21st Parliament · 1st Session
The President (Senator the Eon. A. IE. McMullin) took the chair at 3 p.m., and read prayers.
– -Will the Minister representing the Minister for Air say whether, when the Viscount aircraft that met with disaster .recently was previously at various airports in this country, a guard was placed on it! Does the Minister consider it to be necessary to guard expensive new aircraft, especially as the Government, which is spending money on the Royal Commission on Espionage, apparently suspects that sabotage is occurring in Australia!
– I shall bring the honorable senator’s question to the notice of the Minister for Air and obtain a reply.
– Has the Minister representing the Minister for Supply seen a supplementary report issued by the Auditor-General in which attention is directed to wasteful expenditure and inadequate bookkeeping by the Australian Aluminium Production Commission? In view of the arguments that I presented to the Senate recently on the Bell Bay aluminium project, will the Minister give an assurance, that a full report on the activities of the Australian Aluminium Production Commission will he made available to the Senate before the Parliament goes into recess ?
– The Minister for Supply and I have read the report by the Auditor-General to which the honorable senator has referred. I saw the Minister this morning and asked whether he had any statement to make on the report. Later, he supplied me with a statement which read as follows : -
When this Government came into office, the Australian Aluminium Production Commission consisted of three businessmen, including a co3t accountant, and two Government officials. The commission, which is not subject to departmental supervision, is a separate statutory body, with wide powers and almost complete independence of management. All the shortcomings which have been revealed relate to the commission’s own management, not to policy.
As soon as the member became aware that the commission’s management of its affairs was seriously unsatisfactory, he took action to place tin the commission men who would administer its affairs properly, correct defects, and discover what had been wrong. The history of events is as follows: -
Early in 1052, I became dissatisfied with the lack of sufficient detailed information made available to me concerning the commission’s financial position and its methods of financial control generally. I expressed my dissatisfaction to the chairman, and the then Treasury representative, and was assured that the commission’s financial affairs were under proper control, and that there would be no trouble in obtaining the Auditor-General’s report in due course.
By June, 1952, I. was still uneasy about the matter, and appointed the Secretary of ray Department, Mr. Stevens, to be a deputy member of the commission, with instructions to attend commission meetings to try to ascertain the way in which the commission’s financial affairs were being controlled, and to report to me direct. About November, Mr. Stevens, after attending several meetings of the commission, verbally reported that, in his view, the financial and storekeeping control by the commission were unsatisfactory, and that a confused position existed at Bell Bay, on the stores and accounting side, as a. result of a great increase of activity there over the last two years. I also learned, for the first time, of the chairman’s personal interest in the Wessel Island ^contract. The Auditor-General’s report, which was tabled in the Parliament in November, also disclosed that the commission had not produced its balance-sheet for 1951-1952. I thereupon voiced my strong dissatisfaction to the chairman, and indicated that I proposed to make changes in the personnel of the commission. This was done early in 1!)”>:1. when an amending bill came before” the House. The chairman and two other members wortreplaced. Two members who had represented Tasmania remained.
Instructions were given to the new commission to investigate the affairs of the project thoroughly, and to put them on a sound footing. To the best of my knowledge, all the matters raised in the Auditor-General’s report occurred during the years 1951 and 11)52. under the management of the old commission. The new commission has done remarkably good work in re-organizing the administration of the commission, especially as regards costing, financial and stores control. It has also made extremely rapid progress in the construction work of the project. In the course of its examination into the. affairs of the old commission, especially during the years 1951 and 1952, incidents and items involving bad administration and control were revealed for the first time and reported to me. Some of these were of a character which indicated the desirability of having a full investigation of the commission’s affairs made by the Commonwealth Investigation Service to see whether laxity of administration had given rise to wrong-doing, and this the commission was instructed to do. The Commonwealth Investigation Service was engaged for many months on this matter, and made a detailed report on several matters, including those mentioned by the AuditorGeneral. Some of these matters came to the knowledge of the present commission and myself, for the first time, when the report was presented to us. The report has been examined by the Crown Law authorities, to ascertain whether the .matter referred to involved any criminal wrong-doing. I am advised that no case of criminal wrong-doing has been established.
With reference to the commission’s failure to obtain certification of its accounts, I am informed by the present commission that the Auditor-General is quite satisfied with the commission’s present accounting and stores systems, <but that the “ unsatisfactory accounting records” for the years 1951 and 1952 make it difficult for the Auditor-General to obtain a starting point from which to give future certificates.
The chief difficulty which the new commission has had to solve is not one of necessitating the obtaining of an independent valuation of assets by outside experts, but of properly costing the commission’s expenditure for the years 1951 and 1952, under particular asset heads. The commission is confident that this difficulty will be resolved, and is now in the process of doing so.
Without excusing the mistakes which were made under the old commission, it is satisfactory to know that these were corrected as soon as discovered, and nothing of the sort now exists. In addition to the detailed investigations which have been made by the commission, the Commonwealth Investigation Service, and the Auditor-General, the question of the commission’s financial administration will also shortly be examined by the Public Accounts Committee, as a result of which an impartial report will be tabled in this House.
– I can understand that there are objections to disclosing to the Parliament the report of the Commonwealth Investigation Service which the Minister for Repatriation said has been under consideration. But I suggest that Parliamentarians should not be left in ignorance of this matter until’ the Public Accounts Committee has been able to make its inquiry from the accountancy point of view next year. Will the Minister for Repatriation have a report made by some responsible officer of the commission disclosing the deficiencies that now exist, and providing any explanation that may be available, in time for presentation to Parliament before the end of this session? I make this request because the sums of money that have been mentioned in connexion with this matter are too large for any responsible member of Parliament to overlook.
– I shall be pleased to bring the honorable senator’s suggestion to the notice of the Minister for Supply and ask that such a statement be made available.
– In view of the profit of £493,000 that has been made by the Commonwealth shipping line, will the Minister for Shipping and Transport consider the appointment of a committee or other authority to inquire into the high shipping freight charges which are making it difficult for Australian primary producers to compete in world markets?
– The only committee that I would favour would be one for the purpose of inquiring into how the Commonwealth shipping line made a huge loss when Senator Ashley was in control of it. The profit that has been made by the Commonwealth shipping line represents only a moderate rate of interest on the money that has been advanced to the line by the Treasury. Of course, no taxation was paid by the line before that profit was announced. I have taken a personal interest in this matter. When freight rates are being fixed, consideration is given to the profit that is being made by the Commonwealth shipping line which operates in competition with private enterprise. In view of the losses that have been made by so many other Government bodies, I feel sure that the general public will be pleased to realize that the Commonwealth shipping line is making a moderate profit. I am not prepared to lower freight rates and charge the resultant losses to the taxpayer as Senator Ashley did.
– I desire to preface a question to the Minister representing the Minister for Labour and National Service by reminding the Senate that reports have been received from the United Kingdom of the disastrous effect of the dock strike that took place there recently. Through telegrams and other _a venues of information it has come to my notice that the proposed alterations to the conditions of employment on the waterfront in Australia are likely to have very grave repercussions. I ask the Attorney-General whether it would be possible, even at this late hour, for a committee of responsible people connected with the maritime and waterfront industries, to try to reach a compromise on this matter before the introduction of provocative legislation which may disrupt the whole of the waterfront in Australia as has happened in the United Kingdom.
Senator- SPICER. - It would ill become any member of this chamber to encourage men to engage in a strike directed towards discouraging, or perhaps preventing, this Parliament from carrying out what it considers to be its .duty to the public. Surely members of Parliament, above any one else, should uphold the cause of law and order. I can assure the honorable senator that action of this kind will not deter the Government from taking those steps which it believes to be necessary to remedy existing legislation. As the honorable senator is aware, an indication has already been given of an inquiry into other matters. However, I should hope that every member of this chamber would applaud the Government’s determination not to be deterred from carrying out its duty by performances of this kind.
– According to to-day’s Sydney Morning Herald, the president of the Waterside Workers Federation, Mr. Healy, has made certain references to a report made by Sir Owen Dixon. As those references are distorted, can the Attorney-General say whether the full report is available for public perusal?
– I have not seen the news item to which the honorable senator has referred, and I am not quite sure which report by Sir Owen Dixon is involved, but I shall make inquiries into the matter and provide the honorable senator with an answer to his question.
– Can the Minister acting for the Minister for Commerce and Agriculture say whether it is a fact that Wilcox Moflin Limited signed wool purchase contracts committing the company to pass on any profits over and above the price paid by the Joint Organization at appraisement centres? Did that company, when approached by the solicitors for Poulton, agree to request the Government to withhold the payment of those funds until the Poulton case had been heard by the High Court ? In view of the fact that a single judge and, subsequently, the full High Court, ruled against Poulton, will the Minister approach Wilcox Moflin Limited with a view to obtaining permission to distribute the funds ?
