20th Parliament · 1st Session
The President (Senator the Hon. Edward Mattner) took the chair at 3 p.m., and read prayers.
– Will the Minister representing the Treasurer direct the Treasurer’s attention to an article by the financial editor of the Sydney Sunday Herald which was published under the rather disrespectful heading “Fadden Has Forsaken More Principles”? “Will the Minister inquire whether the Treasurer intends to reply to the article, or to let the statements contained therein go by default ?
– I appreciate the friendly thought that has prompted Senator O’flaherty to direct this question to me. I am sure that, as a parliamentarian of some experience, he will appreciate that the article has not been unnoticed by the Treasurer. I am sure that the right honorable gentleman will give due consideration to the point of view expressed in the article. I am not prepared to say whether or not he will accept that point of view, but I am sure that he will give it some thought.
– I ask the Minister representing the Treasurer whether it is true that the tax on a dozen boxes of matches is 9d.? Is the Minister aware that buyer resistance caused by this tax burden has resulted in unemployment in the industry? Will the Minister urge the Treasurer to reduce this tax in order to avoid adding further to the growing unemployment in Australia?
– I shall direct the Treasurer’s attention to the honorable senator’s question and to his suggestion that the tax on matches should be reduced in order, as f understand him, to provide greater employment in the manufacture of matches.
– Can the Minister representing the Minister acting for the Postmaster-General inform me of the cost of erecting the neon sign on the top of the Padbury building at the corner of Forrest-place and Murray-street, Perth, which advertises certain features of the Australian Broadcasting Commission’s programmes? Is any rental paid for this advertisement?
If so, what sum is paid and to whom is it paid? Why is there a need to advertise national programmes in this manner?
– I shall be pleased to submit the honorable senator’s question to the Minister acting for the PostmasterGeneral and ask that a considered reply be furnished at an early date.
– On the 16th September, Senator Tangney asked the following question: -
Can the Minister representing the Minister for Health state what arrangements have been made in. all the States for their participation in the Commonwealth health scheme? What fees are charged in the various States in public hospital wards? Does the Minister approve of the practice of charging visitors to patients in public wards 6d . a visit, seeing that the patients are paying a minimum of £12 5s. a week for treatment? Is this practice general in public hospitals throughout Australia?
The Minister for Health has furnished the following reply: -
Under the hospital benefits agreements which have been or are being negotiated, each State is having restored its complete authority to determine hospital policy within the State. Thus the question of charges for patients or visitors is entirely a matter for the State or hospital authority concerned.
– On the 16th September, Senator Eraser asked the Minister for Trade and Customs the following question: -
I understand that discussions have taken place about the laying down of uniform conditions for the registering of drugs. Some time ago, I asked the Minister for Trade and Customs whether the Government would consider the advisability of instituting a uniform system of registration for medical practitioners. Can the Minister say whether the suggestion has been considered?
The honorable senator’s question was referred to the Minister for Health, who has furnished the following reply: -
Except in respect of the Northern Territory and the Australian Capital Territory, the Commonwealth has no jurisdiction over the registration of medical practitioners which is a function of the various States.
– I desire to ask the Minister representing the Minister for Health whether it has come to his knowledge that the Tasmanian Government has announced its’ intention to charge 21s. a day for treatment in its public hospitals? Will the Minister consider issuing a statement making it quite clear that the imposition of that charge represents a voluntary decision by the Tasmanian Government, and is not in accordance with any condition imposed by the Australian Government? Will he do this so that the deceptive propaganda now being indulged in to the contrary may be scotched?
– I assure the honorable senator that the charging of fees in public hospitals in the States is a matter for decision by the State authorities. The fees are usually based on the cost of operating the hospitals. I shall obtain a detailed statement on the subject from the Minister for Health, and supply it to the honorable senator at an early date.
– I preface a question to the Minister representing the
Minister for Health by stating that the following organizations have been registered by the New South Wales Government for the purpose of collecting hospital contributions : -
Hospitals Contribution Fund of New South Wales.
The Australian Holy Catholic Guild Hospital Fund.
The Grand United Hospital Rebates Fund.
The Manchester Unity Oddfellows Voluntary Hospital Fund.
The New South Wales Railway, Tramway, &c., Employees’ Hospital Fund.
The Hospital Insurance Society Limited.
Commonwealth Bank Health Society.
Sydney Morning Herald Hospital Fund.
Will the Minister inquire into the position of subscribers to the Underwriting and Insurance Company Limited, which will not now be in a position to receive a certificate from the hospitals concerned?
– The honorable senator’s question involves considerable detail and I shall obtain a considered reply to it from the Minister for Health.
– In view of the non-committal and unsatisfactory reply given by the Minister to my question about hospital charges in Western Australia, will the Minister, in the interests of all senators, have an investigation made and a report issued showing the specific charges in all States for treatment in public wards of all public hospitals?
– I shall have the honorable senator’s question’ brought to the notice1 of the Minister for Health. However I stress again; my point that the responsibility for charges- rests upon the States. The Commonwealth has nothing to. d’o with that.
– My question, which is addressed to- the Minister representing the Minister for External Affairs, relates to the Communist party propaganda conference now being held at Peking, which, I regret to say, has been somewhat incorrectly and even stupidly referred to by the press- as a “peace” conference. Honorable senators are no doubt aware that, through the activities of the Government, certain Australian delegates to that conference have been prevented from leaving Australia, but that the. Government had no power to take action against two delegates who hold passports issued by the British Government. Will the Government request the British Government to take action, as and when requested, to cancel the passport issued by the British Government to any Australian should he, at some future time, attempt to leave Australia to attend a Communist party conference ?
– The attitude of the Government in regard to this matter has been made perfectly clear. We will not extend any of the facilities under our control to persons who seek to attend this conference at Peking, because we take the view that such persons are desirous- of engaging in a conference that is against our national interest md is virtually taking place behind enemy lines. The honorable senator apparently desires us to make certain representations to the British Government concerning persons who hold British passports. That raises an entirely different problem because, just as our action was taken on our own responsibility, what the British Government may desire to do in relation to that matter is the responsibility of that Government. However,. I shall bring the honorable senator’s suggestion to the notice of the Minister for External Affairs.
– In view of the Labour party’s’ persistent fight against communism!, I ask the Attorney-General whether any representations were made to the New Zealand Liberal’ Government to withhold passports from delegates who wished to attend the Peking conference? If not,, why were such representations not made?
– I cannot follow the purpose of the honorable senator’s question. It seems to be very mixed. In the- first part he seemed to indulge in a little propaganda. The Government’s position in relation to the second part of the question has been made perfectly clear. We have not extended Australia’s facilities to persons who desire to attend the conference. Perhaps the honorable senator is: disappointed because we have not done so. Undoubtedly he would have been disposed to criticize had we extended facilities to them. The action taken by other governments in’ regard to this matter is not the responsibility of the Australian Government.
– Will the Minister for Shipping and Transport inform the Senate whether the recent hold-up of Bundaleer was caused by the refusal of the Australian Stevedoring Industry Board to- supply two additional men for the. loading of cement? Was it not previously the board’s practice to supply two additional men when the loading of cement has had to be undertaken 1 If the circumstance that I have mentioned was responsible for the hold-up, will the Minister state the board’s reason for refusing to provide two additional men on this occasion?
– It has. been brought to the notice of my department that the leaders of some trade unions, particularly the Waterside Workers’ Federation and the Seamen’s Union, which are Communist-dominated, have adopted blackmailing tactics in connexion with the lifting’ of Queensland sugar, by
Making requests with which it -has been practically impossible to comply.. Some of the, requests’ have been described1 by conciliation commissioners as frivolous and unfair. As the Government has been greatly perturbed about the matter, I have asked the Minister who is acting for the Minister for Labour and National Service to consider whether remedial steps can be taken.
– I preface a question to the Minister representing the Minister acting for the Postmaster-General by pointing out that quarter size public telephone cabinets are inconvenient to use and do not provide the desired degree of privacy for the users. Requests that have been made in the past for quarter size cabinets to “be replaced by full size cabinets have been rejected on the grounds that labour and materials to construct them were not available. Will the Minister inform me when it is expected that this work will be undertaken ?
– I shall direct the attention of the Minister who is acting for the Postmaster-General to the honorable senator’s question, and endeavour to obtain a considered reply for him as soon as. possible.
– I ask the Minister representing the Minister for External Affairs whether it is a fact that the United States of America has refused Great Britain the privilege of sending a military observer to the Anzus talks which are now being held?
– I think that the composition of the conference to which the honorable senator has referred was decided at the earlier conference of the representatives of the three countries concerned at Honolulu a few weeks ago. However, I shall obtain details of the matter and. provide the honorable senator with them.
– Is the Minister aware that the United Kingdom lost £4,198,000,000 of its overseas wealth and £3,050,000,000 by the destruction of its shipping and other property in World War II., and that the United Kingdom had about 9,000,000 men in its forces and war industries before the
United States of America entered the war? Does the Minister approve of the refusal to allow a United Kingdom Government observer to attend the Anzus conference at Honolulu? Does the Minister not consider that this refusal constitutes a gratuituous insult to the Mother Country? Will he try to persuade the Government to alter its decision on this matter?
– I am not aware whether or not the United Kingdom Government has-been refused permission to have an observer at this conference. As I said in reply to Senator Wordsworth, the agreement in relation to the composition of the Anzus Council was made at the earlier conference at Honolulu. Other quite important international pacts to which the United Kingdom is a party whilst Australia is not, have been made. For instance, Australia is not a member of the North Atlantic Treaty Organization which is concerned with many problems, some of which affect Australia. The composition of the Anzus Council has been brought about by agreement between the parties to it and I think that it will operate very much to the advantage, not only of Australia, but also of the United Kingdom.
– I desire to preface a question to the Minister representing the Minister acting for the Postmaster-General by stating that I have received constant complaints from exceedingly reliable Adelaide businessmen that airmail letters, which have, been posted at Sydney General Post Office as early as noon on a week day, have not been delivered in Adelaide and its suburbs until the first delivery on the second day following the day of postage, whereas letters which have been posted at the General Post Office, Adelaide, up to 4.30 p.m. on a week day have been delivered in Sydney in the first delivery of mail the next morning. Will the Minister ensure that airmail which is posted in Sydney before the early afternoon on a week day and addressed to Adelaide and its suburbs is delivered by the first mail the next morning? For the purpose of achieving this objective, will the Minister consider the use of the daily Trans-Australia Convair service which leaves Mascot for Essendon at 4 p.m., and Essendon for Parafield at 6.55 p.m.?
– I shall be pleased to bring the suggestion of the honorable senator to the notice of the Minister acting for the Postmaster-General who, I am sure, will examine the matter, and I shall let the honorable senator have a reply to his question as early as possible.
– Can the Minister representing the Minister acting for the Minister for Labour and National Service inform the Senate how many of the immigrants who entered Australia during the last three months have been unable to find work? Has the Go-“ vernment any plans to find full employment for those immigrants who are now entering Australia? Will they enjoy priority in the matter of employment over the 58,000 persons who are already registered as unemployed? Does the Government believe that the present situation, out of which there has developed a pool of unemployed, has been brought about by the Government itself or by the Communist party?
– As for the last part of the honorable senator’s question, I repudiate the suggestion that the position of those who are at present unemployed is due to the activities of this Government. A careful consideration of the matter would indicate that the activities of the Communists in this country during the last few years have made a contribution to the position that at present exists. I also regret very much that the honorable senator should have seen fit to follow the example of some of his colleagues on that side of the chamber in endeavouring to create the impression that there is an overwhelming body of unemployment in Australia, as he has done by referring to it as a “ pool “. I cannot imagine that his friend and colleague, Mr. Monk, who has made an affidavit on this subject in the Commonwealth Court of Conciliation and Arbitration, would be very pleased to hear the honorable senator’s propaganda ques tions. If the honorable senator wishes to create the completely false impression that there is an increasing pool of unemployed in this country, that is his responsibility; but I repudiate the suggestion. I suggest that the honorable member put the other parts of his question on the notice-paper.
asked the Minister representing the Minister acting for the Minister for Immigration, upon notice -
– The Minister acting for the Minister for Immigration has furnished the following replies : -
Malta. - («) The agreement with the Maltese Government was signed on the 31st May, 1948, and provides for extensions for two-yearly periods. The most recent extension expires on the 30th June, 1953. (J) The entire intake under the Australia-Malta assisted passage agreement is on the basis of personal nominations submitted by friends or relatives already resident in Australia. The principles involved and the conclusions reached are similar to those referred to above in connexion with the United Kingdom assisted passage agreement, (c) See answer to (&). (d) No provision for termination of the scheme is provided for in the agreement other than the limits referred to in (a).
The Netherlands. - (a) The agreement with The Netherlands Government was signed on the 22nd February, 1951, and provides that the scheme shall operate for a period of five years commencing upon a date to be fixed and that it may be continued thereafter by mutual agreement. The operative date in respect of this agreement was the 1st April, 1951. (6) The agreement does not specify actual numbers of migrants to be received, but provides that selection shall be in accordance with Australia’s stated requirements, which are to he advised from time to time, (c) See answer to (6). (d) No provision for termination of the scheme is provided for in the agreement other than the limits referred to in (a).
Italy. - (a) The agreement with the Italian Government was signed on the 29th March, 1951. and provides that the scheme shall operate for a period of five years commencing on a date- to he fixed and that it may be continued thereafter -by mutual agreement. The operative date in respect of this agreement was the 1st August, 1951. (6) The agreement docs not specify actual numbers of migrants to he received in any one period, but provides that close estimates of Australia’s requirements in respect of each twelve months are to be supplied six months in advance. It also provides that detailed group nominations are to be lodged with the Italian Government three months before it is desired that the workers specified should leave Italy, (c) See answer to (6). (d) The agreement provides that, in the event of conditions arising at any time either in Italy or Australia during the currency of the scheme, which may render it advisable to terminate the scheme, either party shall give to the other six months’ notice of its intention to terminate the scheme.
– Can the AttorneyGeneral inform me whether the Constitution confers on the Australian Government power to direct the various State governments concerning the manner in which they must expend moneys allocated to them by this Government? I refer particularly to the Commonwealth and State Housing Agreement and the manner in which it affects New South “Wales. Can the Attorney-General state the source from which the Commonwealth derives power to make the Housing Commission of New South Wales really an agent for the Commonwealth, constructing houses on sites directed by this Government ?
– I thought I had explained to the Senate last week that there is nothing in the Financial Agreement which requires the Commonwealth to make a contribution towards the loan moneys required by the States. If the Commonwealth had not seen fit to come to the rescue of the States, both this year and last year, they would have had far less loan money to spend than they have in fact spent. My recollection is that at the meeting of the Australian Loan Council at which questions such as that raised by the honorable senator were discussed, it was made quite clear that the amount of contribution which the Commonwealth is making to the loan programmes of the States in respect of State housing was a definite amount fixed by the Australian Government. As I have said, those who provide the funds sometimes are able to call the tune; but whether the kind of limitation to which the honorable senator has referred has been imposed upon the New South Wales Government, I am not aware. I shall make inquiries about that matter and let him know.
