Senate
5 December 1950

19th Parliament · 1st Session



The President (Senator the Hon. Gordon Brown) took the chair at 3 p.m., and read prayers.

page 3561

ASSENT TO BILLS

Assent to the following bills reported : -

Wool Sales Deduction (Administration) Bill 1950.

Wool Sales Seduction Bill (No. 1 ) 1950.

Wool Sales Deduction Bill (No. 2) 1950.

page 3561

QUESTION

CIVIL AVIATION;

Senator MORROW:
TASMANIA

– For some time the residents of King Island have requested that a TransAustraliaAirlines service be extended to that island. I ask the Minister representing the Minister for Civil Aviation whether consideration will be given to the provision of both a freight and a passenger air service to the island.

Senator McLEAY:
Minister for Fuel, Shipping and Transport · SOUTH AUSTRALIA · LP

– If the honorable senator will place his question on the notice-paper I shall bring it to the notice of the Minister for Civil Aviation. I inform the honorable senator that a representative has already been sent to Sing Island in order to investigate shipping and freight problems.

page 3561

QUESTION

SOCIAL SERVICES

Senator BENN:
QUEENSLAND

– I ask the Minister for Social Services whether he, as the chief administrative officer under the Social Services Consolidation Act, substantially increased the weekly rate for board and lodging paid by 1,000 age pensioners domiciled in State-conducted homes in Queensland? Is the Minister aware that the increase of the weekly charge for board and lodging has absorbed two-thirds of the amount by which the age pension was recently increased, and that the higher prices that age pensioners must now pay for tobacco and their other meagre requirements have absorbed the balance of the increase, leaving them in the same position as they were prior to the recent increase of pension rates?

Senator SPOONER:
Minister for Social Services · NEW SOUTH WALES · LP

– Action to increase the rate of board and lodging of any pensioner is entirely beyond my power and has nothing whateved to do with. me. I assume that the honorable senator refers to the apportionment of the increase of pensions between pensioners themselves and the institutions in which they are living. That has always been the practice. I believe it is a statutory provision that a portion of the pension shall be paid direct to the pensioner and the remainder to the institution. When the age pension was increased by 7b. 6d. a week, it was necessary in the case of a - pensioner who was living in an institution, to apportion the amount of the increase between the pensioner and the institution.

Senator O’BYRNE:
TASMANIA

– Will the Minister for Social Services state whether, in the recent review of the social seT- - vices payments full consideration was given to the allowances of wives of invalid pensioners ? Why was no increased allowance given to such persons? Will the Minister state whether the wives of invalid pensioners, who are at a distinct disadvantage, in as much as they have to tend to their invalid spouses, and who, ( in many instances, are unable to supplement their meagre allowances, will, in the near future, he granted an increased allowance in proportion to the increases granted to other pensioners?

Senator SPOONER:

– In the recent review which I made of social services payments I gave full consideration to the position of wives of invalid pensioners when considering proposals for the liberalization of the benefits of the social services legislation. I came to the conclusion that the greatest good to the greatest number would be achieved by making the maximum possible increase in the rates of existing pensions. I am sure that the honorable senator will agree that the allowance to which he has referred is only one of a great number of benefits that are provided under the act which we should like to liberalize. I considered the whole range of pensions and made my recommendation on the lines of the bill that was recently before the Senate, which, in my opinion, gives the best all round result. After all, the wife of an invalid pensioner is not altogether deprived of an increase in that she will benefit to the degree that her husband’s pension has been increased. All these subsidiary benefits .follow very largely the principal benefits to invalid and age pensioners.

Senator McKENNA:
TASMANIA

– Will the Minister for Social Services consider the plight of aged or invalid pensioners who,.’ owning their own homes, are debarred, often by operation of Commonwealth law, from securing possession from tenants, and are prevented by operation of the property and income bars from benefiting fully or at all under the provisions of the Social Services Consolidation Act? As in many instances these aged or invalid people are forced to live in quarters inferior to their own properties, and as they are often in the position of having to pay a higher rent than -they receive, as well as being debarred under the provisions of the means test, will the Minister give urgent consideration to action which will grant relief to such age and invalid pensioners who are at present unduly penalized?

Senator SPOONER:

– The point that the honorable senator has raised is, I confess, one of the most difficult aspects of the administration of the act. The theory that the amount that the applicant receives offsets the loss of his pension is. not borne out in practice. In view of the many aspects of this matter, I should be glad if the honorable senator would place his question on the notice-paper, in order that I can furnish him with a considered replY

page 3562

QUESTION

BROADCASTING

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– On the 8th November, Senator Arnold asked the following question : -

I wish to. ask the Minister representing the Postmaster-General a question which I preface by stating that I understand that a board was established a considerable time ago for the purpose of controlling radio programmes that are broadcast throughout Australia, in order to ensure that broadcasts of sporting events did not represent too great a proportion of the entertainment provided. Will the Minister ascertain whether that board is functioning, and if it is, will he take steps to see thai those people who desire to hear programme!’ other than sporting programmes are provided with suitable entertainment on Saturday afternoons and Monday evenings T

The Postmaster-General has supplied the following reply: -

In accordance with the provisions of the Australian Broadcasting Act 1948 the Australian Broadcasting Control Board was established on the loth March, 1949. One of its functions is to ensure that adequate and comprehensive programmes are provided for listeners and in particular to ensure reasonable variety. In this matter the Board is required to consult with the Australian Broadcasting Commission and the representatives of licensees of commercial broadcasting stations. In conformity with this obligation the Board is examining the question of programme duplication and in this connexion the suggestion made by the honorable . senator that alternative programmes should be available to listeners who do not wish to hear sporting broadcasts has already been taken into consideration. In many areas some form of alternative programmes is already available. The provision of alternative programmes in areas which at present have only one reliable programme service is partly dependent on the development of broadcasting services generally and this is at present receiving the close attention of the Australian Broadcasting Control Board.

page 3563

QUESTION

COMMONWEALTH JUBILEE CELEBRATIONS

Senator ROBERTSON:
WESTERN AUSTRALIA

– Will theMinister representing the Minister for the Navy say whether it is a fact that, although vessels of six British Commonwealth countries will exercise in Australian waters during February, March and April, 1951, it is not intended that the vessels shall visit Western Australia and Queensland? If that be a fact, will the Minister request his colleague to reconsider the itinerary of the ships, with a view to including visits to such wonderful harbours as Fremantle and Albany?

Senator SPOONER:
LP

– I am aware that naval vessels from other nations will visit Australia early next year, but I have not seen the proposed itinerary of the visit. I shall bring to the notice of the Minister for the Navy the proposals contained in the honorable senator’s question.

page 3563

QUESTION

MILK

Senator ANNABELLE RANKIN:
QUEENSLAND · LP

– Will the Minister representing the Minister for Supply state whether it is a fact that large numbers of goats have been lost in flood waters in the flooded districts of central and western Queens land, thereby causing a shortage of milk in those areas? If that is so, will the Minister make inquiries with a view to ensuring that adequate supplies of powdered milk shall be available so that the needs of children will be adequately supplied ?

Senator COOPER:
CP

– I have seen in the’ press a reference to the fact that there have been considerable fatalities among the goat population in the flooded areas of central and western Queensland which w.ould result in a diminution of supplies of milk available to the people of those areas. I shall be only too pleased to confer with the Minister for Supply with a view to ensuring that powdered and other types of milk shall be available in the areas indicated by the honorable senator.

page 3563

QUESTION

KOREA

Senator ARMSTRONG:
NEW SOUTH WALES

– Can the Minister representing the Minister for External Affairs add anything to the statement which he made last week concerning developments in Korea? Has he any information of the results qf the talks being held in Washington between Mr. Attlee and Mr. Truman?

Senator SPICER:
Attorney-General · VICTORIA · LP

– I am not in a position at the moment to add anything to the statement which I made last week on this subject. I shall consult with the Minister for External Affairs and ascertain whether it is possible to make a supplementary statement early this week.

Senator MURRAY:
TASMANIA

asked the Minister representing the Minister for the Army, upon notice -

  1. Is it a fact that the Australian battalion now in action with the United Nations forces in Korea has suffered the heaviest relative casualties of any United Nations unit?
  2. Is it a fact that severely woun’ded casualties are being evacuated to the base hospital in Kure, Japan?
  3. In view of the approach of the severe conditions which exist in winter in Japan, will the Minister take action to have as many of the casualties as possible repatriated to Australia, where they would benefit by the warmer climate and could be visited by their next of kin in the various repatriation hospitals in each State?
Senator SPOONER:
LP

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

  1. Information is not available as to the number of casualties sustained by other units of the United Nations forces in Korea and, therefore, it is not possible to make a comparison.
  2. Wherever practicable, severely wounded casualties are being evacuated to the British Commonwealth Occupation Force hospital at Kure.
  3. Casualties who can be returned to their battalion within a reasonable period are retained in Japan for hospital treatment. .However, cases requiring a longer period of hospitalization and convalescence will be returned to Australia when they are fit to travel.

page 3564

QUESTION

ROADS

Senator COOKE:
WESTERN AUSTRALIA

– During the consideration of the Commonwealth Aid Roads Bill last Thursday evening, I asked the Minister for Fuel, Shipping and Transport whether he would ascertain the method by which the proposed Commonwealth grant of £50,000 to the States for road safety purposes would be apportioned between the States. Is the Minister now able to furnish that information ?

Senator McLEAY:
LP

– I have obtained the following answer from the chairman of the committee that will handle this matter : -

The grant of £50,000 per annum to the States for road safety during the currency of the 1947-49 act was apportioned substantially on the population-area basis applied in respect of financial assistance to the States under the Commonwealth Aid Roads and Works Act.

These three years were essentially an exploratory period and it has been found that, although the population-area basis for alio- ‘ cation of grants for road construction in the States has been generally acceptable, such a basis results in the introduction of anomalies when applied to grants for road safety purposes. The question of the basis on which tho £50,000 per annum will be allocated to the States in respect of the year ending the 30th June, 1951 has been listed for determination by the Transport Advisory Council at its meeting to be held early in the now year. It is intended to submit a more equitable scheme, which will eliminate the anomalies found to exist under the present allocation basis, and which will be acceptable generally to the States. In the meantime interim payments are being continued on the basis which applied last vear.

Amounts received by the States for the year ended the 30th June, 1950 were as follows: -

page 3564

WAR GRAVES

Senator McLEAY:
LP

– On the 29th November ‘Senator Robertson asked mewhether arrangements could be made for the inclusion of a visit to Western Australia in the itinerary of Brigadier Higginson, secretary to the Imperial War Graves Commission. I have ascertained that the principal reason for Brigadier Higginson’s visit to Australia is to inspect the work of the commission, particularly in the island territories of the Commonwealth. He will, in the time available to him, inspect as many cemeteries on the mainland as possible. Arrangements have been made for him to give short talks and displays of films on the work of the commission, in Canberra, Sydney and Melbourne. It will not be possible for Brigadier Higginson tospend any lengthy period in Western Australia, but he will visit the Perth War Cemetery when the vessel on which he is returning to England reaches Fremantle. The film brought to Australia by Brigadier Higginson will be retained here, and Brigadier Brown, Secretary-General of the Anzac Agency of the commission, will screen it in Perth at the first suitable opportunity.

page 3564

QUESTION

ROAD SAFETY

Senator TANGNEY:
WESTERN AUSTRALIA

– Can the Minister for Fuel, Shipping and Transport say whether statistics are available showing the number of fatal road accidents each year, especially among motor cyclists ? Is there a record of the age groups most affected by such accidents? In view of” the appalling loss of life among young men from motor cycle accidents, will the Minister have this matter discussed at the next conference of Commonwealth and State Ministers, so that somethingmay be done, perhaps by raising to 25 years the minimum age for holding a’ motor cycle licence, to reduce the number of accidents and fatalities?

Senator McLEAY:
LP

– Last year, the number of fatal road accidents reached the appalling figure of 1,634. I speak from memory. I do not know whether records exist showing the age groups of the victims, but I shall endeavour to get that information. Conferences have been held to discuss road safety, and recommendations have been made to State governments, some of which have taken appropriate action. The points raised by the honorable senator will be submitted to the next conference of Commonwealth and ‘State Ministers for consideration.

page 3565

QUESTION

COAL

Senator ASHLEY:
NEW SOUTH WALES

– Ever since’ the present Government has been in office, press statements have been published on the subject of coal production in Australia. Will the Minister for Fuel, Shipping and Transport make a statement on the subject as soon as possible in order to clarify the position? In Sydney, there are blackouts every day because of the shortage of coal or because of the poor quality of the coal. Is it true, as was stated by the Minister yesterday, that it is proposed to increase production by open-cut mining to 5,000,000 tons a year? What open-cut fields is it proposed to develop? Is it a fact, as stated by the Minister, that a survey is to be made of the coal recoverable by open-cut working ? Is it not a fact that the Joint Coal Board has already made such a survey in New South Wales, and that it has all the necessary information at its disposal? Is it not also; true that the plan now being developed for open-cut production of coal was evolved by the Labour Government?

Senator McLEAY:
LP

– I am so certain that the information in the possession of the Leader of the Opposition is incorrect that I deem it important that a considered statement should be made to the Senate to-day. I have spent so much time on this matter that I know most of the facts off by heart. The increased supply of coal expected this year from improved production and larger imports is estimated at 3,000,000 tons. However, that will still leave us 3,000,000 tons short of our requirements. The honorable senator has asked whether full information is available about coal deposits in New South Wales. A conference was held in Sydney yesterday between representatives of the New South Wales Department of Mines, the Joint Coal Board, and the Commonwealth Bureau of Mineral Resources. Half of the day was devoted to the particular matter that Senator Ashley has mentioned, and it was agreed by all that although the Joint Coal Board and the New South Wales Government had collected a certain amount of information, the investigations had not been full enough to permit an immediate development of coal resources. For instance, not long ago it was found that a coal-field upon which open-en, operations had been started, was not up to expectations, and a considerable amount of money was lost in that venture. It was agreed at the conference yesterday that the three parties concerned should pool their knowledge and resources, and that a determined- effort should be made to explore the possibilities of the most appropriate areas for open-cut mining. Technical advisers are of the opinion that, with a determined effort, the production of coal from opencut mines could be increased from 1,600,000 tons to 5,000,000 tons a year. The demand for coal has expanded so enormously in this country that every effort is being made to increase production. As New South Wales has the bes.t coal in the Commonwealth, the Joint Coal Board, the Department of Mines of New South Wales, and the Department of National Development are making strenuous efforts -to step up production in that State. They are not, however, losing sight of the prospects in other areas, and the various State governments are doing what they can to investigate their own resources.

Senator Ashley:

– I thank the Minister for the information that he has given and for his promise of a full statement on the matter. However, he has not answered one of my questions. I should like to know from what open-cut fields it is hoped to obtain an additional 3,000,000 tons of coal a year.

Senator McLEAY:

– Several mines are under consideration.

Senator Ashley:

– Where?

Senator McLEAY:

– In the- north and west of New South Wales.

Senator Ashley:

– I ask the Minister to give details of that matter when he makes a statement to the Senate.

Senator MORROW:

– I ask the Minister for Fuel, Shipping and Transport whether he will supply the Senate with a statement setting out the price a ton paid for coal in ships’ holds at Adelaide and Melbourne, which has been purchased from the United Kingdom, New Zealand, South Africa, India, Ceylon, the United States of America and Canada ?

Senator McLEAY:

– I shall endeavour to obtain the information sought by the honorable senator, but he should understand that it is only possible to obtain such information concerning the countries from which coal has been imported. I do not think that the Commonwealth has imported coal from some of the countries that he has mentioned. All the coal coming within the purview of the Australian Government’s plan of subsidy and assistance was purchased from South Africa and India. If the honorable senator desires information concerning those supplies of coal I shall be pleased to obtain it for him. I understand that some months ago some of the State governments imported small quantities of coal from the United Kingdom, but I am not in possession of information about those importations.

Senator ASHLEY:

– Is it not a fact that the Australian ‘Government has subsidized the importation of coal by State governments? If that is so, why is not the Minister in a position to know the cost of such coal?

Senator McLEAY:

– In my reply to Senator Morrow I stated that the coal that has been subsidized by the Commonwealth was imported from India and South Africa. As far as coal from those two countries are concerned I have informed the honorable senator that I shall be pleased to obtain the information requested by him.

page 3566

QUESTION

COMMONWEALTH BANK

Senator FRASER:
WESTERN AUSTRALIA

– On Thursday last I asked the Minister representing the Treasurer in this chamber -

Will the Minister representing the Treasurer inform me whether it is a fact that instructions have been issued to the Commonwealth Bank and to the Commonwealth- Savings Bank to restrict withdrawals from current accounts and savings accounts?

The Minister replied -

I have no knowledge of any such instruction, and I cannot believe that it would be given.

Since I asked that question I have read several press reports stating that an instruction such as that to which I referred had been given by the Governor of the Commonwealth Bank. Will the Minister make a statement before the Senate rises for the Christmas recess setting out any policy instruction that has been given by the Treasurer to the Governor of the bank in respect of withdrawals, advances and loans?

Senator SPOONER:
LP

– There surely must be some confusion, either on the part of the honorable senator asking the question or on mine. I understood that the honorable senator, on the last day of sitting, asked whether an instruction had been given by the Government, or by the Commonwealth Bank, which had the effect of prohibiting or limiting the withdrawal of amounts from current accounts. To that question I gave an emphatic denial. I repeat that denial. I cannot conceive of any circumstances in which the Commonwealth Bank would place a limitation upon the withdrawal by a depositor of money to the credit of his account; nor can I conceive that a person who has money on deposit with the Commonwealth Bank cannot draw a cheque or present his deposit book and so obtain the money. There is no such limitation. Does the honorable senator’s question request details of the general monetary policy adopted by the Commonwealth Bank to limit advances in certain directions and in certain circumstances? If it does, I inform him that the Governor of the hank has recently made a press statement setting out the bank’s policy.

Senator FRASER:

– I again ask the Minister whether he will’ make a concise statement to the Senate as to what instructions have been issued to the Governor of the Commonwealth Bank in relation to the matters raised by me on Thursday last and again to-day.

Senator SPOONER:

– I suggest that in the circumstances the honorable senator put his question in writing, because I do not understand what the question is. I trust that I was perfectly courteous in indicating that I did not understand it. If the question concerns the general monetary policy of the bank, in collaboration with or under the instructions of the Government, that is one thing; if it is in relation to the Commonwealth Savings Bank, that is another thing. I ask the honorable senator to be explicit and clear in his question and I shall do my best to obtain the necessary information for him.

Senator ASHLEY:

– I ask the Minister representing the Treasurer whether the policy being carried out by the Governor of the Commonwealth Bank is in keeping with the policy of this Government, that a limitation shall be placed upon advances and that instructions shall be given to clients, who seek advances, that they should endeavour to secure such advances from other sources, such as insurance companies and finance companies ?

Senator SPOONER:

– I have no doubt at all that the Commonwealth Bank is faithfully carrying out the Government’s financial policy.

Senator GRANT:
NEW SOUTH WALES

– If the Commonwealth Bank as at present constituted is faithfully carrying out the policy of the Government - and there is no reason to doubt that it is - will the Minister explain to the Senate the necessity for additional appointments to the Commonwealth Bank Board ?

Senator SPOONER:

– I assume that in replying to the honorable senator’s question I have the alternative of occupying half an hour, or of dealing with it rather abruptly. I shall give a brief reply, to the effect that as the result of added experience and added ability because of additional appointments to the Commonwealth Bank Board,. the efficiency of the bank will be correspondingly improved. It is of the greatest importance to Aus tralia that it should have the most efficient Commonwealth Bank Board that it is possible to obtain.

page 3567

QUESTION

RAIL TRANSPORT

Will the Minister representing the Minister for National Development ascertain whether a statement can be made to the Senate on the progress that has been made with the standardization of railway gauges. I should like to know, also, how far negotiations have proceeded with the States.