– As this matter is still the subject of litigation, I am not in a position to answer the honorable senator’s question, but I shall refer it to our legal advisers and obtain a reply for him.
asked the Acting Leader of the Government in the Senate, upon notice -
– The Prime Minister has advised me as follows: -
asked the Minister acting for the Minister for Commerce and Agriculture, upon notice -
– The following answer is now supplied: - 1 and 2. The Australian Barley Board bulk contract for the sale of barley to Japan has onemore season to run. This will cover the 1054-55 crop. The board is a State and nota Commonwealth authority. The quantity covered by the contract is a maximum of 200,000 tons and a minimum of 100,000 tons. I am not aware of any approach by Japan to be relieved of portion of the contract commitment.
asked the Acting
Leader of the Government in the Senate, upon notice -
– The following answers are now supplied: -
Senator McLEAY (South Australia-
Minister for Shipping and Transport) [3.24]. - by leave - I move -
That the following Order of the Day, Government Business,” be discharged: -
South-East Asia - Ministerial Statement (dated 10th August, 1954 - Paper - Adjourned debate on the motion that the paper be printed.
As honorable senators may be aware, a statement was made on this subject recently in the House of Representatives by the Minister for External Affairs (Mr. Casey), and a similar statement will be made in the Senate shortly.
Question resolved in the affirmative.
Debate resumed from the 28th October (vide page 1073), on motion by Senator
That the bill be now read a second time.
– The bill before the Senate is one to amend the Bankruptcy Act. As the AttorneyGeneral (Senator Spicer) has already explained, some remedial action became urgently necessary as the result of a decision delivered on the 10th September last by the High Court of Australia. The case that was involved was The Queen v. Davison. The facts were that, upon the debtor’s own petition, an order of sequestration was made by a deputy registrar of the Bankruptcy Court in New South Wales, on the 2nd May, 1952. On the 1st October, 1952, Davison was compelled to apply for an order of discharge. In the course of the hearing of the application, it transpired to the judge that Davison had committed certain offences under the Bankruptcy Act. The court held that he should be charged with the offence of not keeping proper books of account in relation to two businesses he had conducted, and also with the offence of contributing to his bankruptcy through gambling.
In due course, those charges were preferred against Davison, and at the hearing, those who defended him put the case that the order of sequestration, having been made by a deputy registrar of the court, constituted an infringement of the Constitution, which requires that judicial acts shall be performed only by judges with life tenure operating their own Federal courts, or by State courts invested with federal jurisdiction. The argument proceeded that, as the deputy registrar of the court had no power to make that order of sequestration, Davison was not bankrupt, and, therefore, could not be charged with offences tinder the Bankruptcy Act. On the 10th September last, the matter was before the High Court of Australia. It had been removed from the court where the offences were being prosecuted for a decision of the High Court of Australia upon certain questions. The main one was whether the order of sequestration made by the deputy registrar in New South Wales had been validly made.
By a majority decision - five judges to one - the court held that it was not competent for the deputy registrar, or any registrar of the Bankruptcy Court, to make an order of sequestration. The court ruled that, in effect, that amounted to an exercise of a judicial power by an officer, and that such power could be exercised only by a judge duly appointed as I have stated earlier. Five of the judges held that the deputy registrar could not so act, and that, as the estate of Davison wa3 involved in the deputy registrar’s sequestration, the prosecution could not proceed against him. The Chief Justice and Mr. Justice McTiernan, delivered a joint judgment, and Mr. Justice Fullagar, Mr. Justice Kitto and Mr. Justice Taylor concurred in that judgment, but gave their own separate reasons for their opinions. The one dissentient was Mr. Justice Webb, who held that the making of a sequestration order of that nature against Davison was not an exercise of judicial power. His Honour held that, in order to constitute an exercise of judicial power, there had to be power of enforcement, and he claimed that that element did not enter into the order that had been made by the deputy registrar in New South Wales. However, the majority decision prevails, and the bill to amend the Bankruptcy Act that is now before the Senate is presented in the light of that majority judgment.
I agree it is essential that the Government should act quickly to prevent vast confusion from occurring in the community. As the Attorney-General has indicated, since 1924, when the Bankruptcy Act came into force, registrars and deputy registrars have made 10,000 or 11,000 orders sequestrating the estates of debtors who lodged petitions in bankruptcy. One has only to think for a moment to realize what would happen if all those orders were invalid and all the debtors who had been declared bankrupt were, in fact, not bankrupt to-day. There might be a pursuit of bankrupts by creditors. At the instance of trustees in bankruptcy and official receivers, th”. property of alleged bankrupts has been sold and the titles to the property have been passed onto other individuals. Those individuals, in turn, have passed on what may be defective titles to others. If the sequestration orders were invalid, there: would be chaos and confusion throughout Australia. Therefore, I think the Government is to be congratulated foifacing up to the problem quickly and, by this bill, doing whatever can be done to rectify the position.
The broad approach to the problem is that in future it will be left to the Bankruptcy Court, in the exercise of its judicial power, to make orders of that nature. The Attorney-General has intimated in the course of his second-reading speed that he sees no practical difficulties arising from the procedure of leaving it to the court to make sequestration orders on debtors’ own petitions. But apparently that is not the only matter that in future will be left to the court and taken away from the registrars. As honorable senators will have noticed, section 24 of the Bankruptcy Act is to be repealed by this bill. That section confers specific powers upon registrars and deputy registrars, including power to hear debtors’ petitions, make sequestration orders thereon, or give leave to withdraw petitions. By this bill, that section will be repealed completely, and the whole of the sixteen duties hitherto performed by registrars will be denied to them, with the exception of one or two administrative duties that have been picked out of section 24 of the act and will be written into new sections pursuant to some of the clauses of the bill. But when we consider that duties of that nature formerly performed by the registrars will in future be performed by the court, we realize that a very heavy burden will be cast upon the court, which, I understand, is comprised of only one judge. In view of the fact that bankruptcies occur in each of the six States of the Commonwealth, one is justified in having some misgiving as to whether the court, if it remains constituted as at present, will be unduly burdened.
– State judges can act.
– State courts do function in bankruptcy. I recognize that that is a help. The powers formerly committed to registrars and deputy registrars that will be taken away from them by the bill include power to approve unopposed compositions and arrangements; power to grant orders of discharge in bankruptcy, if the applications are unopposed ; power to order payments from a bankrupt’s earnings after an order of sequestration has been made; power to make declarations regarding a secured creditor voting in respect of his whole debt, without allowing for the security that he holds against that debt; and power to give directions regarding the sale of property comprised in a security. If all those matters are to be dealt with by judges, an undue burden might be imposed upon them. I know that the court has power to delegate administrative duties to officers such as registrars and deputy registrars. Under the provisions of section 23, which is to be repealed, and, in effect, re-enacted, the court may be able to delegate purely administrative matters to the registrars and deputy registrars, but there will be a danger that again the High Court will hold that the registrars are, in effect, exercising a judicial power. That is a matter that will need to be watched constantly.
I should like the Attorney-General to tell us whether the Government believes that more federal judges will be required for this jurisdiction. I should like him also to indicate, either when he replies to the second-reading debate or in committee, the future course of events, once a debtor has filed his own petition in bankruptcy. It appears that the matter will have to come to the court for determination. Will it involve the appearance of the bankrupt? Will it involve hh representation by counsel? What will be the course of events from then to his public examination and his discharge? Will the court figure in all those matters ? [ can answer one of the questions myself by saying that I think the public examination of the bankrupt could be, and no doubt will be, performed by a registrar.
– The bill contemplates that.
– That is contemplated. Power to do that will be taken out of the existing section 24 of the act and written into either section 68 or section 69 of the act as amended. The court is given power to make public examinations, and the registrar will be bracketed with the court in that matter. I should like the Attorney-General to indicate the course of events that will ensue in future when a debtor files his own petition. I indicate to the Senate, as a matter of interest and relevancy, that the number of bankruptcies and proceedings under the Bankruptcy Act is increasing appreciably. I notice from the Commonwealth Year-Booh that, in 1951-52, 483 matters were dealt with under the act. I do not want any honorable senator to think that all of them were bankruptcies. They fall under four main heads; first, sequestration orders, or bankruptcies proper; secondly, compositions without bankruptcy; thirdly, deeds or arrangements under Part 11 of the Bankruptcy Act; and fourthly, deeds or arrangements under Part 12 of the act. In 1951-52, 483 such matters were dealt with, but in 1952-53 the number wa3 S06 - very nearly double the figure for 1951-52. So activity in the Bankruptcy Court is growing, not lessening. Thai must pose an administrative problem of some magnitude to all those concerned with that phase of activity.
The main clause of the bill - there are many consequential clauses - deals with the validation of bankruptcy orders that have been made since 1924 by registrars and deputy registrars. I sympathize greatly with those who were faced with the problem of drafting a bill to validate all that had gone on, and all of which had been declared by the High Court to be quite irregular. It was not at all an easy matter. I think great ingenuity was shown by having recourse to the plenary power granted by the Constitution over bankruptcy and insolvency, and avoiding the danger of the Parliament itself seeking directly to validate the acts of registrars and deputy registrars. If the latter course had been followed, and if the Parliament had said, “ We, in the exercise of our plenary power, or alleged plenary power, validate what the registrars and deputy registrars have purported to do “, the Parliament would have done exactly what the High Court said the registrars and deputy registrars had done. . We would, in effect, as a legislature, be seeking to exercise a judicial power. That trap, the draftsman has very carefully avoided. The effect of the validation is’ for us to regard the presentation of the petition as the key point, upon which the Parliament itself relies in order to declare a debtor to be bankrupt. It goes further and says that the order of sequestration that, in effect, the legislature makes, will operate from the same- date and in the same terms as the purported order of a registrar or a deputy registrar. I think that, so far, the Government and the draftsman have shown quite a deal of ingenuity in getting over the difficulty, by resisting the temptation to allow the Parliament itself to exercise judicial power. They have done exceedingly well in a difficult situation.