– On the 11th September, Senator Scott asked me a question regarding the institution of a regular shipping service to Esperance. 1 now supply the following information: -
The question of the institution of a regular shipping service to Esperance and Albany has been considered by the Australian Shipping Board and the Combined Traffic Committee. I have now been advised that, prior to the metal trades dispute, a service was provided to both these ports, but when locomotives could not be supplied to handle cargo on the wharfs it was necessary temporarily to abandon these services. As I have mentioned earlier in the Senate, on the assurance of the Western Australian railways that locomotives would be available to handle cargo at Albany, arrangements were made for a vessel to load a.t that port. In respect of Esperance, the Combined Traffic Committee has been informed by the Western Australian Government railways that at the moment, whilst arrangements could be made to provide shunting facilities to deal with unloading cargo from a vessel, it would not be possible to forward this cargo on from Esperance for at least two months. The Fremantle representative of the Combined Traffic Committee states that there is only a small transit shed, and as prompt delivery out of Esperance is essential they do not feel that cargo could be handled expeditiously by road haulage. The honorable senator is assured, however, that the Combined Traffic Committee is watching the position and as soon as it is practical to do so, a vessel will be fixed to load for Esperance.
– I ask the Minister for Shipping and Transport whether it is true that, despite the Government’s denial on the 12th September that no offer had been made for the Commonwealth shipping line, and that the Government was still exploring the possibility of selling its vessels, the line has already been sold and that the delay in completing the transaction has been caused by disputation between shipowners about the apportionment of the ships ? Has the Minister for Shipping and Transport not been negotiating with the Adelaide Steamship Company Limited for months about the disposal of the fleet? Is it not a fact also that one of the United Kingdom shipping combines, the Peninsular and Oriental Steam Navigation Company Limited, is also financially interested in the purchase of the Commonwealth-owned vessels? Is it true that, in shipping circles, it is no secret that the sale of the ships has been virtually completed, and that confirmation of this may be obtained from the general manager of the Adelaide Steamship Company Limited, Mr. Haddy, or the chairman of the Australian shipping combine, Mr. Coutts? Is it not a fact that representatives of the Commonwealth Shipowners Association and of the Commonwealth Treasury met weeks ago in Melbourne to draw up the conditions of sale, and that Mr. Edwards, a leading executive of Mcllwraith McEachern Proprietary Limited, has been appointed to arbitrate on the division of the Commonwealth shipping line? Will the Government take steps to ensure that the line shall not be sold on the lay-by system, which would repeat a tragic financial transaction undertaken by a previous Conservative government ?
– It is not the practice for a Minister to reply to a propaganda question. If Senator Ashley has been advised by his “ Commo “ friends that the Commonwealth shipping line has been sold, I say that it is a deliberate lie.
– I rise to order. I ask for a withdrawal of the charge that I have told a deliberate lie. It is offensive to me.
– If the words are offensive to Senator Ashley, I withdraw them, but I should like the Senate to understand that the ships have not been sold. In fact, no firm offer has been made for them. I ask Senator Ashley to correct this false rumour that is being circulated by his friends in Sydney. They are criticizing a reputable organization, the Peninsular and Oriental Steam Navigation Company Limited, which has rendered a good service to Australia.
– Order ! If some honorable senators would acquaint themselves with the rules governing behaviour in this chamber, that would add considerably to the dignity of the Senate.
asked the Minister for Shipping and Transport, upon notice -
What shipping freight charges were operating in the overseas and coastal services as at the 30th June, 1947 to 1952, inclusive:
– There is an extensive range of varying freight rates operating in both the Australian coastal and overseas trades. However, a comparison of the freight rates on. general cargo items, operating on the Australian coast and also between Australia and the United Kingdom for the years 1947 to 1952, is as follows : -
– Recently, I had a discussion with a friend of many years’ standing about Soviet Russia and communism. He wanted to go to Russia and remain away from Australia permanently. I do not know why. However, he said that he had been refused a vise1 to go to Russia. Can the Minister representing the Minister acting for the Minister for Immigration inform me whether Communists are refused vises to go to Russia even if they do not want to come back to this country ? Could the Government not reduce its worries by issuing vises to Communists who want to enter what they consider to be a delectable land? Have many requests been received by Communists and fellow travellers for vises to travel to Russia and remain there? Have all such applications been refused by the department?
– The Government’s main complaint is that Communists to whom passports are issued to visit Russia always come back to Australia. If the honorable senator will provide me with details of the specific instance to which he has referred, I shall ascertain the facts. It is most unlikely that a vise would be refused to a Communist who wanted to go to Russia and expressed his intention not to return to Australia. Speaking personally, I should be only too pleased to facilitate the exit from Australia of such a person.
asked the Minister representing the Minister for External Affairs, upon notice -
– The Minister for External Affairs has furnished the following replies : -
Leader.–Mr. C. J. A. Moses, General Manager, Australian Broadcasting Coinmission (Mr. Moses is already overseas ) .
Delegates. - Colonel B. Mander Jones, Director of Education, South Australia; Mr. J. E. Cummins, Commonwealth Scientific and Industrial Research Liaison Officer in the United Kingdom.
Advisors. - Dr. W. Cardner Davies, Attaché, Australian Embassy, Paris; Mr. A. L. Moore, representative in the United Kingdom of the Commonwealth Office of Education.
asked the Minister representing the Minister for the Army, upon notice -
– The Minister for the Army has furnished the following replies : -
asked the Minister representing the Minister for Air, upon notice -
– The Minister for Air has furnished the following reply: -
asked the Minister representing the Minister for Defence, upon notice -
– The Minister for Defence has furnished the following replies : -
Report of Public Works Committee.
– I present the report of the Public Works Committee on the following subject : -
Resubmission of the proposal to erect the National Library and Roosevelt Memorial, Canberra.
Ordered to be printed.
Order of the Day No. 9 - Economic position - Ministerial statement - Resumption of debate - discharged.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Spicer) read a first time.
– I move -
That the bill be now read a second time.
The purpose of the bill is to provide that high commissioners in Australia of Commonwealth countries shall be placed in the same position, as regards immunity from suit and legal process, inviolability of premises and archives, as ambassadors’ and ministers of foreign powers. Honorable senators may remember that certain improvements in the status of high commissioners of one Commonwealth country in other Commonwealth countries have been made in recent years. In 1948 it was agreed, at a meeting of Commonwealth Prime Ministers, that high commissioners should in future rank with foreign ambassadors for purposes of precedence, and arrangements to this end were accordingly made with the approval of His late Majesty. In addition, legislative and administrative action has been taken, from time to time, to bring high commissioners into line with foreign diplomatic representatives in the field of privileges. For example, in Australia they are treated in the same manner as ambassadors in respect of customs and taxation exemptions. However, while formal recognition of the status of high commissioners has been given by their inclusion with ambassadors in the precedence list, and they enjoy taxation privileges and customs exemptions on the 3ame basis as diplomatic representatives of foreign countries, it has never been established that they enjoy immunity from suit and legal process. Moreover, there are some doubts whether a high commissioner could maintain a claim in respect of inviolability of his residence, premises and archives, as can be claimed by a diplomatic representative of a foreign country. In the light of constitutional developments in the status of members of the Commonwealth, it is clear that it is no longer right that high commissioners should enjoy lesser privileges and immunities than diplomatic representatives of other countries. Accordingly,, the United Kingdom Government, in consultation with the Dominions, including Australia, some months ago passed an act to provide that high commissioners should be entitled to the same immunity from suit and legal process and the same inviolability of residence, official premises and archives, as are accorded to foreign envoys. The United Kingdom act also provides immunity from suit and process to the members of a high commissioner’s family and to the members of his staff, subject to certain conditions. Consideration has been given to the advisability of similar steps being taken by other dominions, and I am informed that all members of the Commonwealth contemplate action on these lines. The Australian Government, for its part, accordingly decided to introduce this bill.
Before dealing with the matters which the bill seeks to achieve, I shall mention two matters with which the bill does not deal. In the first place, it is notconcerned with taxation, customs or what are generally referred to as diplomatic “ privileges “, that is, certain exemptions that are accorded to foreign diplomatic representatives in accordance with the general principles of international law and custom. The bill deals solely with the subject of immunity from suit and legal process and, as I have said, the reason for the legislation is that the relationship of the countries within the Commonwealth is not that of foreign countries, and in consequence there are doubts regarding the position of high commissioners in regard to legal process. Secondly, the bill is not concerned at all with the general subject of privileges or immunities of foreign envoys to Australia, a matter which is already governed by the general law based upon international law. The sole object of this bill is to place the high commissioners and their staffs in the same position as regards immunity from suit as foreign representatives. As to the provisions of the bill itself, it will be seen that it will apply to the United Kingdom and all of the Dominions represented in Australia by high commissioners.
The operative provisions of the bill are those contained in clauses 4 and 5 which, as will be seen, confer immunity from suit and legal process upon the high commissioner, the members of his family, the members of his staff, and the members of the families of his official staff. Where, however, a member of the staff of a high commissioner is an Australian citizen and not at the same time a citizen of the country represented, that person obtains immunity only in respect of his official acts. The members of his family do not obtain any immunity under the bill.
Clause 6 is designed to ensure that there shall be complete reciprocity with the United Kingdom and other dominions at all times. Similar provision is included in the United Kingdom act, for the reason that it is considered that all these matters should be based upon the principle of reciprocity. As I have already informed honorable senators, the United Kingdom act has been passed, and our high commissioner in London and members of his staff already enjoy the immunity provided for. The other dominions contemplate the introduction of legislation along similar lines. It is therefore considered desirable, in view of the principle of reciprocity, for Australia now to take action to ensure that high commissioners in this country shall be accorded the immunities which our representatives in other Commonwealth countries will enjoy when legislative action has been taken by them. Clause 8 provides that the immunity may be waived in any given case.
Clause 7 empowers the making of regulations providing that occupants of prescribed offices in the service of the government of a prescribed part of Her Majesty’s Dominions other than countries to which the act applies, may be granted the immunity from suit and legal process to which foreign, consuls are already entitled. The immunity in the case of consuls is, in general, confined to immunity in respect of official acts. The object of clause 7 is to enable provision to be made to cover cases such as that of a colonial representative who performs duties substantially corresponding to those of a foreign consul. Clauses 9 and 10 are machinery clauses, while clause 11 empowers the making of regulations for the purposes of the bill. I commend the bill to honorable senators.
Debate (on motion by Senator McKenna) adjourned.
Debate resumed from the 18th September (vide page 1627), on motion by Senator Spooner -
That the bill be now read a second time.
– The object of the bill is to provide for the States financial assistance additional t© the amount of income tax reimbursement for the current financial year. The bill stems from the existence of a system of uniform taxation in this country, -which was begun in 1942-43. It has run for a decade, and is now in its eleventh year. In effect, the existing legislation provides that if the States vacate the income tax field the Commonwealth will reimburse them in accordance with a formula that was determined by the 1946 legislation. The formula has been applied since the 1st July, 1946. At that time it was generally accepted by the States to be adequate. The States could not foresee what has since happened, and they entered into a gentleman’s agreement with the Commonwealth not to seek to disturb the formula within a period of seven years. From the next year, however, the position was disturbed, because the basic amount of reimbursement of income, tax was found to be inadequate, and, accordingly, it was increased from £40,000,000 to £45,000,000. This inadequacy has persisted through most of the years in which the grant of reimbursement of income tax has been operative. The bill seeks to make good that inadequacy during the current financial year. It covers an estimated amount. In his speech on the motion for the second reading of the bill, the Minister for National Development (Senator Spooner) stated that it was estimated that a total amount of £27,100,000 would be provided to the States under this measure. The reason that the amount payable under the formula cannot be determined with accuracy is that insufficient time has elapsed since the 30th June, 1952.
I had a good deal to do with the drawing up of the formula, as well as with the 1946 legislation, because I had the privilege to participate not only in .the officers’ conference of that year, but also in the conference of Commonwealth and State Ministers that followed it. In fact, the formula was proposed, not by the Commonwealth to the States, but by the States .to the Commonwealth. It was generally accepted as .a very progressive development and as a method of basing Commonwealth and .State financial relationships, in at least one particular, upon some well-founded principle.
The formula adopted is detailed in section 6 of the 1946 legislation. The basis of ‘distribution between the States is set out in section 7 and a further formula, relating to distribution between the States, is contained in the schedule to the act. If one reads these sections of the act rapidly, and for the first time, they seem to be very confusing. That, in fact, is not the case. Once the basic amount was fixed at £40,000,000 in 1946, it varied thereafter in two ways only. It varied according to the increase of the total population of Australia; and it varied according to the percentage increase of average wages paid in Australia. In the year 1946 only a half of that average percentage increase was added to the grant. It was considered that there were many fixed items in State budgets .such as interest charges in respect of which the States should not receive the benefit of what would amount to a complete rise in the national income. In 1948 the basic amount of the grant was increased by the full percentage by which the average wages paid in Australia rose. I repeat that the basic amount was varied in only two ways - according to the increase in population, and in relation to the. percentage increase of average wages. There is certainly nothing complicated about that method of variation and it seemed at the time that there was a great deal of justice and reason in it.
The distribution of the base amount was to be arbitrarily apportioned by the States in agreement with the Commonwealth. That distribution could not be left entirely to the States because, if it were, what might be called the major States - New South Wales, Victoria and Queensland - might, even with the con currence of the smaller States, have taken more than their proper proportion of the base amount and left the smaller States of South Australia, Western Australia, and Tasmania to the good offices . of the Commonwealth Grants Commission. Consequently, the Commonwealth had to have some voice in determining the distribution of the money. I think I can assure the Senate that in 1946 that matter was .amicably arranged. There was general satisfaction, not only with the base amount determined, but with the formula for its increase and with the formula for its distribution. Some very interesting questions arose as to the future distribution of the total amount available by way of income tax reimbursement. It was provided that the total amount payable should be increasingly based upon the population content of the States. Up to 1947 the proportion of the grant to be distributed in this way rose by 10 per cent, each year until after the elapse of a ten-year period the whole of the grant was to be distributed according to the population of each State. In considering the amount to be allocated to each State, I suggest that it was recognized that it would be very much more costly to provide social services and amenities for children than for adults, and also that some States had vast areas in which there was very little population. One need only mention the great areas of Western Australia and Queensland in order to illustrate that fact. Consequently, the distribution was varied according to the number of children in a State and in relation to well defined sparsely settled areas.
It is interesting to notice what has taken place in connexion with income tax reimbursement down the years. From 1942-43, when income tax reimbursement was first introduced, the grant remained at a fixed level of £34,250,000 for four years. In the post-war period the legislation to which I have referred was introduced. The base amount was fixed at £40,000,000 in respect of the financial year 1946-47. In 1947-48 the amount was increased to £45,000,000, in 1948-49 to £54,000,000, in 1949-50 to £62,000,000, in 1950-51 to £90,000,000, and in 1951-52 to £120,000,000. The Government has proposed that in the current financial year the total payments to the States by way of income tax reimbursements should be £135,000,000. Over a period of ten years there has been an increase from £34,250,000 to £135,000,000. These figures provide a barometer of the economic instability which exists in Australia. The extent to which these payments have increased are extraordinary in view of the fact’ that the services accorded to the people have not grown to an. appreciable extent. It is true that the population of the States has grown. It is also true that these vastly increased grants have become necessary because of the greatly increased costs that the States have had to bear in every field of government.