The Minister for National Development has now supplied the following answers : -

In South Australia the gauge is being broadened from 3 ft. 6 in. to 5 ft. 3 in. from Wolseley to Mount Gambier. The agreement between the Commonwealth and that State provides that the South Australian Government shall reconvert to standard gauge of 4 ft. 8$ in. at its own expense when complete standardization takes place in South Australia).

The line from Stirling North (Port Augusta) to Telford (Leigh Creek) is .being converted from 3 ft. 6 in. to standard gauge 4 ft. 8i in. Flans are well prepared and a bill authorizing the commencement is now before the Parliament.

Conferences have been held with the Western Australian and New South Wales Governments concerning plans associated with standardization, but so far nothing definite has been agreed upon.

Honorable senators will appreciate that there are other urgent works in progress, and that shortages of man-power and materials will prevent any further work of standardization for the time being.

page 3567

QUESTION

PYRITES

Senator MURRAY:

asked the Minister representing the Minister for National Development, upon notice -

  1. Is it a fact that at the recent Premiers conference held in Canberra, the Premier of Tasmania stressed the importance of maintaining regular shipments of pyrites from Strahan, in Tasmania, for processing into sulphur and sulphuric acid, a vital element in the manufacture of superphosphate?
  2. Is it a fact that the Tasmanian Government has agreed to provide £15,000 towards the cost of a new wharf at Strahan provided the Commonwealth Government makes a similar contribution? If so, will the Minister give urgent consideration to this matter as an important step in Australia’s national develop ment?
Senator SPOONER:
LP

– The Minister for National Development has supplied the following answers : -

  1. Yes.
  2. Yes; the Commonwealth Government has decided to make available £15,000 to the Government of Tasmania, which, together with the Tasmanian Government’s own contribution of the same amount, will enable the facilities for the shipment of pyrites from Strahan to the mainland to be made.

page 3568

QUESTION

MEAT

Senator WILLESEE:
through Senator Benn

asked the Minister representing the Minister for Commerce and Agriculture, upon notice -

  1. What is the total cost to the Government to date of the slaughtering of cattle for air transport at Glenroy station in the northwest of Australia?
  2. Will the Minister itemize the expenditure under such headings as salaries paid to aeradio operators, subsidies paid, if any, and other appropriate headings?
  3. What is the total weight of beasts killed for beef airlift at Glenroy station?
Senator McLEAY:
LP

– The Minister for Commerce and Agriculture has supplied the following answers : -

  1. Apart from the cost of supplying an export inspection service, which is available to all export works, the Commonwealth has not mct any cost of slaughtering cattle for air transport at Glenroy station.
  2. My colleague, the Minister for Civil Aviation, lias informed me that a small aeradio station, including a homing beacon, was established at Glenroy in 1940 and was staffed by an aeradio operator of his department during the killing season of that year. For the killing season in 1950 the equipment was again available for the air beef operation, but no aeradio operator was provided by the Department of Civil Aviation and operation was undertaken by company personnel. The capital cost of the whole of the installation was of the order ot £1,990, of which approximately £900 is recoverable. The cost of operating, including salary and excess duty payments in 1949, was approximately £520. Total maintenance costs incurred by the Department of Civil Aviation were of the order of £45..
  3. It is not the practice of the Government to reveal production statistics of individual companies.

page 3568

QUESTION

RICE

Senator HENTY:
TASMANIA

asked the Minister representing the Minister for Commerce and Agriculture, upon notice -

  1. What is the estimated consumption of rice in Australia for the months of November, 1950, to the end of May, 1951?
  2. What stocks of rice will be available fur distribution in Australia during the same period ?
  3. If such supplies are insufficient for all needs, will the Minister take steps to make a priority allocation to cover the needs of invalids, &c. ?
Senator McLEAY:
LP

– The Minister for Commerce and Agriculture has supplied the following answers : -

  1. Consumption for the period based on the pre-war period would be about 8,000 tons.
  2. Stocks sufficient to meet this demand were held when the distribution of rice to the public was resumed in October. Heavy buying since then by the public and traders has depleted supplies and the rice millers are now reviewing the position.
  3. The rice millers advise that they will give priority to hospitals and special requirement:! until the new crop comes in.

page 3568

QUESTION

PUBLIC SERVICE

Senator BENN:

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

  1. What number of psychologists and vocational guidance officers is engaged by the Commonwealth Government in each State?
  2. Do these officers perform their duty at primary and secondary schools or at the offices of his department?
  3. Will the Minister consider approaching the States with the object of having the work of his psychologists and vocational guidance officers co-ordinated with the work of similar officers in the employment of the States?
Senator SPICER:
LP

– The Minister for Labour and National Service has supplied the following answers -

  1. Psychologists are employed as such in the Department of Labour and National Service in the Vocational Guidance Branch of the Employment ‘Division (Commonwealth Employment Service) and in the Personnel Practice Branch of the Industrial Welfare Division, as follows: -

Psychologists, as such, are also, I understand, employed in other departments, but I have assumed from the text of the honorable senator’s question that his interest relates to vocational guidance officers who are only employed inmy department.

  1. Vocational guidance is provided in the offices of the department. Where schools desire vocational guidance given their leavers, and it is more convenient to give such guidance in the schools, this is done. My department receives many more requests from schools than it can possibly handle with the staff available to the department.
  2. The Commonwealth Employment Service has endeavoured to persuade the States to develop school counselling services to facilitate the work of the Commonwealth Employment Service, and its Vocational Guidance Branch, in accomplishing a smooth transition from school to work by appropriate placements. The Vocational Guidance Branch of the Commonwealth Employment Service has always maintained close touch with such school counsellors and psychological services as are in existence in the States to eliminate any possible duplication of services. As part of the liaison maintained the Commonwealth Employment Service supplies the State services with the results of its research in the fields of test construction, occupations and employment, and careers opportunities.

page 3569

TARIFF BOARD

Reports on Items.

Senator O’SULLIVAN:
Minister for Trade and Customs · QUEENSLAND · LP

– I lay on the table reports of the Tariff Board on the following items : -

Cotton Canvas and Cotton Duck

Tyre Cord Fabric and Tyre Cord

Ordered to be printed.

page 3569

COMMONWEALTH RAILWAYS BILL 1950

Motion (by Senator McLeay) agreed to-

That leave be given to bring in a bill for anact to amend the Commonwealth Railways Act 1917-1936, as amended by the Salaries (Statutory Offices) Adjustment Act 1950.

Bill presented, and read a first time.

page 3569

AUSTRALIAN SOLDIERS’ REP ATRIA TION BILL 1950

Bill returned from the House of Repre sentatives, with amendments.

In committee (Consideration of House of Representatives’ amendments) :

Clause 49 -

Section one hundred and eight of the Principal Act is amended -

by adding at the end thereof the following sub-section: -

House of Representatives’ Amendment No. 1.-

Paragraph (e), omit “sub-section”, insert “ sub-sections “.

House of Representatives’ Amendment No. 2.-

After proposed new sub-section (5.)add the following sub-section: - “ (6.) In sections one hundred and fourteen and, one hundred and fourteen a of this Act any reference to a member of the Forces includes a reference to a deceased member of the Forces and any reference to persons who are dependent on a member of the Forces includes a reference to a person who, but for the death of a member, would have been dependent on the member.”.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– I move-

That the amendments be agreed to.

The amendments, copies of which have been circulated to honorable senators, relate to clause 49 which deals with definitions. They are intended to liberalize the interpretation of”member of the forces “ for the purposes of sections 114 and 114a of the principalact. Section 114 relates to the contributions of money for the granting of assistance and benefits under the act, which are administered by the Repatriation Commission, and section 114a relates to trust moneys accepted and administered by the commission. Proposed new sub-section (6.) of section 108 defines more clearly a member of the forces than does the principal act. If the amendments are accepted any reference to a member of the forces will include a reference to a deceased member of the forces, and any reference to persons who are dependent on a member of the forces will include a reference to a person who, but for the death of a member, would have been dependent on the member. The amendment is designed so to liberalize the interpretation of “ member of the forces “ and “ dependant “ that there may be no mistake as to which persons should be included within that definition;

Senator ASHLEY (New South Wales - Leader of the Opposition [3.54]. - As the amendments clarify the definition of “ members of the forces “, the Opposition offers no objection to them.

Question resolved in the affirmative.

Resolution reported; report adopted.

page 3570

NATIONAL SERVICE BILL 1950

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Spicer) read a first time.

Second Reading

Senator SPICER:
AttorneyGeneral · Victoria · LP

– I move -

That the bill be now read a second time.

This is a bill to establish a system of national training for the Defence Force of Australia. The present Prime Minister (Mr. Menzies) in his policy speech in November, 1949, announced his intention to introduce “universal military and physical training for periods suited to our conditions and by methods and on conditions as to call-up and numbers to be determined on the best expert advice “. The intention to introduce the national service scheme embodied in this bill was thus placed clearly before the people, and the Government received a definite mandate to give effect to it. The grave international developments of the intervening months demand that it be put into effect without delay. Although we hope that the current crisis will be surmounted, we cannot but bring fresh vigour to the attainment of the greatest practicable degree of defence preparedness in Australia. We must provide the means for our defence, and we must be prepared to act quickly. We cannot assume that there will be time in the event of another emergency to turn completely untrained men into an effective fighting force. The Government has made clear its intention to raise the Permanent Forces of the Navy, Army and Air Force, by voluntary enlistment, to the peace time strengths approved for them. But if war should come, the Permanent Forces would be no more than a nucleus. It is on the Citizen Forces that we would have to rely to augment the Permanent Forces, to give us a Navy, Army and Air Force that would be capable of defending this country and of meeting whatever obligations the Government of the day had decided to assume.

As honorable senators are aware, the Defence Act provides that all male inhabitants of Australia between the ages of 18 and 60 years who are British subjects are liable in time of war to serve in the Citizen Forces. But the act also provides that the Citizen Forces may, intime of peace, be raised and kept up only by voluntary enlistment, and by means of the compulsory training provisions which have not been enforced since 1929. The Government is making every effort to encourage voluntary enlistment in the Citizen Forces.

The national service scheme proposed to be authorized by the measure now before the chamber is not a substitute for the Citizen Forces. Rather are its objectives to complement these forces by providing a reservoir of trained men among those who under the Defence Act will be available to be recruited for service with the defence force in the normal way in the event of an emergency. If, unhappily, war should be forced upon us, any national service trainees who are, by virtue of the provisions of this bill, then in the Citizen Forces, will, like other members of those forces, be available for service by virtue of the very calling out of the Citizen Forces. There is, of course, nothing novel in this proposal. The same obligation applied to trainees under the earlier training schemes. The crux of the matter, however, is that if and when a liability for service should arise under the defence legislation, many of those required to render service with the forces would already have received some training under the proposed national service scheme. The scheme will thus effect a profound change from our present situation. In the unfortunate event of Australia being forced to engage in hostilities, the forces recruited in accordance with the then existing law would contain, at least, a substantial nucleus of persons trained in the latest methods of warfare. It is perhaps unnecessary to say that the bill does not change the existing position with regard to liability for oversea service. The law on that matter is contained in the existing defence legislation, and nothing in this bill is inconsistent with it.

There is considerable difference between this scheme and earlier training schemes authorized by Part XII. of the Defence Act. Honorable senators will remember that, under the Defence Act provisions, youths were liable for service in one form or another in the junior cadets, the senior cadets and the Citizen Forces, from the age of 12 until the age of 26. Service was scattered over this lengthy period, but there was rarely any continuous period of training in excess of fourteen days. That is utterly unsuited to the requirements of to-day. The essence of the present scheme is that it provides for continuous periods of service sufficiently lengthy to enable not only the necessary basic service training to be given, but also an introduction to more specialized forms of service. It applies to those who are sufficiently mature to participate in and derive the maximum benefit from this basic and advanced training, and, as the training will take place with existing organized units of the three services, it not only allows of training in all of the specialized units of the services, but also facilitates the overall training of the regular units of the services themselves.

The proposed national service scheme has, moreover, a second objective. We believe that the measures to be taken by the Government in the field of medicine and medical and hospital benefits, both remedial and. preventive in their purpose, will be the more valuable if they are supplemented by a system of national service which brings to our young men the advantages in terms of physical fitness and morale of a period of regular disciplined training under expert instruction. The scheme is an integral part of the Government’s general defence policy. The foundations of the post-war defence forces were, as the Government has already acknowledged, laid by the previous administration. Our main quarrel with what the former Government did is that it was not enough, and appeared to rely much too heavily upon scientists, a few specialists, and small permanent service cadres. In our view a good deal more is necessary.

Honorable senators opposite may hesitate to accept the principle of compulsion in time of peace, although they have accepted it and applied it in time of war. To the Government, it seems that such distinctions are not possible in the times in which we live. The term “ cold war “ is more than a phrase. It expresses a reality toogrim to be ignored. In addition, I remind honorable senators that the schemes of national service now operating in the United Kingdom and in New Zealand, which are similar in principle to the proposed scheme, were both introduced by Labour governments. Those governments had no thought of dialetic distinction’s. Their attitudes to their responsibilities were founded on realistic appreciations of the vital importance of defence preparedness - in sharp contrast, so it seems, to the attitudes of honorable senators opposite.

To point my comment, may I quote from the speech of the British Minister for Labour and National Service, Mr. George ‘Isaacs, during the second-reading debate on the British National Service Bill in March, 1947. In the course of his speech, Mr. Isaacs said -

We consider that compulsory national service is not only necessary to ensure speed, but it is also the most democratic way of providing the Forces required . . . We think to-day, that the responsibility, the duty - I think one might almost say the privilege - of taking part in the defence of our country should be spread over the whole of our young men, irrespective of their class or their occupation; they should all come along and play their part in this service. We consider it is a national duty that every one, when required, should come to the defence of their country, and individuals should give sufficient time to making themselves competent to undertake that duty.

It has been suggested that the proposed scheme of national service does not go far enough. But every scheme such as this present one must have its beginnings. We have to provide camps and ‘ training facilities. We need to train instructors,, and, in some instances, to recruit them. We do not wish to add to the already extremely heavy pressures on the building industry by rushing up additional camp, accommodation in one short period. We do not propose to take in for training young men for whom there are not adequate instructors and training facilities. Therefore, our plans provide for a progressive building up of the numbers to be trained under the scheme, and as we can provide the extra facilities, so progressively will the total numbers taken under the national service scheme in any one year increase. This also necessarily means that, for the time being, .we must limit the number of centres, particularly in the country areas, in which training can be given and from which, therefore, young men can be called up for training.

Another argument that has been advanced is that industry, being already short of man-power, will be further prejudiced by any withdrawal from civil employment. But let us look at this argument. As I will explain, we will not be able to call up all 18-year-old youths, the class affected by the registration provisions of the bill. “We deduct, first, all those exempt from registration and service under the provisions of the bill. We deduct those who live too far away from training centres to be trained. We deduct those who are unfit for training. After allowing for the numbers which fall into the three classes that I have mentioned, we are reduced to a total availability of less than 30,000. As the period of service is roughly six months, We are, in effect, withdrawing the equivalent of a maximum of 15,000 young men for a period of one year. In fact, in the first few years of the scheme the number will be less, because of the operation of the system of deferment, to which I shall refer. But let us assume the figure is 15,000. The total work force at the moment is nearly 3,250,000, so that if the 15,000 that I have mentioned were deducted, there would be a total withdrawal from the work force of less than half of 1 per cent. We have looked at the incidence of this withdrawal on particular industries. As honorable senators will understand, it will not be uniform. But only in a few instances will the withdrawal from any industry exceed 1 per cent., and then only slightly. The Government has weighed this loss of possible production against defence requirements, and has concluded that it 5s something which has to be borne. And is it so considerable? The loss of production for one day’s public holiday throughout Australia is greater than will be the loss of production flowing from the temporary withdrawal from industry under the proposed national service scheme. And this is simply in quantitative terms. In qualitative terms, we have to weigh the production of skilled tradesmen and experienced workers on the scales against the withdrawal from production of inexperienced young men, most of whom will have been in industry only a short time.

We have considered the question of exempting from service persons in particular industries, and after weighing defence requirements against our industrial and economic needs, we have decided in principle against any such general deferment. The loss in any particular section of industry is relatively small, and we think that there are strong reasons of principle why the scheme should be universal in its application. If once we give exemptions on some industrial or occupational ground, then where do we stop ? Under the conditions in which we find ourselves at the moment, it is not easy to determine degrees of essentiality amongst industries and occupations. That problem becomes much simpler under the overriding compulsion of war. We do, however, meet the industrial need in two particular directions. First, we believe that youths who are apprenticed or are at educational establishments should not have their training interrupted where it would seriously dislocate their studies for a trade or profession. The Government believes that it is in the national interest, as well as in the interest of industry, of the young men themselves, and ultimately of the services that those of our young men who are equipping themselves for special tasks in the community, should complete their training as quickly as possible. Persons who fall into these categories will not be exempted from service. They will, if they wish, be deferred until such time as their educational and trade training has been completed. Secondly we intend to adjust, as far as possible, the call-up of individuals, particularly those engaged in industries having seasonal fluctuations, in such a way that the call-ups will coincide with seasonal slacks and not occur at the peak of activities.

With this introduction to the main objectives of the scheme, and its underlying principles, I now discuss particular provisions of the bill in more detail. First, a word about the general administration of the scheme. This scheme involves registration of persons liable to register under the bill. It provides for their interview and examination as to fitness for service. Deferments and exemptions can be made on various grounds. Machinery provisions are included for the actual call-up for service, and allocation to the different Services. Specific provision is made for protection of civil reinstatement rights. The intention is that the Department of Labour and National Service shall handle this administrative work. The regional directors of the Employment Division of the Department of Labour and National Service will be appointed registrars under the act and their offices will be the national service registration offices. Interviewing and such action as call-up and allocation to the services will be handled by the district employment officers of the Commonwealth . Employment Service under and in accordance, of course, with policy directions from the Minister. General supervision and oversight will be exercised by the permanent head of the department and regional directors. The responsibilities of the individual services attach when the trainee reports to commence his service in accordance with the notice to do so coming to him from the Department of Labour and National Service. There will naturally be the closest liaison between the civil department and the services in ensuring the smooth intake into the services of trainees of the categories required. I should add that these administrative arrangements accord with the practice in the United Kingdom and New Zealand.

As to liability for registration, it is proposed that all male British subjects ordinarily resident in Australia of the age of eighteen years will be required to register under the act when called upon by notice published in the Gazette to do so. The only exceptions will be certain officials in the service of international bodies, diplomatic personnel, men already serving in the Permanent Forces, and aboriginal natives of Australia. In the case of aboriginal natives, the services will consider applications from volunteers seeking to do national service. Provision is made for youths of seventeen to register early if they can show good reason for wishing to do so. This is designed to meet the needs of those who, for reasons associated with their careers, may wish, for example, to get their principal period of service over before commencing their studies.

Provision has been made for the extension of the obligations under the bill to persons who are not British subjects. The Government feels strongly that migrants coming to this country with the intention to make it their home should, equally with Australians and other British subjects in Australia, make their contribution to the country’s defence preparations and be liable for training. We consider that training for national service alongside Australians of the same age would play an important part in the assimilation of the migrants. But there are difficulties in that it is not customary for the nationals of one country to be subjected to compulsory military service in the forces of another country. In some cases, those who join the forces of another country are liable to lose their nationality. On the other hand, among the migrants to this country are many stateless aliens as to whom these difficulties do not arise. But I reaffirm that we desire to see aliens who have migrated to this country joined in this scheme. We are seeking the cooperation to this end, of other countries; for example, those with which we are negotiating immigration agreements. To the extent that we can do so within the rules of international law and practice, we propose to make these new residents of this country liable for national service.