Clause 13, the particularly relevant clause, goes further. Of necessity, it seeks to validate all the acts that have happened in relation to a debtor and his estate from the time the bankruptcy purported to operate. It is desirable that all those things be validated, because, involved in them, are questions concerning property, such as transmission of title, discharge of bankruptcy and the rest. Some of the acts may be judicial, and some may be not. I think that the draftsman has done all that can be done to validate the various transactions which followed on the purported sequestration of the bankrupt’s estate. I certainly cannot at this stage, make any better suggestion than the one that has been incorporated in this bill by the draftsman to validate all that has gone on in the interim. It may be, because one cannot project one’s mind into all the facts and circumstances of some ten thousand or eleven thousand cases, that conceivably some extraordinary set of circumstances will again arise, necessitating further corrective legislation. If that turns out to be the case, the Opposition, which supports this measure, will support any further measure that might be required. I think it is only right that we should declare that at this stage, because a vast amount of public mischief can he caused if there is to he a searching for any possible loophole in this legislation in order to undo all that has been done in good faith down the years in relation to a vast number of estates and people. We accord to the measure our most complete support.
It is rather extraordinary that this decision was not reached sooner, but the interesting thing is that section 24 has been under review by the High Court itself on several occasions. I think I am correct in saying that, as far back as 1929, in another context, section 24 was declared invalid and was, in fact, rewritten in its present form. Later again, in the ‘thirties, I think section 24, the offending one on this occasion, successfully survived an attack in the High Court. So the section we are dealing with has had rather a chequered career. It has survived a lot of hurdles, and now the Government, very properly, takes the opportunity not only of correcting the provision whereby a registrar or a deputy registrar may make an order of sequestration, upon a debtor’s own petition, but also of correcting a whole lot of other matters, and of divesting registrars and deputy registrars of power that might be deemed to offend against the requirement that judicial power shall be exercised by courts and judges alone. The bill has our unqualified approval. We hope that it will effectuate its intention. I repeat, that if in any respect it fails to do so and further legislation is required, we shall be happy to support amending legislation.
There is only one matter to which I wish to revert. It is a perfectly human and personal aspect of the. subject. Davison, who became bankrupt on the registrar’s order in May, 1952, has successfully appealed to the High Court against prosecutions that were instituted against him for offences under the Bankruptcy Act. The High Court upheld his contention that he is not bankrupt, and therefore the prosecutions cannot proceed against him. The passage of this measure by the Senate will make Davison bankrupt. It is a question of whether Davison, who has produced this very important result, is to be allowed to enjoy the benefit of the judgment he has got in the High Court, and so be immune from further proceedings, or whether he will still have to undergo the ordeal of prosecution. I do not want to be dogmatic or legal about the matter, and I should like the Attorney-General to express an opinion on it, if he feels so disposed. I think that Davison should be allowed to enjoy the benefit of the order he has got in the High Court. It may well he that, if he were prosecuted again, he could submit a plea of autrefois acquit, and be acquitted. But putting that possibility to one side - if it does exist - T suggest to the Attorney-General that, in the circumstances, Davison should be allowed the full benefit of his successful appeal to the High Court, and that the Minister should exercise his power and influence in the matter, in order to ensure that the prosecution shall not be proceeded with. I suggest that that might be a proper attitude for the Government, through, the Minister, to adopt. As I have indicated, this is a personal aspect that has cropped up in connexion with this very important and far-reaching bill. Insofar as this matter disturbs my mind, I should rest easier if I knew that the man who has produced this very important and farreaching judgment were to be allowed the full benefit of the judgment that he has obtained in the High Court. The Opposition gives its cordial support to the bill.
– I acknowledge the gracious points in the interesting speech that has just been delivered by the Leader of the Opposition (.Senator McKenna), and I appreciate his submission in relation to Mr. Davison’s future. I support the bill, which contains amendments to the bankruptcy law, of great legal importance. I, also, congratulate the Attorney-General (Senator Spicer) on the thought and care that he has displayed in relation to this measure. I consider that the present is the appropriate time to repair the damage that has been done to the bankruptcy law by the High Court. In the Speech of His Excellency the Governor-General, reference was made to the comprehensive review of the bankruptcy law which was to take place. Although I support the bill I hope, in the course of this speech, to make some suggestions, not for amendments to the bill before the chamber, but for amendments to further bankruptcy legislation. I hope that the AttorneyGeneral will consider these suggestions when he is dealing with the comprehensive amendments to the bankruptcy law that have been foreshadowed.
Bankruptcy law is of very great importance to the growing commercial com munity throughout Australia. Every community must have a sound bankruptcy law because that law restarts people in commercial ventures after their previous ventures have failed. Bankruptcy law may also be described as a sanction because it provides for the punishment of people who have been commercially immoral in their dealings. So it is of’ great importance that this National Parliament should deal -with this matter. As the Leader of the Opposition has stated, the High Court has held a very important section of the Bankruptcy Act to be unconstitutional. That section of the act has been availed of by over. 10,000 people in the last quarter of a century. It may interest the Senate to know that there ure two main ways in which a debtor’s estate can be sequestrated. One way is by the presentation to the Bankruptcy Court of a petition by the debtor himself ; the other way is’ by presentation of a petition by a creditor. In the financial year 1929-30, just after the commencement of the Bank ruptcy Act 1929, 1,425 petitions for sequestration were presented either by debtors or creditors. In the year 1952-53. the number had dropped to “636. It will therefore be realized that these petitions are of some consequence. In the year ended the 31st July, 1953, 45 sequestration orders were made on debtors’ petitions and 30 on creditors’ petitions in South Australia. In other words, in that State, more sequestration orders are made on debtors’ petitions than on creditors’ petitions. Honorable senators will realize that, . although we are going through a period of prosperity, the Bankruptcy Act is being availed of quite considerably throughout Australia.
I now want to make a suggestion concerning a further amendment of this law which may be made at the appropriate time. As the Leader of the Opposition has said, it will be necessary, in future, for a bankruptcy court to deal with all debtors’ petitions in the manner in which they have been dealt with during the last twelve months, since the case of Davison was first taken to the High Court. Prior to the case of Davison coming before any court, it was the practice for the debtor to forward a petition to a registrar in bankruptcy without being present in person. Rule No. 3 in the first schedule to the Bankruptcy Act sets out the form that debtors’ petitions shall take as follows : -
The petitioner’s signature on the form had to be witnessed by a solicitor, registrar in bankruptcy, official receiver or a commissioner for affidavits. The form was then transmitted by post or otherwise to the registrar. Without any judicial inquiry and without even seeing the debtor, the registrar thereupon made a sequestration order. That procedure continued for approximately 25 years. It was of great importance because there were possibly only half a dozen judges in bankruptcy in the whole community. They sat in the capital cities whilst debtors resided throughout the length and breadth of this great continent. It was of great importance that that facility was available to the 10,000 people who used it during the last 25 years. I understand that that procedure will now cease to operate and that it will be necessary for debtors to proceed to the capital cities or wherever the learned judges may be sitting in order to be seen by a learned judge.
– That would not be necessary in every case.
– I am very grateful for that assurance from the AttorneyGeneral. I had considered that the new procedure would cause a good deal of bother and expense to debtors.
The amending bill is otherwise very well drawn. I consider that the whole matter of validation has been adequately dealt with. I agree with the Leader of the Opposition that the validation of all the acts that have flowed from previous sequestration orders is most important indeed. It is true that certain powers once exercisable by registrars under section 24 of the Act are being removed, but I agree with the Leader of the Opposition that possibly those powers could be readily delegated by the existing judges of the court. I am glad to have the assurance that debtors will not have to undertake any more travelling to reach the centres of activity of the Bankruptcy Court than they have to undertake now. It is of great importance that a debtor who is unable to pay his debts when they become due, should have quick and cheap recourse to the Bankruptcy Court. That ready access has been preserved in this measure, andI commend the AttorneyGeneral upon that feature of this bill. I support the measure.
– I shall intrude but briefly into this debate. I find in the decision of the High Court to which this bill relates a most curious example of the guardianship of the important principle that judicial power should be exercised only by judges. But, having said that, I find that the consequences of that decision run quite counter to my own desires. In relation to the purely administrative matters associated with courts, great expense can be saved to litigants by delegating powers to officers of a court. This obviates the necessity for a litigant to appear before the court with counsel, witnesses and so on. But I never thought for one moment that it would be necessary, as a consequence of the High Court’s decision, for debtors hereafter to appear in person. I imagine that the procedure that will be adopted in future will be parallel to that followed in our probate courts where a registrar initials the papers, sends them through to the judges’ chambers, and the judge’s signature goes on the order of sequestration. Presumably the judge need not be a federal judge in bankruptcy, but may be a State Supreme Court judge in whom the jurisdiction is invested. In future, therefore, so far as I am concerned, the practical consequences of the High Court’s decision will be insignificant.