– What about the effect of development?
– Development by the States would require reimbursement of this type only in one way. As development is financed by loan moneys the annual budget would have to include an amount to repay interest on that loan and an amount for payment into the National Debt Sinking Fund in the proportion required by the Financial Agreement. The vast sums that have been expended on development do not fall into ihe category of expenditure which requires reimbursement by way of income tax reimbursements.
– They would if the States have made capital payments out of revenue.
– Yes ; but I am sure that the honorable senator will not try to tell me that any State is at this moment paying for capital works out of revenue. I assure him that if a State were to do so, the Commonwealth in making its adjustments with that State, would immediately disallow the amounts expended on capital items out of revenue. There was a time when some of the States, at any rate, were in a financial position to pay for capital works out of revenue, because they had accumulated substantial surpluses. I am referring to the war years when reimbursement payments amounted to the comparatively small total of £34,225,000. New South Wales, Victoria and Queensland accumulated large surpluses, and total State surpluses amounted to about £75,000,000. However, at that time, it was impracticable to embark upon capital works of any kind. The States were not even able to maintain their services. The railways are a case in point. New South Wales, Victoria and Queensland were using their railways and rolling-stock beyond their capacity. Rolling-stock and permanent ways were not maintained as they should have been so that, during recent years, great arrears of maintenance and replacements have had to be overtaken.
It cannot be contested that, for the most part, the increase of reimbursement grants has been due to rising costs. A small proportion of the increase is due to increased population, the other leg upon which the formula rests. In 1949-50, the first year that the present Government took office, the grants totalled £62,000,000; for 1952-53, the amount is £135,000,000. For this enormous increase the Government is to blame because of its failure to restore value to the £1 as it promised to do. I have no hesitation in saying that if the Government had redeemed its promise to stabilize prices Australia would not have to find such a vast sum as £135,000,000 for income tax reimbursements to the States.
– What was the reason for the increases that took place while the Labour Government was in office ?
– There were no increases during the first four years that the system was in operation. Not only were the grants adequate, but they also enabled some of the States to accumulate substantial surpluses.
– Yes, but ‘what about the later years?
– For the year 1946-47, which was the first post-war year, the grants totalled £40,000,000. This year, it is £135,000,000. While Labour was in office, the grants increased very slowly. In 1946-47 they totalled £40,000,000, in 1947-48 they totalled £45,000,000, and in 1948-49, the amount was £54,000,000.
– Whose fault was that?
– It was no one’s fault; it just happened. Because there were vast arrears of maintenance to be overtaken in the immediate post-war period, there was far more reason for increasing the grants then than there is now, but the actual increases were small. The attitude of the Labour Government towards the States was one of complete understanding, and its approach to the problem of Commonwealth and State finances was sympathetic and generous. There was as that time much satisfaction among the States. From the introduction of uniform taxation until the Labour Government went out of office, the reimbursement grants increased by only about £20,000,000, but since the present Government has been in office they have increased from £62,000,000 to £135,000,000. That increase represents cost increases which the Government has done nothing to control, although it pledged itself to restore value to the £1.
However, let me leave a theme which seems to be so contentious, and so disturbing to Government supporters. Our experience with the working of the formula merely indicates that there is no possibility of evolving a formula that will determine for all time the financial relations between the Commonwealth and the States. There never has been any stability in those relations, and I do not think that there ever will be. The framers of the Constitution itself did not expect that there would be. In the Constitution there is the “Braddon clause” - section 96 - which provides for the granting of assistance by the Commonwealth to the States with or without conditions. The system of per capita payments succeeded the scheme provided for in the “ Braddon clause “. Then there came a new arrangement under the Financial Agreement, and later the Commonwealth Grants Commission came into existence. During the last war, uniform income tax was instituted, and with it was associated the present system of reimbursement grants to the States. Apart from payments under those arrangements, the Common wealth has made various ad hoc payments to the States. I believe that the relations between the Commonwealth and the States should be considered each year as a separate and special problem, and, on the Commonwealth’s side, should be dealt with sympathetically and generously. I think it is true to say that under both the Labour Government and the present Government there has been general satisfaction in the States with the system of income tax reimbursements.
– Not in Victoria.
– I adhere to what I said. There has. been general satisfaction in the income tax reimbursements, and with the supplementary grants. I think the real differences between the States and the Commonwealth lie in the field of Australian Loan Council allocations.
– That is quite correct.
– It seems to me that whatever heat is generated between the States and the Commonwealth in that connexion should not be translated to the question of income tax reimbursement, on which, from my own observation and belief, there is not a great deal of friction between the States and the Commonwealth. It seems to me that the heat has been wrongly applied.
I think that the Senate can play a major part in the important and fascinating subject of Commonwealth and State financial relations. This is a States’ house and is more concerned with this measure than is the House of Representatives. If ever there is to be any useful function for committees of the Senate, I suggest that such a function could be performed by a standing committee appointed to examine Commonwealth and State financial relations. Not only would such a committee be most useful to the Government, of considerable benefit to the nation, and of assistance in building up a wide field of informed opinion in the Parliament, but it would also be an excellent thing for the status and future of this chamber.
– Would the standing committee include persons from outside this Parliament?
– Then it would be absolutely useless.
– I am speaking of a Senate committee, which, of course, could have the most complete powers, to inquire into the whole field of Commonwealth and State financial relations. It would keep abreast of the trends. No one could make a truly intelligent study of this subject unless he constantly watched the trends of State budgets. Those trends must be examined at a reasonably intelligent level.
– It is also necessary to watch the trend of Commonwealth budgets.
– Yes. The overall position must be watched. I suggest, however, that it would be more important to watch the trends in State budgets. Some States have a happy knack of tucking away sums of money in reserve funds which lose their identity and are exceedingly hard to trace. I know from practical experience that the Commonwealth has been in difficulties from time to time in determining the real resources of particular States. The one body that might have an opportunity to look beneath State budgets has no access to the accounts of New South Wales, Queensland and Victoria. I am referring to the Commonwealth Grants Commission which considers applications made under section 96 of the Constitution by only three States - Western Australia, South Australia and Tasmania. The commission receives a good deal of assistance from the other States which supply data and information concerning their finances in order to enable, the commission to make a comparison on an Australia-wide basis, but it has no real power to burrow into the budgets of the three mainland eastern States.
I have already pointed out that apart from the broad approach which the bill before the Senate makes to the question of Commonwealth and State financial1 relations, there are various heads under which the Commonwealth makes payments to the States. Under the terms of the Financial Agreement, each year the Commonwealth makes available £7.500,000 for interest on the debts of the States. In addition, there is a CONtribution of approximately £2,000,000 to help the States to pay off the principal of their debt. Then there is the grant for federal aid roads and works. There are also grants under section 96 of the Constitution, and there is taxation reimbursement. There are additional grants of the kind which the Senate is considering in the bill before it and there are amounts payable in respect of hospital -benefits, relief of primary producers, housing, medical research and welfare, and a number of other items. We here affirm, from time to time, as an abstract principle, the suggestion that those who spend the money should raise it. With that principle as an abstract nobody can quarrel, but if it is the correct principle to apply in one instance - uniform income tax - then it should in fact be applied to most, if not all, of the other heads under which the Commonwealth assists the States. I think that it is inevitable that the Commonwealth must continue to come to the aid of the States in many directions. In my opinion, that will be a growing rather than a diminishing tendency in Australia.
– If the States get back their taxing rights, will such assistance be necessary?
– The honorable senator raises the whole question whether uniform income taxation, should continue. I do not wish to open up that subject too far for the very good reason that the Government has not yet indicated what is in its mind in this connexion. There are many approaches that it could make to the problem. The only statement which the Government has made so far is that made by the Treasurer (Sir Arthur Fadden), in .his budget speech, that the Commonwealth is prepared to give back to the States their taxing rights. Nobody knows exactly what the final proposal will be. I do not wish to guess at it and then to embark upon a whole mass of criticism, that may not be justified.. I prefer to await the formulation of Government policy on this matter. I know that, at the moment, certain officers are reconsidering the whole question of uniform taxation.. I think that they will find all kinds of difficulties in> their way. At this stage, I merely wish to make two observations’.. First, I point out to the Senate that if we have a third, world war, one of the first instruments which the Government must pick up again will be uniform income taxation. It is completely inevitable that that function should be in the hands of the Australian Government, which is charged with responsibility for defence. If the proposal to depart from or to modify the system of uniform income taxation is prompted by the Government’s opinion that the danger of a third world war has receded, I assure all honorable senators that that gives me great pleasure. But let me repeat that the moment war breaks out there must be uniform taxation in this country. Our resources cannot possibly be marshalled for total war without it.
The other broad observation that I wish to make is that the Commonwealth itself has the most limited power in money matters, particularly in the economic field. I merely record my belief that uniform income taxation is the most flexible weapon that the Commonwealth has for controlling the fiscal and economic policy of the country. .Uniform taxation may be moved up or down. It is a major influence in controlling, directing and shaping the economy of the nation; If this power is thrown away by the Commonwealth, which is already deficient in constitutional powers affecting the national economy, I consider that the Commonwealth will divest itself of one of its greatest and most necessary powers during a time of crisis. I do not wish to develop this theme any further, because I think it both proper and fair to await firm proposals from the Government. I leave the thought with the Senate that these considerations should be kept in mind. I invite honorable senators to consider whether the principle that those who expend money should be charged with the responsibility of collecting it should be applied to all those other heads of expenditure that I have just outlined. My own belief is that whilst that principle is sound, it is by no means the only consideration that is involved. There are also the considerations of convenience, simplicity, uniformity, and, I may add, equity between Australians. It is not wise that the Government should, in looking at the complex problem of. Commonwealth and State financial relations, nail all its colours to one mast.
– The opinion of the people must be considered also.
– That must always be considered,, because, sooner or later, it will make itself felt. I believe that any violent alteration of the current scheme which will involve multiple assessments and differing allowances and concessions in the various States, will be regarded as a most retrograde step by the people. I do not say that that is the Government proposal. I sincerely hope that it is not.
As honorable senators are aware, this is one of my favourite themes, and I regret that I have gone a little further afield than I had intended when I began. I was inspired, of course,, by the interjections of some honorable senators opposite. I return now to the specific proposals contained in this measure. There are two main provisions. One is to provide an additional sum, which is estimated, and, I believe, fairly accurately, at £27,100,000. I congratulate the Government upon the fact that, having regard to the special difficulties of Victoria and Tasmania, there is to be some minor alteration of the basis of distribution of that extra sum. It will involve the Commonwealth in a further expenditure of £900,000 which will be divided between Victoria and Tasmania. That is all to the good. We. on this side have no objection to the bill. Indeed, we very cordially support the measure because we recognize that the States have many immediate difficulties and are in real need of these moneys. The Opposition proposes, therefore, with no criticism other than that which I have expressed, to support the bill. I have nothing more to add at this stage and there is nothing useful that can be said about the measure in committee.
– The occasion of the passage of this measure through the Senate invites a little more attention than would at first appear to be necessary. The Senate was established under the Constitution as a States’ House, and we are now debating a measure that is directly germane to a proposal to alter radically this year the existing Commonwealth and State financial relations. The proposal involves the sinews of government and will affect the people of this country in the manner that concerns them most– financially. Governments that raise revenues have a very direct responsibility in relation to the expenditure of those revenues. When there is a division of administrative responsibility, and therefore a division of revenues as there is in a federation, the problem is greatly increased. The introduction of this’ measure provides us with an opportunity to consider the wisdom of the Commonwealth’s proposal to hand back to the States their powers in the income tax field. In the face of such a problem, no good purpose can.be served by treading the threadbare old hessian of ‘ propaganda about Commonwealth prices control. Australia’s economic position was referred to by the Leader of the Opposition (Senator McKenna) in terms of alarm and anxiety. He endeavoured to show that the economic drift had started in 1949, whereas in fact, appendix No. 17 to the eighteenth report of the Commonwealth Grants Commission - the document from which the honorable senator obviously quoted some of his figures in the latter part of his speech - shows quite clearly that there was incipient economic instability in Australia from 1942, when the uniform income tax system was introduced. The movement gathered momentum throughout the years up to 1949, when it was given added stimulus by new external factors, which included high world prices for Australian products, and a huge volume of imports. There was also an important internal factor. I refer to the artificial introduction into the basic wage structure of an additional 26s., which seriously affected the costofliving index. That is how the present-day situation developed. Surely, in the face of the problems that are implied in this measure, these matters can be put in their true perspective because they apply equally to private finance and public finance. The problem that is raised by this measure is the division between the Commonwealth Parliament on the one hand, and the State parliaments on the other of the revenue that the people of this country are compelled to pay in income tax, and of the responsibility for collecting it.
The Leader of the Opposition referred to the introduction of the uniform tax system in 1942 for the justifiable purpose of centralizing control of income tax revenue so that the Government that was charged with the responsibility for defence would have predominant authority over the most flexible field of revenue that was available to it. Honorable senators will recall that the uniform tax system was to be purely a war-time measure. But, it is an inevitable human failing that those who are entrusted with power will always seek to retain it. In 1946, after the war had concluded, a proposal was put to the States that uniform income tax should remain, and that they should continue to be reimbursed by the Commonwealth. The Leader of the Opposition to-day took some degree of pride, as indeed he did when debating a similar measure last year, in his participation years ago in the establishment of the formula by which the States have been reimbursed ; but then he immediately proceeded, quite candidly, to confess the complete futility of that formula. Indeed, not only was he despairing of the efficacy of the present formula, but he also indicated his clear belief that no formula could be devised that would be adequate to determine income tax reimbursements from year to year. In spite of an emphatic protest by most of the States against the continuation of the uniform tax system after the war, they were coerced by the Labour Government into agreeing with its proposal. The Chifley Government pointed out that, although the uniform tax system had been introduced as a war-time measure, the High Court had since declared it to be constitutional under the Commonwealth’s taxation power, which of course, was not limited to war-time. The Commonwealth’s attitude to the States was, “If you agree to our terms, you will receive certain revenues by way of reimbursement grants in accordance with our formula “. As has been pointed out, the formula was intended to provide increasing grants to the States over a tenyears period to provide, in the’ main, for an increase of population. In 1945-46 income tax reimbursement grants to the States totalled £33,521,000. By 1949-50 - I invite the Leader of the Opposition to take particular note of the year - the figure had increased to £62,271,000. I take those figures to indicate not economic instability but an expansion of State responsibility and an inevitable increase of costs due to factors that I have mentioned. The formula laid down by the Chifley Government was completely falsified by the facts. Increased grants to the .States were conceded in the grudging and reluctant manner for which the Chifley Government will always be remembered. It is significant that if the reimbursement formula had been strictly applied the States would have received £70,000,000 in 1950-51, £86,000,000 in 1951-52, and £108,000,000 in 1952-53. The formula was falsified, as the result of experience, to the degree that the Menzies Government realized that if the States were to receive reimbursements which would give to them a reasonable prospect of maintaining their activities, ‘ they required additional grants of £20,000,000 in 1950-51 and £33,500,000 last year. The additional grant which we are seeking to appropriate in this bill is estimated to amount to £27,100,000. It has been stated that the additional grant includes a special amount of £900,000 which is to be paid to Victoria and Tasmania in an endeavour to correct any injustice which those States might suffer by reason, of the application of the reimbursement formula. Some have said that these additional payments are recognized by the States as proper treatment. Others do not agree with that view. Indeed, the Premier of Victoria regards them as most lacking in justice. His comments have indelibly “underlined the disservice that can be done to a system when one of its partners exploits it, and have brought people to a realization that the system is unsound and untenable.