The bill provides for medical examination by a medical board consisting of two medical practitioners. The standards of fitness will be as laid down by the services. As I have already said, one of the objects of the scheme is the improvement of national fitness, and with this in mind we propose to adjust as we go along standards which may result in bringing in persons who might not be fit for actual service with the defence forces in time of emergency. I am pleased to be able to say that the State authorities are cooperating with us in relation to radiological examinations. This has considerable value in connexion with the general campaign which is being waged against tuberculosis. We have already been assured of the assistance and co-operation of the

British Medical Association in arranging for doctors to undertake medical examinations, and I am confident that the medical profession will, when individual doctors are approached for’ assistance, be ready and willing to make its contribution to the successful operation of the scheme. The medical examination will normally be conducted in local training depots, formerly known as drill halls, and will follow upon the interview of the registrant with an officer of the Commonwealth Employment Service. At this interview, questions of deferment, preferences in relation to the services, and suitability for allocation to particular arms of the services will be determined. We propose that these interviews and examinations will take place in the evenings of week days. This should obviate avoidable interruption of industry, and enable the scheme to be administered with a maximum economy of staffing, and will provide the most favorable conditions for the full co-operation of medical practitioners.

Every registrant who complies with the standards of fitness laid down will be liable to be called up for service unless he is exempt from service. The exempt classes, apart from persons subject to prescribed physical or mental disabilities, are theological students, ministers of religion, members of religious orders and conscientions objectors.

The Government has given careful consideration to the position of conscientious objectors. The Defence Act, Part IV., provides that persons whose conscientious beliefs do not allow them to bear arms shall be liable in time of war to be enlisted for duties of a noncombatant nature. During the last war, however, the act was superseded by the National Security (Conscientious Objectors) Regulations, which provided that if a person was found by a court to hold conscientious beliefs which did not permit him to engage in any form of naval, military or air force service, he should be totally exempt, but if his objection was only to combatant duties, he should be enrolled for non-combatant service. The Government believes that conscientious beliefs should be respected. It has, therefore, decided to adhere to the principle established by the National Security Regulations and to admit conscientious objection as a ground of exemption from service under the act. It will be necessary for the applicant for exemption to establish the ground of conscientious objection to the satisfaction of a court. Courts constituted by a police stipendiary or special magistrate will have jurisdiction under the bill to determine these applications. Those who do not establish objection to all forms of service will be registered for non-combatant service.

I have already said that it is a basic principle of the national service scheme that training should begin at the age of eighteen, but to this principle there will be exceptions - eases in which call-up will be deferred while the ground of deferment continues. In such class will be apprentices and students whose course of study at a university, technical school or other approved educational establishment would be seriously dislocated if they were required to do their national .service at the same time as others of their age. These will be granted deferment until they have completed their courses. Another deferred class will consist of those who reside at places too remote from training centres to be able conveniently to attend for training after the first and major period of continuous training. The Air Force would probably prefer trainees living close to Air Force stations, whilst in the case of the Navy, it follows that trainees who can attend at naval depots will be sought. All the services will encourage national service trainees, after their training under that scheme has concluded, to continue to he associated with their units, and undertime additional training as do other young men in the Citizen Forces. It is also hoped that their association with the units will lead some national service trainees to enlist in the Permanent Forces.

In the case of the Army, in which service the majority of the trainees will serve, the present intention is that the training will include in the second, third and fourth years a number of evening and week-end parades and bivouacs. This raises the same difficulty as was experienced under the training provisions of the Defence Act in that it would be some burden to require persons who live far from centres where there are training depots to attend these periodic parades. The old provisions exempted persons whose bona fide residence is not within a distance of 5 miles, reckoned by the nearest practicable route from the nearest place appointed for training”. The Government is still examining the question whether this definition meets modern conditions. Persons who live in remote places, however defined, will not be exempted from service, but their call-up will be deferred so that if a training centre is established at a future time in an area where none at present exists, then all registrants in the area may be called up. There is a qualification which, of course, has general effect, namely, that no person can be called up to commence service under the provisions of the bill if he has reached the age of 26 years. Certain students doing long courses may constitute an exception to this rule. It is necessary to have an upper age limit after which liability for service shall cease as otherwise a man could be under the liability all his life. In any ease, it is desired to maintain some similarity in the agc groups of persons who will be serving together on national service. Of course, if a person changes his place of residence from a place where no training facilities exist to a place where they do, his deferment will automatically terminate.

The circumstances in which students, apprentices and persons living in remote areas will be deferred, will be laid down by ministerial decision. Provision is made whereby individual applicants who claim that service under the scheme would impose exceptional hardship on the applicant, or his parents, or dependants may apply to a court. The court may grant deferment for any period up to twelve months, at the expiration of which the applicant has the opportunity to apply again. It will have been noticed from my opening remarks that it is not proposed as a matter of general principle to grant exemption or deferment from service on the ground of occupation or employment in a particular industry. At the, age of eighteen the trainees will have had limited industrial experience, and their absence in training at this age, followed by short absences in subsequent years, is not expected to involve any serious loss of manpower to industry. It is possible that an exception will be made to the general rule in the case of the coal-mining industry. This industry, because of our great need, occupies a position of unique importance in the Australian economy. Men can hardly be spared from it at present, and it is unlikely that recruits from the industry would be sought in time of war. Therefore, at least in the early stages of the scheme, youths engaged in ‘ the coal-mining industry will be granted deferment of their liability for service.

I now turn to the nature of the service to be rendered under the bill, i! will be with the Citizen Naval Forces, the Citizen Military Forces, or the Citizen Air Force. Over the period of five years, during which a trainee will be in the Citizen Forces, he will undergo 176 days’ training. Having completed that training, there will be no further liability for training or service apart from that which, as I have explained, would attach, under the defence legislation, to all members of the Citizen Forces should war break out before the five years’ period has expired. The present intentions are that for the Navy there will be a period of/ 124 days’ continuous training in the first year, and 13 days in each of the succeeding second, third, fourth and fifth years. For the Army, there will be 98 days’ con tinuous training in the first year, and in the second, third and fourth “years there will be a 14 days’ camp and 12 days devoted to evening and week-end parades and bivouacs. In the Air Force, the training period of 176 days will be served in one continuous period following callUm It is conceivable that in the light of experience the services will find it desirable to recommend some adjustments in their training programmes, and this will be possible within the framework of the bill subject to the total training period not exceeding 176 days over five years.

It will be noted that in the Air Force, the whole of the training, and in the other two services a substantial part of it, will be concluded in one straight stretch and usually in the. trainee’s 18th year and in his first year of training. These arrangements not only meet the needs of the services, but will cause the minimum disruption of civil employment. There are’ few workers at the age of eighteen who cannot be spared from their employment for the period of training proposed foi the first year, and the short absences which will be necessary in the years following should give rise to little more inconvenience than is occasioned by annual recreation leave now granted to employees under the terms of industrial awards.

It might be asked why do the periods of training differ in the various services. The fact is that the type of training to be given differs in each of the services and, furthermore, it has been necessary to take into account our capacity adequately to administer, house and train the trainees. Moreover, the training, as I have previously said, has to be integrated with the training of the regular forces of the various services. In the Navy, the initial training period will be divided into two parts - ashore and afloat. The seagoing training will follow immediately on the training in shore establishments, and will be carried out in vessels commissioned specially for the purpose. Those vessels will also be used to afford seagoing training to the existing Naval Reserve Force. In the Army, the first period of 98 days, or 14 weeks, will comprise basic and specialized training.. Training in each of the succeeding second, third and fourth years will be with Citizen Military Force units. In the Air Force, training will be on Air Force stations and will include class-room instruction and working with qualified permanent personnel. In addition, a selected but limited number will be given elementary flying training. The pay, and terms and conditions of service, of national service trainees will, in general, as with volunteer members of the Citizen Forces, be regulated by the service acts applicable to the particular arm of the Citizen Forces in which they are serving.

I repeat that this bill does not deal with liability for service in time of war. As honorable senators are aware, however, the present arrangements of the Royal Australian Navy and the Royal Australian Air Force do not provide for enlistment of persons who are not liable to serve overseas. Therefore, it would be senseless to train national service personnel in these services if they are not going to be in a position where, in time of war, they can be employed in these two services. Therefore, the bill provides that no registrant should beallotted to and called up for service with the Navy or Air Force unless he has indicated in advance that he is willing to servebeyond the limits of Australia. A formal document volunteering in this way, andcountersigned by a parent, or guardian,, or magistrate, or justice of the peace, wil have to be forthcoming from a registrant before he is allotted to trainingwith those services. This will apply notwithstanding that he may, in his registration form, have indicated a preference for service with one or other of those services. It will also be open to a registrant preferring service with the Army to complete a similar instrument. It may be that at some future time the Navy and the Air Force may decide to enlist persons for service in Australia only, and the bill, therefore, makes provision enabling, if and when such a decision is so taken, allocation of registrants to those forces, even if they do not volunteer for overseas service. I should also point out that the intention is to give effect, as far as possible, to the preference for particular services expressed by registrants, but that may not of course always be practicable.

There remains an important part of the bill not yet discussed - that dealing with protection in relation to civil employment. It is here that the bill calls upon employers to make some contribution to the smooth working of the scheme. It is of great importance that a young man should not feel that he will be prejudiced or penalized in his employment by reason of his liability for service or his absence while serving under the scheme. Any such conduct on the part of an employer will constitute an offence. No reflection on the Australian employer should be read into this. The Government believes that this whole plan has the enthusiastic support of individual employers and their organizations. Already it is evident that many employers propose to give practical support in the form of making up any difference in the pay of trainees. This, I might add, is also the policy of the .Government. Subject to some qualifications which will be mentioned, an employee will be entitled to reinstatement in his employment upon return from a period of national service. He will be protected from dismissal, except for reasonable cause, for a period after bis reinstatement equivalent to the period which he has just served. The qualifications to these rights are that the employee must have been employed by the employer for at last 30 days immediately prior to his going into camp, and after coming out of camp he must present himself for work without delay. The reasons for attaching those conditions to the right of reinstatement should be obvious. The bill further provides that a reinstated employee, provided that he stays in the job at least as long as the period of his absence, will have the period of his absence counted as time worked in his employment for the purpose of computing his entitlement to annual leave, sick leave, and, where applicable, long service leave and superannuation. The bill also requires an employer to pay his employee for any time which he loses from work while attending for interview and examination as to fitness, which he is instructed to attend under the bill, These provisions in the bill are modelled on those that operated so smoothly in relation to service during the last war.

I think that I have now covered the principal provisions of the bill. It is proposed that as soon as the act becomes law all registrable British subjects whose eighteenth birthday falls between the 1st November, 1950, and the 31st March, 1951, will be called upon to register on a date to be notified, or within fourteen days thereafter. As to the numbers who will be trained under the scheme, all that I need say is that, as has already been announced, the plans are based on a commencing training rate equivalent to 13,500 in a year, with a progressive stepping up of the numbers trained. The Government plans that the first intake into the Royal Australian Navy will occur in March, 1951; into the Royal Australian Air Force in April, 1951 ; and into the Army in May, 1951. Def elements during the first year of the scheme on the grounds mentioned already are expected to be heavy, but as those deferments expire, for example, as students complete their courses and apprentices become tradesmen, the numbers available for training will rise. The numbers available will also obviously be related to the standards of fitness fixed from time to time and the capacity of the services to extend training facilities to smaller centres in the country.

One of the things that has made the planning of the scheme difficult has been the absence of statistical and other data to answer such questions as the distribution geographically of the eighteen year old population and the numbers of eighteen-year-old youths who are students or apprentices and, therefore, likely to apply for deferment. That has made it impossible to predict with any certainty what numbers will actually be available, on the basis of the present plans, for training in the first year. Honorable senators can, however, be assured that it is the Government’s intention that all who prove to be available shall be trained and that the present service training programmes will have to be adjusted to cope with any such situation. The whole of the plan will be kept under constant review and such adjustments made as circumstances show to be necessary.

The commencing rate of .training in the first year of the scheme will be somewhat lower than the Government hoped would be possible, but this was our choice. We had either to get the scheme launched with the least possible delay and with the camp and training facilities and instructors that could be mustered in the shortest possible time, or postpone the commencement until such time as these facilities could be extended to permit of the training of greater numbers initially. I feel that honorable senators will support the Government’s decision to take the first of those choices. This could mean that the training of some registrants in the first year of the scheme will be deferred, perhaps for some months. We will not have a clear picture until we are well advanced with the calling up of the registrants in the first year. The Government has pushed ahead with the implementation, of this scheme. The commencing ‘date has been advanced considerably from the first estimates made by our service chiefs. We shall be doing what we can in the future to make the scheme as widespread as possible in its operation.

There will necessarily be some consequential amendments to be made in the existing defence legislation when this hill becomes law. That amending legislation is being brought forward. The Government believes that this bill has the support of the Australian people and that it will make for a higher degree of peace- time preparedness than ever before in the nation’s history. We regard it as of the utmost importance that the scheme should come into operation without delay and I invite the co-operation of the Senate in effecting the speedy passage of the bill.

Debate (on motion by Senator McKenna) adjourned.

page 3578

WHEAT INDUSTRY STABILIZATION (REFUND OF CHARGE) BILL 1950

Bill received from the House of Representatives.

Standing Orders’ suspended.

Bill (on motion by Senator McLEAY read a first time.

Second Reading

Senator McLEAY:
Minister for Fuel, Shipping and Transport · South Australia · LP

– I move -

That the bill be now read a second time.

This bill is intended to provide a refund to wheat-growers throughout Australia, in accordance with the policy of the Government that excessive amounts should not be retained in the Wheat Prices Stabilization Fund. In 1948 Parliament agreed to a wheat stabilization plan, which is now operating as the result of joint State and Commonwealth legislation. The plan was agreed to by the wheat-growers, and one provision of it was that the growers should contribute to a fund for their own later benefit. To avoid the evils of low prices for wheat, growers supported a proposal that they should build up a fund while wheat prices were high. The fund is to be used to increase their income in the future, when prices fall. The Commonwealth, for its part, agreed to guarantee a price, based on costs of production of wheat, if wheat-growers themselves made reasonable provision for their own future welfare. It is hard at any time to decide what is actually a reasonable provision for the future, and that was recognized. But the Australian Govern ment undertook that it would not build up an excessive fund. The fund has now reached a figure which justifies a refund to growers of part of the money held in it, and this bill is to authorize the refund.

The wheat crop concerned is the 1947-48 crop, which was placed in No. 11 pool. It was a record crop, and the Australian Wheat Board received deliveries of 204,000,000 bushels from it. Out of that quantity, 150,000,000 bushels were sold for export as wheat or flour. Wheat exported is taxed to provide the stabilization fund, and, as export prices were good, £16,400,000 was received from the pool. It is that amount which is now to be refunded, and the refund will include the interest earned on the amount while it was invested as part of the fund. The interest will add about £500,000 to the original amount. The payments to the stabilization fund are made by the Australian Wheat Board from wheat pool funds. It is intended that the refund shall go back to the board. The money will then be paid to the wheat-growers as an advance from No. 11 pool, which will enable the pool to be completed. The payment will be made by the board early in the new year, and it will be approximately ls. 8d. a bushel spread over the whole pool. This is equivalent to the charge collected, and interest. The charge was at the rate of 2s. 2d. a bushel on the wheat exported, which is equal to ls. 7£d. on the greater quantity of wheat in the pool.

When the 1948 legislation was approved, the wheat stabilization plan covered a five-year period which would take it to the end of the 1952-53 wheat season. The Government considers that that period is not long enough, and that the Australian wheat industry should be assured of stability for a ten-year period. The details- of an extended plan are now being determined, and the views of the Australian Wheatgrowers Federation were given to the Minister for Commerce and Agriculture (Mr. McEwen) at a recent conference. The greater financial backing which an extended plan will require must be kept in mind. But, despite the longer period for which there will be a Commonwealth liability, the Government considers that a refund to wheat-growers for tax paid on the 1947-48 crop is now justified. The 1947-48 wheat is the last crop acquired by the Commonwealth under National Security Regulations. It was a record crop, and it was followed by two .more big crops in 194S-49 and 1949-50. Another big crop is now being harvested. Although there lias been extensive damage to the wheat crop in Queensland and New South Wales caused by continued rains, the quantity harvested from the new crop will provide a substantial export surplus. The heavy crops of the last three seasons have resulted in large export surpluses, and that, in turn, has given a substantial tax collection each season for the stabilization fund. Collections from the three pools total about £37,500,000 and another £5,000,000 or £6,000,000 will fall due from No. 13 pool - the 1949-50 crop - in the next few months. In view of this, and of the prospects ahead, the refund of payments to No. 11 pool is justified.

It should be explained, however, why the refund should be confined to No. 11 pool, since two later pools have also contributed to the stabilization fund. The reason is -that the principle adopted in making refunds is “first in, first out”. The principle is endorsed by wheatgrowers’ organizations. As this, morally, is the wheat-growers’ money, the Government attaches considerable importance to the views of wheat-growers. The principle is fair, and it i9 easy to operate. A good number of wheat-growers drop out of the industry each year, and, within reason, the fund should be supplied by the people who are to benefit from it. The best way to ensure that is to make refunds to the oldest contributing pool; and fortunately, that method is also the easiest one to administer. This bill is presented because the Wheat Industry Stabilization Fund now holds an amount which is not really needed. That amount should be returned to the wheat-growers from whom it was obtained. The bill provides for £16,400,000, plus interest, to be refunded to No. 11 wheat pool for distribution to growers. It is evidence of the Government’s policy that wheat-growers should not be asked to contribute more than a reasonable amount for the stabilization of the industry. The bill is brought forward with confidence that it will meet with approval in this Parliament, and throughout Australia.

Debate (on motion by Senator O’flaherty) adjourned.

page 3579

SUPERPHOSPHATE BOUNTY ACT REPEAL BILL 1950

Bill received from the House cf Representatives.

Standing Orders suspended.

Bill (on motion by Senator McLeay) read a first time.

Second Reading

Senator McLEAY:
South AustraliaMinister for Fuel, Shipping and Transport · LP

– I move -

That the bill be now read a second time.

The object of this bill is to repeal the Superphosphate Bounty Act 1941 - a war-time measure which has served its purpose and is no longer required. The act made provision for the payment of a bounty to superphosphate manufacturers. The advantage of the bounty was passed on to consumers, the intention being to keep down costs of production in agriculture. As the war developed, payments under the act were superseded by payments under the general system of subsidies, which were made in accordance with the general war-time price stabilization policy. Under that system, the subsidy paid upon superphosphate exceeded that for which provision was .made in the act.

Some months ago, the Government decided that the superphosphate subsidy should be abolished. It was clear that the general level of prosperity of the industries concerned made it desirable to terminate the large expenditure of public money involved in the payment of the subsidy. Accordingly, payments ceased on the 30th June, 1950. Now, unless the Superphosphate Bounty Act 1941 is repealed, it will be necessary to make payments to manufacturers in accordance with its provisions. This bill is designed to terminate payments which are no longer in accordance with the

Government’s policy or the interests of the public.

Debate (on motion by Senator Sandford) adjourned.

page 3580

FLAX CANVAS BOUNTY BILL 1950

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator O’Sullivan) read a first time.

Second Reading

Senator O’SULLIVAN:
QUEENSLAND · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to authorize the payment of a bounty on the production of woven flax canvas piece goods and woven flax canvas fire hose manufactured in Australia from scutched flax fibre produced from flax grown and processed in Australia. The bounty will apply only in respect of flax canvas manufactured for sale and use in the Commonwealth. It is proposed that the bounty shall operate from the 17th July, 1950, the date on which a ministerial announcement was made advising the flax industry that it was the Government’s intention to introduce legislation to provide the bounty.

The Government’s decision on this matter followed a Tariff Board inquiry into the following questions: -

  1. What is the present position and what are the future prospects of the spinning and weaving sections of the Australian flax industry?
  2. Does the future development of flax spinning and weaving warrant some form of assistance and, if so, what form should such assistance take ?

