fund is forced, for good and sufficient reasons, to leave the fund. What the Government is doing now is to suggest that any equity in the fund in respect of such a person, other than what he takes himself, should somehow or other be scrambled and distributed amongst the rest of the future beneficiaries. I cannot see that this is necessarily an equitable procedure. If I leave a fund and all I get is the contribution I have made, while the contribution the employer has made, which has been allowed as a deduction and in respect of which the taxation revenue has lost something, at the discretion of the trustees and subject to certain reservations provided in one of these tests goes into a pool for the benefit of the surviving or remaining members of the fund, this scarcely seems to me to be necessarily and always an equitable procedure. All I am suggesting here - and I am adopting a view in this connection opposed to that of some other honorable members - is that I do not resent what the Commissioner of Taxation is to do, although I have suggested that the strain put upon him is a little too great in terms of the other tasks that he is called upon to perform. But at least I think that there should be some umpire or arbitrator other than the fund itself. We have certain statutory provisions here in these nine gateways, if one likes to regard them as such, plus ultimately the discretion of the Commissioner as to whether the tests have been complied with. It has been suggested by the honorable member for Sturt (Mr. Wilson) that it is almost impossible for any fund to get through these nine gateways.

Mr Cleaver:

– All nine of them.

Mr CREAN:

– I would like to know in what respect it is impossible to fulfil these tests. As I see it, the main argument hinges on a rather difficult point - and I submit there are some difficulties where you have some hundreds of employees and you have to make a declaration as it were, in respect of every individual employee. I think that the amendment that has been suggested is at least sensible in that direction. The Treasurer having guaranteed to accept that amendment, I should like some other honorable members to point out which of the other conditions they find to be onerous as far as funds are concerned. It is easy enough in this House to talk about good funds and to suggest that people are being penalised. I should like to have a little more concrete demonstration of how these nine conditions are found to be offensive. To which conditions is it virtually impossible for good funds to adhere? I should be interested if perhaps later in the debate an honorable member could throw a little more light on that aspect.

Amendments agreed to.

Clause, as amended, agreed to.

Clauses 10 to 14 - by leave - taken together, and agreed to.

Proposed new clause 14a.

Mr FOX:
Henty

.- I move-

That the following new clause be inserted in the Bill:- “ 14a. After section 53E of the Principal Act the following section is inserted: - 53f. - (1.) In this section- “ conversion costs “, in relation to a unit of property, means expenditure incurred by the taxpayer in converting or adapting the unit for use in connexion with the system of currency provided for by Part II. of the Currency Act 1965; and “ unit of property “ means a unit of property not being trading stock of the taxpayer. (2.) Conversion costs incurred by the taxpayer in the year of income in respect of a unit of property used by him for the purpose of producing assessable income or carrying on a business for that purpose shall, subject to this section, be an allowable deduction. (3.) For the purposes of this Act -

no part of any conversion costs shall be an allowable deduction, or be taken into account in ascertaining the amount of an allowable deduction, under a provision of this Act other than this section in the assessment of the taxpayer in respect of income of any year of income; and

conversion costs shall be deemed not to be capital expenditure or expenditure of a capital nature. (4.) Notwithstanding anything in any other provision of this Act, the Commissioner may amend an assessment in respect of income of any year of income before the year of income that commenced on the first day of July, One thousand nine hundred and sixty-five, for the purpose of giving effect to this section.’.”.

The purpose of this amendment is to enable the owner of a business machine, such as an accounting machine, cash register or adding machine, to be able to deduct from his assessable income in the year of expenditure the amount of money paid by him to convert this equipment for use with decimal currency. Without this amendment this expenditure would have been treated as capital expenditure which could only be depreciated over a number of years. I shall be moving two other consequential amendments and I shall refer to them a little later.

Proposed new clause agreed to.

Clause 15.

After section 62 of the Principal Act the following section is inserted: -

Mr FOX:
Henty

.- I move-

Omit the clause, insert the following clause:- “ 15. After section 62 of the principal Act the following section is inserted: - 62 aaa. - (1.) In this section - “ compensation payment “, in relation to a unit of property, means a payment received by the taxpayer in respect of the unit in pursuance of the Decimal Currency Board Act 1963-1965; and “ unit of property “ means a unit of property not being trading stock of the taxpayer. (2.) For the purpose of calculating the depreciation allowable under this Act in respect of a unit of property in respect of which a compensation payment has been, or is, or compensation payments have been, or are, received by the taxpayer during a year of income, the depreciated value of the unit at the end of that year of income shall be deemed to have been, or to be, as the case may be, reduced by so much of the amount of that payment, or of the sum of the amounts of those payments, as does not exceed the amount that, but for this sub-section, would have been, or would be, as the case may be, the depreciated value of the unit at the end of that year of income. (3.) Where the amount of a compensation payment that has been, or is, or the sum of the amounts of any compensation payments that have been, or are, received by a taxpayer during a year of income in respect of a unit of property exceeds the amount that, but for the last preceding subsection, would have been, or would be, as the case may be, the depreciated value of the unit at the end of that year of income, the Commissioner shall successively reduce the respective depreciated values, at the end of that year of income, of -

any unit of property acquired by the taxpayer during that year of income to replace the first-mentioned unit of property;

any other unit of property acquired by the taxpayer during that year of income, being a unit of property of a description, of having a use, similar to that of the first-mentioned unit of property;

any other unit of property acquired by the taxpayer during that year of income;

any other unit of property owned by the taxpayer, being a unit of property of a description, or having a use, similar to that of the first-mentioned unit of property; and

any other units of property owned by the taxpayer, by such amounts as are not, in the aggregate, greater than the amount of the excess. (4.) An amount equal to so much, if any, of the amount of the excess referred to in the last preceding sub-section as is greater than the sum of the reductions made under that sub-section shall be included in the assessable income of the taxpayer of the year of income referred to in that sub-section. (5.) Where a unit of property of the taxpayer has been, or is, disposed of, lost or destroyed and the taxpayer has received, or receives, a compensation payment in respect of the unit in the year of income in which the disposal, loss or destruction took place or takes place -

the depreciated value of the unit immediately before the disposal, loss or destruction shall be deemed to have been reduced by so much of the amount of the compensation payment as does not exceed the amount that, but for this paragraph, would have been, or would be, as the case may be, that depreciated value; and

if the compensation payment exceeds that last-mentioned amount -

the Commissioner shall successively reduce the respective depreciated values, at the end of that year of income, of the units of property referred to in paragraphs (a) to (e), inclusive, of sub-section (3.) of this section by such amounts as are not, in the aggregate, greater than the amount of the excess; and

an amount equal to so much, if any, of the amount of the excess as is greater than the sum of the reductions made under the last preceding subparagraph shall be included in the assessable income of the taxpayer of that year of income. (6.) Where a unit of property of the taxpayer has been, or is, disposed of, lost or destroyed and the taxpayer has received, or receives, a compensation payment in respect of the unit in a year of income succeeding the year of “income in which the disposal, loss or destruction took place or takes place, sub-sections (3.) and (4.) of this section do not apply in relation to that payment but -