As to the validation of the past orders, I only wish to say that I, too, agree, without pretending to understand the matter fully, that the draftsman has shown great ingenuity in drawing up the provision whereby these bankruptcies shall have taken place, as I understand it, not on a previous adjudication, but by virtue of a previous simple act of presentation of a petition. But to me these are matters of no importance at the moment. “What I do wish to say is how much I appreciate the information in the second-reading speech of the Attorney-General (Senator Spicer) that the whole of the Bankruptcy Act is under review. ‘ It is one of the acts that were foisted on the legal profession very soon after I joined it. It is an excellent example of the confused administration that is always required by Canberra. The stage has now been reached in Tasmania where nobody will accept the responsibility of a trustee in bankruptcy. The remuneration is so exiguous, and the requirements of the Administration so pettifogging, that no reputable accountant in Tasmania will undertake the responsibility of becoming registered as a trustee in bankruptcy. Anybody who knows the great service that can be rendered by a competent accountant, free from the Official Receiver’s office, will realize the degree to which this administration has become clogged up. The two parts of the Bankruptcy Act which are chiefly availed of to the satisfaction of debtors and creditors, Parts 11 and 12, are so rigorous that they, too, are becoming impractical. We find a debt collector making arrangements with every single creditor to collect from a debtor. He says to the debtor, “ You pay so much a week, and I will distribute it “. With the very doubtful exemption thereby gained from infringement of the Bankruptcy Act, a service is given to impecunious people who find Parts 11 and 12 of the act unacceptable.
I am delighted to have the AttorneyGeneral’s assurance that a general review of the Bankruptcy Act is now in progress. May I suggest that, at the appropriate occasion, the services of members of the legal profession, both inside and outside the Parliament, be availed of in the formulation of the new bill. That. could be done by appointing a committee to review the bill before its presentation to the Parliament, or, alternatively, the bill could be presented and then referred for consideration to members of the Parliament who are especially interested in it because of their practice in this jurisdiction. The measure could also be referred to the law societies of the various States. I only hope that all available assistance from the legal profession, both inside and outside the Parliament, will be availed of in the preparation of the bill, so that all the ingenuity that Canberra will inject into the new measure may be tempered down to make it workable and practical.
– in reply - I thank the Leader of the Opposition (Senator McKenna) and my colleagues, Senator Laught and Senator Wright for the reception they have given to this bill, the formulation of which has been a difficult task. I assure the Leader of the Opposition that I do not expect any practical difficulties to arise in the performance by the court of the judicial functions formerly carried out by the registrar. I do not think that it will be necessary to appoint additional judges at this stage. At first sight, one might think this legislation could impose upon the judges a very heavy burden. For example, the mere fact, as I stated in my second-reading speech, that over a period of years there have been some 11,000 debtors’ petitions presented, might suggest that a judge will be concerned with a large number of those petitions. However, I am informed that, in fact, even that figure works out at an average of less than two debtors’ petitions each working day over the whole period. The procedure which will be followed, I imagine, in relation to those petitions will not differ very greatly from that which has been adopted in the case of registrars. It is not for me, of course, to say how a judge of any court will perform a judicial function which is vested in him, but I see no difficulty - and, in fact, I think there has been no difficulty in the past - in a debtor’s petition being received in the court and presented to the registrar, who will go through the papers and satisfy himself that they are in order.
If they are in order, he will present that petition to the judge, who then will be in a position to exercise the judicial function of making up his mind, having regard to the material before him, whether the debtor has complied with the law and whether his estate should be sequestrated. That involves the judge, in effect, in writing on the papers something in the nature of a direction for a sequestration order, as sought. Then the registrar will proceed to prepare the formal document, which will issue from the court as a court order. That will involve some extra work for the judges, but not, I suggest, a great deal of additional work.
From then onward, the sequestration will proceed in very much the same way as it proceeded in the past. The bankrupt will have to attend the office of the official receiver and present a statement of his affairs, setting out his assets and liabilities. The official receiver will convene a. meeting of the creditors, arrange for the public examination of the bankrupt, and proceed to realize the assets. If one of those intervening matters will place any added burden on the court. When it comes to the matter of discharge, I imagine that the same kind of procedure before the judge will be followed, unless there are difficulties, as was followed on the presentation of the petition. The fact is that that procedure has been followed for approximately the last sixteen months. Ever since Davison’s case first become a pending case, the subject-matter of debtor’s petitions has been dealt with by the court, and no particular difficulty has been found in coping with the volume of work that has come before it.
It may be, as I have indicated, that some judges will require the attendance of petitioning debtors before them. As a matter of fact, it has been suggested to me that certain judges in Tasmania already adopt that course. If they do that, they will merely continue the process that they have followed to date. It is not for me to say how a judge will perform a judicial function of this kind, but I can see no difficulty whatever in the performance of the function in the way I have indicated.
I was glad to have, from the Leader of the Opposition, an assurance that if any further amendments of the legislation were found to be necessary, provided that they met with his approval, he would extend his support to them. I wish to say that, if we discover that any further amendments are necessary, we shall have no hesitation in bringing them before the Parliament. This is a difficult problem. We have endeavoured to envisage all the possibilities and to meet them, but with some 10,000 or 11,000 petitions to be dealt with in. this way, and with all the multifarious transactions that may take place in the sequestration of those estates, most curious sets of circumstances could arise which might make it necessary to enact even more explicit legislation than that which is before the Senate to-day. Perhaps I can indicate my own mind on this subject by saying that, in fact, only to-day a suggestion has been brought to my notice which I have not had time to investigate fully. I should like the judge of the court himself to see it. If it were considered, that that suggestion would improve the legislation, we would have it introduced in the House of Representatives, in order to make the legislation as complete as we can possibly make it.
With regard to the fate of Mr. Davison, I am not going to be tempted into expressing any view. I fully appreciate what the Leader of the Opposition had to say on that subject. My difficulty about it is that, if I recall the act aright, it is the function of the court to commence the proceedings whereby a man may be charged with some of the offences referred to. I should not like to express an opinion concerning the view that the court might take, or to pre-judge the position, in any way, after this legislation is passed. As I say, I appreciate fully the force of what the Leader of the Opposition has said, and I have no doubt that the considerations he put forward are also considerations which would enter the mind of any person who had to deal with the position of Mr. Davison in the situation which is created by this legislation.
I have already indicated that Senator Laught’s fears that debtors might be called from all sorts of remote places in the country to present their petitions are not, in my opinion, real. I thank him for his contribution to the debate, and I also thank Senator Wright. As far as the further legislation is concerned, I shall see that steps are taken to bring it into being as soon as we possibly can do so.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 2nd November (vide page 1164), on motion by Senator McLeay -
That the bill be now read a second time.
Senator COURTICE (Queensland) 1 4.19]. - The purpose of this bill is to amend the Customs Act 1901. It is a simple measure, and the Opposition will support it. The bill is designed to amend the principal act in three particulars, and they are purely of an administrative nature. Section 37 of the act provides that customs entries shall be made by the delivery of the entry by the owner to the Collector of Customs, and on delivery of the entry, the goods specified therein shall be deemed to be entered. It may happen that after the making of an entry for home consumption in terms of section 37, but before the payment of duty, there is an alteration in the Customs Tariff. In such cases, it has been the practice for some importers to prepare a new entry, and pay duty on the goods at the lower rate. The amendment provides that any such new entry may be made only with the consent of the Collector of Customs.
The second amendment applies to section 92 of the principal act. Under this amendment, licensees of customs warehouses will be required to provide reasonable accommodation for the use of the customs officers employed at the warehouses. Owners of wharfs already have to provide such accommodation. The other amendment applies to warrants for. search. Customs officers have to have a warrant before they may search premises. At present, the warrants are valid only for three months. Then a new warrant has to be taken out. That involves a considerable amount of unnecessary work. The amendment in the bill provides for an extension of that period from three months to six months. There is nothing contentious in the bill, which is designed only to streamline administration, and the Opposition will not oppose its passage.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 2nd November (vide page 1165), on motion by Senator McLEAY -
That the bill bc now read a second time.
– The Opposition supports the bill, which is to authorize the payment of 6d. per lb. on continuous filament acetate rayon yarn produced in Australia. The yarn is used for weaving and for the manufacture of piece goods, ribbons and apparel, and is used either alone, or with a mixture of other fibres. The Opposition knows that the Tariff Board has inquired into the operations of the rayon industry, and has made a recommendation to which the Government proposes to give effect. Over the course of the years, the Parliament has come to accept the Tariff Board’s recommendations, because honorable senators have found that the board is an expert body and, without prejudice, arrives at findings that are fair to all concerned. Its advice to the Government is generally acceptable. In this instance, the Opposition considers that the recommendations of the Tariff Board for a bounty might have been more generous. The Opposition has only one reservation in accepting the Government’s proposal. Honorable senators on the Opposition side had hoped that the industry might have been given more than the recommended assistance.
I suggest that the Senate should consider the operations of the rayon industry before passing this bill, because it is a fundamental industry that has developed in Australia principally since World War II. Before the war, most of Australia’s supplies of rayon yarn came from Great Britain. The Japanese were the strongest competitors in the manufacture of textile goods, but Great Britain was supplying most of the raw rayon that was used in Australia. Rayon is also used in the manufacture of tyres, and during the war, Australia had great difficulty in obtaining sufficient rayon for the production of all the rubber tyres that were needed. Rayon became a vital war material, and was given a high priority at one stage of the war because the production of tyres was handicapped, principally because of a shortage of rayon. When the war ended, officers connected with defence matters wanted to avoid a repetition of the shortage of rayon that occurred during’ the war period, because, with the development of modern transport, the demand for pneumatic tyres has grown considerably. We do not want be in a position where we shall not be able to get a vital commodity that is required for the use of the armed forces and transport in Australia.