The Leader of the Opposition has said that as a general principle governments which raise revenue should have responsibility for its expenditure. “We all agree with that statement. I go further and say that that principle must be adhered to as a major plank of the platform for Federal and State financial relations if we are to retain the forms of democracy. Pamphlets published by informed persons on this subject and discussions that took place in what I might describe as the easy financial years of 1946 to 1951, proved that the principle was acceptable to Australian federalists. The writers of the pamphlets and those who took part in the discussions agreed that a system under which one government raises money for another government to expend is vicious. Other commentators on the subject, including the Leader of the Opposition, if I correctly interpreted his remarks during his speech on this bill, have said, in effect, “ That may be true under other systems but not under the federal system. Under the federal system the great central treasury may distribute largesse to the States in such amounts as it thinks fit without the States having any real responsibility for its expenditure “.
I rejoice that this Government has realized that the system must be reviewed and that if the States justify their existence as independent parliamentary entities in the Commonwealth they must take to themselves the credit of raising their own revenue as well as the obloquy of expending it. Honorable senators will have noticed that in stating my proposition I have transposed the usual arrangement of words. I hope that when the States raise their own revenues they will regard it as a matter of credit to impose taxation and as a matter of criticism to provide funds for this, that and the other thing in order to purchase popularity.
I do not desire to detain the Senate unduly but my references to the subject would be incomplete if I did not include some reference to the degree to which the States in general, and Tasmania in particular, have become simply the recipients of Commonwealth revenue. That fact can be proved by reference to Appendix No. 15 to the report of the Commonwealth Grants Commission. That report contains figures relating to 1949-50, but through the courtesy of the Treasury I have obtained the figures relating to 1950-51. From these figures it will be seen that of the aggregate revenues administered by the claimant States-South
Australia, Western Australia and Tasmania - 45.3 per cent. comes from the Commonwealth Treasury. When such a situation has been reached the States would do well to re-examine their claim that they can justify their existence. If honorable senators will examine the Tasmanian budget for 1951-52 they will ascertain that of the total revenue derived by the State in that year, which amounted to £9,800,000, no less than £5,000,000 was represented by grants from the Commonwealth. Thus, more than one-half of the revenue of that .State comes from the Commonwealth Treasury. This year the proportion of its revenues derived from that source will be increased. I cite these facts because, probably at this very moment, the Treasurer of Tasmania is delivering his budget speech and is adverting to these very matters. It will be interesting for me to examine his speech because I expect that it will contain a claim for not less, but more ‘Commonwealth revenue, and that instead of attempting to reject the Chifley formula of reimbursement of centralized taxation he will advocate its continuance. Under this system, ‘and in the later years the system under which supplementary grants are provided, Tasmania has received more revenue from the Commonwealth than it had any real hope of raising by taxation alone. I do not wish to deny to the people of Tasmania the advantages of federation, but I suggest that the present method of giving those advantages to them is wrong and that we must revert to the position under which Tasmania took responsibility for raising its own revenue, and, insofar at its .revenue falls short .of reasonable requirements to bring the standards of the people of that State to parity with the standards enjoyed by the people of other States special grants will be made in .accordance with the recommendations .of the Commonwealth Grants Commission.
Another aspect of this matter to which
I wish to refer relates to the capital moneys. The disease of centralized taxation has infected the ideas of Treasury officials throughout the Commonwealth to such a degree that there is complete irresponsibility in relation to capital requirements and 3oan programmes for State development which, if it is allowed to continue, will produce a disastrous -state of affairs and may bring about a repetition of the circumstances that led to the necessity for the Commonwealth to rescue the States from financial disaster by concluding the Financial Agreement of 1929, It is now ,a matter of history that in the twenties competitive borrowing by each State was so lightly indulged in that the States were threatened with bankruptcy. Responsibility for loan raisings and interest rates, and appropriate -sinking funds had to be undertaken, not by the Australian Government, but by the Australian Loan Council to discharge State loans. After each conference of Commonwealth and State Ministers, and of the Australian Loan Council, during the last three or four years, the Premiers have set up an unmitigated howl to be provided with additional loan moneys to enable them to carry out their developmental programmes. One would think from their statements that they believe that money should be borrowed for the States in ever-increasing cartloads for this purpose, and that the Commonwealth should bear the continued responsibility of providing a sinking fund for the repayment of the loans and to meet interest payments. In 1946-47, the State governments borrowed £66,000,000 for capital works. The borrowings rose to £99,000,000 in 1948-49, and by 1950-51 the amount borrowed for this purpose had jumped to £234,000,000.
– That sounds like galloping inflation.
– At the last meeting of the Commonwealth and State Ministers in August the Premiers sought £350,000,000 for their works programmes. The Premiers^ subsequently must ‘have realized that that was an inane action on their part, because two days later they resolved - the Commonwealth dissentingthat £247,500,000 should be borrowed for the States’ public works programmes ; that is, almost four’ times their expenditure on capital works in 1946-47. .This is evidence of the irresponsibility with which they ‘have ‘been infected under the centralized system ;of taxation that was introduced in 1942. In order to arrest .these rabid inflationary. tendencies, it is imperative to restore taxing powers to the States. The. people will then be able to assess the necessity for taxation proposals, and State governments will have to budget within their revenue.
This Government has been most generous in its treatment of the States. This bill provides for the payment to the States during this financial year of approximately £27,000,000 in addition to their reimbursement of tax in accordance with the formula. Duringthe last financial year an additional amount of £33,000,000 was paid to the States for this purpose, and in the year previous to that an extra £20,000,000 was paid to them in recognition of the work that they perform to develop the country andto sustain its population. This subject should be viewed in its proper perspective. For too long theState Premiers have exploited the situation for party political purposes. I hope that ‘the proposal of the Prime Minister (Mr. Menzies) to return taxing powers to the States will be supported fully. The States will then bear responsibility for the taxation that is imposed on their people, and the three claimant States will not be able to depend on the Commonwealth Treasury for about 45 per cent. of their revenue. Tasmania has obtained more than 50 per cent. of its revenue from the Commonwealth Treasury. A reversion to individual State finance will dispel the belief that the Commonwealth Treasury is the repository of unlimited finance for States, public works. Although the State Premiers resolved at the last meeting of the Commonwealth and State Ministers that £247,500,000 should be raised for State developmental works, they did not consider the source from which the money could be obtained-. The Opposition will not support the idea that the amount should be raised by taxation, and the loan market is not now capable of providing it. Shortly after the conference a frustrated State disciple made in Melbourne the extraordinary suggestion that forced loans should be considered in the year 1952! After taxing powers have been restored to the States the various State governmental instrumentalities will be forced to a realization that State taxation will have to be imposed in order to provide a sinking fund from which to meet interest commitments and capital repayments. I consider that the restoration of taxing powers to the States will restore sanity and responsibilty to our financial structure.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 18th September (vide page 1627), on motion by Senator Spooner -
That the bill be now read a second time.
– I shall address myself very briefly to this measure which, like the States Grants (Special Financial Assistance) Bill 1952, provides for payments to the States. This is aclear exercise by the Commonwealth of the power conferred by section96of the Constitution. It is a continuation of the arrangement that was made by the previous Labour Government, after the people had rejected, aft the 1948 referendum, a proposal that the Commonwealth should be vested with power to control prices, charges, rents and other matters of that nature. The Australian Government of the day gave to the States ample notice of its intention to vacate the field, and, at the request of the States, provided them with equipment, office accommodation, and staff, and undertook to defray the cost ofexercising control over rents, prices and land sales. The third item has dropped out of the picture ; no State now exercises control over land sales. The moneys that shall be payable pursuant to this measure relate to the control of prices and rents. Although supporters of the Government have deprecated the value of prices control as a Commonwealth measure, and have contended that, as it merely treats the symptoms, but does not touch the causes of inflation, it should not be exercised by the Commonwealth, by this measure the Government will subsidize the exercise of those very controls by the States. One would have believed that as the Government considered that there was no virtue in prices control, it would certainly decline to subsidize the control of prices by the States. The Government knows that State control is necessarily ineffective. The Minister in charge of prices control in every State has told the Government that. Every State has asked the Australian Government to take over the control of prices but the Government has declined. It has been consistent in refusing to administer this system. But it is not consistent in deprecating the virtues of prices control while it proceeds to grant over £1,000,000 to the State governments in order to enable them to exercise this control which the Government despises. The Government must recognize some virtue in prices control, deficient as control by the States necessarily is. The Government is at least consistent, if entirely wrong, in its approach to prices control. The Opposition sees great virtue in the system, whether exercised by the States or the Commonwealth. We have never claimed that it was a panacea that would clear up all difficulties. We consider it to be desirable merely as an incidental control and not as a sine qua non. For that reason we support the measure.
The bill provides for the total administration costs incurred by the States in controlling prices to be paid by the Commonwealth. Advances will be made to the States from time to time and adjusted against statements to be submitted by the State governments which must be certified by the Auditor-General and made available to the Commonwealth by the 30th September, 1953. The Federal Treasurer quite properly will retain the right to disallow items which the States may claim. It is not intended, for example, that claims should include any capital expenditure that the States may incur. They should be confined to administrative expenses. “ In the financial year 1948-49, the total amount paid by the Commonwealth to the States for the administration of prices control was £597,000; in 1949-50 it was £706,000; in 1950-51, £703,000; in 1951-52, £936,000. It has been estimated that £1,087,000 will be paid to the States for this purpose during the current financial year. This amount is double that which was granted in 1948-49, despite the fact- that one of the three types of control that this legislation was intended to sustain has been relinquished. For the broad reasons that I have given, and because the measure will help the States, the Opposition has no objection to the measure and supports its passage.
– The Leader of the Opposition (Senator McKenna) suggested that the Government was inconsistent in introducing this bill for the payment of more than £1,000,000 to the States for the administration of prices control in view of the fact that it has refused to accept the responsibility for the administration of this control. I see no inconsistency whatsoever in the Government’s policy. I remember well the debate which took place in this chamber and outside prior to the referendum on prices control. On that occasion the party to which I have the honour to belong stated clearly that it supported the continuation of prices control by the States. Indeed, it announced that the States would embark on a programme of prices control if the referendum proposals were defeated. I do not think that the public was under any misapprehension as to the attitude of my party on this subject at that time. Since then, the States have administered prices control for what it has been worth. I have considered very seriously whether it is worthwhile continuing the measure of prices control that is being exercised by the State governments at present.
The Leader of the Opposition referred to the increasing cost of administration of prices control by the States. He also mentioned that certain controls had been relaxed or abandoned. It is now necessary to ask whether we have not reached a stage at which the States should consider the complete abandonment of prices control. Surely the time must come when prices will find their own level. A measure of inflation is inherent in prices control whether exercised by the States or the Commonwealth. Under any system of prices control there is very little incentive for the economic or efficient management of industry. Immediately an industry is faced with extra costs it hurries to the prices commissioner, and requests that it be allowed an increase of the selling price in order to recoup costs. The prices commissioners have been quite unable adequately to check the requests that have been made for permission to increase prices. Invariably they have made a cursory examination of the claims before them and then have granted permission to charge an increased price. I firmly believe that if prices control were removed we should return to that state of affairs in which manufacturers and business people indulged in some form of competition. The Leader of the Opposition has again put forward the view that the cure for inflation is Commonwealth prices control.
– Then I think it may fairly be said that the Leader of the Opposition suggested, as has been suggested over and over again by Opposition senators, that Commonwealth prices control would be considerably more effective than State prices control. T refuse to accept that proposition. I have already mentioned that State prices Ministers have been unable to conduct a proper examination of claims for prices increases that have been placed before them. How much more impossible would it be for prices control to be administered effectively by the Commonwealth, even if it had deputy prices commissioners in all Status Prices control would be much more difficult to administer on a Commonwealthwide basis. If it is to be administered at all it must be left in the hands of the States. Prices control should be almost completely abandoned. Perhaps some case could be made out for the continued control of rents and petrol prices. If rents were freed from control considerable hardship would be caused to many people.
– Why does the honorable senator suggest that a case could be made out for the retention of prices control on petrol?
– I suggest that the abandonment of rent control might cause hardship, at least for a time. There might also be increases in the price of petrol which would be hard to justify if that commodity were freed from control. I believe that the days of prices control are numbered. Very little will be achieved as the result of the expenditure of this £1,000,000 in this financial year. As- Government supporters have stated from time to time, the solution of our economic problem lies in the production of more goods in order to meet the demand of the consuming public. I believe that we are approaching the stage at which that demand will be satisfied. Goods are now in more plentiful supply than they have been for some years past. Because we are witnessing the return of a buyer’s market, the day? of prices control are going. I commend the bill to the Senate because it will enable the States to carry out what they believe to be their duty, but I hope that prices control will be rapidly tapered off.
.- With the Leader of the Opposition (Senator McKenna) and Senator Pearson I, too, commend the bill to the Senate. However, I am completely at a loss to follow the logic of Senator Pearson. One becomes tired of hearing honorable senators opposite continually allege that the Opposition claims prices control as the panacea for all social evils.
– What is the other?
– I shall not announce it until the day for its introduction draws close, in order that Senator Pearson may not suffer mental anxiety for too long. Perhaps the best panacea would be the defeat of this Government.
– I can understand Senator Critchley’s concern for our mental anxiety.
– Senator Wright will probably be a little more concerned when his remarks are compared with those of the Treasurer of Tasmania. The Government has no alternative but to continue these payments to the States because when the Government parties put their case to the people in connexion with the referendum proposals on prices control they promised to reimburse the States the cost of administering such control.
They scouted the statement of members of the Labour party, and of those members of the community who understood the matter, that prices control would be almost completely ineffective if it were administered by six separate States. Subsequent events have proved the truth of what we then said. The abandonment of prices control by the Commonwealth was followed by galloping inflation. What would be the position if, as Senator Pearson suggested, control were to be retained over rents and petrol only? It is generally agreed that the promise made by the present Government parties to remove petrol rationing played an important part in their victory at the polls in 1949. I should like to know why Senator Pearson singles out petrol as the one commodity over which control should be retained. Most owners of motor cars will admit that the purchase of petrol is the least part of the cost of running a car.
The amount to be paid by the Commonwealth to the States to reimburse them for the cost of administering prices control is to be increased from £937,000 to £1,087,000. That is a substantial increase, but it is in line with the general increases that have taken place throughout the entire economic field. The cost would not be too great if prices control were really effective. However, it has been proved conclusively that control by the States cannot be effective.