the Commissioner shall successively reduce the respective depreciated values, at the end of the year of income in which the payment was, or is, received, of-

any unit of property acquired by the taxpayer during that year of income to replace the firstmentioned unit of property;

any other unit of property acquired by the taxpayer during that year of income, being a unit of property of a descrip tion, or having a use, similar to that of the first-mentioned unit of property;

any other unit of property acquired by the taxpayer during that year of income;

any other unit of property owned by the taxpayer, being a unit of property of a description, or having a use, similar to that of the first-mentioned unit of property; and

any other units of property owned by the taxpayer, by such amounts as are not, in the aggregate, greater than the amount of the payment; and

an amount equal to so much, if any, of the amount of the payment as is greater than the sum of the reductions made under the last preceding paragraph shall be included in the assessable income of the taxpayer of the year of income in which the payment was, or is, received. (7.) The depreciated value of a unit of property shall not be reduced under sub-section (3.), paragraph (b) of sub-section (5.) or sub-section (6.) of this section unless -

at the end of the year of income, the unit was used exclusively for the purpose of producing assessable income or had been installed ready for use exclusively for that purpose and was held in reserve; and

depreciation under this Act is allowable to the taxpayer in respect of the unit. (8.) An amount by which the depreciated value of a unit of property has been reduced in pursuance of this section shall, for the purposes of this Act, be deemed to be depreciation that has been allowed in respect of that unit in the assessment in which the reduction was made.’.”.

The purpose of this amendment is to provide that where the Government has paid to the owner of a business machine an amount of compensation towards the cost of converting the machine for use with decimal currency, the amount of this compensation shall be applied to reducing the book value of the equipment before depreciation is claimed. Where the equipment has been scrapped and new equipment purchased, the amount of the compensation shall be applied towards reducing the book value of this new equipment before depreciation is claimed. Where the equipment has been lost and not replaced the written down value of the asset shall be reduced by the amount of compensation. Where the amount of compensation paid by the Government exceeds the written down value of any equipment being used for decimal currency the excessive amount of compensation shall be applied towards reducing the book value of other equipment used by the taxpayer and on which he is entitled to claim depreciation.

Finally, where the amount of compensation exceeds the written down value of all such equipment the amount of the excess shall be included in the taxpayer’s income for that year. This, of course, is subject to the fact that whatever amount the taxpayer pays out of compensation or otherwise for conversion costs may be deducted in full in the year in which it is paid. These amounts would otherwise have been treated as capital expenditure and would only be capable of being depreciated over a number of years.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 16 agreed to.

Clause 17.

Section 79 of the Principal Act is repealed and the following section inserted in its stead: - “ 79.- (1.) In this section- asset’ does not include a policy as defined by sub-section (1.) of section four of the Life Insurance Act 1945-1961; “ (2.) Subject to the succeeding provisions of this section, this section applies, in relation to a year of income, to a superannuation fund if the Commissioner is satisfied that -

  1. the right of each member of the fund and his dependants to receive benefits from the fund is defined by the terms and conditions applicable to the fund and was communicated in writing to the member either before, or at the time when, contributions were first paid to the fund in respect of the member or of his dependants or before such later date as the Commissioner approves in relation to the member;

  2. where a right of a member of the fund or of the dependants of a member to receive benefits from the fund has ceased during the year of income and, at the time of the cessation of the right, a specific part of the amount of the fund was appropriated for the provision of benefits for the member or his dependants - the amount of the benefits the right to receive which has so ceased is applied in the year of income or in the period of two months after the year of income, or will be applied after the year of income in accordance with an undertaking by the trustee of the fund given to, and approved by, the Commissioner, being an undertaking that has effect in relation to the year of income, for all or any of the following purposes:-

    1. the provision of the benefits that other members of the fund or their dependants have rights to receive from the fund;
    2. the provision for other members of the fund or their dependants who have rights to receive benefits from the fund of additional benefits on a basis that is reasonable, having regard to all the circumstances; and
    3. any other purposes approved by the Commissioner;
  3. where a right of a member of the fund or of the dependants of a member to receive benefits from the fund has ceased during the year of income and, at the time of the cessation of the right, a specific part of the amount of the fund was not appropriated for the provision of benefits for the member or his dependants - any additional benefits that have been, or will be, provided from the fund for other members of the fund or their dependants’ by reason of the cessation of the right have been, or will be, provided on a basis that is reasonable, having regard to all the circumstances; and

  4. at all times during the year of income, the terms and conditions that were applicable to the fund -

    1. did not permit a member of the fund or dependants of a member to receive, otherwise than in the event of the death, sickness or permanent incapacity for work of the member or in such other circumstances as the Commissioner approves, any benefits from the fund before the sixtieth anniversary of the birth of the member;
    2. required that any pension or annuity that a member had a right to receive from the fund was to commence to be paid, and any other benefits that a member had a right to receive from the fund were to be paid, not later than the seventieth anniversary of the birth of the member; and
    3. required that any pensions or annuities that dependants of a member had a right to receive from the fund were to commence to be paid, and any other benefits that dependants of a member bad a right to receive from the fund were to be paid, not later than the seventieth anniversary of the birth of the member or were to commence to be paid or were to be paid, as the case may be, in the event of the death of the member before that anniversary, and the terms and conditions applicable to the fund during the year of income have been approved by the Commissioner having regard to -
  5. the reasonableness of the benefits that have been, are being or may be provided from the fund or from any other provident, benefits, superannuation or retirement fund, whether a superannuation fund for the purposes of this section or not, for members of the first-mentioned fund or their dependants;
  6. the amount of the fund in relation to the benefits that are being or may be provided for its’ members; and
  7. such other matters as the Commissioner thinks fit, and were complied with by the trustee of the fund during the year of income. “ (6.) Subject to the next succeeding sub-section, where the Commissioner is not satisfied that an undertaking approved by him in relation to a superannuation fund for the purposes of paragraph (d) of sub-section (2.) of this section was complied with during a year of income of the fund in relation to which it had effect -
  8. the Commissioner shall inform the trustee of the fund, by notice in writing giving for the purposes of this sub-section, that he is not so satisfied;
  9. for the purposes of sub-section (10.) of this section and of this Act other than this section, this section shall be deemed not to have applied to the fund in relation to that year of income of the fund; and
  10. the undertaking does not have effect, and shall be deemed not to have had effect, in relation to any succeeding year of income of the fund.
Mr BOWEN:
Parramatta

.- by leave - I move -

  1. After the definition of “ asset “ in sub-section (1.) of proposed section 79, insert the following definition: - “ ‘ dependant ‘, in relation to a member of a superannuation fund, includes the spouse and any child of the member; “.
  2. In sub-section (2.) of proposed section 79, omit “the Commissioner is satisfied that”.
  3. In sub-section (2.), paragraph (c), of proposed section 79, omit “and was communicated in writing to the member either before, or at the time when, contributions were first paid to the fund in respect of the member or of bis dependants”, insert “ and notice in writing of the existence of that right was given to the member not later than the time when contributions were first paid to the fund in respect of the member or of his dependants or the thirty-first day of March, One thousand nine hundred and sixty-six, whichever is the later,”.
  4. In sub-section (2.), paragraph (d), of proposed section 79, omit “ will be “, insert “ is to be “.
  5. In sub-section (2.), paragraph (e), of proposed section 79, omit “will be” first occurring, insert “ are to be “.
  6. In sub-section (2.), paragraph (e), of proposed section 79, omit “ will be “ second occurring, insert “ are to be “.