Efforts were made after the war to induce manufacturers of the commodity to come to Australia. During the war, we found that some of our textile manufacturers had prepared plans for expansion. They were encouraged by the then government to build new factories, import looms and expand their activities as much as possible in the field of rayon weaving. But soon after the war ended, it became very difficult to obtain adequate supplies of rayon yarn from Great Britain and the United States of America. First, dollar restrictions prevented manufacturers from obtaining yarn from the United States, and subsequently, import restrictions hindered the flow of yarn from Great Britain. The allocations granted to our manufacturers were so small, and deliveries were so intermittent, that it was impossible for them to maintain continuous production or to plan production over a number of years. Another difficulty was that British manufacturers of finished rayon goods were able to buy raw yarn from British yarn producers at prices sometimes as much as ls. 6d. a lb. below the prices charged to Australian weavers. In addition, Australian firms had to pay freight charges on the yarn So Australian textile manufacturers were placed in a serious position in the immediate post-war years.
Consequently, the Government made every endeavour to attract to Australia producers of raw rayon yarn. I recall that Sir John Jensen, who was then the Secretary of the Department of Munitions, made strenuous efforts to bring yarn manufacturers to Australia. He believed that, in view of our experience during the war, Australia should never again have to rely on imports of such a vital material. He played a great part in inducing the Courtauld organization to come to Australia. After a great deal of negotiation with various Australian authorities, Courtaulds decided to establish a plant in New South Wales, at a place called Tomago, just outside Newcastle. In 1949, an Australian company was formed to produce raw rayon yarn. It is true that something like 40 per cent, of the capital of the company was subscribed by British investors, but the majority was subscribed by Australians. The company is an Australian company, but its affiliation with the British company, which is one of the biggest raw rayon yarn producers in the world, is of great value, because the parent company supplies information about the latest technical developments to the Australian company. “We were thus fortunate in being able eventually to induce Courtaulds to come to Australia, bringing with them their know-how and technicians, and to form an Australian company for the production of raw rayon yarn in Australia. The project was launched in 1949. It was a very big project. It involved the building of a large plant outside Newcastle, and the construction of what may be regarded as a village. In those days, the housing shortage was so acute that it was necessary for the Australian company to build houses to accommodate the technicians brought out from England. To-day, there are 200 or 300 new houses round the plant. Modern machinery was brought to Australia, and the equipment of the factory is the most modern of its type.
In 1949, when the Australian economy was reasonably stable, it was estimated that the cost of works and buildings would be £2,400,000. But between 1949 and April of last year, when the plant first went into production, there was disastrous inflation in Australia. Wages rose by almost 100 per cent. In the evidence tendered to the Tariff Board, it was stated that the cost of steel, coal and chemicals rose by 42 per cent So the company, instead of spending £2,400,000 on the venture, had to spend over £4,000,000. In considering whether it would be worth while to start a venture of this kind in Australia, wages and costs of raw materials were examined closely. As a result of that examination, it was felt that, with modern plant and under existing conditions, it would be possible to produce raw rayon yarn in Australia at world parity prices. On that basis, the company was prepared to go into production without assistance from the Government. However, during the three or four years it has taken to prepare the plant, there has been a disastrous degree of inflation in this country, and costs have risen so much that the company finds now that it is unable to supply yarn to Australian knitters and weavers at prices comparable with world prices. So it has asked for tariff protection.
I think all fair-minded people who examine the facts of this matter will agree that that is not the fault of the company. It has a very efficient staff and modern equipment, but it is placed at a disadvantage compared with overseas competitors. In Great Britain, where there is a 44-hour working week, the male rate of pay is £8 17s. 7d. a week, compared with £15 4s. 2d. in Australia, where there is a 40-hour working week. The female rate of pay in’ Great Britain is £6 7s. lid. a week, as against £11 ls. 4d. in Australia. In those circumstances, I think all honorable senators will agree that assistance should be given to this industry, if only’ to maintain the decent standard of living enjoyed by the people it employs. But something else must be taken into consideration. We must remember that Australia is passing through a period of great expansion. We have set out to attract to this country a vast number of people from other parts of the world. I believe that both this Government and its predecessor did, and are doing, a very good job to attract immigrants to Australia and assimilate them into the community. But we cannot continue to take immigrants unless we expand our industries. That requires capital from overseas with which to. buy new plant and equipment. We must look to investors in Great Britain and the United States of America to invest in Australian industries and help us, not only to become self-sufficient in relation to the things that we need for the maintenance of our economy, but also to provide employment for the many people who are coming to Australia. So, whatever government is in power, it must do its best to attract overseas capital to Australia and establish new industries. If it does attract capital to Australia, it must play fair with the investors. It must assure them of a reasonable opportunity to get a reasonable return from their capital. I think the capital of the Courtauld company now is about £8,000,000. That is a very large amount of capital to invest in a new project, and I think the Government has a duty to the people who have invested the capital to ensure that the company will be given a chance to compete on equal terms with its competitors and find a niche in our economy.
The company asked for a tariff of 25 per cent, on imported raw rayon yarn, but the Tariff Board considered that it would be better if the assistance took the form of a bounty rather than tariff protection. I think there was a lot of wisdom in that suggestion, because there are two kinds of raw rayon yarn, and the imposition of a tariff might cause all kinds of anomalies. I believe the Tariff Board’s suggestion of a bounty is a good one. We must accept the umpire’s verdict that the payment of a bounty of 6d. per lb. on continuous filament acetate rayon yarn produced in Australia will provide sufficient protection for the industry at present, but I do not think that the proposed annual maximum amount of bounty will put the industry on its feet. The company’s modern, highly mechanized factory is operated by workers who, I believe, are as skilled as those engaged in any other part of the world. Therefore, I think that eventually the company will be able to compete successfully with the products of other countries. At present, the Australian industry is confronted with difficulties that were not envisaged three or four years ago. I urge the Government to indicate to the industry, which was established in this country at a time when we badly needed it, and which will be of great benefit to us not only in peacetime, but also during the period of any future war, that although this bounty has been granted in order to assist the industry to overcome its present difficulties, if it is found, subsequently, that, it is insufficient, the Government will ask the Tariff Bord to reconsider its case.
I have inspected the huge plant that lias been established by Courtaulds (Australia) Limited at Tomago, in New South Wales, and the splendid housing settlement that has been established by the company, whose employees are very contented. They are well housed, and enjoy first-class Australian working conditions’. I hope that the industry will become firmly established in the Australian economy. The Opposition will facilitate the passage of this measure, and 1. hope the Government will inform the company that it is sympathetic towards its expansion and continued progress.
– The Senate is indebted to Senator Arnold for his analysis of the provisions of the bill, and I unhesitatingly join with him in wishing this new Australian industry good luck and prosperity. Both as members of Parliament, and citizens, I think we must accept recommendations of the Tariff Board in the way that we accept an umpire’s verdict. Despite the good reputation enjoyed by Courtaulds (Australia) Limited, and its ramifications, the Tariff Board has reported that the company’s application, which was lodged during the early stages of the industry, was for overgenerous treatment. In effect, the company asked for more than a fair deal, having regard to all the circumstances. The Tariff Board, which was confronted with a very difficult task, furnished four reports that were of tremendous importance to the textile industry in Australia. To a degree, they were inter-related. After inquiry, the hoard furnished a report on the production of acetate flake, which is the basic raw material used in the manufacture of cord. It then directed its attention to the manufacture of yarn from the cord, and considered, also, the manufacture of yarn from viscose. The board also considered applications that had been made for assistance in relation to the manufacture of cotton-base cord and fabric. One of the difficulties inherent in the matter is that yarn made from acetate flake is, to a large extent, interchangeable with viscose yarn. Therefore;, the provision of over-much protection for acetate yarn might not do the company much good. It could increase the demand for viscose yarn to the detriment of the manufacturers of acetate yarn.
The Tariff Board also took into account the fact that the imposition of a duty on acetate yarn would automatically give imported materials made from such yarn an advantage over materials manufactured in Australia from that yarn. To carry the matter a stage further, the disadvantage that would be created for Australian manufactured fabrics or piecegoods would follow through to garments made from that yarn. The hoard, therefore, recommended the payment of a bounty on the production of continuous filament acetate rayon yarn. Although the chairman of the company, Mr. Vicars expressed the opinion that the Tariff Board might have been more generous in the matter, and those sentiments were echoed b> Senator Arnold. As I have already said, we must accept the board’s recommendation, which was based on a careful and conscientious inquiry, in ‘the nature of our umpire’s decision. The Government wishes the industry success, and I am sure it will be successful, because it has bridged a big gap that existed in our manufacturing industries. To-day, th»i textile industry in Australia is making an important contribution to secondary manufacture.
The bill provides for the payment of a bounty of 6d. per lb. on continuous filament acetate rayon yarn produced in
Australia, for a period of three years from the 1st November, 1954. Therefore, in the normal course of events, this subject will be again referred to the Tariff Board for review in about two years’ time. We must consider this matter not only in the light of the Tariff Board’s recommendation, but also from the point of view of our obligations in the international sphere. It will be recalled that the Ottawa Agreement provided that we should not impose a higher protective duty than that recommended by the Tariff Board. Although the Ottawa Agreement referred specifically to the rate of duty, as distinct from bounty, I do not think that we should take advantage of that technicality. The four reports of the Tariff Board to which I have referred make very interesting reading. In view of the importanceof the textile industry in Australia, I commend them to honorable senators. They refer to the production of flake from imported cellulose, the conversion offlake into yarn, the conversion of viscose into yarn, the making of fabric from yarn, and the making of fabric from imported raw cotton. Taken together, these reports tell a fascinating story of Australia’s industrial development.