We have been told that there has been a return to a buyers’ market. For those on fixed incomes, and particularly for pensioners, the buyers’ market has disappeared for the rest of their lives. For their sake, if for no one else’s, prices control is necessary. I hope that this Government, during the brief period of office that remains to it, will take measures to restore prices control to the Commonwealth, which can administer it most effectively. I support the bill, although I do not approve of the way in which prices control is now being administered. The people who listened to the promises of the present Government parties during the .1949 election campaign now regret their decision. Even now, if control over prices were restored to the Commonwealth, there might be some prospect of restoring value to the £1.
– Because of the spirit of tranquillity that has been expressed in the speeches of other honorable senators on this bill, I rise now to sound a discordant note. My approval of the bill i3 qualified. If it were not for the existence of three extraordinary factors I would oppose the bill. Those factors are the circumstances associated with the Korean war and the influences that they generate, the existence of import restrictions, and the eccentricities of our industrial machinery. But for those factors, I would ardently assert that the time was now ripe to allow prices to be governed by the interplay of commercial activity, and a mutual appreciation of one another’s worth. There is no more stabilizing factor in a community of decent, civilized people than private enterprise. My approval of this bill is qualified, also, by the fact that it makes no provision for controlling the price of the service for which it is proposed to pay. The bill imposes no limit on the amount to which the Commonwealth may be committed in order to defray the costs incurred by the States in administering prices control. Moreover, the bill leaves to each State the right to apply whatever policies it chooses in the matter of prices control, no matter how prejudicial they may be, in the opinion of the Commonwealth Parliament, to the national economy. For instance, some features associated with the control of rents by the States are undoubtedly of disadvantage to the national economy.
As I hear re-stated from year to year, and almost from speech to speech by members of the Opposition, the virtue of prices control as a stabilizing factor in our economy, my mind turns with interest to a little brochure printed by the Sane Democracy League, of Sydney. Mr. Ben Doig, the author of the. publication, deserves commendation for having compiled a most interesting set of facts. For instance, he points out that in the days of the Roman Emperor, Diocletian, when the emperors were recruited from among the most ignorant pugilists of the Praetorian Guard, and when the burden of taxation was so great as to invite corruption among officials and to promote the decay of the Empire, there was in existence a primitive system for the control of prices and wages. It should gladden the heart of the Leader of the Opposition (Senator McKenna), to hear at this time, just five minutes before the dinner recess, that in those glorious days the price of a pigeon was controlled, as was also the price of a dormouse. An edict was published stating that a cobbler’s wage was to be so much. Those times will bear remembering by the modern dispensers of the panacea for economic instability, who, supported by every piece of propaganda that can inject indolence and disaffection into the community, preen themselves on the discovery that a system of prices control possesses every economic virtue. As I have said, were it not for the existence of the three abnormal factors which govern our economy to-day, I should ardently advocate that now was the time to drop prices control altogether, and revert to the system of free enterprise.
However, I think it somewhat odd that we should have been solemnly and, for the most part silently, prepared to pass a measure providing for the expenditure of more than £1,000,000 of public money without examining the policies that are to be applied by the States which are to benefit under this legislation, and without imposing any effective restraint on the cost of administration by the States. The only safeguard that it is proposed to provide in order to secure the proper expenditure of money which we, as the elected representatives of the people, are appropriating for the purpose is the provision that the Treasurer may disallow any item of expenditure in the bill that the States present to us for payment. We all know that the functions under that provision will be exercised by a Treasury official, and I do not think that the provision is a sufficient safeguard against the possible activities of Mr. Finnan and the other State Prices Ministers. I find it odd that we should not wish to say to them: “What did you do last year about the price of petrol? What have you done about the price of timber ? How is it that your policy for the control of rents and the price of timber has worked out so greatly to the disadvantage of the people who need houses? “. I believe that the twin evils of rent control and control of the price of timber have done more injury to the public interest and of housing than any other factors that I can think of. Under the system of prices control now in operation, the price of timber has risen so much that buyer resistance has become very marked. In Tasmania, many timber mills have closed because prices, under the present system of so-called control, have gone beyond the reach of would-be home builders. I suggest that it is incumbent on those responsible for this measure to obtain information about the working of prices control in the States, and its effect on prices, before similar legislation is introduced next year. Sitting suspended from 5.45 to 8 p.m.
-I wish to place on record my opinion that rigid rent control is maintained in Australia because the landlord class is much less numerous at the polling booths than is the tenant class which it shelters.
– That is as it should be.
– Majority rules ; that is democracy.
– I do not think there is a great deal of wisdom in the croaking of the honorable senator opposite. Naturally, there are good and bad landlords. There are also those who exploit a situation, like some honorable senators who interject. Landlords acquire their assets by thrift. The houses they own represent salted down past earnings. It is those assets which provide the real resources from which the less resourceful members of the community are given shelter.
It is proper that any government which has the requisite power should curb the inflationary prices that have been realized for real estate since a free market prevailed. Of course, people have been very active in their pursuit of the acquisition of real estate, because the economy which this Government inherited in 1949 consisted of froth and bubble. Investors have preferred to purchase real estate and thus acquire real resources rather than to invest their money in doubtful ventures. Accordingly, there has been an acute inflationary upsurge of real estate values, which, is indicative of the apprehension which a community experiences during a period of inflation. I am not advocating that rents should be allowed to go sky high as real estate prices have done; I merely protest against the injustice of fixing upon certain people in the community rigid control of rents at 1939 levels.
– I rise to a point of order. I seek your ruling, Mr. President. In Victoria, rents are controlled by legislation passed by the State Parliament. As far as I am aware, the bill now before the Senate has nothing to <lo with rent control in Victoria.
– I cannot uphold the honorable senator’s point of order.
– It .would be apparent, even to Senator Hendrickson, if he read the bill, that the object of this measure is to authorize the Australian Government to subsidize State authorities whether or not they fix prices of goods or control rents. In my wildest moments of despair I never expected that such an inane objection would be taken to the bill.
Because of a socialist urge for government construction of houses, Mr. and Mrs. Smith and family are placed in a plaster sheet humpy of four rooms and charged £2 15s. 6d. a week rent. Next door to their house there may be a perfectly good brick structure built prior to 1939, in the piping days of free enterprise, an infinitely more valuable home, for which the rent is £1 or £.1 2s. 6d. a week. Rigid rent control places a premium on inflationary inefficiency and denies justice to the man whose thrift and efficiency have established a worthwhile home for a family in the community. I hope that during the committee stage the Minister for National Development (Senator Spooner) will explain why the bill contains no provision to impose prices control on the cost of administering the legislation; in other words, why there is no limit on the expenditure which the Commonwealth Treasury may incur for the purpose of subsidizing the administration of prices control in the various States. I hope that the passage of the bill will be deferred until such time as a limit is placed upon such expenditure. I suggest that such expenditure should not exceed that which the Parliament authorized last year. In my opinion a limit of the kind to which I have referred should be contained in the bill in order to ensure that the State prices administrations, over which we have no control, do not exceed that expenditure.
– I cannot see that it is possible for the Senate to reject this measure. If it did so, the rejection would amount to repudiation. This Government has agreed to finance the administration of prices control in the various States, because it believes that the States can effectively control prices. As honorable senators are aware, the Australian Labour party contends that the States cannot effectively control prices. A referendum was held on this subject because the previous Labour Government appreciated that if prices control is to be effective it must be controlled by only one authority. I am somewhat dismayed by the turn which this debate has taken, because 1 had no idea that the merits or demerits of price fixing would be discussed. Had I known that it would be, I should certainly have had some facts and documentary evidence available to prove beyond all doubt the great benefit that price fixing was to the Australian economy during World War II., and particularly during the immediate post-war years.
In the United States of America, where liberty and freedom of action are con sidered to be most important, prices control operates even at the present time. In my opinion, it was most unfortunate that the people of Australia refused to give power to the Commonwealth Parliament to control prices. My administrative experience of Commonwealth prices control was relatively short, hut I estimate that it saved the consumers of Australia approximately £100,000,000. The system was of tremendous value to the economy. I recall that there were hundreds of applications for permission to increase prices, many of which were rejected in the absence of positive proof to justify an increase. During the years of which I speak there were many avaricious persons in the community. Some of them should have been sent to gaol. Because of shortages of goods, they were able to rob other members of the community by charging excessive prices. The Australian Government of the day controlled that situation to a considerable degree. Although there are, no doubt, some virtues in prices control as it is operated by the States, in my opinion it is a physical impossibility for such control to operate effectively. If a commodity is controlled in one State it becomes scarce. It is transported to other States where prices control does not operate and is sold in those States. Unfortunately, the Commonwealth Parliament has no power in such matters. A great de.al of time and money was expended in presenting cases concerning overcharging to the courts during the war and post-war years, but although people were being fleeced by certain individuals, in many instances magistrates refused to inflict penalties appropriate to the crimes involved. It was a tragedy indeed when price fixing was removed from the Commonwealth’s jurisdiction. “Why should individuals be permitted to charge exorbitant prices for goods that are in short supply and so make enormous profits? Honorable senators opposite want wages to be pegged; but how can wages be pegged if prices are to be permitted to sky-rocket ? When this Government took office, the basic wage in Queensland was about £6 7s. a week. To-day, it is nearly double that figure, yet the people are no better off. The Government has refused to deal with the rootcauses of our economic instability. It has dealt only with effects. It has increased social services payments, but has done nothing to solve the problem which has made such increases necessary. Commonwealth price fixing was of tremendous value to Australia, and it was a sorry day when the people were misled by honorable senators opposite and their supporters into believing that there was no longer any need for the Commonwealth to control prices. To-day, I am sure many Government supporters regret their action .on that occasion. Some of them even agree now that the prices of certain commodities should be controlled by the Commonwealth. The defeat of the prices referendum was followed by soaring prices. However, our economy was still sound when this Government was elected, and the people were still prosperous. To-day they are discontented and despairing.
– I believe what I say to be true. Reports published in our newspapers every day indicate that commercial and industrial interests are greatly perturbed about the future. Undoubtedly our position to-day would have been much better had the Commonwealth retained its power to prevent profiteering and racketeering as it did during the war when an efficient system of prices control did much to protect the earnings and savings of the people. The fact that business people were unanimously in favour of the abolition of Commonwealth prices control was a strong argument in favour of its retention. As I have said, honorable senators opposite would not hesitate to control wages. Surely if it is fair that arbitration authorities should peg the earnings of men and women, it is also fair that the prices of the commodities that men and women have to buy should be pegged also. Profiteering imposes the heaviest burden upon people in the lower income groups, and I am quite certain that if a referendum were held to-day a substantial majority would favour the re-introduction of Commonwealth prices control.
– This measure is one of the most para.doxial that could be introduced by the present Government. Honorable senators opposite say that they are opposed to Commonwealth prices control, yet to-night we are being asked to approve a measure which provides for the expending during the next twelve months of a substantial sum of money on the administration of a most ineffective system of controlling prices ! The Minister for National Development (Senator Spooner) said in his second-reading speech that grants for the current financial year had been estimated at £1,087,000 compared with £937,000 in 1951-52. Will any honorable senator opposite argue that price fixing by the States is an effective system ? Do. honorable senators opposite believe that the £1,087,000- will, be expended wisely and well’ this. year?. “Will the cost of living’ be reduced, as the result of this expenditure? I say that it will not be reduced. Six individual State prices authorities have no- chance at all of coping with the avarice of certain of our commercial interests. During the discussion of another matter recently, honorable senators opposite drew attention to the enormous increase that has taken place in the basic wage in- recent years. That increase is surely striking testimony to the inefficacy of the present price fixing system. In 1949, the basic wage wa3 only £6 4s.; to-day it is £11 7s. 8d. What is the reason for that increase? The main reason is the inefficiency of our price fixing system. Every student of economics knows that wages follow prices. The basic wage is adjusted quarterly in accordance with cost-of-living figures supplied to the Commonwealth Court of Conciliation and Arbitration. To-day £11 7s. is required to purchase the commodities that could be bought in 1949 for £6 4s. I have heard the suggestion from honorable senators opposite that the basic wage should be pegged. That of itself would be of no avail. Obviously it would not be fair to peg the basic wage and, at the same time, to permit prices to increase.
Primary producers and manufacturers alike are clamouring for the complete abolition of prices control so that they may obtain what they consider to be fair and reasonable prices for- their goods; but press reports have made it quite clear that the abolition of controls in the past has enabled commercial interests to make higher profits. If prices are to be pegged at all, then let us provide the best machinery that is available- for- this purpose. The only interpretation that we can place upon the Government’s’ willingness to spend more than £1,000,000 on the present make-believe system of controlling prices is that it believes in prices control. If it does not believe in prices control then it is wasting public money. However, let us assume that the Government does believe in prices control. Do honorable senators opposite consider the present system to be effective? Obviously it is not effective.. Therefore, why not return to the system that, proved so effective during the war and in the immediate post-war years? The continuance of Commonwealth administration of prices control after the war- period had passed was ruled by the High Court to be invalid, but this1 difficulty could be overcome if the proposal that the Commonwealth should re-enter the. prices control field were approved by the people at a referendum. The- success of Commonwealth prices control during the war cannot be disputed. In those years our economy was under severe- strain. Every one who wanted to work andi was able to work was in employment. In- addition to the diversion of labour from civilian industries to war production, the output of ordinary consumer goods was further- restricted by the flow of hundreds of thousands of young men and women into the armed forces. In spite of the vast spending power in the community and the shortage of goods that then existed the economy of the nation remained almost stationary, thanks to the system of prices control which was instituted and operated by the Labour Government. It: is true that the basic wage was increased, but only very slightly. Now, with Commonwealth prices control no longer- in operation, despite the fact that hundreds of thousands of men and women have returned to industry and are producing and manufacturing commodities that are urgently required by the people, we are passing through a period of uncontrolled inflation. If the. Government desires the basic wage to remain, stationary it should take appropriate steps to ensure that the prices of the commodities included in the basic wage regimen are properly controlled by the Commonwealth.. Next, year, during the holding, of the Senate election the Government should ask the people to clothe the Commonwealth Parliament with power to control prices. Last week, in the High Court of Australia, the Government successfully vindicated its rights1 to- impose regulations to control capital, issues.. It contended that the imposition, of such, a control i3 essential in order to enable it to prepare the defences of. Australia. The people would derive the greatest benefit from the expenditure of large sums of money on defence preparations if a proper system of Commonwealth prices control were in existence. Prices should be fixed which will allow a reasonable return to the producer or the manufacturer and at. the same time be fair and reasonable to the consumer. Why is it necessary for the Government to provide such huge sums of money in the budget this year in comparison with the amounts provided in last year’s budget? It is necessary only because commodity costs have increased. The Government has not taken legitimate steps to see that its requirements are sold to the nation at fair and reasonable prices..