  7. Omit paragraph (g) of sub-section (2.) of proposed section 79, insert the following paragraph: - “ (g) the reasonableness of the benefits that have been, are being or may be provided for members of the fund or their dependants from the fund, or from any other fund being -

    1. a fund of a kind referred to in paragraph (jaa) of section twenty-three of this Act;
    2. a fund any income of which is or has been, or, but for Division 9b of this Part, would be or would have been, exempt from income tax by virtue of paragraph (ja) of section twentythree of this Act; or
    3. a fund to which this section or section twenty-three r of this Act applies in relation to the year of income or has applied in relation to a previous year of income; “.
  8. After sub-section (2.) of proposed section 79, insert the following sub-section: - “ ‘ (2a.) Where a deed or instrument relating to a superannuation fund contains a provision the purpose of which is to avoid a breach of a rule of law relating to perpetuities, the provision does not prevent the fund from being treated as an indefinitely continuing fund for the purposes of paragraph (a) of the last preceding sub-section.”.
  9. In sub-section (6.) of proposed section 79, omit “the Commissioner is not satisfied that an undertaking approved by him in relation to a superannuation fund for the purposes of paragraph (d) of sub-section (2.) of this section was complied with “, insert “ an undertaking approved by the Commissioner in relation to a superannuation fund for the purposes of paragraph (d) of subsection (2.) of this section was not complied with “.
  10. Omit paragraph (a) of sub-section (6.) of proposed section 79.
  11. After sub-section (6.) of proposed section 79, insert the following sub-section: - “ ‘ (6a.) Where it appears to the Commissioner that an undertaking referred to in the last preceding sub-section was not complied with during a year of income, he shall inform the trustee of the fund in writing of the respect in which, in the opinion of the Commissioner, the undertaking was not complied with.”.

These amendments relate to clause 17 which deletes the old section 79 of the principal Act and inserts new section 79. In the main the new section reproduces the old but some minor amendments have been introduced by the Government. Again we find that this relates to superannuation funds. It provides that 5 per cent, of the cost of assets of superannuation funds established for the benefit of employees or for other persons is an allowable deduction. Again, in order to obtain this allowance - the deduction of 5 per cent, of the cost of assets - the fund has to pass a number of tests. There are nine tests but they are not quite the same tests as were provided in section 23f. However, the test in paragraph (d), which is amended by the Government proposal, relates to the case where members of a fund have ceased during the year to have a right to benefits. The condition as it stood previously was that these benefits had to be allocated to the remaining members of the fund.

The amendment proposed in the Bill is similar to that in relation to section 23 p, namely, that an undertaking to make an allocation to the satisfaction of the Commissioner will be a sufficient compliance with that condition. The Government Members Taxation and Finance Committee again considered that this new proposed section 79 had in it conditions which were somewhat too stringent so far as genuine funds were concerned, and the amendments I am moving are those which have been put forward by the Committee.

The first proposes a definition of dependant which corresponds with that which I mentioned earlier in relation to section 23 f. Amendment No. 2 deletes reference to the satisfaction of the Commissioner. This again, consistently with our earlier amendment, seeks to make compliance with these conditions depend upon the actual facts and not upon what might be the opinion of the Commissioner about those facts. Amendment No. 3 relates to the condition which requires communication to each beneficiary of a fund of the terms and conditions which give rise to his right. This amendment will make it sufficient to give notice in writing of the existence of the right and to provide a date on or before which existing funds would be entitled to give that notice, the date being 31st March 1966. That is a mat ter on which the Bill itself is silent. The next three amendments are purely verbal and consequent upon the other amendments.

Amendment No. 7 relates to the question of aggregating the benefits of the members of a fund. The honorable member for Melbourne Ports (Mr. Crean) wanted further light to be thrown on the difficulties that genuine funds might have in complying with these conditions. This, perhaps, might serve as one simple illustration. If the honorable member were a trustee of such a fund he would no doubt claim for the fund, after 30th June in a particular year, that it was exempt from tax, in order to get that benefit for his beneficiaries. The honorable member, if he were a trustee, would not know whether some of the members of this fund were also members of some other fund. If they were, and if their benefits when aggregated with the benefits they had under his fund would give those particular individuals an excessive retiring allowance, he would find, quite inadvertently as far as he was concerned, that the entire income of the fund he was administering would be liable to tax at the rate of 10s. in the £1. All his beneficiaries would be liable to 10s. in the £1 because one or two of those people belonged to other funds without his knowledge. That is one difficulty I mentioned as an example to the honorable member for Melbourne Ports.

What is sought to be done by amendment No. 24, is to make reasonable benefits in the case of funds dealt with in section 79 of the Act depend upon aggregating only the benefits which a member of that fund may have under funds which receive tax exemptions. It excludes any aggregation of funds which are themselves liable to ordinary rates of tax. Amendment No. 25 proposes to include in section 79 provision regarding the rule against perpetuities similar to that in favour of which I was speaking in relation to section 23f. I do not repeat my argument in favour of that provision. This provision is necessary to make sure that a genuine fund can pass the first condition which is in paragraph (a), otherwise there would be a difficulty for some funds in passing it.

Amendment No. 26 deletes a further discretion in the Commissioner relating to the question of whether an undertaking to allocate lesser benefits has been complied with or not, and makes it depend on the fact of whether or not it has been complied with. There are then certain consequential amendments dealt with in the amendments circulated on my behalf, Nos. 27 and 28. They are consequential to the change dealing with the satisfaction of the Commissioner as to the undertaking. I commend these amendments to the Committee.

Amendments agreed to.

Clause, as amended, agreed to.

Clauses 18 to 21 - by leave - taken together.

Mr CLEAVER:
Swan

.- I would like to speak to clause 20 of the Bill. I do so for the reason that I am most concerned with its contents. I was looking forward, at least, to having portion of my hopes and ambitions achieved by the amendment which it was my understanding that the Treasurer (Mr. Harold Holt) would probably introduce in connection with clause 20. This is another aspect which gives us concern because of the speed with which we deal with these important matters affecting taxation: The amendment was only available today and when I received it and had the opportunity to analyse it, I found that the Government’s amendment, which will affect clause 42 at a later time in this debate, had its impact on clause 20 only to a fraction of the extent that I anticipated. That means that I come hopefully and very genuinely to ask the right honorable gentleman if he will give further consideration to a possible amendment of clause 20. If I cannot achieve that now - because I have had no time to draft the amendment, as only the Parliamentary Draftsman could do it at my request - I hope that the injustice which I portray here might be appropriately fixed at a later date. The amendment which will be brought forward by the Treasurer when dealing with clause 42 I suggest virtually concedes the point which gives me concern.