The Tariff Board, in its report of the 28th November, 1949, submitted the following recommendations : -

  1. That no alteration be made at present in the duties applying to flax yarns, canvas or hose.
  2. That the weaving industry be assisted for the present by a reduction in the price charged to yarn spinners for scutched fibre that enters into woven products. The spinners would, of course, be under an obligation to pass the benefit of the reduction on to the weaver.
  3. That the price reduction be based on an amount of £60 per ton for C grade tankretted flax with the necessary variations for other qualities.
  4. That flax fibre production be considered apart from the spinning and weaving sections of the industry and a price basis be established for it; that when consideration has been given and a determination made regarding the growing and processing of flax fibre, the question of protection to the manufacture of flax products be again reviewed.
  5. That all sections of the industry collaborate in the meanwhile with a view to reductions in costs and pricesof products made from line flax.

It will be seen that the board did not favour protecting the woven flax industry by imposing tariff duties, but recommended that the flax spinning and weaving industries be assisted by reducing the price to them of their raw material, scutched fibre, by an amount equivalent to £60 a ton for C grade tank-retted flax. The Government approved the principle underlying this recommendation, which it is proposed to implement by the payment of a bounty to weavers in order that the actual net cost of the raw material will be as recommended by the board.

The bounty will not exceed the sum of £30,000 per annum, and provision is made in the bill for the bounty to operate for a maximum period of two years. The assistance afforded the flax industry by this measure will be reviewed, in the light of the prevailing circumstances, after the measure has been in operation for a period of twelve months.

As is normal in bills of this type, the measure contains a clause relating to. a profit limitation of 10 per cent; on capital actually usedby the manufacturer in the manufacture and sale of the product. The Government, in reaching its decision to grant the bounty, was influenced by the fact that manufacturers of canvas and fire hose were meeting considerable difficulty in selling locally manufactured canvas in competition with imports. This situation led to the banking up of stocks of scutched fibre produced in Australia for which a use could not be found. It is necessary to have the spinning and weaving sections of the flax industry operating in Australia if the products of the growing and scutching sections are to be absorbed.

This bounty is of a somewhat tentative nature, and it is proposed at an appropriate time again to refer the question of the protection of the spinning and weaving sections of the flax industry to the Tariff Board for further inquiry. I commend the bill for favorable consideration.

Debate (on motion by Senator Critchley) adjourned.

page 3581

WOOL PRODUCTS BOUNTY BILL 1950

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator O’Sullivan) read a first time.

Second Reading

Senator O’SULLIVAN:
QueenslandMinister for Trade and Customs · LP

– I move -

That the bill be now read a second time.

In presenting the budget, the Treasurer (Mr. Fadden) announced the Governments intention to pay a subsidy of £20,000,000 on woollen goods for home consumption in Australia to offset the higher costs of woollen products which must result from the high prices now being paid for wool by Australian manufacturers. The Government has shared the concern which has been expressed inside and outside Parliament at the effect of these high prices on consumers, and it feels that, having regard to the established system of selling wool by auction, a subsidy is the most effective way of assisting the wool-consuming public in present circumstances.

Owing to the uncertainty as to the extent to which wool prices will rise at auctions and the limitations on the amount which can be expended on subsidies, it is not possible to peg the price of wool to the Australian manufacturer back to a given point. The Government feels, however, that by spreading the substantial sum of £20,000,000 over the whole range of wool which Australian manufacturers purchase, the rise in wool prices can be materially offset, to the great benefit of the community as a whole. The responsibility for ensuring that the benefit of subsidy payments will be passed on to the public rests, of course, with the State prices authorities, for the Commonwealth now has no powers in this field? The cooperation of those authorities has been sought, and the Commonwealth will take all necessary steps to assist them in their efforts to ensure that the public will receive full benefit from the plan.

Generally speaking, wool purchased since the auctions commenced this season and the high wool prices became evident is only now coming into manufacture in Australia. Therefore, it is proposed that the subsidy, or, for the purposes of the bill now before the Senate, the bounty, shall be payable on all wool tops, wool noils, woollen yarn, wool felt and wool waste produced after the 29 th November. These wool products are basic to. all woollen and worsted goods. The wool goods manufactured from them will carry forward to the consumer the subsidy element contained in them. Woollen blankets, for example, are made from woollen yarn and will derive subsidy therefrom. Wool products produced on or before the 29th November, 1950, from wool sold this season will be subsidized by administrative process out of funds already appropriated by the Parliament, thus ensuring that all products made from wool sold this season will be covered by the subsidy. The exception will be wool products which have already passed into consumption channels. In these cases, the benefit of the subsidy could not be passed on to the consumer. Applications for subsidy payments under the administrative procedure to which I have referred are at present being received, and advances of subsidy should be made against those applications at an early date.

In due course, it will be necessary to specify a date after which the bounty on wool products will no longer be payable. It is still too early to say what that date should be. It largely depends on the time that will be taken to use this season’s wool. This, in turn, depends on the rate of wool usage by manufacturers, which can be determined only in the light of experience. Therefore, it is proposed in the bill that the date after which wool products may no longer qualify forbounty shall be prescribed in regulations. To ensure that wool products made from next season’s wool will not qualify for bounty, the bill expressly states that bounty will not be payable on wool appraised by the Australian Wool Realization Commission after the 30th June, 1951. All wool to be made up into wool products entitled to bounty must be appraised by the Australian Wool Realization Commission, which will be responsible for the detailed administration of the scheme. Bounty payments will be made by reference to the quantity and quality of raw wool which goes into the wool product on which bounty is claimed.

The quantity, of course, is determined by the purchaser. The quality and yield of clean wool from each lot of greasy wool sold at auction is at present determined, as part of the reserve price machinery of the wool disposals plan, by valuers of the Australian Wool Realization Commission. These determinations, or appraisements, will enable each lot of wool sold at auction and purchased by Australian manufacturers to have a wool type ascribed to it. Special arrangements will be made for appraisement of wool purchased by manufacturers outside the auction system. The rate of subsidy or bounty for each type of wool may then be ascertained by reference to a table of subsidy limits, which sets out the amount of subsidy or bounty payable in respect of each type of wool going into the manufacture of a woollen product. The table has been so constructed as to accord to wool products manufactured from a particular type or types of wool an amount of subsidy which pays due regard to the quality of that wool. Products made from the better types therefore receive a higher rate of subsidy whilst the inferior types attract a lower rate of subsidy than the average. In this way manufacturers are not encouraged by the subsidy to purchase better qualities than is their custom, nor are they induced to deteriorate the quality of their cloths by purchasing inferior wools. It will thus be seen that every endeavour has been made to ensure that the subsidy system will not alter the pattern of buying by Australian manufacturers. The table of subsidy limits has been constructed by the Australian Wool Realization Commission, with the co-operation of leading members of the wool manufacturing industry. Circumstances may require that it be altered from time to time and the bill provides that such variations must be approved by the Minister. This flexibility will allow of changes in the rate of subsidy, particularly if movements in wool prices during the course of the year cause changes in the market relationship between different types of wool.

In the Customs Tariff (Export Duties) Bill now before the Senate, provision is made for recovery of the subsidy or bounty element in woollen goods exported. This will prevent a subsidy from being paid on exports of woollen goods and the escape to consumers abroad of money voted by the Parliament for the benefit of Australian consumers. The recovery of subsidy on exports is a very important feature of the scheme as a whole. At the present time Australian manufacturers absorb about 10 per cent, of the Australian wool clip - that is, about 360,000 bales. A subsidy of £20,000,000, therefore, represents on the average, about 45d. per lb. of greasy wool purchased by Australian manufacturers. In the four months July-October, 1950, the average price for all greasy wool sold at auction was 118. 2d. per lb. Honorable senator? will recognize in these figures the very substantial amount of the subsidy and the great degree of protection which it offers the Australian wool using public against the incidence of the high wool prices we are now receiving. I commend the bill to the Senate.

Debate (on motion by Senator Benn) adjourned.

page 3582

CUSTOMS BILL 1950

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator0’SULLIVAN) read a first time.

Second Reading

Senator O’SULLIVAN:
QueenslandMinister for Trade and Customs · LP

, - I move -

That the bill be now read a second time.

The purpose of this bill is to provide machinery, and to extend the provisions of the Customs Act, to strengthen control of dutiable exports in order that the revenue may be fully protected and to make clear that certain provisions relate only to imported goods. These amendments are necessary as a consequence of the decision of the Government to impose an export duty on all products for the purpose of recovering any subsidy or bounty which may have been paid on the wool content of the goods being exported. Details of the intended effects of each clause of the bill will be apparent from the perusal of the notes which have been circulated to honorable senators.

Debate (on motion by Senator Ashley) adjourned.

page 3583

TRACTOR BOUNTY BILL 1950

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator O’sullivan) read a first time.

Second Reading

Senator O’SULLIVAN:
QueenslandMinister for Trade and Customs · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to authorize, for a further period of three years, the payment of bounty on tractors of the internal combusion engine type, in capacity ratings from 10 to 55 belt pulley horse-power, as are produced and ‘sold in the Commonwealth. The Tractor Bounty Act was enacted in 1939 for a period of five years. In 1944 that act was extended for an additional three years and in 3 947, following a further inquiry by the Tariff Board, it was extended to the 23rd October, 1950. A report has recently been furnished by the Tariff Board on the necessity for continuing to assist the production of tractors in the Commonwealth. In that report the Tariff Board has, amongst other matters, recommended continuance of bounty for another thre years. The rates of bounty as recommended by the board are -

The proposed rates of bounty vary somewhat slightly from those which were previously in operation. The previous rates were -

Bounty in the immediate past has been payable on the “ brake horse-power ‘.’ capacity of the tractor engine, but the present bill provides for payment to be made on the basis of the “ belt pulley horse-power “ of the engine. This is ‘ a much more satisfactory and more practical method of measuring the capacity of a tractor and will, I feel sure, be readily acceptable to manufacturers and users alike. Under existing provisions payment of bounty at the full rates prescribed is restricted to such tractors in respect of which the cost of materials and parts wholly manufactured in Australia is not less than 90 per cent, of the factory cost of the tractor. “Where the cost of materials and parts wholly manufactured in Australia is less than 90 per cent, of the factory cost of the tractor the rates of bounty are reduced proportionately and where such percentage is less than 60 per cent., no bounty is payable. These provisions have as their objective the manufacture of tractors entirely from Australian, materials and parts.

However, because of difficulties which are being experienced by all tractor manufacturers in obtaining their full requirements of Australian-made materials and parts, and of the consequent need to import them at much higher costs, it is now proposed, when determining the “ factory cost “ of the tractor for bounty purposes, to exclude from that cost the cost of imported materials and parts which are admitted into the Commonwealth under by-law provisions of the Customs Tariff. This exclusion will not, however, be allowed to any extent greater than 10 per cent, of the factory cost of the tractor, inclusive of the cost of all imported materials and parts, nor will it be permitted to continue when normal conditions in the Commonwealth render unnecessary the by-law admission of the materials and parts concerned. The bill appropriates for bounty payment the following amounts : -

These amounts should be sufficient to meet in full any likely claims made by the Australian tractor manufacturers. Five companies are engaged in the production in Australia of tractors within the bountiable range. The capital employed is approximately £4,000,000 and direct employmentis given to approximately 2,500 persons, of whom over 2,000 are males. Annual requirements for the next few years are estimated by the Tariff Board to be 22,000 tractor units, after which they will probably settle down to approximately 17,000 units per annum.

Production of tractors in the Commonwealth meets only a very small proportion of the Commonwealth’s total requirements, and although considerable progress has been made in the post-war years the industry is as yet too new to be regarded as fully established. A very useful industry can be built up in the Commonwealth at a net cost to the community low in relation to possible benefits. The alternative to bounty assistance would be the imposition of protective tariff duties, but as Australian production is as yet relatively small, the imposition of protective duties would be costly to the principal users, who are mainly engaged in the primary industries.

The economy of this industry has been very fully investigated by the Tariff Board. The general conclusions reached by the board were that the level of bounty as provided for in the Tractor Bounty Act 1939-47 was adequate without being over-generous, that it is necessary to provide assistance to several units of the local industry, and that without disturbing the general level of bounty the groupings could be varied slightly with provision being appropriately made for a higher rate of bounty on the largest tractors in the highest bounty group. This bill gives effect to those conclusions as embodied in the Tariff Board’s recommendations. Payment of bounty, as pro- posed in this bill, is for the three years’ period commencing on the 24th October, 1950, and ending on the 23rd October, 1953. The question as to what assistance should be accorded the industry beyond that period will, in due course, be the subject-matter of a further inquiry by the Tariff Board.

I commend this bill as one which merits favorable consideration.

Debate (on motion by Senator Katz) adjourned.

page 3584

CUSTOMS TARIFF (EXPORT DUTIES) BILL 1950

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator O’sullivan) read a first time.

Second Reading

Senator O’SULLIVAN:
Minister for Trade and Customs · Queensland · LP

– I move -

That the bill be now read a second time.

This bill is for the purpose of providing machinery for the recovery of any subsidy or bounty that may have been paid under the Wool Products Bounty Act 1950, on goods consisting of or containing wool, or manufactured or derived from wool, and exported from Australia. The bill provides for the payment of an export duty of an amount which represents the amount of subsidy or bounty paid or payable in respect of the production of the wool products of which the goods to be exported consist or which are contained in the goods or from which the goods were manufactured. It is not the intention of the Government to subsidize exports, but, as a manufacturer of wool products is not, as a rule, in a position at the time of claiming bounty, to distinguish between the goods that may be consumed locally and those that may subsequently be exported either in the form in which he has produced the goods or after some further process of manufacture, it is necessary to legislate for the recovery of any subsidy or bounty that may be contained in the goods when exported. I commend the bill to honorable senators.

Debate (on motion by Senator Ashley) adjourned.

page 3585

NATIONALITY AND CITIZENSHIP BILL 1950

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Spicer) read a first time.

Second Reading

Senator SPICER:
AttorneyGeneral · Victoria · LP

– I move -

That the bill be now read a second time.

The Nationality and Citizenship Act was passed in 1948 and was proclaimed to commence on the 26th January, 1949. During the period of almost two years since that date, experience has shown some minor amendments to be necessary and others to be desirable. It is with these minor amendments that this bill is concerned. The proposals, although of importance to a number of individuals, do not represent any major change in the law. They are aimed at removing some disabilities which are likely to cause unwarranted hardship, and at clearing up some drafting anomalies.

The first amendment, which is contained in sub-clause (a) of clause 3 of the bill, seeks to benefit certain women by excluding them from the category of “ naturalized person “ and by placing them instead in the position of Britishborn persons. One example of the disabilities of naturalized persons is, that if they take up residence outside Australia, they must give annual notice of intention to retain Australian citizenship; otherwise they lose that status after seven years absence. It is considered that disabilities of the kind should not be imposed on two classes of women. The first class consists of those women who were natural-born British subjects, but who at some time lost British nationality - usually by marriage to aliens - and who later became naturalized in order to regain British nationality. If such women had refrained from becoming naturalized, they would eventually have regained British nationality automatically, under section 27 of the Nationality and Citizenship Act, and would not now be included in the category of “ naturalized person “. It is, of course, quite wrong that such women should be penalized for their natural desire to regain their British nationality without delay. They will be so penalized if they are left in the category of “ naturalized person “. The second class contemplated by sub-clause (a) of clause 3 comprises those women who were first of all aliens, then became naturalized, and later married British subjects. Such women are at present defined as “ naturalized persons “. Yet other women who were aliens at birth, and married British subjects without being naturalized beforehand, are not “naturalized persons “. This means that the woman who had sufficient attachment to the status of British subject to induce her to seek that status by naturalization, before her marriage to a British subject is ina worse position than the woman who acquired British nationality solely by reason of her marriage. It is considered that all women who married British subjects before the commencement of the act whether they were naturalized or not, should be in the same position - that is, that none of them should be regarded as naturalized persons, but should be treated in the same way as British-born persons.

The second amendment is set out in sub-clause (b) of clause 3 of the bill, and deals with the question of residence in Nauru, in relation to the provisions of the act. Under an agreement approved by the United Nations, trusteeship for the island of Nauru was conferred jointly upon the Governments of Australia, New Zealand and the United Kingdom. By arrangement, Australia has continued the actual administration of the island, which is therefore for all practical purposes in the same position in relation to this country as is the trust territory of New Guinea. The Nationality and Citizenship Act made special provisions relating to New Guinea; for example, residence in New Guinea may be accepted as part of the qualifying period required of applicants for citizenship. No such provision was made for Nauru, and it is considered that residence there should be acceptable in the same way as is residence in New Guinea. This result and some minor consequential changes in a number of other sections of the act, will be achieved by sub-clause (b) of clause 3.

Clause 4 anticipates a difficulty which will arise after the 26th January, 1951. Up to that date, the Minister will have power to exempt applicants for naturalization from making a declaration of intention to apply if they are in a position to comply with all the other requirements of the act; but after the 26th’ January next, as the act stands, the Minister will have no power to grant naturalization unless the applicant has made a declaration of intention at least two years earlier. When the act was drafted, it was contemplated that the period between the 26th January, 1949, and the 26th January, 1951, would give sufficient time and warning to all prospective applicants, and that at the end of that period it would be possible to make the requirement’ a rigid one without causing hardship or injustice. Theoretically, all aliens who have completed their qualifying period of five years residence in Australia before the 26th January next should have applied for naturalization before then; those who will not have completed their qualifying period by that date should have made declarations of intention. The fact of the matter is that there are thousands of aliens who have resided in Australia for more than five years, but who have not applied for naturalization. It seems certain that, despite the publicity that has been given to the future necessity for declarations of intention, many persons have not heard of the new requirement, and that of these there will be some few instances at least where it will be desirable to grant naturalization without the two-year delay involved in requiring a declaration to be made. For example, applicants will be found to have given meritorious service to the nation in the forces or in other spheres, and to require naturalization in order to secure the age pension ; others may require naturalization in order to join the armed or civil services. In these instances, and in other circumstances which cannot be foreseen, it would not bc to the nation’s interest that the Minister should have no discretion in the matter, and that the applicants should invariably have to make a declaration and then wait for two years. Clause 4, therefore, proposes that the Minister shall have power, in special cases, to exempt the applicants from the necessity to make the declaration of intention. The clause will not confer any discretion upon the Minister to dispense with other requirements of the act, such as five years residence, good character and knowledge of English, and it is not contemplated that the discretion which it does confer should be exercised in any but the most, exceptional circumstances.

Clause 5 of the bill aims at easing the requirements for the naturalization of alien women married to Australian citizens. Such women do not now acquire Australian citizenship or British nationality automatically upon marriage, but it was the intention that their qualifying period of residence for naturalization should be one year, instead of the five years required of other aliens. Subsection (4.) of section 15 of the act specifies at present that such a woman shall have resided in Australia for one year “ with her husband “. The effect of the words “ with her husband “ is that it has been necessary for the woman to have resided in Australia for a year after her marriage, even though she may have spent three or four years in Australia before the marriage. Proposed new sub-section (4.) omits the words “ with her husband “, so that the women in question will be eligible after one years’ residence in Australia. It also proposes that the same conditions should apply to the widows, as well as to the wives of Australian citizens.

Finally, clause 6 of the bill is designed to eliminate the necessity for British subjects, wishing to register as Australian citizens, to advertise in the newspapers their intention to apply for registration. Persons who are already British subjects stand to gain very little in a monetary or other material sense from becoming Australian citizens, and we can he assured that those who apply for registration are disinterested and sincere in their approach to the matter. It is, therefore, the more desirable in their case that’ the requirements should not be any more irksome and expensive than is necessary. It is considered that advertisements in the newspapers may be dispensed with for such applicants.

Honorable senators will, I think, agree that there is nothing of a contentious nature in the amendments proposed by this bill, and I commend it to the Senate for approval.

Debate (on motion by Senator Grant) adjourned.

page 3587

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION ASSESSMENT BILL 1950

Second Reading

Debate resumed from -the 29th November (vide page 3246), on motion by Senator Spooner -

That the bill be now read a second time.