Question resolved in the affirmative.
Bill read a second time.
– The Tariff Board has recommended the payment of a bounty of 6d. per lb. on continuous filament acetate rayon yarn produced in Australia, and that the maximum amount of bounty that may be payable in a year shall be £100.000. At first sight, that provision appears to be fairly liberal. However,I point out that. Courtaulds (Australia) Limited has made a capital investment of about £8,000,000. In its first year of operation, the company will probably manufacture about 3,000,000 lb. of acetate yarn, and it should not take the company very long, thereafter, to increase its production of such yarn to about 4,000,000 lb. a year, the approximate quantity to which the maximum bounty of £100,000 a year would apply, on thebasis of 6d. per lb. I should like the Minister for National Development (Senator Spooner) to indicate whether, in the event of the company being unable to earn a net profit of 10 per cent., and its production of yarn rising to mors than 4,000,000 lb. a year, the Government would consider increasing the maximum yearly amount of bounty payable to more than £100,000.
– No simple answer can be given to the question raised by the honorable senator. It is true, as Senator Arnold has pointed out, that Courtaulds (Australia) Limited has made a capital investment of about £8,000,000. However, we must bear in mind the fact that a portion of that capital investment is used in connexion with activities other than the production of acetate yarn, such as the production of yarn from viscose. One of the Tariff Board reports recommends the provision of protection in relation to that yarn also. The company is also manufacturing the fabric for tyres from that viscose yarn. Another report of the Tariff Board recommends that the industry should receive protection for that sphere of its activities. Again, it must be remembered that in a manufacturing concern of this size the great object is an increased turnover. If the company, as a result of the payment of this bounty, is able to attain its objective of selling about 10 per cent. of total Australian consumption, many of its other problems will be surmounted because a high rate of turnover can cover a multitude of costs and would put the industry in a more advantageous position than it has been whilst struggling for business in the early stages of its development.
. - The Minister for National Development has done very well, but he has, not answered my question. I appreciate that as turnover is increased, unit costs are reduced and that an increased turnover in this industry may ultimately justify the removal of the bounty. It was that fact that I had in mind when I asked my question. The industry may reach the stage at which, with an increasing turnover, it could be losing money for a period following the stage at which it received the maximum bounty of £100,000. I should like the industry to increase its turnover to the stage at which it would not need the bounty. But, I think that, having gone this far, the Government might go further and tell those engaged in the industry that if its production passes the point at which £100,000 is payable by way of subsidy and it needs another £20,000 the Government would be prepared to pay that additional amount.
.- The sum of £20,000 would not be great in relation to the shareholders’ funds that are involved in this industry. [ cannot give the answer that the honorable senator seeks. As much as we all wish success for the venture, I do not think that any government could adopt a Tariff Board recommendation with the proviso that, if the recommended assistance were not sufficient, the Government would give more assistance than the Tariff Board recommended. This and other companies can always rely on careful examination of their position by the Tariff Board. I do not think that a government could do more than give an assurance that if the circumstances so warrant, it would facilitate arrangements for the Tariff Board to hold a further inquiry and make a further recommendation.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Debate adjourned from 2nd November (vide page 1166), on motion by Senator MCLEAY -
That the bill be now read a second time.
– I have pleasure in saying that the Opposition has found nothing in this bill to oppose. As a matter of fact, the Opposition is grateful that the Government has decided that the flax industry must receive support. The bill proposes to pay a bounty on scutched flax fibre produced from flax grown in Australia.
The Minister for Shipping and Transport (Senator McLeay) has stated that the bounty will operate from the 1st November, 1954, this being the date on which the flax Commission, which was established under the Flax Industry Act 1953, took over the direction and control of Commonwealth flax undertaking. The Minister also said that during the year 1953 a sharp fall had occurred in the overseas price for flax fibre and that the users of Australian flax fibre were thus placed in a difficult position in meeting competition from overseas. The Opposition is at a loss t’-. know what occurred that made the deferment of the establishment of the Flax Commission necessary. One would imagine from the actions of the Government that something had occurred which had lessened the necessity for the establishment of the Flax Commission. But all the evidence that has been given to the Tariff Board seems to indicate that the establishment of the commission has become more necessary than ever because of the increase in, production costs which have risen above world parity prices for flax. It seemed urgently necessary that the commission should be established in 1953 in order to give the industry that guidance and assistance which could be so valuable at a time when inflation was forcing Australian costs of production above world parity.
The overseas parity price for flax was £364 a ton in 1952. “lt dropped to £311 a ton on the 5th February, 1953. The period during which the appointment of the commission was deferred was a very critical period in the history of this industry which was established by a Labour government. It was realized that its establishment would be expensive and that it would be some time before the industry could operate economically. In 1940 great differences of opinion existed on whether the Government should entertain this venture but it became necessary to proceed with it in order to obtain supplies of flax for military and civil purposes. Lately, this industry, which was established in a time of war has been carrying on with difficulty because of i.ta early setbacks. Australians were not experienced in the growing of flax when we commenced this venture. Cutworms and rust affected the crops hut scientific research has gradually removed those pests. Soil deficiencies also had to be overcome. But because of economic conditions the industry is now facing as serious a challenge as it did in its early stages. I request the Minister for Shipping and Transport to explain why the appointment of the commission was deferred. The Auditor-General ha3 referred to this matter in the following terms : -
Under the Flax Industry Act 1953 (commenced 13tU May, 1053) provision was made for the establishment of a Flax Commission to maintain and develop the flax industry in Australia. Due to uncertainty regarding the future of this industry, the Commission had not been established at 30th June, 1954. Seven mills operated during the year.
The sum lost in 1952-53 was £146,829. The accumulated loss to the Commonwealth from the inception of the scheme in the financial year i940-41 to the 30th June, 1954, totalled £694,055. In view of these audited figures I should have imagined that the Government would have been eager to appoint the commission in order to assist the industry and protect itself. I think the Minister should provide a more adequate explanation of the Government’s deferment of the appointment of the commission than, ho has provided in his second-reading speech.
The proposed bounty is very nearly in accordance with the recommendations of the Tariff Board. In the course of his second-reading speech the Minister said that a bounty of £35 a ton on flax fibre would be appropriate at a parity price level of about £330 c.i.f.e. a ton for standard grade B fibre. As I have mentioned, world parity price levels have fluctuated from £364 to £311 a ton. The Government has been very wise in allowing some sort of tolerance for the adjustment of this rate in accordance with the world parity price level. But the Opposition would like to receive an assurance that the Government will take steps to ensure the economic operation of the industry so that the people of Australia will not, have to bear the burden of an inefficient industry. Whilst the Opposition desires to have the bounty paid to the industry, it also wants the highest degree of efficiency in the industry so that its costs will remain, at the lowest possible level. It should be our objective to enable the industry to stand on its own feet so that the bounty can eventually be removed. Further assistance to the industry should be considered by the Government in the light of its efficiency.
The provision- that the bounty shall be reviewed in two years is reasonable. Because the industry exists only in three States it is necessary for the Government to give some consideration to the disabilities of certain States. In 1953, Victoria sowed 9,581 acres of flax which was 61.7 per cent, of the total acreage sown throughout the Commonwealth. The yield was 13,508 tons of flax straw, or 60.5 per cent, of the total Australian yield. In the same year, South Australia planted 2,857 acres or 18.3 per cent, of the total acreage, and produced 4,368 tons, or 19.5 per cent, of the total yield. Western Australia sowed 3,100 acres or 20 per cent, of the total, and produced 4,470 tons or 20 per cent, of the total. Western Australian is at a disadvantage because of its distance from the major secondary industries of the Commonwealth which require flax for spinning into yarn and for the manufacture of articles. For that reason Western Australia should have special consideration, and I believe that the Government appreciates that need. Flax production in Western Australia is carried out by a co-operative firm and production costs indicate that the industry there is as efficient as it is in the Eastern States. It is interesting to note the evidence given at the Tariff Board’s hearing by Mr. E. L. Cummins, manager of the Blackwood Flax Co-operative Company Limited, of Boyup Brook, of Western Australia, part of which has been summarized in the report as follows: -
In 1953 the spinning industry, which is conducted in the Eastern States, imported flax fibre at prices considerably under those which the Flax Production Committee and the Blackwood Flax Co-operative Company Limited- had fixed, namely, £398 per ton “B” grade fibre basis.
That appears to be the economic price, without government assistance. The summary continues -
The spinners advised the Committee and the Company that the price of Australian fibre must be” adjusted to world parity.
That could be done, of course, either by reducing production costs or by selling at a loss. Clearly there was a need for the Government to intervene and support the industry. Mr. Cummins continued -
This was done and resulted in the Australian price of” B “ grade fibre being reduced by £107 per ton in August, 1953. In November, 1953, overseas prices rose sufficiently to enable prices in Australia to be increased to £329 per ton “ B “ grade fibre basis. To enable the company to continue its operations a price of £398 per ton at least is required.