I am sure he will recall that in my representations I have pointed out the injustice done to people who knew that section 80b, which was inserted in the Act in OctoberNovember 1964, was a very comprehensive piece of new taxation legislation based on the Ligertwood Committee’s recommendations that evasion or avoidance of tax in this field should be stopped. This section deals with provisions relating to beneficial ownership of, or rights attached to, shares, and is linked with the acquisition of loss companies.

Every honorable member knows that this field has been exploited. Let it be on record that I hold no brief whatever for the evasion or avoidance of tax as we have seen it presented by the Ligertwood Committee. It is apparent from last year’s effort that section 80b was in the mind of the Government. It became law and people then had to try to put their affairs in order. Things they contemplated doing, commitments half made, commitments fully made, all had to be lined up with the new legislation. Within 12 months, between the amendment of the Act by the insertion of section 80b and 28th October this year, a substantial amendment is again made, the purpose of which, I know, is to close a door that might have been partly open. But it goes beyond that. I am making a claim that fairness and justice should be extended to those people who, having entered into contracts or agreements within this 12-month period, now find they are more than embarrassed. I have said that clause 42 would appear to recognise this point, yet when we analyse that clause we find that instead of exempting those contracts or agreements which have been entered into in this period of 12 months since the major amendment of last year, the proposal is that only one year of assessment, not seven years, will be the benefit extended.

I have stressed that section 80b as inserted in the principal Act last year is comprehensive. I urge that it remain unaltered because of the action undoubtedly taken by many taxpayers between the date of its enactment and the date of the introduction of this Bill. I assert that they probably acted in good faith on what we purported the law to be - what was in the Government’s mind at the end of last year. Was there any indication that it would be altered? No. It would be the understanding of the advisers to the people who would seek an interpretation in law that this was the mind of the Government. If it is now proposed that the law should be altered, I believe that that could unexpectedly be seriously and, of course, unjustly financially embarrassing to those who have entered into agreements and contracts.

Clause 20 of the Bill proposes a vast extension of sub-section (5.) of section 80b -all, of course, to the detriment of the taxpayer - in an endeavour to catch those who might be contravening the law. If that clause is not deleted, I urge most genuinely that, in accordance with the accepted principles which can be found in clause 42 (1.) of the Bill in respect of bonus shares, it should at least declare that apart from options of the nature mentioned in the existing sub-section (5.), the proposed new sub-section (5.) should not apply to contracts made between the dates that I have so clearly underlined - the enactment of last year and 28th October of this year. The memorandum which accompanied the Bill has the following paragraph at the foot of page 59 -

In broad terms, the proposed new sub-section (5.) will apply in relation to an arrangement entered into for the purpose (or for purposes that included the purpose) of maintaining an overt position regarding beneficial interests in a “loss” company designed to ensure the deductibility of the loss–

I ask honorable members to note these words - and also to ensure that the beneficial interests will change after the deduction for the loss has been obtained.

A study of proposed new sub-section (5.) reveals that it will disallow losses even where contracts that are mentioned in no way ensure that the beneficial interest will change after the deduction for the loss has been obtained. We could take an example of this. If I owned shares in a company free of all encumberances, charges and options, surely my beneficial ownership of such shares is not imperilled by agreeing with another shareholder that, during a certain period, I shall not sell such shares or grant any option thereover. But, by clause 20 as it now stands, such an undertaking would appear to disentitle the company to a deduction for losses of previous years. Similarly, if I did not grant any person an option over my shares but took from him an option, which I might or might not exercise, giving me the right to call upon him to buy my shares, surely my true beneficial ownership of the shares would not be affected. But here again the result would be just as I have stated, as far as clause 20 is concerned. My proposition to the right honorable gentleman is that the clause gets right away from the true object as explained in the explanatory memorandum. I believe it goes too far. So it was that at a much earlier stage than this I appealed that at least those contracts into which people had entered in good faith should be clearly exempt, and unfortunately–

Mr Harold Holt:

– What does the honorable member mean by “ good faith “ in this instance? Would he agree that the only arrangements entered into between the enactment of the 1964 legislation and the introduction of the present Bill that could be affected are those that have a purpose of circumventing the intention of the legislation?

Mr CLEAVER:

– Seeing that the interruption has come from my right honorable friend as my time is about to expire I cannot answer it except to state that I firmly believe that if legal advice were sought, based upon our own enactment of last year, contracts and agreements could be so entered into.

The TEMPORARY CHAIRMAN (Mr Failes:
LAWSON, NEW SOUTH WALES

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

Mr HAROLD HOLT:
Treasurer · Higgins · LP

– I will say something more on clause 42, on this amendment. As presently advised, I merely repeat what I have said. The only arrangements entered into between the enactment of the 1964 legislation and the introduction of the present Bill that could be affected are ones that have a purpose of circumventing the intention of the legislation in its original form.

Clauses agreed to.

Clause 22.

Section 82aaa of the Principal Act is amended by omitting from sub-section (1.) the definition of “ superannuation benefits “.

Mr BOWEN:
Parramatta

.- I move -

Omit the clause, insert the following clause: - “22. Section 82aaa of the Principal Act is amended -

by inserting in sub-section (1.), before the definition of ‘eligible employee’, the following definition: - “ dependant “, in relation to an employee, includes the spouse and any child of the employee;’; and

by omitting from sub-section (1.) the definition of ‘ superannuation benefits

This is a small amendment. Three sets of provisions relate to superannuation funds. They are section 23f, section 79 and a group of sections which deal with the position of the employer who makes contributions to such funds. These were section 82aaa and other following sections. The amendment now proposed simply carries into this portion dealing with deductions the definition of dependant so as to include the spouse or any child of the employee. I commend the amendment to the Committee.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 23.

Sections 82aao to 82AAL (inclusive) of the Principal Act are repealed and the following sections inserted in their stead: - “82AAG.- (i.) …. “ (7.) Subject to sub-section (10.) of this section, if the Commissioner is satisfied that the scheme has been complied with during the relevant year in respect of the amount of the terminated benefits, sections eighty-two aah to eighty-two AAL, inclusive, of this Act do not apply in respect of those benefits in the assessment of the taxpayer in respect of income of the year of income of the taxpayer that corresponded with the relevant year. “ (8.) Subject to sub-section (10.) of this section, if the Commissioner is not satisfied that the scheme has been complied with during the relevant year in respect of the whole or any part of the amount of the terminated benefits -

  1. the Commissioner shall inform the trustee of the fund, by notice in writing given for the purposes of this sub-section, that he is not so satisfied;
  2. sections eighty-two aah to eighty-two AAL, inclusive, of this Act apply in respect of those benefits in the assessment of the taxpayer in respect of income of the year of income of the taxpayer that corresponded with the relevant year; and
  3. the scheme does not have effect, and. shall be deemed not to have had effect, in relation to any year of income of the fund succeeding the relevant year.
Mr BOWEN:
Parramatta

.- by leave - I move -

  1. In sub-section (7.) of proposed section 82aao, omit “ the Commissioner is satisfied that the scheme has been complied with “, insert “ the scheme was complied with “.
  2. In sub-section (8.) of proposed section 82aao, omit “ the Commissioner is not satisfied that the scheme has been complied with “, insert “ the scheme was not complied with “.
  3. Omit paragraph (a) of sub-section (8.) of proposed section 82aao.
  4. After sub-section (8.) of proposed section 82aao, insert the following sub-section: - “ ‘ (8a.) Where it appears to the Commissioner that a scheme referred to in the last preceding subsection was not complied with during a year of income, he shall inform the trustee of the fund in writing of the respect in which, in the opinion of the Commissioner, the scheme was not complied with.”.