Senator O’FLAHERTY:
South Australia

– Whenever a measure provides that the people shall receive something from the Government, even if only of small value, they are pleased. Consequently it is hot often that such measures are opposed in the Parliament. The measure before the chamber provides for reductions of taxes that will cost the Treasury about £15,000,000 for a full year, and about £7,000,000 for the remainder of the present financial year. In his second-reading speech the Minister for Social Services (Senator Spooner) stated -

This is the first step in the Government’s ulan for the progressive simplification of the Commonwealth’s taxation laws.

I should like to know what other steps in this connexion ar? proposed. Because of the suspicion that attaches to statements that have been made by supporters of the Government to the effect that social services contributions could be applied for the purpose of providing superannuation benefits, I consider that the present method of applying social services contributions should be continued. This bill provides for the unification of income tax and social services contributions. This is being done allegedly in the interests of simplifying procedure, but I can see that the new system may be used at some time in the future to render liable to income tax persons without dependants who receive an income of £104 a year or more, as well as making them liable to some future social services contribution should another contributory system be introduced.

We have been told that it is proposed to simplify the method of assessing tax, and that incomes would be graded for taxation purposes in units of £50. If 19 true that the graduations are of £50 up to a total of £300, but for incomes greater than £300 the units vary. For instance, from £300 to £1,000 the units are £100; from £1,000 to £2,000 the units are £200; and for incomes greater than £2,000 the units are £400. It is true that the tax rate has been fixed at a round penny, instead of in decimal points, so that it will be easier for the taxpayer to assess the amount for which he is liable. I agree that under the existing system it is difficult for an ordinary person to assess the amount of his tax, but the average person is not greatly concerned about how his tax is assessed. He is concerned with how much he has to pay.

In any case, the simplified procedure does not apply to primary producers whose incomes, for assessment purposes, are averaged over a period of five years. The old, complicated system of assessment is retained in their case, and I should like to see it simplified. The bill provides for a slight amelioration of the provision in regard to the taxing of undivided profits.

It is proposed to substitute a system of deductions for the present rebate system when making taxation allowances. Under the new system, those in receipt of big incomes will reap an advantage as compared with those with low incomes. For instance, the existing ceiling allowance in respect of dependants is to be eliminated, and this provision will apply over all ranges of income. During the whole time that the Labour Government was in office, there was a spate of criticism directed against the then Treasurer (Mr. Chifley) in particular, and against the Labour party in general, on the ground that high incomes were being unduly taxed. It was claimed that a tax rate of 15s. in the £1 was too much, but the fact is that no one was ever asked to pay at the rate of 15s. in the £1 on his entire income. Every taxpayer will receive the benefit of the deduction system and the graduated tax rate, and in future there will be no limit to the amount of the allowable concessions. Under the rebate system, the tax rate is struck on a man’s gross taxable income, and then rebates are allowed in respect of allowable concessions. Under the new system, the allowances will be deducted before the rate is struck. I wish to debunk the claim that any one was ever required to pay at the rate of 15s. in the £1 on his entire income. A man with an income of £12,500 a year would, if he paid at the rate of 15s. in the £1 on his entire income, pay £9,375 in tax, but under the proposed arrangement his tax will amount to only £7,496. The rate of 15s. in the £1, which will be payable on only part of his income, is made up of 13s. 6d. income tax, and ls. 6d. social services contribution. Even when the highest tax rate was 18s. 6d. in the £1 on certain incomes, we tried to explain to the public that that rate was never payable on the whole of a man’s income, but we were not believed. On an income of £12,500 a year, the remissions provided for in this bill will amount to £15 17s., whereas on incomes between £105 and £500 a year, the average remission will work out at only £1 13s. a year. On those lower incomes the remissions will total about £6,000,000. On an income of £15,000 a year, income tax at the rate of 15s. in the £1 would amount to £11,250, whereas the taxpayer with such an income will pay, in fact, only £9,371 13s. He, too, will receive a remission under this legislation amounting to £15 17s. I deny the statement of the Minister that the provision works out fairly for all classes of taxpayers. According to the Minister, a further £6,000,000 in remissions is to be divided among those taxpayers whose incomes range from £600 to £1,000 a year. Their remissions will average £1 19s., as against £15 17s. for the big man. A taxpayer with a wife and two children, who receives an income which would render him liable to be taxed at the rate of 15s. in the £1 on part of his income will receive a benefit of £86 7s., or about £1 13s. a week because of the change-over from the rebate system to the deduction system, the removal of the ceiling allowance for dependants, and the substitution of the penny unit for the decimal fraction in assessing the rate of tax. Under this proposal taxpayers in the higher income groups will benefit more than will the less fortunate members of the community. It is true that the system is being simplified, but the simplification will mean more in hard cash to wealthy people than it will to the poorer classes. I hope that the Minister for Social Services will take up with the Treasurer the need to simplify the averaging income tax system applied to primary producers. The present method is most complicated.

Although there is to be no reduction of company taxes, companies will make some gain from the provisions of this measure relating to undistributed profits. Whether that is a wise move or not, I shall not argue now. The fact remains that the step has been taken, and that it will result in some benefit to companies.

I notice that the comparative income tax tables still go back to 1942. I believe it is time that we got away from comparisons with the war years. We paid enormous sums in taxes in those days, and nobody wants to be reminded of that fact. Nothing is to be gained by comparing present rates with the war-time peak rates. All that need be shown is a comparison of last year’s rates with those proposed for the current year. A restriction of the tables in that way would save a lot of time and paper.

Senator McCALLUM:
NEW SOUTH WALES · LP

– I congratulate the Treasurer (Mr. Fadden) on this measure. This beginning ‘of simplification is most commendable. I have never regarded the social services contribution as anything but an additional income tax, and to continue to show the two payments separately would serve only to maintain the illusion that the social services contribution was being paid into a special fund whereas it was simply treated as ordinary revenue.

Senator O’Flaherty faintly expressed a fear that the Government intended at some future time to increase taxes to pay for social services. This measure has no relevance to such a fear. If, at some future date, the Government finds that it has not enough money, it will increase taxes, but we all hope that that will not be ‘ necessary. Simply because certain sums of money were set aside and labelled “ For Social Services “, it did not necessarily follow that social services would be maintained at existing rates or that the community would not be called upon to pay additional taxes. I should like to see our social services placed on a contributory basis. That could be done, of course, only after a most searching inquiry. However, if it were done, one would hope that it would be accompanied by a reduction of taxes. .The fear voiced by Senator O’Flaherty that taxpayers in the lower income groups would be the most likely to suffer if a contributory scheme were introduced is quite illusory, because people in those groups would receive the age pension in any event. Those on middle incomes stand to gain most under a contributory system. They include persons who are already contributing to superannuation funds and insurance schemes or are otherwise providing inadequately for their old age. There should be no cause for regret in the fact that some people in the higher income ranges might gain a little. After all, a person’s contribution to the welfare of the community is not measured entirely by the size of his income. Consideration must also be given to his responsibilities. There are bachelors and married couples without children who are on fairly low incomes and have no responsibilities. On the other hand, there are people on middle, or what to most of us appear to be, high incomes who have very heavy responsibilities. I have in mind particularly parents who are giving to their children higher education at universities, technical colleges, and other training institutions. Those people are entitled to “every consideration.

I do not propose to speak on thi3 measure at great length. I am sure that the bill will be passed without amendment. “We all regret, of course, that it has not been possible for the Government to make greater tax reductions, but we all recognize that that is because of the difficult times through which we are now passing. Defence needs alone would make it quite unwise at present to reduce taxes substantially. Therefore, I support the bill.

Senator BENN:
Queensland

– Last week, a Government supporter in this chamber told us a parable about animals, each of which offered a reason why the others should pay taxes. The ^ honorable senator could have gone further and told us another amusing story. I have no doubt that, in his earlier years, he read Pickwick Papers, and therefore will know of the discussion that took place between Mr. Pickwick and Mr. Snodgrass on politics. Mr. Pickwick’s advice to Mr. Snodgress was quite clear. The only doubt left in Mr. Snodgrass’s mind was what action should be taken if there were more than one political party to support. Mr. Pickwick’s advice was “ Always shout with the larger group “. A perusal of the second-reading speech made by the Minister for Social Services (Senator Spooner) on this measure reveals that the Government has disregarded Mr. Pickwick’s advice. It has not heeded the noise and clamour for taxation reduction. As Senator O’Flaherty said, from the point of view of the Taxation Branch, there are two groups of taxpayers in the community. The first consists of those individuals who receive salaries and wage’s. Their income is easily assessed. The second group consists of business people, whose interests are extensive and diversified.. It is impossible for them to give full attention to taxation matters. For instance, a professional man may also own a property or may hold shares in e company.

Sitting suspended from 5.59 to 8 p.m.

Senator BENN:

– Before the sitting was suspended, I had pointed out that in the community there are two groups of taxpayers, and I had stated that in respect of the first group there was no question of complexity as far as the income tax legislation is concerned. That group consists of the majority of the workers of Australia. At the end of each year they furnish their income tax returns to the Taxation Branch and put their trust in Providence and the officers employed in the Taxation Branch and hope for the best. I had also pointed out that many persons in the second group have interests that are very extensive arid very diversified. In attending to their own interests they have no time to devote to taxation affairs or to the compiling of information required from time to time by the taxation authorities. In the community there is a group of professional men which specializes in accountancy and taxation work. That group of men is as indispensable to our commercial life as doctors are to the public health. The conduct of a modern business requires the expert knowledge possessed by accountants and by persons who are qualified to understand the taxation laws and to guide persons engaged in business in respect of those laws. The question of profit-making must be considered by persons conducting businesses, and in giving consideration to profitmaking they must necessarily give considerable thought to taxation. In Queensland, that group of professional men has been accorded statutory recognition. In that State they must be registered, and rightly so.

In his introductory speech, the Minister stated -

On the other hand, there have been constant and bitter complaints from representative organizations regarding the complexities of the taxation system.

Those “constant and bitter complaints” have not come from the first group of taxpayers to which I have referred, because the question of complexity does not arise in relation to it. In respect of the second group of taxpayers, I cannot see how constant and bitter complaints could arise, because the majority of those concerned do not devote any of their time to taxation affairs. Does it not appear that if there have been constant and bitter complaints from representative organizations they have come from the group of professional men in the community which devotes its time to taxation and public accountancy work? I think that that is the position and that “the Government, in its endeavour to simplify the taxation laws, has its ear to the ground and is listening to that group of professional men.

The question arises whether the income tax laws are complex and difficult to interpret. It is freely admitted that the.v are complex. That must be so, when consideration is given to the history of those laws. Commonwealth taxation “laws have been in operation for more than 50 years. They have been amended from time to time to meet changed conditions, to suit the. policies of various governments, and to meet the requirements of special circumstances. The income tax legislation in operation to-day has been evolved gradually during the past 50 years in order to meet the country’s requirements. It is only necessary to examine that legislation to find how difficult it is to understand and to appreciate to the full that the work of simplification of taxation legislation is the work of experts. The proposal that has been presented in this bill, as the first step towards simplification, will be a costly one for the country. It may be found advisable to tackle the act itself. After all, it is from the act that the complexities flow. Perhaps they should be attacked in their stronghold. Consideration might also be given to recasting the act and to redraft it in such a way that it will be rendered comprehensible to the average taxpayer.

It has been stated that the art of living lies in spending money wisely. That saying also applies to national housekeeping. The taxpayers decide whether taxes are high or low, according to how the money is spent. They are not so much concerned with the amount of taxes they are obliged- to pay, as with the manner in which their contributions are expended. That point was illustrated during the last war, when the people did not quibble about the rate of taxes they were required -to pay. They were content to pay any rate, provided that the revenue was used for the purpose of prosecuting the war. During that period, although the citizens of Australia were taxed comparatively heavily, as a whole they were satisfied to pay those taxes. Peculiarly enough, the people have a knowledge of whether money is spent wisely or not. When they paid their social services contribution they knew how that money would be expended and whether it would be used for a good or a wasteful purpose. I consider that the Government is in error in merging the income, tax rate with the social services contribution. When the sums were paid separately the people knew the result of the respective payments. They knew that social services contributions went into the National Welfare Fund, and that from there it went to the people who were obliged to draw upon the resources of that fund. The people, as a whole, are so altruistic in their outlook that they will never raise objection to a high rate of social services contribution provided that the money collected will benefit those who are obliged to seek assistance. I do not think that the Government’s intention to merge those two payments is for the purpose of rendering the National WelfareFund bankrupt. If I thought so, I should be putting up a much stronger fight at this moment.

Recently, when social services legislation was dealt with in this chamber and the age pension rate was increased, two very important pensions were overlooked. They were the payments provided in respect of unemployment and sickness. Australia was never in a more prosperous state than it is at the moment, but what will happen if, in the near future, the country is not so prosperous and it is found essential to increase the rate of payments provided under the Social Services Consolidation Act? Will the excuse be advanced that the taxpayers cannot bear a higher rate of income tax? The people will then be paying one rate of income tax, because the income tax rate and the social services contribution will have been merged. I should like to have some clarification on that point. I do not know that the Minister for Social Services (Senator Spooner) is able to give any more than an assurance, but I should like him to consider that in the future the financial state of the National Welfare Fund will be obscure for the reason that the Government intends to make contributions to it from revenue.

Since its election to office this Government has given consideration to the appointment of a committee on taxation. The people generally acknowledge the necessity for such a committee, which could, by starting at a certain point and having in mind the logical conclusion of its deliberations, advance the position and do much towards simplifying the taxation laws. At the same time it would allow the laws that have been passed by the Parliament to retain their force and effect. I take it that it is not the function of a committee on taxation to decide whether relief can be granted, to ‘ any section of taxpayers. The best reforms which can be introduced in respect of any legislation emanate from the men who do the daily chores. In this instance, all that would be necessary in order to effect simplification, would be for the Treasurer to indicate to the officers ‘ of the Taxation Branch what he desires to be done. Those officers could then set to work and, after a certain period, show him some results. I have grave doubts whether this simplification is the result of advice that was tendered to the Government by officers of the Taxation Branch. I believe that the form of the bill was influenced moreby the committee to which I have referred than by high permanent officers of the department.

The merging of income tax with socialservices contributions and the change from the concessional rebate system to. the concessional deduction system will result in an annual loss of £15,000,000’ revenue. If that loss be the answer toa request for simplification by a group of malcontents, it is a high price to pay for simplification. There are six States of the Commonwealth, and one-sixth of £15,000,000 is £2,500,000. I believe that during this financial year each of the States could use £2,500,000 to great advantage. This is not the year in which to reduce taxes. The concessional rebatesystem has been in operation for the last eight years. Therefore, it has stood the test of time. The average man in thecommunity does not complain about it ; in fact, he largely approves of it. Nevertheless, it is to be abandoned in favour of a system of concessional reductions,, although the alteration will cause a lossof £15,000,000 of revenue a year. Another Taxation Board of Review has been established. I have no doubt that, owing tothe increase of the volume of business in Australia during recent yeaTs, theadditional board is necessary,- but it is regrettable that a sum of £10,000 must be appropriated to give it life.

There are one or two matters upon which I ask the Minister to give some information when he replies to the debate. I seek the information more for my own benefit than for the benefit of other honorable senators. I should like theMinister to. tell the Senate of the recommendations that were made by the Taxation Branch in connexion with the merging of income tax and social services- contributions. Doubtless, there are departmental files upon that matter. Probably, the Commissioner of Taxation referred the request for the amalgamation to his subordinates, after writing in the margin of the documents the two words “ For advice “. The Taxation Branch is a huge and important organization. It has sub-departments and sections each of which is engaged upon specialized duties. Work upon income tax matters is not ordinary work. Even the work of the records section of the Taxation Branch is not similar to the work of the records sections of other government departments. Other classes of the work of the department, such as assessing income tax, can be done only by experts. Even the officers who are admitted to the service of the department must pass special examinations before they can be permitted to engage in the assessment. of income tax. I ask the Minister to tell the Senate what revenue will be lost as a result of, first, the amalgamation of income tax and social services contributions; secondly, the adoption of the system of concessional deductions; and, thirdly, the introduction of stepped rates of tax.

Senator ARNOLD:
New South Wales

.- It is regrettable that the Government has seen fit to abandon a practice that has been in existence for a period of years. For the benefit of honorable senators who do not know the history of the separation of income tax and social services contributions, I remind the Senate that in 1940 the Parliament established the Social Security Committee, which rendered a very valuable service by the recommendations that it made to the Parliament. In the early days of the war, especially in 1943, all parties in the Parliament gave pledges that when the war ended a new order would be established in Australia. It was envisaged that, under the new order, all “lame ducks “ or persons who were unable to sustain themselves by their own efforts would be cared for by the community and would be entitled to receive social services benefits. The Social Security Committee recommended that a scheme of that kind should be evolved. The committee did very valuable work, but I regret to say that shortly after the war ended it was disbanded. The committee pointed out that many people in Australia were reluctant to accept assistance from the Government because they felt that by so doing they would’ be accepting charity, which was something to be avoided. That attitude had developed over the years. It had been the practice of governments to discourage people from accepting any form of governmental assistance. The attitude originated owing to the operation of the English poor laws, and persisted until a few years ago. Many people believed that accepting assistance from a government was akin to accepting charity, despite the fact that it had been stated repeatedly that/the payment of taxes gave taxpayers an entitlement to assistance from governments. The Social Security Committee, the members of which belonged to parties on both sides of the Parliament, recommended unanimously that the amounts paid by taxpayers in income tax and social services contributions should be shown separately upon the assessment forms in order that the people should know how much they had contributed towards their age pensions, .child endowment payments or other social services benefits that they received. The committee expressed the belief that if that were done the people of Australia would be made aware that if they accepted assistance from the Government they would not be accepting charity but something for which they had paid and to which they were entitled as of right. It induced the government of the day to give effect to its recommendations.

The committee attempted to evolve a comprehensive social services plan. It realized that social services had to be financed and went very deeply into the question of whether the necessary money should be raised by a graduated tax upon incomes or by a flat rate contributory scheme. Many people believe that a contributory scheme must always be upon a flat rate basis, but, in fact, the present graduated social services contributions constitute a contributory scheme. The committee came unanimously to the conclusion that it would be more equitable to finance social services by a graduated tax than by a flat rate contributory scheme. I pause to pay tribute to the present Minister for Repatriation (Senator Cooper) who was the vice-chairman of the committee. The honorable senator did valuable work on the committee, and agreed that a graduated tax was the most equitable method of financing social services. Effect was given to the finding of the committee in that connexion. Under the system that was then put into operation, the people knew that they were paying each year a certain sum by way of social services contributions, and realized that if they fell upon evil days they had a right to receive assistance from the Government.

The Government now proposes to abandon the system under which income tax and social services contributions are shown separately. It has been said that the new system will effect a simplification, but I cannot see that it will have a great effect in that way. Under it, all taxpayers will still be faced with the very difficult task of completing their returns of income, in the same manner as they did last year. Having completed the forms and forwarded them to the Taxation Branch, they will feel that a heavy weight has been lifted from them, and will then wait until they receive their assessments. When they do so, the total amount for which they are liable by way of income tax and social services contributions will be shown on the form, as it was previously, but there will be no indication of the liability in respect of income tax and that in respect of social services contributions. Only the total liability will be shown. I do not think that this proposal will achieve any great simplification. I certainly do not think that any simplification that it may achieve will be sufficient to offset the loss of the benefits that are to be derived from a separation of the two payments.

I regret that the Government has seen fit to abandon the present system. I hoped that we should establish in this country a system of social services that ultimately would afford protection for everybody in the community from birth until death. Over the years I have always hoped that the ordinary Australian citizen would be assured of a minimum standard of living. The Government is doing a disservice to that principle by destroying a taxing basis that has operated for many years. Whether or not it has another plan in mind, I do not know. Possibly the Government believes that the day of the graduated tax has gone and that it is now desirable to replace it by a flat rate system. If so, the Government should give us some indication of what it has iii mind even if only for the. purpose of simplifying income tax returns. I regret the introduction of this measure.