Mr. Cummins then went on to request that a duty of 22½ per cent. ad valorem be imposed on flax fibre, or that the industry be protected to the same extent by means of a bounty. After conducting a full enquiry, the Tariff Board decided that assistance should be given by way of a bounty, and, looking at the Australian economy generally, I believe that decision tobe wise. In this legislation, the Government is dicharging its responsibility to implement the Tariff Board’s recommendation. Nevertheless, I believe that price fluctuations should be carefully watched. Although the flax market has been rather jittery for the last couple of years, I should like to know how the adjustment of the home production selling price in accordance with world parity, is to be applied. Mr. W. H. Dolling, the representative of the Flax Production Committee, made the following submission to the Tariff Board : - (16.) The price of line fibre is subject to many and violent fluctuations. In time of war and international tension the price of flax is high. At the present time the price is relatively low, and it would appear that the industry cannot be carried on at a profit without some protection. The current cost of production of flax fibre is £384 per ton, and the present Australian price for Grade “ B “ fibre, based on world parity is £320 per ton. Asthe fibre produced averages Grade” B “ the excess of costs over selling price is £55 per ton.
So, Mr. Dolling’s figures suggested a bounty £20 higher than that recommended by the Tariff Board. If his evidence is correct, the Tariff Board has not been over-generous, and the industry will have to work efficiently if it is to succeed, even with the assistance of the bounty. The representative of the Victorian Flax Growers Association, Mr. W. F. A. B. Weigall submitted-
Statements are submitted which show -
Then the evidence goes on to show that, even with the payment of a bounty, areas used for the production of flax give a very much lower return than can be obtained from either of those two industries. I believe that there is a substantial area that could be devoted to flaxgrowing without encroaching upon land; used either for dairying or lamb and wool production. There is only one way in which flax production can be assisted by the Government, apart from the payment of a bounty, and that is by ensuring that the industry has the best technical advice available, and that its machinery for flax treatment is up to date. There is one other matter to which I should like to direct the attention of the Senate. The Minister, inhis secondreading speech, said that there was no need for him to stress - and by thatI assume he meant that he should stress - the importance from a defence point of view of ensuring an adequate supply of flax fibre and of maintaining processing facilities. At one time, the United States and Soviet Russia supplied a substantial proportion of the flax fibre used throughout the world, although small quantities came also from Belgium and the Netherlands. To-day, little flax is reaching the world’s markets from the United States, Soviet Russia or other sources, and we can virtually abandon any idea of obtaining supplies from those countries in a time of war. Flax is being stock-piled, and very little is available for us to import. Therefore I believe the bill to be a worthy measure. Nevertheless, I think that the Government owes us an explanation of the delay of twelve months in establishing the Flax Commission when we were all agreed that the industry should be assisted.
– It is with great pleasure that I rise to speak on this bill as I reside in an area where a very large flax mill has recently been erected. I refer to the Mount Gambier district in the southeast of South Australia. According to evidence given to the Tariff Board, the cost of the mill was £134,000. The new Flax Commission will have assets, including that mill and plant and machinery, valued at over £700,000. The flax industry as I see it is of great importance to the Commonwealth. Senator Cooke referred to the importance of flax production as a defence industry. I agree entirely with his remarks on that subject. At this stage, it may perhaps be opportune for me to comment on an important event that occurred on the 1st November. I refer to the inauguration of the Flax Commission. It was my privilege to be present at a short ceremony last Thursday in this building when the Minister for Shipping and Transport (Senator McLeay), acting for the Minister for Commerce and Agriculture (Mr. McEwen), formally welcomed members of the commission to their duties. I predict that the flax industry will be greatly assisted by the commission. It is important that this measure should become law without delay. Senator Cooke, like all of us, was somewhat concerned because the delay in the commencement, of the operations of the commission was somewhat greater than we expected when we considered the Flax Industry Bill last year. But the Minister has told us in his secondreading speech that the Government thoughtit best to defer the establishment of the commission pending an examination of the industry by the Tariff Board. The board’s most comprehensive report has now been tabled, and on the 1st November the commission commenced its operations. I believe that the Government’3 reason for proceeding cautiously with this industry is satisfactory. It was wise to avoid building up the hopes of primary producers unnecessarily.
I agree also with Senator Cooke that flax production methods should be up to date and as scientific as possible. I pay a tribute to the work that has been done on flax by the Commonwealth
Scientific and Industrial Research Organization since 1937, through its plant fibre section and through other sections which deal with the technical side of flax production. As I have stated, the newest flax mill has been built in South Australia. Senator Cooke rightly pointed out that the economic success of the flax industry is wrapped up with the volume of production of this important mill. The rhythm of the mill is based on the maintenance of adequate supplies of raw. materials. The retting process is carried out by the use of hot “water, and firing the boilers in order to heat the water to the desired temperature is a very expensive process. In order that the mill may operate on an economically sound basis, there must be regular and adequate supplies of raw materials. As I see it, scientific methods of growing flax, pest extermination, and efficient harvesting methods, are of tremendous importance if this mill, which will probably cost £150,000 when it is completed, is to operate successfully.
I compliment the Government on following the report which was so carefully prepared by the Tariff Board. In common with Senator Cooke, I hope that the efficiency of the industry will increase to such a degree that it will be possible to discontinue the bounty at a future date. I am encouraged in that hope by the calibre of the members of the commission who have been appointed, and by the great service that a number of those men have given in the past. In conclusion, I wish to pay a tribute to Mr. J’. A. Stevenson who, for many years, was the leading light of the Flax Production Committee. I understand that he is about to retire after 38 years of service to the Commonwealth. As honorable senators are no doubt aware, the last part of his service has been with the Department of Commerce and Agriculture. I believe that the appointment of this commission and the successful negotiation of the bounty will give Mr. Stevenson great satisfaction during his years of retirement.
– I also support the bill. I am particularly pleased that it has been introduced, because Western Australia has taken, and is continuing to take, an important part in the production of flax. Like Senator Cooke, I consider that the Senate deserves some explanation of the delay in the appointment of the Flax Commission, other than that given by Senator Laught. Although the Minister has stated that that delay was rendered necessary because of the Tariff Board inquiry into the industry, I point out that the last of the evidence in connexion with that inquiry, which was made in Perth, Sydney and Melbourne, was taken on the 19th March last. The decision to hold an inquiry was made in October, 1953. The delay between the 19th March and the present time is of considerable importance to this industry, which has experienced many ups and downs since attempts were first made to grow flax in this country. Despite the claim, made this afternoon, that the flax industry is of comparatively recent origin, I remind honorable senators that it will soon celebrate its centenary.
It was in. 1857, in Victoria, that the first attempts were made to grow flax in this country, and it was not until 1905 that success attended those efforts. During World War I., a fillip was given to the industry by the provision of funds by the Australian Government, as a result of the gearing of primary industries to the war effort. However, it again declined in the post-war years. Various attempts were made between 1920 and 1939 to provide a satisfactory basis on which the industry’ could work, and it was not until the outbreak of World War II., when the necessity for Australia to supply not only its own flax requirements but also those of the United Kingdom, made action imperative. Until then, the United Kingdom had imported most of its flax from Belgium, Russia, Latvia, other Baltic countries, and the Netherlands. When the Lowlands were invaded and Russia and the Baltic countries became enmeshed in the war, the British people were unable to obtain supplies of flax from the European markets which, of course, were much closer to Great Britain, with consequently lower transport costs and a smaller number of transport problems generally. The United Kingdom, therefore, was thrown upon its own resources at a time when its need of flax was greatest. As we all know, flax is necessary for use in manufacturing webbing equipment, parachute cords, and other essential items of war-time equipment.
A request was made to the Australian Government to develop the flax industry in this country, and a great deal was done in that direction from 1940 onwards. Peak production in the industry was reached in 1942. It was in that year that the Boyup Brook flax mill came into operation in Western Australia. It was erected very speedily. Indeed, the whole of the industry was organized quickly. As Senator Cooke and Senator Laught have pointed out, the flax industry is a complex one, for various reasons. For instance, the financial return from an acre of flax is not as great as is the return from an acre of land used for dairying or other agricultural purposes. Successful flax-growing depends, to a great degree, on suitable geographic and climatic conditions. If there is a had year, it is difficult to dispose of the waste product. When the flax is affected by disease, a bad season, or by other climatic conditions, it cannot he used for stockfeed and is of no value to the farmer. A number of the problems associated with the production of flax have been studied most intensively by the Commonwealth Scientific and Industrial Research Organization and some of the State Departments of Agriculture.
During the war, the main flaxproducing States were Victoria, Tasmania, South Australia and Western Australia. After the war came to an end, Great Britain found that its European markets were once again becoming available, and the Australian commitment to supply flax to the United Kingdom ceased. The Australian Government felt that it could not carry on its war-time trading in flax and, therefore, decided to sell some of its flax mills. I think it is correct to say that, during the “war, there were 30 mills in operation throughout Australia. Since then, of course, the number has declined considerably. In Western Australia, the State Government took over rae mills from the Australian Government in order to ensure continuity in the industry. As honorable senators know, if the continuous operations of an industry are interrupted, it is not long before the industry becomes moribund and, eventually, ceases to function altogether. A co-operative organization, known as the Blackwood Flax Co-operative Limited, was formed to carry on the industry in the Boyup Brook district. I understand that, at the present time, there are between 60 and 70 operatives employed at the mills in that area, which compares very favorably with the number employed during the peak period of the industry during World War II.