The effect of these amendments is to delete the satisfaction of the Commissioner as a requirement and to make the matters dealt within the clause depend upon whether or not in fact the parties have complied with the requirements of the law. This is the form which, it will be seen, I have endeavoured to give effect to in earlier amendments. It is really making the deduction provisions which bear on the contributions of employees consistent in this regard with the earlier provisions relating to the exemption of the income of superannuation funds. This applies to all the amendments I have moved at this time and I commend them to the Committee.

Amendments agreed to.

Clause, as amended, agreed to.

Clauses 24 to 28 - by leave - taken together, and agreed to.

Proposed new clause 28a.

Mr BOWEN:
Parramatta

– move -

That the Following new clause be inserted in the Bill:- “28a. Section 121ba of the Principal Act ii amended -

  1. by omitting from sub-section (4.) the words the Commissioner is satisfied that’; and
  2. by omitting from sub-section (4.) the words and that that income’ and inserting in their stead the words ‘ and that income ‘.”.

This amendment provides for section I21ba of the principal Act to be amended and again in the same respect eliminates one of the discretions of the Commissioner and makes the matters referred to in that section depend upon the true facts and not upon the Commissioner’s opinion. Section 12 Iba deals with the income of superannuation funds in Division 9b. It is a related topic and is a consequential amendment which was needed to be made in the principal Act after the earlier amendments were put forward in order to make the rest of the existing Act consistent with those amendments.

I commend to the Committee the insertion of proposed new clause 28a in the Bill in order to effect this amendment to section 121ba of the principal Act.

Proposed new clause agreed to.

Clauses 29 to 41- by leave - taken together, and agreed to.

Clause 42. (1.) The amendments made by paragraphs (b) and (c) of section 13 of this Act apply in relation to dividends (other than dividends declared by a company on or before the tenth day of June, One thousand nine hundred and sixty-five) that were or are satisfied by the issue, after that date, of shares in the company. (2.) The amendment made by paragraph (a) of section 7 of this Act applies to assessments in respect of income of the year of income that commenced on the first day of July, One thousand nine hundred and sixty-four, and in respect of income of all subsequent years of income. (3.) The amendments made by section 5, paragraph (b) of section 7 and section 9, 16, 17 and 19 to 26 (inclusive) of this Act apply to assessments in respect of income of the year of income that commenced on the first day of July, One thousand nine hundred and sixty-five, and in respect of income of all subsequent years of income. (4.) The amendment made by section 32 of this Act applies to assessments for the year of tax that commenced on the first day of July, One thousand nine hundred and sixty-five, and for all subsequent years of tax.

Mr HAROLD HOLT:
HigginsTreasurer · LP

– I move -

At the end of sub-clause (1.), insert “but, in the application of those amendments in relation to dividends declared by a company on or before the twenty-eighth day of October, One thousand nine hundred and sixty-five, regard shall not be had to paragraph (b) of sub-section (2d.) of section 44 of the Principal Act as amended by this Act “.

I have a second amendment to this clause which I shall formally move later. I propose to speak to both amendments now with the concurrence of the Committee.

The TEMPORARY CHAIRMAN:

– There being no objection, the right honorable gentleman may adopt that course.

Mr HAROLD HOLT:

– The amendment that I have just moved relates to the commencement date of the provisions of clause 13. Under the terms of that clause, dividends declared after 10th June last are not to be exempt from income tax if shares issued in satisfaction of the dividends are redeemable in the strict sense known to company law or in the wider sense set out in that clause. An illustration of shares that are treated by that clause as redeemable in the wider sense is found in bonus shares that are issued by a company out of capital profits with a view to their being cancelled and cash paid to shareholders on a subsequent reduction of the capital of the company. The issue of non-redeemable bonus shares followed by a reduction of capital and payment of cash to the shareholders achieves much the same result as a bonus issue of redeemable shares redeemed by cash payments.

The Government’s decision to seek an amendment of the law was announced in my statement of 10th June 1965, which indicated that the amendment would apply to dividends declared after that date. The statement referred in specific terms to redeemable preference shares. It also, I thought, indicated the Government’s general concern with arrangements for making taxfree distributions of profits to shareholders in cash. However, it appears from representations received that some people at least did not infer from my statement that the proposed amendment would extend beyond redeemable shares strictly so called. This being so, further consideration has been given to the question of the conmmencement date of this amendment of the law. Insosar as it relates to redeemable shares, it is proposed that the commencement date of 10th June 1965 set out in this clause shall be retained. To the extent that the amendment of the principal Act relates to shares that are not redeemable in the strict sense, it is proposed that the amending provisions shall apply only to shares issued in satisfaction of a dividend declared after the date of introduction of the Bill’ in this chamber - 28th October 1965. The amendment that I have just moved will give effect to these proposals.

The second amendment, which, as I have said, I shall formally move later, relates to a matter on which I have received representations from several quarters. In particular, I mention representations made by the honorable member for Swan (Mr. Cleaver). This amendment relates to the commencement date of clause 20 and affects deductions allowable for company losses. Clause 20 will insert a new sub-section (5.) in section 80b of the principal Act. Subclause (3.) of the clause now before the Committee provides that the new sub-section is to operate from the commencement of the current income year. This is the commencement date of the provision being replaced by the new sub-section, which is designed as a safeguard against special arrangements entered into for the purpose of avoiding the percentage of shareholding test governing deductions for prior year losses of companies. Existing sub-section (5.) of section 80b provides a safeguard against the use of options as a device to avoid the percentage of shareholding test.

After the passage of the 1964 legislation, there were suggestions that possibly other arrangements that would have the same effect as the options covered by the safeguard were being resorted to and that these arrangements were not clearly within the scope of this safeguard. The amended provision inserted by clause 20 was designed to ensure that these more complex arrangements were not substituted for the option arrangement that was covered by the 1964 legislation. The honorable member for Swan has put to me most convincingly that taxpayers were entitled to act in accordance with their understanding of the 1964 provisions and that we should have regard to this fact. What I now propose is that the amendments made by clause 20, insofar as they affect arrangements of the type not known when the 1964 legislation was introduced, should not apply in assessments for the 1965-66 income year if the arrangements were entered into-

Mr Cleaver:

– Does it apply only to one year?