Senator Wright has referred to the control of rents. It is true that certain anomalies exist as the result of the pegging of rents, but the prices control authorities have nothing to do with the fixation of rents in Tasmania, which State is represented by Senator Wright in the Senate, nor, I believe, in the other States. In most of the States rents are controlled by State enactments. It has been suggested that in Victoria, now that the Liberal Country party is supporting the “.pure merino Country party”, as it is termed, the control of rents will be relaxed. In the determination of the basic wage rent has played a very important part. If rent control in Victoria is relaxed, as surely a3 night follows day, the landlords will see to it that in future they get a bigger rake off from the community than they have had in the past. It is true that, as the result of the pegging of wages, certain anomalies have arisen in regard to rents. I am inclined to agree with Senator Wright’s suggestion that economic rents fixed by the housing authorities for shanties erected by them should be abolished. That is a matter for the housing authorities. Those who are opposed to the principles of Labour claim that rents should be unpegged but that wages should be frozen. They cannot have it both ways.
If the Government is really sincere it will make arrangements for the taking of a referendum of the people on the subject of prices control. It has a few months in which to make the necessary preparations. Last week, the Minister for
Trade and Customs (Senator O’sullivan) informed us that it is unlikely that the Senate election will be held before 1953. Senators elected at ‘that election must take their places in this .Senate on the 1st July, 1953. Being, one of those who can afford to sit back and let the rest of the world go by, I do not want to frighten those honorable senators who will have to face their masters next year-
– We all may have to face them because- there may be a double dissolution before then.
– That is true. The Government should take steps to hold a referendum of the people in order to ascertain their wishes in relation to prices control. Government supporters should tell the people that when it advised them to vote against the rents and prices referendum submitted by the Labour Government it honestly believed that the States would be better able to handle prices control than could the Commonwealth, but that experience of State control has now convinced them that prices control can be properly administered only by the Commonwealth. Let them be honest and admit their mistake. If they are not prepared to do so, they will be discredited in the eyes of the people. I leave these thoughts in the minds of honorable senators opposite in the hope that they will see their way clear to sponsor an effective system of Commonwealth prices control in the interests of Australia.
– I have been amazed by some of the statements made by Opposition senators in this debate. It may be well for me to put them on the right track because they have strayed far from it. The Leader of the Opposition (Senator McKenna) untruthfully said that the Western Australian Government had refused to hand over to the Commonwealth power to control prices. That Government refused to give to the Commonwealth power to control prices on a permanent basis. Indeed, that was the main issue upon which the rents and prices referendum was fought. I remember attending a conference with representatives of the Australian Government on this matter and having proved to the satisfaction of the then AttorneyGeneral that the statute-book of Western Australia contained an enactment which transferred this very power to the Commonwealth Parliament. The enactment to which I referred is the Commonwealth Powers Act of 1945. .Section 3 of that act reads as follows: - (1.) Subject to the limitations and conditions in this Act contained, the matter of Prices (other than prices or rates charged by the State or semi-governmental or local governing bodies for goods or services ) , is hereby referred to the Parliament of the Commonwealth.
In order to emphasize that the transfer of power to the Parliament of the Commonwealth was not to be of a permanent nature section 5 (1.) was inserted in the enactment, which reads as follows : -
This Act shall not he construed as referring the said matter permanently to the Parliament of the Commonwealth.
In order to ensure that nothing would interfere with the proper transference of this power, sub-section (5.) of that section provided as follows : -
Insofar as the provisions of section six of this Act are inconsistent with any provision of section sixteen of the Interpretation Act, 1018, section six of this Act shall prevail and take effect and section sixteen of the Interpretation Act. ISIS, shall not apply.
Of what use is -it for honorable senators opposite to contend that the Commonwealth Parliament has no power to control prices because the parliaments of the States would not refer it to the Commonwealth ? The Commonwealth has the requisite power but the Labour Government did not want to exercise it as a temporary measure. I hope that the Parliament of Western Australia will never alter its stand on this matter. Why should rents in Western Australia be controlled by the Commonwealth Parliament, the members of which know nothing about the subject? Another f feature of the rents and prices referendum that I recall very vividly was the reluctance of the then Attorney-General of the Commonwealth to define the word “ commodities “ in the referendum proposal. The people did not know precisely the power that they were asked to transfer, and many believed that power in relation to wages was included. It was suggested that copies of a proposed regulation should be distributed amongst honorable members, and if they did not lodge an objection within a certain time it would become law. I stoutly opposed that suggestion. It is of no use for honorable senators opposite to claim that the Commonwealth did not have the power, and could not obtain it. The Commonwealth surrendered its power after its attempt to gain permanent power to control rents and prices had been defeated. I am not enamoured of a policy of control. The sooner that we can get rid of controls the better.
Yet I am glad that control is being maintained in relation to petrol. Many of the major petrol companies have spent enormous sums of money to advertise their products over the air. The removal of the present control would be disastrous to many relatively poor people who use their motor vehicles only occasionally. Rent control is very efficient in Western Australia where rents are fixed on a reasonable basis rather than at the 1939 or 1942 levels. I consider that rent control should be continued in Western Australia until the housing shortage has been overcome. I am convinced that if that control were removed many people would be evicted from their homes. I repeat, that power to control prices was transferred to the Commonwealth by Western Australia, but because the Commonwealth could not obtain control over prices forever it threw control back to the States and caused a degree of chaos.
– Senator Seward has claimed that the Commonwealth had power to control rents, and sought by referendum to make it permanent. I should like to point out that Tasmania did not transfer power to the Commonwealth in this connexion. An attempt to do so was defeated by the Legislative Council in Tasmania. I remind the Senate that the Commonwealth could take over the control of rents and prices only with the consent of all States. It was not sufficient for only Western Australia and several other States to give consent. It was wrong for the honorable senator to accuse the Leader of the Opposition (Senator McKenna) of having misrepresented the position.
Senator Wright has stated that control of prices by the Commonwealth would have no effect on the present inflationary situation. I am convinced that the honorable senator has not followed the trends that have developed in this country. Prices control was imposed by the Commonwealth from 1942 to 1949, during the regime of the previous Labour Government. In respect of the whole of that period the basic wage rose by only £2 4s. a week. Had prices not been controlled considerable bargaining would have taken place for the goods that were in short supply. The Opposition has never claimed that the re-introduction of p rices control by the Commonwealth would cure all of our present ills. In one year after the present Government took office the basic wage rose by £2 2s. a week, which was almost equal to the rise for the whole of Labour’s period in office. During the last quarter of 1948 there was an adjustment upwards of the basic wage by 4s. a week. Previously, quarterly adjustments had been ls. a week. The highest upward adjustment during 1949 was by 3s. a week. After the present Government came to office and the control of prices by the Commonwealth was relinquished, the basic wage rose steadily. There was a rise of 8s. a week on the 1st February, 1951; another of 7s. a week in May ; another of 13s. a week in August ; and another of 14s. a week in November, 1951. How can Senator Wright sustain bis contention that the exercise of prices control by the Commonwealth during the regime of the previous Labour Government did not have an effect on our economy? The honorable senator claimed that free enterprise would keep down the cost of housing construction. During the campaign on the referendum in relation to rents and prices Labour told the people that the States would not be able to control prices effectively. It was pointed out that 80 per cent, of the goods that were consumed in Tasmania came from the mainland. Consequently, prices in Tasmania could be fixed only on the basis of the landed cost. Tasmania would have no control in relation to prices in Victoria. The landed cost took into account mainland manufacturers’ costs, whether legitimate or otherwise.
Senator Wright also referred to the effect of controlling the price of timber. The honorable senator did not mention that, after the Tasmanian Government had fixed the price of scantlings and flooring boards, the mill owners and timber merchants would not sell flooring timber to a builder who wished to employ his own workmen to lay the floor. Although the price of timber was fixed, the mill owners and timber merchants made huge profits by employing their own men to lay the flooring, and the builders were charged four or five times the men’s wages for that service. I know for a fact that that practice was followed by a supporter of the Liberal party. That is an example of happenings under free enterprise.
A number of references have been made to the major oil companies, which assisted to remove Labour from office because they thought that an anti-Labour government would free their products from prices control. They had made application to the Prices Branch for an increase of the price of petrol, which was rejected. Although the petrol storage tanks in Tasmania were full, the petrol sellers would not provide motorists with more than a couple of gallons at a time. They told them that the Chifley Labour Government had refused to import additional supplies of petrol. During that period 1 believe about 22,000,000 gallons of petrol, in 44-gallon drums, was concealed in swamps and in mines. Many people who were not politically minded considered that the control of petrol should be abolished, and the votes of those people assisted this Government to gain power.
Radio plays that are sponsored by oil companies are broadcast over an Australiawide hook-up on Sunday evenings. At appropriate times the products of the sponsors are advertised. The oil companies also advertise their products extensively in the press. The full-page advertisements of petroleum products that honorable senators have probably seen in the Sydney and Melbourne press during the last week have cost the companies about £500 each. As advertising costs are taken into account when the oil companies apply to the State, price-fixing authorities for an increase of the retail price of petrol, all these costs .aire passed on to the public.
During recent months the major oil companies have purchased many garages and converted them into one-brand petrolselling stations. In many instances very high prices have been paid for valuable sites. Again, these costs are reflected in the retail price of petrol. The petrol companies are now seeking a rise of 1-Jd. a gallon. I am convinced that if the Government .had adopted the suggestion that was made by the Opposition in another place to again submit to the people, by referendum, the question whether Commonwealth prices control should be re-instituted, the referendum would have succeeded.
.. - Labour’s attitude to prices control is quite evident from the remarks of Senator Courtice .and Senator Sheehan, despite the fact that the Leader of the Opposition (Senator MeKenna) has disavowed that the Australian Labour party believes that it would be a panacea for all our ills. I have no great love of prices control in .any shape or form, although I believe that, to a limited degree, it is .a necessary evil. It is for that reason that this bill has been introduced. It provides for the reimbursement of the States for their exercise of .a certain measure of prices control. As the Minister for National Development (Senator Spooner) has pointed out, a substantial range of goods and .services is still subject te control. I consider that the people of this country were wise to reject the attempt that was made by the Commonwealth to gain permanent control over prices. I have ,yet to have it proved to me that State control is less effective than Federal control, although the figures that have been cited in this debate might, at first sight, give that impression. But it is necessary to take into consideration many other factors that have an important bearing on prices.
I concede that, as stated by Opposition senators, there was a comparatively slow increase in the price level during the war years and the early post-war years. But we must examine other factors which came into operation after “the Labour party went out of office. I should like honorable .senators to consider a hypothetical case. Let us :assume that the Labour party was successful in gaining the power which it sought at the referendum on prices. I think that the proposal put to the people at that referendum was for control over prices and rents including charges. Those terms are extremely comprehensive and might mean anything What does the word “ prices “ mean ? Are not wages the price of a man’s labour? This proposal could have meant that the Commonwealth could have power to fix wages. It provided that the Government should have power to fix rents, including charges. The term “ charges “ would be difficult to define. As I have said, let us assume that the referendum proposals had been accepted by the people and that the Labour party had been returned to office in 1949. On the admission of the Leader .of the Opposition (Senator MeKenna) a certain measure of wage control would be necessary in order to make prices control effective. The honorable senator had the temerity to suggest that the Labour party would have had the co-operation of the unions in that matter. He did not make that assertion in th course of this debate but he did make a statement to that effect on another occasion. I do not think that he would deny that. In the financial year 1949-50 Australian wool to the value of £286,000,000 was exported. In the following year wool exports were worth £636,000,000.
– And the Treasurer got 15s. in every £1.
– Whatever the Treasurer received is beside the point. Australia received that money from the export of wool. Again, in the financial year 1951-52 an almost fantastic price was received for our wool, although it was not much more than half the amount received in the previous year. In other words, during those years .an enormous sum of money was filtered into the community. What would a Labour government have done in those, circumstances? Would it have allowed the primary producers to retain their tremendous incomes while the rest of the community remained tied to a fixed wage and fixed price levels? Such a suggestion is fantastic. With, the obtaining of high prices overseas it was inevitable that prices should rise in Australia. Whatever authority controlled prices during those years it would not have prevented the rase in prices that we have experienced. Price control only records price increases, [t does not really control prices, and it never could. I hope that the time is not far distant when the Government will be able to taper off prices control. To return to the hypothetical case that I mentioned, how would the Labour party have treated the primary producer in those years? Would it have allowed him to enjoy the prices that he obtained for his produce?
Opposition senators interjecting,
– Order ! Honorable senators will all have an opportunity to state their case. I ask them to do so one at a time.
– I suggest that had a Labour government experienced the set of conditions to which I have referred it would either have had to control the prices that were being received by primary producers or it would have had to put into effect a rigid system of socialism and general prices control. I think that that was the original aim of the Labour party when it sought to have Commonwealth control of prices authorized at the referendum. I am well satisfied that it was not successful in achieving those aims.
I consider that prices control is highly undesirable. I am willing to concede that we live in an extraordinary set of circumstances and that a certain measure of control is necessary temporarily. I believe that the administration of prices control by the States has been as successful as was its administration by the Commonwealth. Nothing will lead me to believe otherwise. I saw racketeering going on throughout the land when prices control was administered by the Commonwealth. [ shall never give way in my belief that prices control is, at best, a necessary evil. [ should like to see a tapering off of these controls which place a premium on inefficiency and have been responsible, to some degree, for the inflationary trend. I support the bill because I realize that the States have to continue to control the prices of certain goods and services which are in short supply but it will be a great day for Australia when prices control can be relinquished altogether.
.- I was very glad when I heard Senator Hannaford say that he would support the bill. For a few minutes prior to his making that statement I was convinced that he intended to vote against it because of the statements that he made against price fixing in Australia. The purpose of the bill under consideration is to provide funds for the purpose of subsidizing the States’ price fixing operations. I subscribe to the opinion that price fixing is necessary whether it is carried out by the States or by the Commonwealth but I believe that it could be administered better by the Commonwealth than by the States. Nevertheless, as price fixing is necessary, let us have it carried out by the governments which have the authority to implement it. Some people may be hazy as to why the Government has proposed that this sum should be provided. The State governments may have to extend their prices control operations as the year proceeds. They may find it necessary to employ additional skilled investigators. Also, there may be a further increase of the basic wage before many months have elapsed. So the State governments will not know what the administration of prices control will cost them for the year until they submit a statement of costs to the Treasurer (Sir Arthur Fadden) at the end of the year.
We are rather fortunate in Australia because we have passed through a period in which the Commonwealth had charge of price fixing and also through a period in which the States have controlled prices. The Commonwealth controlled prices during a war period. During war periods wages have always increased by from 20 per cent, to 50 per cent. I propose to cite figures relating to fluctuations of the basic wage in Queensland between 1939 and the present time. Those fluctuations were based on variations in the C series index. In August, 1939, the basic wage in Queensland was £4 4s. a week. By the 1st November, 3948, which was the date upon which prices control was handed over by the
Commonwealth to the States, the basic wage in Queensland was £5 19s. Thus, during a period of nine years, which included the war period, the basic wage increased by only £1 15s. a week’, a fact which in itself is sufficient justification for prices control by the Commonwealth. Between the 1st November, 1948, when the States resumed control of prices, and August, 1952, the basic wage in Queenland increased from £5 19s. to £10 13s. Thus, during the period that prices were controlled by the Commonwealth the basic wage in Queensland increased by only £1 15s., whereas during the subsequent four years it increased by £4 14s. Between the 1st November, 1948, and December, 1950, the basic wage increased from £5 19s. to £7 14s., an increase of £1 15s., which is exactly the amount by which it increased during the period of nine years from 1939 to 1948, when prices were controlled by the Commonwealth.