Senator SPOONER:
Minister for Social Services · New South Wales · LP

. - in reply - I think that it can be said without exaggeration that Australians are a very tax conscious people and that that tax consciousness manifests itself in all spheres of operations, from the computation of tax on overtime and the effect of fares and travelling expenses on wages to the possibility of repaying loans from profits earned after the deduction of tax and right throughout the gamut of our financial transactions.

Senator Arnold:

– It is more noticeable here than elsewhere.

Senator SPOONER:

– I am not in the position to say whether that it has developed more in Australia than elsewhere. A bill which simplifies taxation has its reactions throughout the community. I disagree with Opposition senators who have decried the results of simplification. When the average taxpayer in Australia receives his tax assessment he is unable to check its accuracy and make sure that the rebates granted are correct. It can be fairly said that even in this assembly a very substantial proportion of senators cannot check their tax assessments. That, with respect, is bad for the community at large. Taxpayers generally should be able to compute their tax liability in advance.

This bill has much to commend it, particularly as it is obvious to all those who have a technical knowledge of taxation matters that the elimination of the social services contribution and the substitution of one tax is a condition precedent to tax simplification. While the Government is giving effect to this major reform it proposes to make reductions of income tax amounting to £15,000,000 per annum. That, I submit, is not a bad effort. I disagree with Senator Benn, who, looking a gift horse in the mouth, decried the Government’s proposal ,to reduce income tax by that amount. Any one who decries a tax reduction is playing a lone hand in the community. Whatever may be our individual share of the proposed reduction, we shall all be very thankful indeed to receive it.

Senator Arnold, who raised a point which I am sure must have exercised the minds of other honorable senators, asked what would be the effect of this reform on the social services contribution generally. I think that the answer to that is that a statutory formula in the legislation provides that the social services contribution shall be taken at the level of last year’s tax and be increased or reduced in consonance with increases or reductions of the wages tax. The National Welfare Fund, with all its virtues and imperfections, will continue to be a separate account in the books of the Government and will show the receipts into the fund and payments made from it.

Senator Ashley:

– This is not the first step in a contributory scheme?

Senator SPOONER:

– I am not prepared to debate that point at this stage beyond saying that our social services legislation must be recast. I have done a good deal of work in connexion with this matter, but I shall not prognosticate what may be the result of that work. I merely say to Senator Arnold that this bill is simple and straightforward. The people as a whole will be pleased that the moneys paid into the National Welfare Fund will in future be obtained as the result of a simple rather than a complicated form of assessment.

Senator O’Flaherty complained that the graduated steps do not increase by exactly £50 in each instance. There is not much to that point because after a certain income level has been reached the further steps will be in multiples of £50. The honorable senator endeavoured to’ make a political point by saying that taxpayers who are in receipt of high incomes will obtain more benefit from this legislation than will those in receipt of lower income. With respect I point out that the bill must be considered in broad relief. Of the total concession of £15,000,000, £6,000,000 will be received by taxpayers with incomes of less than £500; £6,000,000 by those in receipt of incomes between £500 and £1,000; £1,500,000 by those in receipt of incomes of from £1,000 to £2,000; and the balance by those in receipt of incomes in excess of £2,000. If, out of a total tax reduction of £15,000,000, £3,000,000 will be received by taxpayers on incomes in excess of £1,000, it can be truly said that the scales will be weighted in favour of those in receipt of incomes of less than £1,000.

Another honorable senator made play on his statement that those on larger incomes will receive greater monetary amounts than will those on smaller incomes. There is no other way in which a scheme such as this could operate. Surely it is not the monetary amount that counts. The tables which show the percentage reduction granted to taxpayers in each category clearly demonstrate that the smaller taxpayer will have a very substantial portion of his tax waived whilst those on the higher incomes will have only a nominal amount of their tax waived.

An honorable senator has asked how the proposed reduction of £15,000,000 will be distributed among the various classes of rebates. I doubt whether that information can be obtained. Another honorable senator has asked what are the views of the departmental officers on this proposal. I say, with respect, that it would be unwise to disclose their views. After all, they serve impartially the government of the day, whatever may be its political complexion. I do not pretend to have a knowledge of their views. I remind honorable senators that as departmental officers served on the expert committee they undoubtedly had their say during its deliberations. It would be unwise, however, to disclose in this Parliament what views they had expressed. I commend the bill to the Senate.

Question resolved in the affirmative.

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

page 3595

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION BILL 1950

Second Reading

Debate resumed from the 29th November (vide page 3248), on motion by Senator Spooner -

That the bill be now read a second time.

Senator O’FLAHERTY:
South Australia

– The purpose of this bill is to remove the social services contribution and to merge it with the income tax. I do not propose to reiterate the views that have been expressed by Senator Benn in relation to the merging of the two separate charges into one tax. As I pointed out during the secondreading debate on the Income Tax and Social Services Contribution Assessment Bill 1950, which has just been passed by this chamber, the provisions in that hill, a9 well as the bill now before the Senate, constitute what the Minister for Social Services (Senator Spooner) has described as an instalment of the Government’s plan to overhaul and simplify our taxing system. I should like to know what other steps the Government proposes to take in this connexion, because this measure applies not only to income tax, but also to social services contributions. Does the Government intend to call upon the people to make a special contribution to the National “Welfare Fund? Senator McCallum stated during the secondreading debate on the Income Tax and Social Services Contribution Assessment Bill 1950 that he believed in the establishment of a contributory system in connexion with the provision of social services. Honorable senators on this side of the -chamber consider that the present Government, by this measure, and the measure that has just been passed, is abolishing the contributory system that was inaugurated by the former Labour Government. Under that system, taxpayers, with very few exceptions, contributed to the National “Welfare Fund. By another measure awaiting our consideration, I believe that the Government seeks to divert money from certain funds for the purpose of making up the amount on average that has been paid into the

National “Welfare Fund under the present system.

As the Minister has already informed us that the present proposal is merely the first leg of the Government’s plan, will he make it clear whether the next instalment of the Government’s plan will deal with the averaging system to which I have just referred? Although I should not like the Minister to think that I am unduly stressing this aspect of the matter, I point out that it is of considerable importance to the primary producers. Reference has also been made to what has been termed notional income, a term that is well understood by both the Minister and his departmental officers. Even under the proposed simplified method of taxation, it will be necessary for officers of the Taxation Branch to apply a complicated formula in order to ascertain whether a person has a notional income. The ‘bill specifies rates of tax on incomes, as well as surcharges on both property and personal exertion incomes.

As the Minister has already pointed out in connexion with the former bill, the proposed reductions will cost the Treasury £15,000,000 in a full year, and £7,000,000 this year. The people will be pleased to accept the proposed reductions, and it is to be hoped that additional reductions will be effected next year.

Senator SPOONER:
Minister for Social Services · New South Wale3 · LP

.-^ in reply - The two aspects of this matter are the simplification of taxation and the financing of the National “Welfare Fund. Senator O’Flaherty has drawn a red herring across the trail by referring to the averaging system in relation to the taxing of primary producers, which opens up a very wide field of debate. The effect of that system is that a rate of tax is applied in accordance with the average of five years’ income, including the present year’s income. I agree with his implication that the avoidance of decimal points in deciding the rate of tax to be applied under that system is extremely difficult. I am unable to forecast further recommendations of the expert committee that has been established for the purpose of recommending means by which our income tax laws could be simplified. I understand that from time to time the committee submits proposals to the Treasurer and the Taxation Branch for examination. We can deal with those suggestions only when they reach us in the form of legislation. So far as the financing of the National Welfare Fund is concerned, I can only repeat what I have said previously in this connexion, that I see no reason why persons who’ contribute towards the cost of the provision of social services should not have it clearly in their minds that they are so contributing, in view of the fact that income tax assessment forms are headed “ Income Tax and Social Services Contribution “.

Question resolved in the affirmative.

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

page 3596

WHEAT INDUSTRY STABILIZATION (REFUND OF CHARGE.) BILL 1950

Second Reading

Debate resumed (vide page 3579).

Senator O’FLAHERTY:
South Australia

– This bill gives effect to a promise that was made to the wheatgrowers of this country by the former Labour Government. It is very pleasing, in these times of increased taxation, that the Government has brought down this measure. When the fund was established it was the intention of the former Government to maintain it at a level of approximately £20,000,000, which it was considered would be sufficient to stabilize wheat prices. That Government’s intention was to make refunds to the wheatgrowers from time to time in accordance with the quantity of wheat that was compulsorily acquired from them. Taking into account the 2s. 2d. a bushel that will be levied this year on export wheat, there will be in the fund an amount of approximately £15,000,000, or £16,000,000 beyond the £20,000,000 to which I have referred. It is expected that between £5,000,000 and £7,000,000 will be credited to the fund in respect of wheat exported this year. As honorable senators are aware, legislation was .recently passed to impose a sectional tax on wool-growers. It is all the more pleasing, therefore, that a distribution is to be made to the wheat- growers from No. 11 pool, on the basis not of the amount of wheat exported but of the whole of the wheat that went into that pool. The wheat-growers will receive approximately ls. 7£d. a bushel for the wheat that they put into No. 11 pool, including wheat that was gristed for flour and other by-products.

The result of this legislation will be that the wheat-farmers will have more money to spend. I hope that we shall not hear statements from the Government side of the chamber such as were made during the debate on the wool deduction legislation, when one honorable senator opposite stated that the growers would spend more money on luxuries, and that they had no right to do so. The proposed distribution will not affect the stability of the fund because I am confident that after the levy on this season’s crop has been credited to it there will be a credit balance of more than £20,000,000. The wheat-growers have for some time been asking that the period of stabilization be extended from five to ten years, and the Government has announced that it is considering the proposal. I do not object to the proposed extension. Indeed, objection has been raised by only a few die-hard growers who do not want any kind of a stabilization scheme. The growers should understand, however, that if the period is to be increased from five to ten years, it will be necessary to increase the fund in order to make it actuarially sound. At present, it is generally believed that the fund should stand at about £20,000,000, but it will be necessary to increase it to £25,000,000 or even £30,000,000 if the period of the stabilization scheme be extended.

Senator REID:
New South Wales

– I support the bill, which provides for refunding to the growers the wheat tax levied upon them in respect of the No. 11 pool for stabilization purposes. This proposal is in accordance with the promise made by the government of the day. It was never necessary to hold in the fund more than enough money to make the stabilization scheme effective. As matters have turned out, it is not necessary to hold any money in the fund at all in order to make a five years’ stabilization scheme effective. Under the

International Wheat Agreement, the minimum amount payable for export wheat was 7s. 3d. a bushel prior to the depreciation of our currency, and the effect of depreciation was to increase the Australian price of export wheat by 40 per cent. Thus, we are now assured of a price greater than the guaranteed price under the stabilization scheme. That price was at first 6s. 2d. a bushel, and was later raised to 6s. 8d. It now stands at 7s. 3d. The amount will vary according to the cost of production.

Senator O’Flaherty said that, for a fiveyear scheme, an amount of ?20,000,000 should be held in the stabilization fund. At the time the stabilization scheme was introduced, no specific amount was mentioned, but it was understood that about ?25,000,000 would be retained in order to make the scheme sound. At that time, we did not know that international arrangements would be made about wheat prices, but since then the International Wheat Agreement has been signed. The amount at present available in the fund, apart from payments in respect of the current crop, is ?44,000,000. Even after refunding ?16,000,000 in respect of the No. 11 pool, there will still be more than sufficient to meet commitments.

I believe that the period of stabilization should be extended from five to ten years, I have always been in favour of stabilization, provided the producers retain control of their product. I also agree that if the period be extended sufficient should be retained in the fund to make the scheme economically sound during the last five years. At present, the price of wheat is more than sufficient to meet stabilization commitments, but no one can foretell the future. If the price fell, and the stabilization fund were depleted, the general body of taxpayers would be called upon to make up the guaranteed price. The wheat-farmers do not want to be under an obligation to the general taxpayers. By their acceptance of the stabilization scheme, they have shown that they are prepared to help themselves. Because of the introduction of a home-consumption price for wheat they have contributed a large amount for the benefit of their fellow Australians. The home-consumption price was’ originally 6s. 2d. a bushel. It is now 7s. 2d. which is much less than the export price. About 60,000,000 bushels a year are used in Australia for human consumption and other purposes, and on every bushel the grower loses the difference between the home-consumption price and the export price. I agree thai ?16,000,000 should be refunded to the growers as proposed, notwithstanding the effect which such a distribution might have on currency inflation. A promise was made, and it, must he honoured. The growers favour a stabilization scheme for their own sake, and for the benefit of Australia as a whole.

Senator HANNAFORD:
South Australia

– As a wheat-grower, and as the representative of a State in which wheat-growing is an important industry, I wish to say a few words on this bill. We recognize that the promise to the growers must be honoured, and that they are entitled under the original agreement to the refund which it is nowproposed to make. I have always favoured the introduction of a wheat stabilization scheme. When the wheatgrower knows what price he will receive for his produce some years ahead he can plan hi9 operations, and farm his country to the best advantage, instead of exploiting it. In spite of the objections of a few growers, I believe that the industry as a whole has benefited under the stabiliza-tion scheme. The money which it is now proposed to refund to growers was collected through the tax imposed on the 1947-48 crop. It has been explained that the money in the stabilization fund represents tax collections for the three years 1947-48, 1948-49 and 1949-50. Iii each of those years a good crop was har, vested. Indeed, Australia has experienced a run of excellent seasons. It was always understood that the Government would not retain in the fund more money than was necessary. Under the stabilization scheme, the Government, as guarantor^ had certain obligations, and it was neces-sary to retain in the stabilization fund sufficient to meet those obligations over a period of five years.

The refund represents about ls. 8d. a bushel which, of course, is less than the amount of 2s. 2d. a bushel that was paid! into the fund. It must be recognized, however, that 2s. 2d. a bushel on export wheat represents only about ls. 7d. a bushel on all the wheat in the pool. The present Government parties promised, during the last election campaign, to extend the period of the stabilization scheme.

Senator Courtice:

– Who started it?

Senator HANNAFORD:

– I am not arguing about that. The scheme was started by the Labour Government, but I supported it although I was in the Liberal camp. An interesting point was raised by Senator O’Flaherty, and I believe that it i9 well worth consideration, in spite of what has been said by Senator Reid. I refer to the fact that, if the scheme is extended to a ten-year period, the Government will assume a greater responsibility because of its guarantee. As Senator O’Flaherty has said, the Government’s financial liability must be taken into consideration if and when we consider an extension of the period of the scheme. Senator Reid has pointed out that the International Wheat Agreement is now in operation. He may have greater faith in such agreements than I have. I concede, however, that some plan was justified at the time, and I must confess that the agreement has worked satisfactorily so far. I hope that it will continue to do so. However, we have all seen international agreements break down, and I still believe that there is a necessity foi an internal stabilization plan for the wheat industry. I know how farmers view these matters. Some of them - fortunately they are in the minority - adopt a short-sighted view, but when the present policy was put into effect, it was supported by a substantial majority, and I think that it is completely in accord with the wishes of the people engaged in the wheat industry. I know what a burden and a bugbear the wheat problem was when growers were receiving a litle more than ls. a bushel for their produce. I should not like to see a return of those days.

Senator O’Flaherty:

– We received as little as ls. 3d. a bushel at one time.

Senator HANNAFORD:

– I do not know whether the honorable senator has grown wheat, but I have done so, and I know that on many occasions in the past growing it has been much easier than selling it. With the price of wheat down to a little more than ls. bushel, wheat-farmers could not succeed financially, even if they had received their land as a gift. For that reason I supported the policy initiated by the previous Government.

Finally, I wish to deal with the principle of- making a refund in respect of the first year of the stabilization plan. Most of the growers who contributed to .the fund in that year will receive some return, even though they may have given up growing wheat. There is always a possibility, of course, that when schemes such as this go on for too long some growers will leave the industry, and thus receive no refund of any contributions that they may have made. Similarly, should a wheat-grower die, no refund is credited to his estate. However, usually over short periods most growers who have contributed to stabilization will receive some refund of their payments. The sum involved in this measure is £16,400,000, plus interest. I am sure that wheat-growers, generally, will approve of this Government’s decision to honour a promise made by the Parliament some years ago. Therefore, I support the bill.

Question resolved in the affirmative.

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

page 3598

SALARIES (STATUTORY OFFICES”) ADJUSTMENT BILL 1950

Debate resumed from the 30th November (vide page 3353), on motion by Senator Spooner -

That the bill be now read a second time.-

Senator McKENNA:
TASMANIA · ALP

.- This bill will increase the salaries of certain officers whose positions are created by statute. They include justices and judges of the High Court, the Commonwealth Court of Conciliation and Arbitration, the Federal Court of Bankruptcy, and the Supreme court of the Australian Capital Territory; the Public Service Arbitrator, the AuditorGeneral, the chairman of the Public Service Board, members of the Public

Service Board, the Commonwealth Commissioner for Railways, the Commissioner of Land Tax, and the Assistant Commissioner of Land Tax. With the exception of one class of officers the increases are of £500 a year, and are to be effective from the 1st July of his year. The exceptions are the conciliation commissioners, who are to receive an increase of £300 a year each. The need for the increases in the view of the Opposition arises from the fact that the Public Service Arbitrator recently granted certain increases to public servants under the jurisdiction of the Public Service Board. Those increases, which were made retrospective to December, _ ‘1949, brought the salaries of some public servants either very close to, or right up to, the salaries of their departmental heads. Accordingly, it became encumbent on the Government to increase the salaries of departmental heads. When that was accomplished, the salaries of departmental heads were very close to those of the holders of certain statutory offices, and this .bill has been introduced to preserve the proper margins. Margins, relative seniority, and dignity are just as important in the higher realms of activity in the community, as they are amongst those members of the community who are covered by awards of arbitration authorities.

I should like the Minister for Social Services (Senator Spooner) to explain the position of judges of the Northern Territory and of Papua and New Guinea. There is no mention of them in this bill. I do not know how they are appointed but I should like the Minister to assure the Senate that they have not been overlooked. The Opposition will not oppose this measure. Honorable senators on this side of the chamber support the principle that the higher executive officers of the Public Service should be paid sufficient, first to ensure that they are adequately remunerated”, secondly, to ensure that they are remunerated on a basis consistent with the importance and dignity of their office; and thirdly, to ensure that their emoluments are comparable with those that they might have earned had they been in private employment competing with captains of industry and high business executives. As the Minister has acknowledged, the

Labour Government in 1947 granted increases - in some instances exceeding £1,000 - to departmental heads. It. was recognized that the three principles that I have mentioned should be observed, out of consideration not only for the office holders themselves, but also for the Public Service generally, which had been suffer^ ing the loss of high and able executive officers to outside industry at a time when it could ill afford to lose men of such calibre. It is important that those at the head of affairs in the Public Service of this country should be paid well because of the psychological effect that high, emoluments have on the officers who work under them. When a person takes a ticket in a lottery he has his eyes on one prize only, and that is the first prize. Any thought that he may give to other prizes is purely incidental, or sub-conscious. Similarly, officials of a department, right down to the office boy, have their eyes only on the top job, that- of the departmental head, who receives, perhaps £3,000; £4,000 or £5,000 a year. Whether an aspiring officer has ability or not, he will at least have some spark of avarice in him and he will regard the office of his departmental head as that to which he hopes, ultimately, to succeed. I submit seriously to the Senate that it is important that public servants, right down to the lowestpaid officers, should be able to feel that there is a real prize awaiting them at the end of the trail. Obviously, they cannot all reach it, but there is some virtue in the old theory that a donkey can be urged to greater efforts by dangling a carrot in front of it. The payment of high salaries to leading public servants is an incentive to hard work and to ambition, which, of course, are most desirable from a public viewpoint. The Labour Government took a revolutionary step in 1947 when it; increased the salaries of certain public, servants by substantial amounts. Those increases, I suggest, brought new respect for the Public Service.