Mr HAROLD HOLT:

– This was the period that applied to the earlier provision. We could hardly put these on a more favourable basis than those that were covered by the earlier provision. I might mention that the altered commencing date 1 am proposing proceeds on the same principles as the 1964 legislation affecting company losses. That legislation allowed companies that had been taken over to continue to deduct losses against income derived up to 30th June 1965. The modification in the amendment I have moved will correspondingly allow deduction of losses to the companies concerned against income derived up to 30th June 1966.

Amendment agreed to.

Mr BOWEN:
Parramatta

.- I move -

In sub-clause (3.), omit “paragraph (b) of section 7 and sections 9, 16, 17 and 19 to 26 (inclusive) “, insert “ paragraphs (aa) and (b) of section 7 and sections 9, 16, 17, 19, 21 to 26 (inclusive) and 28a “.

The object of this amendment is twofold. You will recall, Mr. Temporary Chairman, that because certain earlier amendments were accepted, some additional provisions were inserted in the Bill. It is necessary to give a commencing date to those additional provisions. One of the purposes of this amendment is to insert in clause 42, which states when the provisions shall commence to operate, a provision to deal with those new enactments that were inserted by the amendment. The second purpose is to delete a reference to clause 20 which occurs in sub-clause (3.). The reason for this is that a separate provision, already referred to by the Treasurer (Mr. Harold Holt), is to be made dealing with clause 20. It is necessary, therefore, to take it out of sub-clause (3.). This amendment does those two things in relation to sub-clause (3.).

Amendment agreed to.

Mr FOX:
Henty

.- I move-

After sub-clause (3.), insert the following subclause: - “ (3a.) The amendment made by section I4a of this Act applies to assessments in respect of income of any year of income.”.

This amendment is associated with my other amendments and it has a common purpose with them. I should like to take advantage of this opportunity to thank the Treasurer (Mr. Harold Holt) for the consideration that he has given to this matter and which has enabled me to move the amendment.

Amendment agreed to.

Mr HAROLD HOLT:
Treasurer · Higgins · LP

– I move -

Before sub-clause (4.), insert the following subclauses: - “ (3b.) Subject to the next succeeding subsection, the amendment made by section 20 of this Act applies to assessments in respect of income of the year of income that commenced on the first day of July, One thousand nine hundred and sixty-five, and in respect of income of all subsequent years of income. “ (3c.) In relation to contracts, agreements or arrangements entered into, or rights, powers or options granted, on or before the twenty-eighth day of October, One thousand nine hundred and sixty-five, the amendment made by section 20 of this Act applies to assessments in respect of income of the year of income that commences on the first day of July, One thousand nine hundred and sixty-six, and in respect of income of all subsequent years of income.”.

Amendment agreed to.

Clause, as amended, agreed to.

Title agreed to.

Bill reported with amendments; report - by leave - adopted.

Third Reading

Mr HAROLD HOLT:
Treasurer · Higgins · LP

– by leave - I move -

That the Bill be now read a third time.

I take this opportunity to thank members of the House and the Committee for the consideration they have given to the measure.

Question resolved in the affirmative.

Bill read a third time.

page 3393

SUSPENSION OF STANDING ORDERS

Motion (by Mr. Harold Holt) - by leave - agreed to -

That so much of the Standing Orders be suspended as would prevent Orders of the Day Nos. 3 and 4, government business, being called on.

Question resolved in the affirmative.

page 3393

INCOME TAX (INTERNATIONAL AGREEMENTS) BILL 1965

Second Reading

Consideration resumed from 28th October (vide page 2328), on motion by Mr. Harold Holt-

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr. Harold Holt) read a third time.

page 3393

INCOME TAX (NON-RESIDENT DIVIDENDS) BILL 1965

Second Reading

Consideration resumed from 28th October (vide page 2329), on motion by Mr. Harold Holt-

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr. Harold Holt) read a third time.

page 3393

BILLS RETURNED FROM THE SENATE

The following Bills were returned from the Senate without amendment -

Superannuation Bill 1965.

Defence Forces Retirements Benefits Bill (No. 2) 1965.

Universities (Financial Assistance) Bill (No. 2) 1965.

House adjourned at 11.13 p.m.

page 3394

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated -

Radiation Laws. (Question No. 1167.)

Mr Whitlam:

m asked the Prime Minister, upon notice -

What progress has been made since his answer to me on 20th October 1964 (“Hansard”, page 2129) in securing Federal control of all uses of ionizing radiation?

Sir Robert Menzies:
LP

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

Since my replyin 1964 the Government has again examined this question.

Two hues of action are being pursued at present by the Commonwealth with a view to having uniform legislation and administration in all essential aspects of radiation control adopted by the States and the Commonwealth. The two lines are (a) a continuance of the scheme whereby the National Health and Medical Research Council examines and makes recommendations to the Commonwealth end State Governments on the legislation needed to achieve adequate controls over the use of ionizing radiation; and (b) the offer of technical advice and assistance to the States by the Commonwealth through the Commonwealth X-ray and Radium Laboratory.

The various State Departments of Health have been contacted and informed of the Commonwealth’s offer of technical assistance. All States have expressed their desire to avail themselves of this offer as the occasions arise and, in fact, two Stales, namely Victoria and Tasmania, have already done so. in addition, the National Radiation Advisory Committee has been invited to keep under review theeffect of ionizing radiation on thecommunity and to report periodically whether the situation requires additional action by the Commonwealth.

It is considered that the present arrangements for controlling ionizing radiation are operating effectively and that action by the Commonwealth to seek wider direct legislative control is not warranted at present.

Asian Students. (Question No. 1305.)

Mr Jones:

s asked the Prime Minister, upon notice -

  1. How many (a) Colombo Plan students and (b) other Asian students have graduated annually from Australian universities since 1950?
  2. How many students, in each category, have (a) applied for and (b) been granted permanent residence in Australia?
Sir Robert Menzies:
LP

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

Full information to answer each of these questions is not currently available and may prove not to be. However, I am having a further examination made of the relevant records and shall see to what extent the necessary information can be provided later.

Overseas Service Bureau. (Question No. 1333.)

Mr Hayden:

n asked the Prime Minister, upon notice -

  1. Does the Government help the body known as Australian Volunteers Abroad by subsidising the organisation or its volunteers in any way?
  2. If so, what are the details?
  3. Is he able to state whether, although there are volunteers waiting to serve this body abroad in its praiseworthy activities and their services can be readily used and are in fact needed for projects in under-developed nations, the services of many of them are not being utilised because of the inadequate manner in which the organisation is being helped by the Government?
Sir Robert Menzies:
LP

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

  1. Yes. The Government’s decision on this matter was announced on 7th November by the Ministers for External Affairs and Territories.