It was stated by one honorable senator that prices control could not function satisfactorily unless wages also were controlled. He should know that wages cannot be varied except by application to an industrial tribunal and that, in practice, they are chained to the C series index. For the benefit of Senator Hannaford, whose contribution to the debate was more weighty than were the contributions of most honorable senators on his side of the chamber, I point out that there was a period when wages were pegged in accordance with regulations under the National Security Act. The law provided that any person who committed a breach of the regulations could be imprisoned, but that did not prevent the breaking of the law. For instance, in the shipbuilding industry, wages were fixed by regulation, but the employers blatantly broke the law to suit themselves. The Senate may be interested to hear how it was done. Boilermakers were employed to affix plates to the ships’ hulls, and in the course of this work rivets had to be driven in and welded. Contrary to the provisions of the award, the men were paid so much for each rivet. At the end of the week, the men received their wages and later, at another place, they were paid what was known to them as “ funny money “. It represented a bonus in addition to their ordinary wages. It is not claimed by members of the Labour party that any price fixing system would be 100 per cent, efficient. There will always be some people who are prepared to break the law. Recently, in New South “Wales, a royal commission has been inquiring into a certain industry, and it has become evident that there was a racket in the sale and distribution of the commodity concerned. In the absence of price fixing there would be nothing to stop racketeering and profiteering of the same kind in connexion with tea or any other commodity. We must reconcile ourselves to the fact that prices control will have to continue, at any rate for such basic commodities as bread, meat, milk, rents, &c.
This bill provides for the payment of about £1,000,000 to the States to reimburse them for the cost of administering prices control. No one really believes that the money will be wasted. I have no doubt that Commonwealth Treasury officials have investigated the administration of prices control by the States, and have satisfied themselves that this money will be wisely expended. Indeed, the expenditure of £1,000,000 in this way may very well save the people many millions of pounds by preventing overcharging. We not infrequently read reports in the newspapers that traders, have been brought before the court for over-charging customers on the sale of basic items such as meat, bread, &c.
Senator Wright had a good deal to say about the control of rents. It is evident that he has not studied the operations of the C series index or he would realize that if rents were allowed to rise the result would be a further increase of the basic wage. Bent is one of the major items in the C series index. Any general increase of rents would be reflected in the figures for the quarter, and the basic wage would increase, also. I support this bill because I believe that the public are benefiting from the system of prices control by the States. I believe that prices control will have to continue indefinitely., Ever since 1920, price fixing regulations have operated in Queensland. In that year, the Profiteering Prevention Act . was passed, and it continued in force until the Commonwealth assumed control of prices at the outbreak of the last war. In war or in peace, during periods of inflation or deflation, control of prices is essential. There are business adventurers in every street.
Motion (by Senator McLeay) put -
That the question be now put.
The Senate divided. (The President - Senator the Hon. Edward Mattner.).
Majority . . 4
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a second time.
Clauses 1 and 2 agreed to.
– I suggest that although this Government professes to be opposed to prices control, it is really assisting the implementation of such control by proposing to expend a large sum of money for that purpose without receiving in return any guarantee that service will be given for the money expended. Senator Hannaford has said-
– I rise to a point of order. I draw your attention, Mr.
Temporary Chairman, to the fact that Senator Aylett is trying to make a secondreading speech. I submit that he must confine his remarks to grants to the States, with which this clause is concerned. If he wishes to move an amendment, that is another matter.
– (SenatorReid). The point of order is well taken. Senator Aylett cannot at this stage deal with any subject other than grants to the States.
– If I may be permitted to relate my remarks to the clause -
– Order ! I have given a ruling and I ask the honorable senator to keep to the subject-matter of the clause, which is grants to the States.
– I am opposed to granting to the States any sum of money unless something in return will be received for it. The Government is proposing to grant to the States certain sums of money without any guarantee that anything at all will be received in return. Senator Wright made out a very powerful case for the Commonwealth to take over the administration of prices control. The honorable senator pointed out that this Parliament is being asked to grant money to the States-
The TEMPORARY CHAIRMAN.Order! I have ruled that the honorable senator cannot reply, in the committee stage, to remarks made during the secondreading debate.
-I contend that the Parliament has no right to grant money to the States holus bolus without some guarantee that such money will be wisely spent. For all we know, the States may waste this money. They are making a mess of prices control at the present time because their administration of the control is inefficient, and they lack cooperation. If honorable senators could be assured that the expenditure of this money would bring about some uniformity of prices and would be of benefit to the community generally, there would be some merit in it. Has the Minister for Shipping and Transport (Senator (McLeay) any guarantee that the States have efficient officers in their departments
The TEMPORARY CHAIRMAN.Order! The honorable senator is attempting to discuss another clause. He may refer to that matter when a subsequent clause is being dealt with. i
– I wish to ask the Minister a question. Is this money to be granted holus bolus to the States without any guarantee concerning the purpose for which it will be used?
The TEMPORARY CHAIRMAN.Order! I have already ruled that that matter may be discussed when another clause is being considered.
– I am opposed to this clause as it stands. [ submit that the Senate is entitled to know exactly what the Government means by the legislation which it introduces. The clause reads -
There is payable to each State, for the purposes of financial assistance towards the costs of administering the control of prices and rents. … [ should like to know what constitutes prices, from the point of view of the Government. The Senate is entitled to something more than general terms. “We all know that many prices are charged for the same commodity in the various States of the Commonwealth. It may be said that the price of a commodity is the cost of production. Yet what constitutes the cost of production? I contend that honorable senators are entitled to know. It seems to me that this clause represents a rule of thumb proposition, which is not popular with people who wish to know, in precise terms, exactly what is meant by certain words.
– Like the Labour Government’s referendum proposals.
Sena.tor CAMERON. - Possibly. I could give the honorable senator a certain explanation of that matter, but I am sure that the Temporary Chairman would not allow me to do so. In most instances, the price of an article includes the cost of production, plus profit. Some people demand a greater profit than do others. Those who are acquisitively disposed and are eager to build up their bank balances as quickly as possible wish to make a large profit. Does the word “ prices “ also refer to profits ? Perhaps the Minister for Shipping and Transport (Senator McLeay) will tell us something about that matter. Similarly, what is meant by the word “ rent “ ? I suggest that it has a number of meanings. As honorable senators are aware, many capital charges which have never been incurred are always included in rents. For instance, the capital cost of a slum hovel built 80 years ago ha? long since been recovered. Yet the rent continues to recover capital cost. Let up take the position of a worker who gives a week’s , services for a certain sum of money. He can charge for his services only once. He cannot recover over and over again for one week’s work. Yet the landlord may do so. If the Government is really sincere in this matter it should tell us precisely what it means when it. refers to prices and rents. If it does not do so, the Opposition will be justified in assuming that this bill represents another make-believe proposition, another of the political soporifics, to which I referred recently, for the benefit of persons who are supposed not to know any better. In the circumstances, I contend that the Opposition is justified in viewing this clause with suspicion and in opposing it.
If we are to get anywhere in the scheme of things governmental, we must not leave it to a State official to decide what the Government means. The obligation is on the Government itself to say what it means. In this instance it has not done so. It’ has worded this clause in general terms which mean, in effect, that the implementation of the clause will not benefit the proposed beneficiaries. The officials in charge of prices control in the States will continue to function as in the past. The gentlemen who sell commodities over the counter will still be able to go to the prices authorities and claim that costs have risen. Any one who knows anything at all about costs will appreciate why prices have gone up. Yet the Government makes no provision to counter rising prices. All prices today are loaded because of inflation, which is definitely the responsibility of this Government. To date it has made no attempt to control inflation. In effect, the Government is the political office boy of the. private banks, which cause inflation.
– What about the Commonwealth Bank?
– The new board now controls the Commonwealth Bank with the private banks, as the Government intended when it reconstituted the board. I enter a protest against this clause because this is not the end of increasing prices and increasing rents. They will be followed by an increase of wages, although it will not be an actual increase. Wages are the price of labour power or of services rendered. Increases of wages are so much political window-dressing, so much make-believe to deceive the unfortunate worker who is not supposed to know any better and is not allowed to learn any better because of the Government’s system of fixing prices.
– I appeal to honorable senators opposite to behave like senators.
– This is a most important question.
– Senator Cameron raised certain matters in order to waste time-
– I rise to a point of order. I submit that I too have rights. I object strongly to the statement of the Minister that I spoke in order to waste time. I consider the term offensive and I ask that it be withdrawn.
The TEMPORARY CHAIRMAN.Order! I ask the Minister to withdraw the remark.
– I withdraw it. Senator Cameron was a member of the Government which inserted this provision in the 1948 bill. That measure was introduced by the then Minister for Trade and Customs, Senator Courtice. Apparently both Senator Courtice anc! Senator Cameron supported the bill because there is no record of any objection on their part. I shall refuse to answer any questions that are not relevant to this clause.
– I ‘assume that in speaking to this clause I shall be in order in referring to clause 5, which is mentioned in clause 3, and also to clause 4, which is referred to in clause 5.
The TEMPORARY CHAIRMAN.No. The honorable senator must stick ti clause 3.
– Clause 3 provides -
There is payable to each State, for the purposes of financial assistance towards the costs of administering the control of prices an rents in that State during the financial year which commenced on the first day of July, One thousand nine hundred and fifty-two, such amount as is determined in accordance with section five of this Act.
I submit, therefore, that, in speaking to this clause, I am entitled to refer to clause 5.
The TEMPORARY CHAIRMAN.No. The committee is dealing with clause 3 and not with clause 5.
– I remind you, Mr. Temporary Chairman, that the “ Act “ referred to in clause 3 is this bill. This is not an amending bill. It will be almost impossible to discuss clause 3 adequately without referring to clause 5.
The TEMPORARY CHAIRMA N . - Nevertheless, I am afraid that the honorable senator must endeavour to do so.
– I find myself in a most difficult position. I wish to discuss the manner in which the Treasurer may exercise his discretion.
The TEMPORARY CHAIRMAN.I adhere to my ruling. The honorable senator must confine his remarks to clause 3.
– I do not wish to dissent from your ruling, Mr. Temporary Chairman, but I cannot intelligently discuss clause 3 unless I refer to clause 5.
The TEMPORARY CHAIRMAN.The honorable senator will have to try to do so. I do not propose to alter my ruling.
– The Government finds itself in an extraordinary situation. It is asking this Parliament to vote money for a purpose in which it has no confidence whatsoever. The States are to be reimbursed for rendering a service of which the Government disapproves.
– That is not so.
– Members of the Government parties have said consistently, in Parliament and on public platforms, that they do not believe in prices control at all. In this debate, Government supporters have expressed the opinion that prices control should be abolished altogether. They believe that if industry is freed from this allegedly unnecessary control, goods will flow more freely and prices will find their own level That is the philosophy of the Government parties ; yet they are now asking the Parliament to vote a substantial sum of money to reimburse the States for the administration of prices control !
– I rise to order. 1 submit that Senator Byrne is now discussing the merits and demerits of prices control as a principle and, therefore, is out of order.
– I am not discussing the merits and demerits of prices control. I am discussing the anomalous position in which the Government finds itself to-day. The Commonwealth will have a certain overriding authority in respect of the money that will be expended under this measure. It will have power to inspect accounts and I should like to know how the Commonwealth’s discretion is to be exercised. What principle will be applied when the Treasurer is asked to scrutinize the accounts presented by a State. Auditor-General? Money cannot be voted and expended willy-nilly. It must be accounted for. Will the Treasurer examine the efficacy of prices control? Will he consider whether the expenditure on the administration of prices control is justified? Will he investigate, overhead expenses and employment in State prices offices? I submit that, on the question of the efficacy of prices control, the Treasurer should refuse to sign any warrants for payments to States because the Government of which he is a member considers prices control of any kind to be unnecessary. Obviously Government supporters cannot honestly vote money to reimburse the States for carrying out a service which they believe to be unnecessary. The alternative, pf course, is to make a gesture of political courage. Clause 3 is a magnificent demonstration of sheer political cowardice. The Government believes that prices control should be abandoned, but has not the courage to say so. We on this side of the chamber believe firmly in prices control. We believe that it should be exercised by the Commonwealth; nevertheless we consider that, in State hands, prices control is at least reasonably effective. If the Government were to adhere to its belief, it would refuse to vote any money to the States for the administration of prices control. That would be an act of political courage, but I do not expect to see it.
– Senator Byrne’s skill in debating this clause in spite of the restrictions that you placed upon him, Mr. Temporary Chairman, is only to be expected from one as well versed as he is in dialectics, particularly the dialectics of law. It is a skill that we have learned to associate with many eminent predecessors of his name and race. The essence of his argument was that the Senate could examine the manner in which the money that is to be paid to the States under this measure is expended. I wish to put the matter into its proper perspective. We are agreeing to pay certain money to the State, and I do not think it is our job to endeavour to investigate how the States propose to use that money. For instance, a certain proportion of the revenue derived by the Commonwealth from the petrol tax is paid to the States for road construction and maintenance but the Commonwealth does not examine the manner in which the States expend that money on roads.
– I rise to order. I should like to know how the roads programmes of the States can be related to the administration of prices control?
The TEMPORARY CHAIRMAN.The point of order is justified. The honorable senator must confine his remarks to clause 3.
- Senator Byrne argued that the Senate could examine the manner in which the States are expending moneys voted to them under measures such as that now before us. I am merely pointing out that the Commonwealth does not require from the States any account of their expenditure of moneys voted to them for road construction work. That matter is entirely within the province of the States.
– I rise to order. The honorable senator is misrepresenting my statement. I did not. say-
– Order. That is not a point of order.
– I submit that it is not the function of thi3 Parliament to examine how State grants are being expended. It is up to the people of the States to ensure that the money shall be expended wisely.
– I think that Senator Byrne was perfectly in order in asking his question. Clause 3 is of the essence of the bill. We have to decide whether we shall support the clause or not, and therefore we must deal with it in a general way. Senator Cormack said that the Commonwealth Government did not examine how the States expended their grants, but I draw attention to what has been happening in Queensland during the last two day3. According to the honorable member for Lilley in the House of Representatives (Mr. Wight) certain houses built in Queensland with Commonwealth moneys are unsatisfactory. I direct the attention of the honorable and learned senator to the fact that the Australian Government sent two gentlemen to Queensland to examine the houses built in that State because it wished to make sure that money granted to the Queensland Government for that purpose had been properly expended. The clause states that money shall be made available to the States for a certain definite purpose. In spite of your ruling, Mr. Temporary Chairman, if we do not agree with that purpose, we shall be in order in stating our reason in a general way. I trust that Opposition senators will be permitted to ask such questions of the Minister as they desire without interference by the Chair.
– I, too, have an interest in the clause which reads -
There is payable to each State,-
That means to each of the six States - for the purposes of financial assistance towards the costs of administering the control of prices and rents in that State during the financial year which commenced on the first day of July. One thousand nine hundred and fifty-two, such amount, as is determined in accordance with section five of this Act.