Unquestionably, the Commissioner of Taxation will take a substantial part of the increases proposed in this measure, but, at least, they will servo to raise the dignity and status of publicservants who are undertaking herculean tasks that make great demands on their energy and ability. The Opposition, accordingly, supports the proposed increases. I was somewhat concerned, however, to hear the Minister for Social Service in his second-reading speech say that this Government is convinced that the salaries concerned should be adequate, and is providing for increases in accordance with similar legislation introduced in 1947. T suggest to the Minister that he would have great difficulty in persuading most Australian citizens that a salary of £4,500, or even of £4,Q00, per annum is not adequate, and that the question of adequacy demands that there should be increases of £500 per annum. Although I do not object to the increases, and although the Opposition offers no criticism of them, I wish to make that comment on the argument advanced by the Minister and to place on record my astonishment that he should put that forward as one of the grounds upon which this bill has been presented. The only officers who do not receive an increase of £500 under this bill are conciliation commissioners, who, I understand, are nineteen in number. They receive increases at the rate of £300 per annum, and I consider that they bear sufficient responsibililty to justify that increase. I might perhaps stir a note of sympathy in the Senate if I say that there are other people in the community receiving a similar salary whose claims might also be given consideration at some future date. That statement may strike a responsive echo in at least some breasts in this chamber.

The Opposition is pleased to support the bill. Honorable senators on this side of the chamber trust that the granting of the increases will preserve margins and, if possible, spur the holders of the offices- concerned to greater efforts on behalf of the community. There is not an officer mentioned who has not vast responsibility and who does not earn and deserve the commendation of the people of Australia.

Senator HARRIS:
WESTERN AUSTRALIA · ALP

– I wish to say that this bill, which provides for increases in salary of £10 a week for some officers concerned, is a disgraceful measure. Recently, this chamber dealt with legislation under which pensioners received miserable increases of 7s. Gd. and 10s. a week. It is interesting to note that the secondleading speech of the Minister for Social Services (Senator Spooner) on this measure is contained on two pages of typing and that the measure involves the payment of an additional sum of between £12,000 and £13,000. When this chamber was considering legislation to increase the pensions of nien who fought for the holders of these statutory offices, the Minister in charge of the bill produced an eight or ten page second-reading speech. In it he pointed out the generosity of the Government in granting those pensioners increases of pensions of 10s. and 7s. 6d. a week. I remind honorable senators that some of the officers referred to in this bill received an increase of £1,000 per annum only a few years ago. It is time that this Government honoured some of the promises made to the people prior to the last general election.

There is a measure of levelling off under this bill, because although most of the officers concerned will receive increases of £500 a year, they will be obliged to pay approximately £250 of that by way of taxes. The Australian Government is presenting the State governments with a difficulty, because these increases of salaries will no doubt lead to requests for like increases to be applied to similar officials in the various States. But, of course, this Government will again reap handsome profits in the way of taxes levied if such increases are granted. I wish to record my protest against increases of salary to persons who have not earned them. These increases are not justified in any. shape or form. Had the Government desired to be generous it should have provided larger increases for those who really need them.

Senator SPOONER:
Minister for Social Services · New South Wales · LP

. - in reply - I express my sympathy with Senator MeKenna on the trials and tribulations that he is obliged to endure. I expect that there are occasions when he wishes that the day of Pentecost could be repeated so that all people might be of one accord in one place. It would facilitate the debate on the other side of the chamber. However, I do not accept the declaration of Senator Harris as representing the real views of the Opposition upon this measure. Although the views of the Government werebriefly expressed in my second-reading speech, this is nevertheless an important piece of legislation. I believe that the members of the Opposition agree with the Government that those who are trusted and responsible members of the Public Service, and who hold the high honour of being members of the judiciary, deserve the adequate and proper remuneration proposed in this bill. Let us hope that the day is long distant when the sentiments expressed by Senator Harris, to the effect that there should be a levelling down instead of a levelling up of the remuneration, ambitions and aspirations of the Australian community, will be generally held.

The first of the two main points raised by Senator McKenna during his speech concerned the judges of the Northern Territory and of the Territory of Papua and New Guinea. This matter was raised in the House of Representatives and the Minister in charge of the House at the time stated that he would have immediate inquiries made. From inquiries made to-night I can inform the honorable senator that the position is that the salaries of those gentlemen are not fixed by legislation but by executive minute. Their salaries are receiving consideration concurrently with the salaries of those officers covered by the statutory provisions of the bill. The other point raised by the honorable senator concerned the remuneration of conciliation commissioners. I point out that the increases given to those officers is in relationtoa substantive salary of £1,500 per annum. The substantive salaries of the other officials referred to in the bill are on a much higher level. I commend the bill to the Senate.

Question resolved in the affirmative.

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

page 3601

NATIONAL WELFARE FUND BILL 1950

Second Reading

Debate resumed from the 30th November (vide page 3354), on motion by Senator Spooner) -

That the bill be now read a second time.

Senator McKENNA:
Tasmania

.- The bill before the Senate isa short one and might also be described as a technical one. The Opposition offers no objection to the measure. The National Welfare Fund was established by a Labour government, and this bill does not abolish it but it preserves it as an integral part of Commonwealth finance. However, the measure alters the basis of contribution. Hitherto, the fund has been augmented by proceeds from the social services contribution tax on the one hand, and by the proceeds of the pay-roll tax on the other. As I read the bill, the pay-rolltax will continue in existence, and the proceeds of that tax will continue to be paid into the fund. Although it cannot be determined with accuracy at the moment, it is estimated that the amount to be paid in from that source this year will be approximately £26,000,000, whereas the estimated yield from the social services contribution from thisyear will be £101,000,000. I point outto the Minister that the amount of £101,000,000 is made up of payments of £71,000,000 and a contribution from the Consolidated Revenue Fund of £30,000,000 to take the place of the provisional tax that normally would be assessed for this year by way of social services contribution. Both the £71,000,000 and the £30,000,000 are really estimates. If it were known exactly what those taxes would yield at the rates to be applied in individual cases, it would be desirable to work on a firm accurate basis for the year instead of on an estimate. An estimate may or may not be accurate. If it is inaccurate it may be so to a fairly high degree. As the Minister has accepted two estimates as the basis upon which the fund is to be augmented in future years, I should like him to inform the Senate what his advice is concerning the accuracy of the estimates. How confident are his advisers that they are accurate? If they are not confident about their estimates, will the Government give consideration to the insertion of a clause in the bill to provide that when the amounts can be ascertained with accuracy they will be substituted for the estimated amounts? I have some experience of estimates. I have great respect for the estimates that are prepared by the officers of the Commissioner of Taxation, but I know that estimates can be very unreliable. Now that a formula is being evolved in order to keep the National “Welfare Fund alive, I do not want it to be based upon an estimate if that can be avoided. It may be necessary to base it upon an estimate in the first instance,- but, as the figure could later be ascertained with accuracy, why should not the accurate figure bc substituted for the estimate subsequently ? I appreciate that the translation of the figure from an estimate to a figure determined with accuracy would necessitate the assessment of taxation return after taxation return and would involve a vast amount of work that would not yield any result in the way of additional revenue. I should be sympathetic if the Minister put it to me that the Commissioner of Taxation did not want to embark upon a task that would involve a vast amount of detailed work and would not yield any additional revenue for the Commonwealth, and if the Minister were in a position to give me an assurance about the near-accuracy of the estimate I should be more ready to suggest that the Commissioner of Taxation should not be burdened with all that additional detailed work.

Now that social services contributions have been merged with income tax payments, a new basis is being established for payments into the National “Welfare Fund. The base figure that has been taken is £101,000,000, which is the estimate of what would have been received from social services contributions this year. It is provided that that figure shall vary upwards or downwards in accordance with the rise or fall of pay-roll tax collections compared with the pay-roll tax collected this year. It is important to realize that there may be a rise or a fall. At this point, I shall indicate to the Minister what is, to my mind, a slight flaw in the formula. Whilst it is provided that the amount to be paid into the fund shall rise or fall with variations of the pay-roll tax collections, no thought appears to have been given to the fact that the rate of pay-roll tax may not remain stationary. It would be possible for this or some other government to reduce the rate from the present level of, I think, 2£ per cent, to, say, 1 per cent, or 1 per cent., or to increase it to, say, 10 per cent. I point put to the Minister that as long as the comparison between the pay-roll tax collections this year and in subsequent years is based upon the same rate of tax, the comparison will be a true one, but the bill does not provide that the comparison shall be made on the assumption that the rate of tax will remain stationary. If the rate of pay-roll tax were reduced, the National Welfare Fund would suffer appreciably because the amount paid into the fund would be determined on the basis of a decreased collection from the tax. If there were an increase of the rate of tax, the contribution to the fund would, under this formula, be unduly inflated. A comparison of the pay-roll tax collections would give a true basis for variation only i’f the rate of tax remained constant, or, if it did not remain constant, if the calculations made under the formula were made on the basis that the rate of tax was the same each year. The only weaknesses that I can find in this measure are, first, that the base figure is an estimate only and, therefore, may be inaccurate to some degree; and secondly, that the formula is to vary in accordance with the pay-roll tax collections, disregarding all variations of the rate at which the tax is imposed. I fear that that may give an untrue result.

The Minister has described this formula as a simple one. It is a reasonable formula, and can be expressed in very simple terms. I pay tribute to the ingenuity of the draftsman who drafted this hill. I confess that, although I have legal qualifications, I had to read it three times before its implications began to bear in upon me.

Senator O’flaherty:

– I have read it six times, but I still do not know what it means.

Senator McKENNA:

– It is apparent that I have not succeeded, as I hoped to do, in clarifying the position to some degree. The formula has been expressedwith complete clarity by the draftsman and I congratulate him upon a most ingenious presentation of something that it is not easy to reduce to legal terms. But I say that it would be difficult for a person to understand the hill if he did not have a knowledge of the implications of social services contributions and the pay-roll tax, and also have a copy of the second-reading speech delivered by the Minister. The Minister, in his speech, took some time to explain the formula that he described as simple, although he made perfectly clear what was meant. Let me see if I can summarize the position in non-legal terms. The National Welfare Fund had two sources of revenue - the social services contributions and the pay-roll tax. The social services contribution having been merged with income tax, in its place there is to be put this year an estimated amount of £101,000,000. Tinder the formula, in subsequent years that sum of £101,000,000 will rise or fall in accordance with rises or falls in the collections from the payroll tax. I have one qualification to make, and then I believe that I shall have stated the proposition with accuracy. Although the social services contribution ha9 ‘been merged with income tax as from the 30th June, social services contributions will dribble into the Treasury for a number of years, as the Commissioner of Taxation catches up with defaulters and as disputed returns are resolved by hoards of review. It is certain that during the next few years there will be receipts of social services contributions in respect of past years. They will be projected into future years from past years. Whatever money comes in from that source will go into the National Welfare Fund, but it will be deducted from the amount that would otherwise have been determined under the formula.

Senator Courtice:

– Does that mean that the pay-roll tax will go on for ever?

Senator McKENNA:

– I have not the gift of prophecy.

Senator Courtice:

– It is an iniquitous tax.

Senator McKENNA:

– At the present time, all employers who are paying salaries of the order of £1,000 a year are obliged to pay pay-roll tax upon them.

Senator Courtice:

– Whether they make a profit or not?

Senator McKENNA:

– That is true. I point out to Senator Courtice that in business it is the invariable practice to pass into the price structure and, therefore, on to the consumer all that is paid in pay-roll tax. It is an element of the prices that the public ultimately pay. The burden of the tax does not fall upon the employer alone. That ha9 been the position ever since the pay-roll tax was instituted. All that I can say to Senator Courtice is that the tax has been in operation in this country since 1941.

Senator Courtice:

– That does nol make it a fair tax.

Sentaor McKENNA. - I shall not argue that proposition. The pay-roll tax was a source of revenue for the National Welfare Fund. The tax was intended originally to be a burden upon industry, but in fact the hurden has been cast on to the shoulders of the Australian people who buy goods and utilize services.

Senator Ashley:

– They pay for everything.

Senator McKENNA:

– Ultimately the pay-roll tax is paid by the people. I had not proposed to speak at length upon this bill, but honorable senators sitting around me began to show some flickers of interest in my speech and I was tempted to go on. I should like the Minister later to say something about the matter of the estimate to which I have referred. I ask hin to take note of the criticism that I have made of the fact that for the purpose of the formula it is assumed that the present rate of pay-roll tax will be maintained. I suggest that comparisons of pay-roll tax collections in this year and subsequent years will only be effective if the rate of tax remains constant. I suggest also, as a good arithmetical, mathematical and accounting proposition, that the Government should give consideration to amending clause 2 (2.) and incorporating in it a provision that the rate of pay-roll tax shall be deemed to be constant, irrespective of what alteration of the rate may be made. If the comparison is not made on that basis, some extraordinary results may be obtained. The fund may be robbed, or far too much money may be paid into it. ‘

Senator SPOONER:
Minister for Social Services · New South Wales · LP

[9.5 in reply - I am glad, that Senator McKenna and other honorable senators opposite have supported the general principles of this measure. Senator McKenna referred to the accuracy of the estimate. The estimate is one that has been constantly used by the Treasury in connexion with budgetary proposals, and is as accurate as it can be. The Treasury had to choose between using an estimate as the basis for the formula or utilizing an actual figure. The actual figures that were available were some years out of -date. Therefore, the alternatives were to use an up-to-date estimate or to use an actual figure that was out of date. In all these problems, there must be an element of mathematical uncertainty, and it is better to take the figure which is clear and definite and which can be promptly and decisively used than to have a formula which, for its final determination, awaits the result of some future event. The estimate that has been used is as accurate as any estimate can be.

Frankly, the point raised by Senator McKenna in relation to the pay-roll tax did not occur to me. I say, with respect, that probably it did not occur to me because it was so obvious that if the rate of pay-roll tax were altered the basis of the formula would be destroyed. If an alteration of the rate of the pay-roll tax were contemplated the whole formula would have to be recast because a false result would be obtained in contrast with what we are aiming at in the bill. The Opposition need have no fears on that point. The formula was evolved to yield a result on a level comparable with what has been obtained in the past. To cut out the very substance of the formula would be so unfair as to be unthinkable.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator McKENNA:
Tasmania

– I propose to refer briefly to the matter which was touched on by the Minister. Clause 2 which deals with the variation of the pay-roll tax, proposes that -sub-sections (1.) and (2.), of section 5 be omitted and replaced by two new sub-sections. Proposed new sub-section (2.)’ reads as follows: -

The amount calculated under this subsection iea a financial year is the amount which bears the same proportion to the sum of the amounts specified in paragraph (a) of the last preceding sub-section as the collections

I emphasize the word “collections” - of tax under the Pay-roll Tax Assessment Act 1941-1042 in that financial year bear to the collections-

Again the word “ collections “ - of that tax in the financial year which commenced on the first day of July, One thousand nine hundred and fifty.

The comparison which the formula insists should be made is between the amount actually collected in one year from the pay-roll tax and the amount actually collected in another year. The probability that the matter might be overlooked is not as real as the Minister has suggested. It would be a simple matter to incorporate in this measure a provision that the comparison is to be on the basis of the maintenance of the same rate throughout. In establishing a new basis for this fund it is not sufficient for the Government to say “ “Well, if the rate of pay-roll tax is altered, we shall have to throw the formula overboard”. There is no need to throw the formula overboard. All that is needed is a simple provision that the collections in a subsequent year shall be calculated at the same rate as applied in 1950-51. The Government may please itself about this matter but as a member of the Opposition I have an obligation to point out what we think is an obvious weakness in the drafting of the measureIt is no consolation to the Opposition to be told that if that rate of pay-roll tax is altered this formula will be thrown overboard. That leaves us with a great deal of uncertainty because the formula determines the major content of the National “Welfare Fund. The Minister’s explanation only leaves me more concerned than ever to ensure that the formula shall be put on a completely accurate mathematical basis which should be clearly expressed. I am alarmed to think that the formula might be thrown overboard entirely as the result of some alteration in the rate of pay-roll tax which yields only £26,000,000 per annum to the National Welfare Fund, compared with £101,000,000 to be determined under the formula. The Minister will concede that approximately four-fifths of the amount of the National Welfare Fund is contributed pursuant to this formula and that its fluctuation may depend on the variation of another source of revenue that constitutes only one-fifth of the fund. The Government should take seriously the suggestion of the Opposition that the mathematical basis of the fund should be specified with a’bsolute clarity. Many people are concerned that the credit of the fund should be preserved. Indeed, it may well be an important factor in the scheme which the Minister has in mind to abolish the means test. The balance in the fund may play an important part in assisting the commencement of that scheme. I do not think it is right that the fund should be left at the mercy of fluctuations in the rate of a tax that brings in such a very small proportion of the total receipts of the fund. The Minister may not be prepared to accept the suggestion at the moment. I agree that it cannot be expressed in legislative form without proper thought. However, the draftsman has shown vast ingenuity in drafting this legislation, and I am sure that he could quickly draft a suitable amendment to give expression to the suggestion that I have made. The Opposition does not want to delay the passage of the bill, and accordingly I merely ask the Government and its officers and the draftsman to consider my suggestion. The Opposition will watch this matter with keen interest.

Senator SPOONER:
Minister for Social Services · New South Wales · LP

– I do not attach to this matter the importance which Senator McKenna has attached to it. I assure him that I shall refer his remarks to the Treasury officials and to the draftsman for investigation. The pay-roll tax is levied and paid into the National Welfare Fund for the sole purpose of replenishing the fund. Any alteration of the rate of that tax must be considered in conjunction with social services generally. It would not be possible to alter the rate of the tax and thus accidentally affect the receipts into the National Welfare Fund. The pay-, roll tax is so completely and inextricably bound up with the National Welfare Fund and the Social Services Fund that; the whole subject of social services would automatically come before the Parliament if any attempt were made to alter the rate of the tax.

Senator O’FLAHERTY:
South Australia

– I am sorry that I cannot understand the Minister’s explanation. What would happen if a Government, in its wisdom, decided to abolish the payroll tax altogether? The comparison is made between the collections of pay-roll tax in 1942 and the collections in 1950-51. If a government abolished the tax altogether - and there has- been a good deal of pressure for its abolition - what would be the position of the fund ? Would the formula fall by the wayside and would the Government make up the difference from general revenue? It seems to me that if no pay-roll tax were collected the formula would go by the board and could no longer be used as a measuring rod for determining the difference.

Senator SPOONER:
Minister for Social’ Services · New South Wales · LP

– My experience has taught me never to answer a question which involves a legal issue if I can possibly avoid doing so. Legal questions are for lawyers to answer. Senator O’Flaherty has asked what would be the position if the pay-rol 1 tax were abolished. In layman’s ‘terms as I understand the legislation, and subject, of course, to correction, I should say that in that event £101,000,000 would go into the fund and that that amount would not be varied either upwards ‘ or downwards. I make the same reply tq the honorable senator as I have made to Senator McKenna. The pay-roll tax could not be abolished without a full dress debate in the Parliament on social service^ because the be all and end all of the payroll tax is to provide revenue for social services. That tax could be abolished only when sufficient revenue was derived from other sources to render the tax unnecessary or when insufficient revenue was obtained from both sources and some recast of financial arrangements became necessary. The points raised by Opposition senators about the pay-roll tax are,, from a practical point of view, nebulous because that tax is so inherently a part of the method by which social se’r> vices are financed that any interference with it would lead to a full dress debate in the Parliament on the issues involved.