  2. The Government’s assistance to the Overseas Service Bureau for its Australian Volunteers Abroad Scheme will be in the form of annual grants towards the costs of mutually agreed programmes for voluntary overseas service. These programmes will be discussed each year between the Bureau and the departments concerned. The Bureau will need to continue to raise substantial amounts from the public itself. Other important elements of the arrangement are -

    1. while providing financial assistance to the Bureau, it is the Government’s wish to respect as far as possible the independence and the voluntary character of the Bureau and its volunteer activities;
    2. the Government hopes that its support will encourage continued and expanded support from private sources for the Bureau’s work, thus permitting a significant increase in the number of Australian volunteers going to Asia, Africa and the Pacific, as well as to Papua and New Guinea; and
    3. under the current Australian Volunteers Abroad Scheme, about half of the volunteers are serving in the Territory of Papua and New Guinea and it is expected that, under the new agreement, this will continue. Special attention is being given to the needs of the Territory because of the nature of Australia’s United Nations Trust responsibility, the extent of the work of the Christian Missions in the Territory and the present stage of the Territory’s development.
  3. See above.

Pharmaceutical Benefits Advisory Committee. (Question No. 1375.)

Mr Reynolds:
BARTON, NEW SOUTH WALES

s asked the Minister for Health, upon notice -

  1. How often has the Pharmaceutical Benefits Advisory Committee met during the last twelve months?
  2. What is the average time taken between reference and decision on items coming before the committee’s notice?
  3. How many items have been referred to the committee in each of the last three years?
  4. How many references are awaiting decision after consideration for (a) six months, (b) nine months, (c) twelve months and (d) more than one year?
  5. What persons or authorities are empowered to make references to the committee?
Mr Swartz:
LP

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

  1. On three occasions.
  2. My department refers all applications for the listing of drugs as pharmaceutical benefits for consideration by the committee at its first meeting after receipt of the application, provided the application is received in sufficient time for that meeting. It is the committee’s practice at each meeting to reach a decision as to its recommendation on the great majority of applications placed before it for consideration. In some instances a minor delay is occasioned while the committee obtains the views of the Australian Drug Evaluation Committee on a matter or refers an application to a specialist body, such as the Antibiotics Committee of the National Health and Medical Research Council, for specialist advice. It is not possible to state precisely the average time taken between receipt of an application and the committee’s decision on that application. However, as the committee meets at least three times a year, there would not normally be a greater delay than about three months.

  3. 1963: 624. 1964: 535. 1965: 421. These figures include -

    1. applications for the inclusion of new forms and strengths of existing pharmaceutical benefits;
    2. applications for variation in the conditions of prescribing existing pharmaceutical benefits; and
    3. cases where the committee rejects an application for the listing of a drug at one meeting and a subsequent request is made for that drug to be reconsidered for listing at a later meeting in the same year. 4. (a) One, which was first considered by the committee at its meeting in March 1965.
    4. None.
    5. One, which was first considered by the committee at its meeting in November 1964.
    6. None.
  4. Any person, authority or firm may make submissions to the committee, and all submissions are considered by the committee.

Medical Benefits. (Question No. 1433.)

Mr Reynolds:

s asked the Minister for Health, upon notice -

  1. Are medical fund organisations precluded from payment of benefits in respect of electrocardiogram services provided in a hospital, but not when these services are provided by a medical practitioner in private practice?
  2. If so, why is the contributor prejudiced by this distinction?
  3. Is this an unfair discrimination, especially in the circumstances of a patient rushed to hospital at the time of a coronary occlusion?
Mr Swartz:
LP

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

There is no prohibition by the Commonwealth on the payment of fund medical benefit by registered medical benefit organisations in respect of electrocardiogram services provided by public hospitals, and some organisations in fact do pay fund benefit for these services. It must be understood that the medical benefits scheme is intended primarily to assist persons who are insured with registered medical benefit organisations to meet the cost of medical services rendered by registered medical practitioners in private practice. Consequently, Commonwealth benefit is not payable in respect of electrocardiogram services provided by public hospitals. The question of providing fund benefit in these cases is one for determination by the management committees of the individual organisations. This is in line with the principle followed since the inception of the medical benefits scheme that organisations should be left free to conduct their own affairs with the least possible interference by the Government.

Telephone Services. (Question No. 1435.)

Mr Collard:
KALGOORLIE, WESTERN AUSTRALIA

d asked the Postmaster-General, upon notice -

From which areas in the electoral division of Kalgoorlie have firm applications been received for telephones, as stated in his answer to Question No. 1329 on 27th October (“Hansard “, page 2302), and when are these applications expected to be satisfied?

Mr Hulme:
LP

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

As at 8th November 1965, firm applications for telephone service were on hand from the following areas in the Kalgoorlie electoral division -

Circle Valley. In 1950, a Telephone Office was located at Circle Valley but it was closed in 1963 when the telephone office keeper sold his property, and neither the purchaser nor any other person was willing to conduct the office.

The present applicants for service live some few miles east of Circle Valley and a resident in this area has indicated his willingness to operate a manual exchange if one were established. However, none of the fourteen (14) applicants has accepted the terms and conditions. Consequently, action has not been taken to establish the manual exchange. Should a sufficient number of the residents accept the terms and conditions offered, investigations will proceed into the possibility of establishing either a manual exchange or a country automatic exchange to serve the area.

Dowak. At present there are insufficient applicants to justify the provision of an exchange. Investigations into the problems involved in providing services for the existing applications are proceeding.

Scaddan. A telephone office is already established at Scaddan. Plans are in hand to replace this office with a manual exchange should any of the applicants in the area accept terms and conditions of service for connection to it. Two groups, one consisting of three (3) applicants in a northerly direction and the other six (6) in a westerly direction, were offered service earlier but failed to accept. Investigations of the problems involved in providing services for all applicants in the area are proceeding. A new exchange is being considered for Scaddan East where some thirteen (13) of the hirty-three (33) applicants are located.

Walgoolan North. At Walgoolan North the applicants concerned have accepted terms and conditions or connection to an exchange proposed for the area but present indications are that additional pplicants are necessary to justify the expenditure nvolved. If a sufficient number is not received, the method of providing service in the area will be e-considered.

In all cases where the establishment of a new exchange in these areas is justified, an estimated date of provision will be determined having regard to the claims of other areas in the State for new exchanges. The projects will then be included in an appropriate position on the installation programme.

Defence Forces: Imperial Acts. (Question No. 1445.)

Mr Whitlam:

m asked the Acting Minister for Defence, upon notice -

When was consideration last given to introducing Australian legislation to take the place of those sections of (a) the Naval Defence Act and (b) the Air Force Act which apply Imperial acts and regulations?

Mr Hulme:
LP

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

The introduction of legislation on this matter is under active consideration in conjunction with the current general review of defence legislation. This review will be completed and the necessary legislation introduced at the earliest practicable date.

Commonwealth Serum Laboratories. (Question No. 1447.)