Several questions present themselves to my mind in relation to the clause. For instance, what is meant by the word “towards”? Is it intended that the Commonwealth shall cover the whole of the costs incurred in each of the States, or does the insertion of the word “ towards “ mean that the Commonwealth will merely make a contribution towards the costs incurred by the States in administering the control of prices and rents? The insertion of the word “ towards “ appears to indicate that the Commonwealth is prepared to make a partial contribution towards the administrative costs incurred by the States in this connexion. I should like the Minister to clarify the intention of the clause.
The questions posed by Senator Cameron were very much in point, in particular his request for an interpretation of the word “ prices “. On many occasions honorable senators have heard lengthy arguments about the meaning of that term. Does it include charges ? And what is meant by the word “ rents “ ? Rents may cover chattels, vacant land, household requirements or premises of every conceivable kind. Is a contribution to be made to the States in respect of control of rents of all kinds, or is the Minister prepared to be specific and state that the word “ rents “ relates solely to premises used for human habitation and excludes manufacturing premises, broad acres and things of that kind? The clause also states that payment is to be made to the States during the financial year which commenced on the 1st July, 1952, and that it will comprise such, amount as is determined in accordance with the provisions of clause 5. With great deference to your ruling, Mr.
Temporary Chairman, I ask the Minister to state what amounts the Government proposes to contribute to the States for this purpose. It is clear that if honorable senators may not refer to the matters covered by clause 5 - I do not dispute your ruling on that point, Mr. Temporary Chairman - I shall have grave difficulty in stating the question which I desire to address to the Minister. Your ruling will, I assume, apply equally to the Minister as to other honorable senators. If I am obliged to stop at the words “ such amount “, the Minister will have as much difficulty in answering my question as I have in propounding it. The Minister should estimate the amount involved. I look forward with great eagerness to his estimation of it.
– The Leader of the Opposition (Senator MeKenna) was responsible for the insertion of this clause in the original legislation and nobody knows better than he does what it means. I am advised by the technical officers that the whole of the expenses associated with the adminisration of prices control by the States is provided foi- in the bill, subject to the limitation in clause 4 (2), which reads as follows: -
The Treasurer may disallow any item of expenditure set out in a statement furnished to him in pursuance of the last preceding sub-section.
As I indicated in my second-reading speech the estimated amount involved is £1,087,000.
– I am concerned to know whether the Commonwealth is getting value for the money which it pays to the States for the administration of prices control, and the fact that there, is no uniformity in the practices and procedures adopted and applied by the State price fixing authorities. The prices of goods produced or manufactured in one State and sold in another State are fixed by the prices authorities in the State in which they » are sold, all too often without consideration of production costs. In this bill the Commonwealth merely proposes to grant financial assistance to the States for the administration of the control of prices and rents without regard to the efficacy of the control. Can the Minister explain how he can justify the grant of financial assistance, say, to New South Wales, for the administration of prices control imposed in respect of commodities produced or manufactured in Victoria or Tasmania? In fixing the prices of such commodities the New South Wales prices authorities may not take into consideration production costs or the cost of freight. The system of reimbursing the States for the costs incurred by them in administering prices control must eventually break down under its own weight. The Minister must admit that prices control by the States is ineffective. Tinder the present system the price of timber sent from Queensland to Victoria is fixed, not by the prices authorities of Queensland, who are aware of production and other costs and charges, but by the prices authorities of Victoria who know nothing about these matters.
In some States the lower, house of the parliament decides which commodities shall be subjected to prices control, but when the appropriate measure is submitted to the august upper chamber, the members of that branch of the legislature say, “ Certain items in the schedule to the bill must be de-controlled. Unless the lower house agrees to our demand that they be omitted we shall not pass the bill “.
– That is done in New South Wales.
– It is also done in Tasmania. Another important point is that the Commonwealth has no control over administrative costs incurred by the State price-fixing authorities.
Senator Wright has submitted an excellent case for the establishment of Commonwealth prices control. The Minister must agree that it is foolish to continue this “ higgledy-piggledy “ system of State prices control, the cost of which is borne by the Commonwealth although it receives no report from the States on the manner in which their prices authorities function or on the efficacy of the control. Has the Minister ever received such a report since assistance of this kind has been granted to the States so that members of the Parliament may be informed of the manner in which the taxpayers’ money is being expended?
– - Does the honorable senator represent a sovereign State in this Senate?
– I represent the people of Australia, in particular, the people of Tasmania. It is my responsibility to ensure that the taxes paid by the electors of Tasmania shall be wisely expended. If this clause is passed in its present form the money which the bill seeks to appropriate will certainly not be wisely expended.
– - In Tasmania?
– It will certainly not be wisely expended in that State. I bring these matters to the notice of the Minister at this stage because I was prevented from doing so during the secondreading stage of the bill. Does the Minister know whether prosecutions have been launched by the State prices authorities for breaches of the prices regulations? If such prosecutions have been launched, how many have been successful and what breaches of the regulations have been involved ? Can the Minister inform me of an instance in which an offender has been jailed? Although some supporters of the Government have criticized the control of prices that was exercised by the Commonmonwealth during Labour’s regime, I point out that that control stabilized the Australian economy at that time. Can the Minister prove that the present system of the control of prices by the States is efficient? “Will he inform honorable senators of details of penalties that have been inflicted on offenders? Have they been as severe as those that were imposed under Commonwealth control? Has a limit been placed on the profit that a big company may make, under the present system of control? I consider that all these matters are relevant to the clause. Apparently the Government believes that the States are doing a good job and, in effect, it is saying, “ We ask no questions. Here is a grant of financial assistance towards your costs of administering the control of prices and rents “. I should bp glad if the Minister would furnish honorable senators with information about the aspects of the matter that I have raised.
– It is quite obvious that Senator Aylett is speaking in a dying voice-
– There is nothing dead about his argument.
– I again point out, that a clause of similar wording to this clause was inserted in the original legislation by the previous Labour Government. This Government has already made it perfectly clear that it believes that the States can control prices as effectively as could the National Parliament. No doubt the States have discovered that under a system of prices control prices rise. I resent Senator Aylett’s criticism of Mr. Finnan, who is a member of the New South Wales Parliament. I have been associated with Mr. Finnan in many discussions about prices control, and I am convinced that Mr. Finnan and the other-
– I rise to order. The Minister has implied that I cast a alor on Mr. Finnan. In point of fact, I did not mention any names. Therefore I ask for a withdrawal.
– Is the Minister prepared* to accept Senator Aylett’s denial?
– I was under the impression that the honorable senator referred to Mr. Finnan. However, I accept his assurance that he did not do so. The fact that this Government is prepared to reimburse the States for costs of administering the control of prices and rents, indicates that the Government appreciates the fact that under war-time conditions, and under present conditions, the control of prices, rents and other charges is necessary. I have no intention to supply to Senator Aylett the details for which he has asked. The honorable senator will have plenty of leisure time in which to search the records in order to ascertain the information he seeks. It has been obvious from press reports from time to time that the State authorities have dealt very severely with breaches of the prices laws. Senator
Aylett had ample opportunity in 1948 to display the genius that he has displayed to-night, on the occasion that Senator Courtice, who was the Minister for Trade and Customs in the previous Labour Government, introduced a similar measure. Along with other supporters of the Labour party, Senator Aylett acquiesced in its passage. Indeed, he did not utter a word.
– This evening we have witnessed an extraordinary spectacle. The Minister for Shipping and Transport (Senator McLeay) has apologized continuously for the necessity for the bill. He has stated that it is a replica of a bill that was introduced by me in 1941, when I was Minister for Trade and Customs in the previous Labour Government. The vital difference between the Minister and myself is that I was sincere in the statements that I made on that occasion. As the ‘Commonwealth had been denied the power to continue to control prices, the next best thing was to reimburse the States for administering that function. Had the Minister accepted that situation he could have got out of his present difficulty. Honorable senators on this side of the chamber are uneasy.
– Are they sincere?
– Yes, we . are sincere. We believe that only good could result from the reinstitution of Commonwealth control of prices. The AttorneyGeneral (Senator Spicer) has stated over and over again that he does not believe in prices fixation; he considers that it merely makes provision for the recording of prices, and has no effect on our economy. Honorable senators on the Government side of the chamber who doubt the sincerity of the Opposition in this matter should consider their own attitude to it. I believe that the Minister is piloting this bill through the chamber only because the Government has not the courage to tell the people of this country that it. does not believe in prices control.
Senator FRASER (Western Australia) [10.231. - Under the provisions of the clause,” about £1,0S7,000 will be paid to the States in this financial year to reimburse them for their costs of administration of prices control. I am not satis fied that the job that is being done by the States warrants the proposed expenditure. The Minister for Shipping and Transport (Senator McLeay) has referred to certain happenings in 1948. When the Commonwealth lost its power to control prices it was necessary for the Labour Government that was then in office to take whatever steps were practicable in order to stabilize the economy of this country. It was then decided, in agreement with the States, that the States would carry out certain activities. I do not think that the Minister himself really believes that the States can control prices as effectively as could the Commonwealth. As far as I can see, there is no check on the manner in which Commonwealth grants for this purpose are expended. Although my colleague, Senator Byrne, was not permitted to refer to clauses 4 and 5, 1 point out that those clauses make provision for details of expenditure by the States in administering the control of prices and rents to be furnished to the Treasurer. I consider that honorable senators should be supplied with details of expenditure by all States for this purpose during the last financial year, because the legislation of the various States in relation to rent control differs somewhat. I understand that Victoria has controlled rents by legislation, as has also Western Australia, in which State provision has been made for an appeal to be made against the decision of a landlord to raise the rent of a property. I should like lo know the practice that is followed in other States. I consider that the crux of the matter is the effect of clauses 4 and 5 on this clause. I do not consider that a State authority can apply prices control as effectively as the Commonwealth could do it. I shall repeat what I have said on other occasions in this chamber, that I consider that if the Prime Minister (Mr. Menzies) were to discuss this matter with the State premiers, I am sure that they would be pleased to hand over prices control to the Commonwealth. Although the present Government is ostensibly opposed to prices control, it is willing to reimburse the States to the extent of approximately £1,087,000 for their costs of administering the control of prices and rents during this financal year.
-I rise to order! Is the honorable senator in order in discussing the merits and demerits of prices control by the States, in a consideration of the clause?
The TEMPORARY CHAIRMAN.Order ! SenatorFraser should confine his remarks to the clause.
– I shall show that my remarks bear a definite relationship to the provisions of the clause.
The TEMPORARY CHAIRMAN.Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Chairman do now leave the Chair a nd report to the Senate.
Question resolved in the affirmative.
The Chairman having reported accordingly,
– Order! In con formity with the sessional order relating to the adjournment of the Senate, I formally put the question: -
That the Senate do now adjourn.
.- In the debate which followed the presentation of the Repatriation Bill in this chamber last week Senator Hendrickson supported the bill with some reservations. In Ms desire to commend the Minister for Repatriation (Senator Cooper) for his fine work on behalf of the soldiers and the war widows of Australia, he said that all Ministers for Repatriation should be protected from those who worried them and especially from “ that old war horse, Mrs. Vasey”. Whether we agree or disagree with the methods that Mrs. Vasey has adopted in her work for war widows in Australia, I think that we should recognize that she is a public-spirited voluntary worker who has given years of service in the interests of the war widows of this country. She has welded the war widows into a very powerful organization, and she has fought and is fighting a battle on their behalf. She has done much for the preservation of the morale of this large body of brave women and she has gained many material benefits for them. ‘There are a number of men and women in Australia who have given hours of time and service in the interests of others in a voluntary capacity. Other honorable senators who suport the Government also disapprove of the action of Senator Hendrickson in using, in this highest court of the land, an expression of that kind in describing a voluntary worker. As the phrase “that old war horse” is offensive to me and my colleagues and to the majority of the people of Australia, I ask that it be withdrawn.
– It is quite true that I had something to say with regard to the Repatriation Bill which was before this chamber last week. I read about three or four words of that speech in the press. It was also reported in the press on Saturday that Mrs. Vasey was quite honoured by the fact that I had referred to her as an old war horse. During the course of the debate on the Repatriation Bill I said that no two men could have done a better job than Mr. Frost and Mr. Barnard when they were Ministers for Repatriation during the regime of the Labour Government. I also said that there was no greater sympathizer with the returned soldiers than the present Minister for Repatriation (Senator Cooper). I wish that the press had published at least sufficient of my state- . ment to show that my case was just. I said that there were two classes of pensions. One class of pension was granted as compensation for inconvenience caused to ex-servicemen and the other class included totally and permanently incapacitated pensioners and war widows. Both the totally and permanently incapacitated soldiers and the war widows are forced to keep their families on what the Government pays them. During Mr. Barnard’s period of office as Minister for Repatriation, Mrs. Vasey, as president of the War Widows Association of Australia, was reported in the press every day to have stated that Mr. Barnard should have done more for” the war widows. I do not say that more should not have been done for the war widows, but I do disagree with Mrs. Vasey’s implication that Mr. Barnard was to blame for more not having been done tor them.. If more should have been done for the war widows, the government of the day was to blame, not Mr. Barnard, Nevertheless, I believe that for political reasons, Mrs. Vasey did everything possible to embarrass the then Minister for Repatriation despite the fact that the government of the day increased the pensions of war widows and returned servicemen from both world wars. Let us examine the bill that was before the Senate last Thursday. During the debate on that bill I said that certain pensioners, including the war widows, were more entitled to receive a pension than anybody. I said, “ Where is the old war horse ? “
– Order I The honorable senator is not in order in discussing, a measure that has been dealt with by the Senate.
– I do not wish to discuss the bill. I only wish to mention that I asked why that old war horse, Mrs. Vasey, was not present for the purpose of ensuring that the war widows would receive the increase in pension to’ which they were entitled because of spiralling costs. In no way did I intend to disparage Mrs.. Vasey. If honorable senators opposite think that I attempted to do so they are quite wrong and must be quite unaware of what I have done on behalf of returnedsoldiers since I returned from World War I. There would be no better woman to represent the war widows in this Senate than Mrs. Vasey. She could represent them much better than Senator Robertson does, but the Liberal party has not selected her as their candidate.
Question resolved in the affirmative.
The following papers were pre sented : -
Defence Act, Naval Defence Act and Air Force Act - Regulations - Statutory Rules 1952, No. 73.
Lands Acquisition Act - Land acquired fox Defence purposes - Garbutt, Townsville, Queensland.
Public Service Act - Appointments - Department -
Civil Aviation -F. J. Arnold, E. C. Fawkes, J.Glindemann.
Defence Production - J. A. Foley,R.R, Smart.
Repatriation - A. B.Conomy, R. McP. Dunn, C. M. Maxwell, J. H. Simpson, T. E. Waters, E. C. Wilson.
Shipping and Transport- W. C. Millar. Seat of Government (Administration) Act - Variation of the plan of lay-out of the City of Canberra and its environs, together with the plan referred to, dated 26th August, 1952.
The Senate adjourned at 10.40 p.m.
Cite as: Australia, Senate, Debates, 23 September 1952, viewed 22 October 2017, <http://historichansard.net/senate/1952/19520923_senate_20_219/>.