Senator McKENNA:
Tasmania

Senator O’Flaherty has raised a. very interesting point. I do not readily accept the Minister’s suggestion that if the pay-roll tax were abolished the amount of £101,000,000 to be paid into the National Welfare Fund this year would also be paid into the fund in the year in which the tax was abolished. The £101,000,000, comprising two amounts, one of £71,000,000 and the other of £30,000,000 is covered by sub-section (1.) paragraph (a) of proposed new section 5. Sub-section (1.) reads -

There shall be payable out of the consodidated revenue fund, which is hereby appropriated accordingly, for the purposes of the National Welfare Fund -

in the financial year which commenced on the first day of July, One thousand nine hundred and fifty-

the amount of social services contribution which becomes payable under the Social Services Contribution Assessment Act 1945- 1948 in that financial year-

That is, £71,000,000- and

  1. an amount of thirty million pounds ;

The £101,000,000 will be for the financial year 1950-51 only. Paragraph (b) reads -

In each financial year thereafter -

the amount of social services contribution which becomes payable under the Social Services Contribution Assessment Act 1945-1948 in that financial year; and

the amount by which the amount calculated under the next succeeding sub-section for that financial year exceeds the amount specified in subparagraph (i) of this paragraph.

These ingeniously drafted provisions clearly indicate that if there were no pay-roll tax collection in a particular year there would be no payment to the social services fund corresponding to the £101,000,000. Senator O’Flaherty has posed a very important question. I accept the Minister’s statement that if such a decision were made the government of the day would have to face up to the future of the National Welfare Fund. In such circumstances it might allow the fund to lapse. I am eager to guard against such a temptation. The Opposition is keen to ensure that the fund shall be preserved and that a specifically identifiable amount shall be earmarked for social services benefits that can be drawn on in times of great unemployment or widespread sickness. If large numbers of our people were to claim sickness benefits as a result of an epidemic sweeping through the country, it is easy to imagine that the fund would soon disappear. We are concerned not only with the maintenance of the fund, but with the preservation of its reserves in order to meet such contingencies. Anything that makes it easy to lead to the abolition of the National Welfare Fund is to be deprecated. As I have stated before, if we can only get this formula reduced to a point where it will be fixed and clear, there will not be a temptation for governments to alter the position. I accept the Minister’s assurance that he will refer my suggestion to those responsible. I ask him to do so with enthusiasm, because, as the matter stands, the way is open for the rapid demolition of the National Welfare Fund.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 3606

SUPERPHOSPHATE BOUNTY ACT REPEAL BILL 1950

Second Reading

Debate resumed (vide page 3580).

Senator SANDFORD:
Victoria

– This bill has been introduced for the purpose of validating the discontinuance by regulation of the bounty on superphosphate as from the 30th June last. In its usual co-operative spirit, the Opposition does not oppose the passage of this measure. However, it is to be deplored that the Government has seen fit to discontinue the bounty, in view of the relatively small expenditure that it involved. The bounty has been of inestimable value to primary producers, particularly newcomers to the industry under the scheme for the land settlement of exservicemen. Prior to the last general election, the Government gave no indication to the farmers of its intention to abolish the bounty, and doubtless many primary producers will be astounded at its action. In his second-reading speech, the Minister for Social Services (Senator Spooner) stated that the object of the bounty was to keep down the cost of agricultural production. The cost to the Treasury of paying the bounty would be more than saved indirectly because of the benefits that accrued to the primary producers as a result of their being able more readily to obtain supplies of superphosphate. Indirectly, the community as a whole benefited, and for that reason it was desirable that the payment of the bounty should have been continued.

Senator PIESSE:
Western Australia

– As has been pointed out by Senator Sandford, this bill abolishes the bounty on superphosphate that was introduced in 1941. The cost of superphosphate was rising rapidly. There had been three rises of 10s., 16s. and 32s. a ton respectively. The bounty proved of considerable assistance to the primary producers who were, at that time, receiving much lower prices for their produce than the prices now being received. In view of the present high prices for wool and wheat, it would be difficult for the wool and wheat growers to advance a sound reason why the bounty should be continued. However, small farmers who work for long hours to produce whole milk and butter fat will suffer a hardship until prices for their produce are increased as a result of the efforts of the cost of production committees. The removal of the bounty will not affect fruit and vegetable farmers, who use nitrogenous manures, on which a subsidy will still be paid. I point out that there is considerable need for the use of superphosphate in Western Australia. Without its use the present rate of agricultural production could not have been achieved. However, we shall suffer to an appreciable degree in that connexion at present, because the supplies of superphosphate in Australia are insufficient to meet requirements. In fact, that commodity is rationed in Western Australia, where there will be a shortage of 36,000 tons this year. It is expected that there will be an even greater shortage next year. The Government should do everything possible to increase the production of superphosphate in Australia, particularly in Western Australia. It can assist in that direction by making available adequate supplies of steel and other building materials in connexion with the construction of the new superphosphate works in that State. On present indications the supply of superphosphate in Western Australia will be insufficient to meet demands for some years to come.

It was regrettable, from the point of view of the ex-servicemen who have been settled on the land, that the bounty was discontinued as from the 30th June this year. It would have been of considerable benefit to ex-servicemen settlers if the bounty had been continued, so that each of them would benefit for at least a couple of years. Many prospective exservicemen settlers have not yet taken up their farms. Through no fault of their own, many small fanners in Western Australia who had lodged orders for superphosphate some months before the 30th June, and had paid for it, did not receive delivery before the bounty was discontinued. In some instances, the cause was lack of transport facilities, while in others the superphosphate works were unable to fulfil the orders. In Western Australia orders for about 5,000 tons of superphosphate were outstanding at the 30th June. The small farmers will suffer definite hardship because of non-delivery of their orders before the 30th June. I realize, of course, that . the bounty in respect of the whole of Australia involved the Treasury in a large expenditure. However, I was very sorry that the Government could not see its way clear to accede to representations that were made for the bounty to be paid in relation to orders that had been lodged and paid for prior to the 30th June, but not delivered at that date. I am referring not to farmers who merely wanted to store superphosphate for use next year, but rather to the small farmers who required it for immediate use. Almost overnight the cost of superphosphate to these farmers rose by £2 15s. a ton.

The position in relation to supplies of superphosphate in the future is not very clear. As the supply of sulphur is not guaranteed indefinitely the alternative is the use of pyrites, which would increase the cost to the farmer. The farmers have been very grateful for the bounty. I hope that the Minister will keep in mind the possibility of the necessity for a bounty being paid in the future in this connexion. I support the bill.

Senator MURRAY (Tasmania) 1 10.28]. - The farmers in Tasmania are experiencing difficulties in connexion with obtaining supplies of superphosphate, similar to those that exist in Western Australia to which Senator Piesse has referred. Although Tasmania does not produce large quantities of wool and wheat, it produces large quantities of potatoes, apples, pears and other small fruit, and the farmers and orchardists are dependent upon adequate supplies of superphosphate. The Tasmanian farmers deplore the fact that the bounty on superphosphate has been removed. This has increased the hardships of the farmers, particularly exservicemen, whose markets, unlike those of the wool and wheat producers, are not assured.

I was interested in the remarks of Senator Piesse about the use of pyrites in connexion with the manufacture of superphosphate. There are huge deposits of pyrites on the west coast of Tasmania, the by-products of which could be used in the manufacture of superphosphate in place of large quantities of sulphur and sulphuric acid. If it is necessary to import these commodities, a considerable dollar expenditure is involved. However, there are ample supplies of pyrites in this area.

Debate interrupted.

page 3608

ADJOURNMENT

The PRESIDENT:

– Order! In accordance with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Senate do now adjourn.

Question resolved in the negative.

page 3608

SUPERPHOSPHATE BOUNTY ACT REPEAL BILL 1950

Second Reading

Debate resumed.

Senator MURRAY:

– There are ample supplies of pyrites in Tasmania, and if the deposits are exploited under a national development scheme, the production of superphosphate in Tasmania should be considerably increased. I trust that the Government will heed the plea that I have made on behalf of small fruitgrowers and potato-growers.

Senator McLEAY:
Minister for Fuel, Shipping and Transport · South Australia · LP

in reply - I appreciate the points made by honorable senators in their remarks on this bill, particularly those about the need for increased induction. However, the Government believes that prices of primary products are now so satisfactory that there is no longer any need to pay a bounty on superphosphate, having regard to the limited quantity available.

Question resolved in the affirmative.

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

page 3608

FLAX CANVAS BOUNTY BILL 1950

Second Reading

Debate resumed (vide page 3581).

Senator CRITCHLEY:
South Australia

.- The purpose of this bill is to provide for the payment of a bounty on flax canvas, which is defined as woven flax canvas piece goods, and woven flax canvas fire hose, manufactured in Australia from scutched flax fibre produced from flax grown and processed in Australia. The bounty was recommended by the Tariff Board, which inquired into the flax industry, and the Government has adopted its recommendation. The Opposition has no desire to delay the passage of this measure. All honorable senators appreciate the importance of the flax industry, which was re-established in Australia during the last war. I am pleased to note the progress that the industry has made, but I am perturbed that it has not proved to be economically selfsupporting. Therefore, a bounty is to be paid on the production of flax, and the arrangement is to be reviewed at the end of six months. When that review is made I hope that all factors affecting the growing and processing of flax will be thoroughly examined. Flax is of such great importance to Australia that I hope that everything necessary will he done to promote the welfare of the industry.

Question resolved in the affirmative.

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

page 3609

WOOL PRODUCTS BOUNTY BILL 1950

Second Reading

Debate resumed (vide page 3582).

Senator BENN:
Queensland

– All honorable senators will understand why this measure has been introduced. Wool is selling at a high price, and the prospects are that the present price will be maintained or increased. Therefore, it has become necessary to pay a bounty on woollen fabrics so that the average person can afford to buy them. It is proposed to pay the bounty to the manufacturers in Australia, and the State prices authorities will then fix prices for thi-, manufactured goods at such a level thai the benefit of the bounty will pass on to consumers. The Opposition supports the bill.

Senator MAHER:
Queensland

, - The object of the Wool Products Bounty Bill is to provide for the payment of a subsidy of £20,000,000 on woollen goods manufactured for use in Australia as an offset to the higher prices expected to rule for woollen products because of the greatly increased price of raw wool. It is important to stress that many traders are seeking to justify the high prices that they are charging for woollen goods by saying that raw wool is being sold at fantastic prices. Admittedly, wool prices are high, but have we not always striven, from the time Australia was first settled, to get as much as possible for our wool? It has been often said that Australia rides to prosperity on the sheep’s back, and that is as true to-day as it ever was. The whole of our economy is geared to the price of wool. Those who prophesy economic disaster because of the high price of wool should pause to consider the certain effecton the economy of the country if the price of wool were to drop substantially in the next few months.

Senator Fraser:

– It will certainly drop.

Senator MAHER:

– Yes, and that decline will affect the economy of the country, and there will be far louder lamentations then than there are now. In any case, the high price of wool is not the main reason for the high p,rice of woollen goods. It is a factor, of course, but not the main one. According to figures taken out by the New York Wool Bureau, the cost of raw wool in a two-piece worsted suit of 13 to 14 oz. cloth, requiring 3.3 yards of fabric, is only 10.9 per cent, of the retail price. The rest of the cost is made up of wage’s, transport charges, &c. In other words, those who buy woollen fabrics have to pay for the shorter working week, higher wages and higher freight charges. However, the Government has taken into consideration the high cost of woollen goods, whatever the cause, and proposes to pay a bounty of £20,000,000 to the manufactures of woollen goods upon conditions explained in detail by the Minister for Trade and Customs (Senator O’Sullivan] when he introduced the bill. I shall not delay the Senate by dealing with the details of that matter now, but I believe that I should stress the last point that was made by the Minister for Trade and Customs in this connexion. He said that the Australian manufacturers absorbed about 10 per cent, of the Australian wool clip, or approximately 360,000 bales. A subsidy of £20,000,000, therefore, represented an average of about 45d. per lb. on greasy wool purchased by Australian manufacturers. The Minister went on to say that, in the four months from July to October of this year, the average price of greasy wool sold at auction had been 118d. per lb. The subsidy is payable only on wool that is manufactured in this country. Another measure enables the Government to deal with wool that is exported. The real object of this bill is to ease the inflationary pressure due to the high cost of wool, and to the increasing charges of every description that contribute to the rising cost of woollen fabrics in this country.

Senator ASHLEY:
Leader of the Opposition · New South Wales

.: - I should not have entered this debate had it not been for Senator Maher’s stupid statement that the greatly increased price ofwool had little bearing on the cost of clothing, and that higher prices for woollen garments was due mainly to increased fabrication costs. Obviously, if theprice of wool has increased from 50d. per lb. to 200d. per lb., the manufacturer is paying an additional 150d. per lb. for his raw material. That means, of course, a greater capital investment and, consequently, higher interest charges on that higher capital. Even without taking into consideration higher wages in the woollen industry, it is obvious that the increased capital investment must contribute substantially to the higher prices of woollen goods. I have never heard a more stupid remark in this chamber or anywhere else than that made by Senator Maher to-night. I hope that the Minister for Trade and Customs (Senator O’Sullivan), in his reply to the second-reading debate, will clarify the position by showing the effect that the enormously increased price of wool is having upon the price of woollen goods.

Senator O’SULLIVAN:
QueenslandMinister for Trade and Customs · LP

. - in reply - I appreciate the reception that has been accorded this measure by the Senate. I do not propose to act as arbitrator in the dispute that has arisen between Senator Maher and the Leader of the Opposition (Senator Ashley). Apparently there has been some misunderstanding. As I understood Senator Maher, he said that the actual cost of the wool in a suit costing, say, £35, was comparatively small. However, that is a matter on which, fortunately, I do not have to adjudicate to-night. Again I thank the Senate for its support of the bill.

Question resolved in the affirmative.

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

page 3610

CUSTOMS BILL 1950

Second Reading

Debate resumed (vide page 3582).

Senator COURTICE:
Queensland

– The object of this bill is to protect the revenue of the Common wealth. No bounty is payable on wool for export, and, as the Minister for Trade and Customs (Senator O’Sullivan) has pointed out, this bill provides machinery for the recovery of any subsidy or bounty that may have been paid under the Wool Products Bounty Act on goods consisting of, or containing, wool, or manufactured or derived from wool, and exported from Australia. The Opposition supports the bill.

Question resolved in the affirmative.

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

page 3610

TRACTOR BOUNTY BILL 1950

Second Reading

Debate resumed (vide page 3584).

Senator KATZ:
Victoria

.- The purpose of this bill is to continue the assistance that has been given in past years to the production of tractors in the Commonwealth. To ensure a supply of tractors to Australian primary producers during the war and post-war years, the Labour Government made dollars available for the importation of those most essential machines from the United States of America. Importations from Great Britain were also considerable, as the following table shows : -

In the same years, importations from the United States of America were as follows : -

In the past, the bounty on Australian produced tractors has been payable on the brake horse-power capacity of the tractor engine, but this measure provides for payment to be made onthe basis of belt pulley horse-power. The difference between the two systems is slight. The bounty ranges from £32 on a tractor with an engine exceeding ten but not exceeding fifteen belt pulley horse-power, to £96 on a tractor with an engine exceeding 40 but not exceeding 55 belt pulley horse-power. To-day the tractor-building industry is well established in this country, and all tractor parts excluding magnetos and carburettors are produced in Australia. Clearly Australian industry, if given an opportunity, is quite capable of making these 20th century implements of production. There is an obligation upon the Government to ensure that primary producers shall have available to them the latest machinery of all types. One seldom sees horses on farms to-day. Their place has been taken by the mechanical horse, the tractor. Motor lorries and semi-trailers can be seen on our highways any day of the week carrying as many as three or four large tractors to various parts of the Commonwealth. The importation of tractors from Great Britain has been encouraged as much as possible by allowing them to enter this country duty free. The amount of duty charged on ordinary tractors imported from the United States of America is 8 per cent., and for crawler and creeper types of more than 30 horse-power, it is 10 per cent. A bill of this kind should not be dealt with from the angle of party politics. Many years ago in this Parliament, heated debates ensued between members of political parties on the question whether a protective tariff should be plaoed upon certain commoditiesor whether they should he admitted to this country free of duty.Within the last few years, successive governments have had in mind the protection of the country’s economy and the need to make available every modern means of production and the latest types of mechanical equipment for the use of those who till the soil of Australia. I do not oppose this measure in any way.

SenatorO’SULLIVAN (QueenslandMinister for Trade and Customs) [11.2]. -in reply - I thank the Senate for the manner in which this measure has been received, and for the support accorded to it. As Senator Courtice has already stated, this industry is vital to our primary producing industries, as well as being, of itself, a considerable factor in secondary industry. It has flourished because of the reasonable amount of assistance which has been extended to it. The Tariff Board’s report of the 5th October, 1950, provides some interesting figures. From the time when a bounty on tractors was first introduced, in 1922, until 1934, the production of Australianmade tractors was approximately only 360 per annum. In 1949-50, the production was 3,403. That is a highly commendable increase, and, as Senator Courtice has stated, the standard of quality is now first class.

Question resolved in the affirmative.

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

page 3611

NATIONALITY AND CITIZENSHIP BILL 1950

Secondreading.

Debate- resumed (vide page 3587).

Senator GRANT:
New South Wales

– This is abill to amend the Nationality and Citizenship Act 1948. It is self-explanatory, but I should like to tell honorable senators the story of a’ lady who took her daughter about the country and insisted, wherever they went, upon her playing the piano. The lady invariably asked the question : “ What do you think of my daughter’s execution?” On one occasion, a listener was moved to reply, “I am quite in favour of it”. I suggest that that is the position in relation to thisbill and that no more need be said concerning it.

Question resolved in the affirmative.

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

page 3611

CUSTOMSTARIFF (EXPORT DUTIES) BILL 1950

SecondReading.

Debate resumed(vide page 3584).

Senator COURTICE:
Queensland

– This bill has some relation to another measure that has been dealt with in the Senate to-day. Its purpose is to enable the Department of Trade and Customs to collect duty on certain commodities that are derived in whole or in part from wool products. The Opposition has much pleasure in supporting the bill.

Senator O’SULLIVAN:
QueenslandMinister for Trade and Customs · LP

in reply - I thank the Senate for the manner in which this bill has been received and for the support accorded to it.

Question resolved in the affirmative.

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

page 3612

HOUR OF MEETING

Motion (by Senator O’Sullivan) agreed to -

That the Senate, at its rising, adjourn to to-morrow, at 11 a.m.

page 3612

PAPERS

The following papers were presented : -

Aliens Act - Regulations - -Statutory Rules 1950, No. 87.

Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. - 1950 -

No.69 - Commonwealth Public Service Artisans’ Association.

No. 70 - Fourth Division Postmasters, Postal Clerks and Telegraphists’ Union.

No. 71 - Postmaster-General’s Department State Heads of Branches Association.

No. 72 - Association of Architects, Engineers, Surveyors and Draughtsmen of Australia.

Canned Fruits Export Control Act - Regulations - Statutory Rules 1950, No. 84.

Commonwealth Public Service Act - Appointments - Department -

Defence -J. I. Serman.

Fuel, Shipping and Transport-P. A. Maclean.

Interior - H. D. Waring.

Defence Act, Naval Defence Act and Air Force Art - Regulations- Statutory Rules 1950. No. 80.

Defence (Transitional Provisions) Act - Regulations - Statutory Rules 1950, No, 85.

Egg Export Control Act - Regulations - Statutory Rules 1950, No. 81.

Lands Acquisition Act - Land acquired for- Defence purposes -

Rottnest Island, Western Australia.

Department of Civil Aviation purposes -

Normanton, Queensland.

Postal purposes -

Longreach, Queensland.

Malvern North, Victoria.

Mr Gravatt, Queensland.

Rosebud, Victoria.

Meat Export Control Act - Regulations - Statutory Rules 1950, No. 83.

Naval Defence Act - Regulations - Statutory Rules 1950, No. 86.

Seat of Government Acceptance Act and Seat of Government (Administration) Act -

Australian Capital Territory Soil Conservation Council - Third Annual Report and Statement of Receipts and Expenditure, for year 1949-50.

Ordinance - 1950 - No. 13 - Liquor.

Wool Use Promotion Act - Regulations - Statutory Rules 1950, No. 82.

Senate adjourned at 11.8 p.m.

Cite as: Australia, Senate, Debates, 5 December 1950, viewed 22 October 2017, <http://historichansard.net/senate/1950/19501205_senate_19_211/>.