Mr Whitlam:

m asked the Minister for Health, upon notice -

  1. What biological products have been prescribed for production, sale and research by the Commonwealth Serum Laboratories Commission? On what dates were they prescribed?
  2. In what cases and on what dates has he determined that the Laboratories should (a) undertake research towards the production of biological products other than those prescribed for production, sale and research and (b) install or maintain plant or equipment capable of being used for the production of biological products, and produce and hold stocks of biological products, for purposes other than the immediate sale of those products?
Mr Swartz:
LP

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

  1. The prescribed biological products are specified in the Commonwealth Serum Laboratories Regulations, which have been made as follows -

A number of products is involved, and accordingly I am arranging for a copy of the Regulations to be forwarded to the honorable member. 2. (a) Determinations relating to research on other than prescribed products have been made in respect of each of the financial years since 1962-63 as follows- 1962- 63 - Determination made on 30th November 1962-

  1. The investigation of Australasian soils for antibiotic-producing moulds and the clinical evaluation of any new antibiotics discovered.
  2. The investigation and testing of human and veterinary viruses and the methods of isolation and identification of these for new vaccines.
  3. The identification of types of staphylococci involved in bovine mastitis for the preparation of a vaccine.
  4. The investigation of factors concerned with the pathogenicity of microorganisms and the purification of bacterial antigens.

The Commission’s expenditure under this Determination was £108,333. 1963- 64 - Determination made on 16th April 1963-

  1. The investigation of Australasian soils forantibioticproducingmoulds.
  2. The development of inactivated and attenuated strains of virus for a measles vaccine.
  3. The development and testing of a vaccine for staphylococci] bovine mastitis.
  4. The investigation of factors concerned with the pathogenicity of microorganisms and the purification of bacterial antigens.
  5. Biochemical factors involved in antibiotic resistance in staphylococci.

Determination made on 10th October 1963 -

  1. Screening of biologically acting compounds in co-operation with the Commonwealth Scientific and Industrial Research Organisation.

The Commission’s expenditure under these Determinations was £83,820. 1964- 65 - Determination made on 24th April 1964-

  1. The nature of essential antigens of pathogenic micro-organisms.
  2. Bacteriological problems associated with human disease in New Guinea.
  3. Biochemical factors concerned or associated with antibiotic resistance.
  4. The nature of immunological response to viral vaccines and factors influencing such response.
  5. Screening of biologically acting compounds in co-operation with the Commonwealth Scientific and Industrial Research Organisation.

The Commission’s expenditure under this Determination was £107,935. 1965-66 - Determination made on 29th April 1965-

  1. The nature of essential antigens of pathogenic micro-organisms.
  2. Bacteriological problems associated with human and animal disease in Papua-New Guinea.
  3. Clinical effects and applications of various non-cellular constituents of plasma.
  4. Factors concerned in development of clinical resistance to antibiotics. (e)The nature of immunological response to viral vaccines and factors influencing such response. (f)Screening of biologically active compounds in co-operation with the Commonwealth Scientific and Industrial Research Organisation and other organisations. 2. (b) The only determination in this respect is one made on 28th February 1963, authorising the Commission to produce and hold at the Laboratories 1,000,000 doses of smallpox vaccine for purposes other than the immediate sale of this product.

Life Insurance Policies.

Sir Robert Menzies:
LP

– On 31st August 1965, the Leader of the Opposition (Mr. Calwell) asked me to investigate an allegation contained in a question asked by the honorable member for Scullin (Mr. Peters) that life insurance companies are -

  1. refusing to insure soldiers serving in South Vietnam;
  2. re-writing policies so that soldiers in South Vietnam will have less protection than they would have had if they had remained in Australia as civilians.

I pointed out at the time that I would also need to know past practices as well as the position relating to South Vietnam.

I am informed that, in the case of the Second World War, all policy conditions reducing liability in the event of death due to war service were waived by the great majority of the life insurance companies then operating in this country. On the other hand, war clauses were inserted in new policies issued during the continuance of that conflict - frequently, however, the limitations imposed by such clauses could be reduced or removed by payment of an extra premium at a rate varying with the risks involved.

I understand that at the time of the Korean War a few life insurance companies refused to insure servicemen under notice of posting to a combat area. The remaining registered companies which deal with the public issued policies of life insurance on application by such servicemen provided an appropriate extra premium, which varied from one company to another, was paid during the period of service in that area. As during the Second World War, there were in some cases limitations as to the size and type of policy. The position is substantially the same in the case of servicemen who are under notice of posting to Malaysia or South Vietnam.

In relation to all three campaigns, I am informed that most companies have issued or will issue life insurance policies, which are free of restrictive clauses limiting the benefit payable on death due to war, to servicemen who are not under notice of posting to a battle zone or combat area and who are not subject to any other form of special or extra risk. There is, I understand, no uniformity of practice as regards the type of policy which may be obtained or the maximum sum which may be insured - some companies will only issue endowment insurance contracts under which the sum insured is payable at the end of a fixed term of years or on prior death; other companies have no restrictions on these aspects. The maximum sum insured varies from £5,000 to unlimited amounts.

I gather that there is no question of life insurance policies now in force being rewritten without the consent of the policyholder so as to vary the protection already afforded by those policies. Life insurance policies are written for a definite period and all terms and conditions are set out in the contract when it is effected.

The Honorable the Leader of the Opposition will probably recall that when he was in charge of the Life Insurance Bill in 1945 he accepted an amendment proposed by the then Opposition and which became Section 121 of the Life Insurance Act. This section reads as follows - “Any term or conditions of a policy issued after the commencement of this Act which limits, to an amount less than the sum insured, the amount payable under the policy in the event of the death of the life insured occurring on war service, shall not have any force or effect, unless the person who effected the policy agreed in writing to the insertion in the policy of that term or condition”.

The Section effectively precludes the insertion in a policy of restrictive conditions on account of war service without the applicant’s express consent in writing.

The practices adopted by the companies are based on what I am informed is a well established insurance principle that each insured person should pay a premium commensurate with the risks as they appear at the time when the proposal for insurance is being considered.

Concerning the supplementary question asked by the honorable member for Scullin on 2nd September, I understand that the $10,000 insurance scheme to which he referred appeared in a proposed Congressional Bill which has been rejected by the Committee on Veteran Affairs of the United States House of Representatives. Instead, a contributory scheme is being considered.

The matter of life insurance of servicemen has been examined on previous occasions but it is considered that, having regard to Australian conditions, adequate provision exists under the present legislation to meet the immediate and future needs of dependants of personnel killed on active service.

The policy followed is that compensation paid takes the form of a pension, the rates of which are reviewed periodically, designed to meet the real needs of widows and other dependants.

I would point out that for those who suffer incapacity arising from war service, and for the dependants of those whose deaths are caused by war service, the Commonwealth under repatriation arrangements provides a comprehensive system of compensatory pensions, medical treatment and related benefits, and a wide range of other assistance. These provisions compare favourably with those of other countries.

The Government is not aware that the insurance matters raised have had any prejudicial effect on recruiting.

Cite as: Australia, House of Representatives, Debates, 30 November 1965, viewed 22 October 2017, <http://historichansard.net/hofreps/1965/19651130_reps_25_hor49/>.

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