Since the war years, the Boyup Brook mill has paid £56,000 to flax-growers in the district for their product. Of course, most of the flax-growers are not entirely dependent on flax, because the growing of flax alone would not support them. In most instances, they grow flax in conjunction with other primary products. In that way, they are able to use the machinery which is used in the production of cereals, for harvesting their flax crop. That brings me to a point of difference between the methods of producing flax in this country and those in Belgium. Production in Belgium is greater to the acre than it is in Australia, because the Belgian crop is harvested mainly by hand. In Australia, we harvest by means of machinery, which is not the best method of harvesting. Because of man-power difficulties, we find that, in order to harvest the flax crop, it is necessary to use machinery which is also used for other agricultural purposes. Belgium, which has a. much higher population density than has Australia, has no labour troubles in harvesting the flax crop. Generally speaking, the flax which Great Britain is able to import from its near neighbour, Belgium, is of higher quality than is Australian flax, but the quality of the Australian product is really very good, even compared with hand-harvested flax.
I understand that, before the war, 80 per cent. of the world production of flax came from Russia. That flax, of course, is used byRussia or disposed of on the European markets. Australia is in the position of being able to produce flax but unable to supply world markets. In this connexion, I think that comments made at the Tariff Board inquiry by Mr. McDonald, an argicultural adviser to the
Victorian Government, are very pertinent. He said -
If the flax industry could be retained asa “ live industry “ in peace-time, it would have an opportunity of developing efficiency that may enable it to survive without government support. If it is not so retained, and flax is again required as a vital war-time commodity, a costly developmental programme similar to that followed during the last war will be necessary.
I think that that is the whole point of this discussion of the flax industry. If we encourage the industry to thrive during war-time, when flax is essential for the manufacture of defence equipment, but allow it to drift into the doldrums when the war is over, we cannot expect to have a vigorous industry. I understand that, when the Korean war broke out, the flax industry again received a fillip. If these constant ups and downs and a lack of real stability are allowed to continue, the whole of the industry must suffer. Therefore, the Government has decided to pay a subsidy rather than afford to it tariff protection, which would have a detrimental effect on industries which are associated with the flax industry. Every country which has a standard of living higher than a peasant level finds it necessary to subsidize or guarantee certain industries. For instance, in the United Kingdom the flax industry is controlled. The flax which is produced is sold at world prices, and the losses incurred are borne by the United Kingdom Government. The same is true of the industry in Northern Ireland. I ask for leave to continue my remarks at a later stage.
Leave granted; debate adjourned.
Sitting suspended from 5.47 to 8 p.m.
.- I move-
I wish first to establish the responsibility of the Senate in this matter. Under the Constitution, Canberra and the Australian Capital Territory are directly under the control of the National Parliament. All subsidiary control is subject to review by the Parliament or either House of the Parliament. The Senate is not, as many people imagine, merely an appendage of the Constitution. It is not in the position of a State upper house or, indeed, of any other upper house in the world. In its powers, it is far superior to any other upper house in the British Commonwealth of Nations. The only upper house that I know of in the world that has more important functions is the Senate of the United States of America upon which this .Senate was modelled. The committees appointed by the Senate have roles that stem not from any upper house but from the House of Commons of the United Kingdom. Therefor, if the Senate undertakes the responsibility I ask it to undertake, it will not be usurping the functions of any other organization. It will be asserting its own function as a guardian of this city.
I shall state briefly the purposes of the committee that I have in mind. As honorable senators will notice from the motion that I have submitted, the proposal is stated in broad and general terms. I have phrased it in such a way that the committee would not be hampered by lack of power in any inquiry it chose t,o undertake. Nevertheless, I do not propose - nor did I have in mind - merely a general excursion into the affairs of Canberra. I believe that when the committee is appointed and meets, it will find certain specific matters to which it can direct its attention. Before I refer to those I have in mind in detail, I emphasize that we do not want to interfere with anybody or any organization associated with Canberra that is functioning to good purpose. The city is under the administration of the Minister for the Interior, and I am one of those who have great respect for the present Minister for the Interior (Mr. Kent Hughes). I believe that he is doing his work very well. There is a National Capital Planning and Development Committee. I do not know whether it is doing all the work it should be doing, or whether it has all the powers that it should possess. I am inclined to think that its powers are too limited, but I do not suggest that we should interfere with that body. I merely suggest that we should inquire into what it is doing, and ascertain whether its work should be supplemented. There is an Advisory Council and, finally, there is the Public “Works Committee, which is a joint committee of the two Houses of Parliament. I believe that certain of the matters with which the proposed committee might be concerned are already under examination by the Public Works Committee. I presume that the proposed committee would do nothing to interfere with that work, but would wait for the report of the Public Works Committee, which will probably be ready shortly. The committee that I propose would take up its examination of the facts from that point.
I wish to give honorable senators now a general idea of the matters into which I believe we could inquire. First, I suggest that the committee might consider the departures, and proposed departures, from the original plan for Canberra and their effect. Some departures from the plan are proposed now, and they have caused grave disquiet to honorable senators, members of the House of Representatives and the citizens of Canberra. I do not propose to canvass at present whether that disquiet is justified. That, is something into which the proposed committee could inquire. Secondly, I believe we should inquire whether administrative and advisory organizations are functioning as well as they should, and in that connexion, whether Canberra has adequate and full representation on those bodies. It has representation, and I believe it is worthy representation, but probably it needs more numerous and more effective representation. Thirdly, I suggest that an inquiry should be made into roads, parks, architecture and anything connected with the general plan of the city. To mention only one matter, it has become fairly obvious to many people that most of the roads in Canberra are too narrow. They were designed when motor traffic was no more than a curiosity. I believe that they were designed with, the idea that city traffic would never go faster than 15 miles an hour. That means that at present they must be dangerous.
Some persons may get the idea that the purpose of the proposed committee would be to sponsor extravagant expenditure. On the contrary, I believe that it would prevent extravagant expenditure. Such extravagance in the long run gives a poor return. A policy of insisting on nothing but the best pays in the long run. I blame nobody for the many errors that have been made in Canberra. As honorable senators know, many of them were the result of World War II. During the war, it was necessary to try all sorts of temporary expedients, and after the war, that line was continued, but I hope that we can look forward confidently to a number of years of peaceful development. The time has come when we should ensure that nothing is built in this city that is not durable or worthy of the place.
I -wish to refer briefly to the one city from which we can take an example. That is Washington, D.C., the capital of the United States of America. The whole conception of Canberra was based on Washington. America had the same problems as those that confronted the founders of Canberra. There were different States, and it would have been impossible to pick a capital, or even a city, in the States as being worthy of representing the whole nation. So, they hit on the expedient of a federal district and. a federal city. We copied that concept. The Americans began with a fine design. Washington was designed by Major Pierre L’Enfant, a French engineer, who had fought for the Americans in the War of Independence. He was a good soldier and a fine engineer, and his planning was of a high order considering the time in which he planned it - about 1790. The city was started on that plan. The Capitol, the White House and a few other places were erected in accordance with the plan, but, after a few years, the plan was abandoned and Washington became a city of great contrasts. In the time of Lincoln, during the Civil War, some living quarters were squalid and slums developed, as the copious novels and histories dealing with the Civil War have revealed. That was the result of the departure from the plan and the haphazard way of building the city. Gradually those responsible returned to the plan, and it is interesting to record that the great series of developments that have made Washington one of the greatest cities in the world were encouraged in 1900 by Senator McMillan, who was chairman of the Senate Committee on Washington. Many great alterations were made -in accordance with his report. Railroads that had been allowed to go to the centre of the city were taken out at heavy cost. If an estimate could be made of the cost to Washington of departure from the original plan, and efforts to go back to it, I am sure that it would amount to many millions of dollars.
We are in a period of development when it will not be so costly to build Canberra according to plan. We already have quite a number of good buildings, and the suburbs have been formed. Nobody would want to interfere with that progress, but a large part of Canberra is still gardens or parks or virgin country. Modifications could be made, if necessary, without resumptions or tearing down buildings or making other physical changes of that nature. Therefore, this is the time to act. In 1910, President Tait set up a Commission of Fine Arts for Washington, and it was given a charter much wider than the charter that has been given to any advisory body in Canberra. Since then, Washington has become one of the most beautiful cities in the world. It has one disadvantage compared with Canberra that might surprise some honorable senators. It has a much worse climate, or a climate that is not so good as that enjoyed by Canberra. The variation in temperature in Washington is from 17 degrees below zero to 108 degrees Fahrenheit.
– With high humidity.
– In addition, as Senator Maher has reminded, me, during more than one season of the year the humidity is high. I asked the honorable member for Sturt (Mr. Makin), who was formerly Australian Ambassador to Washington, to describe the climate. He said that at times the climate was admirable. In the American fall or autumn, the climate could not be better, but during other seasons, notably midsummer, it was one of the worst in the world. Canberra has one of the best climates in the world. I know that the icy breezes disturb honorable senators from northern parts of Australia, but those who were bred in the highlands of Australia or Scotland or elsewhere welcome the icy breezes. I believe that they stimulate mental activity.
At this point, I make an appeal to the Senate. To-night, I am talking to honorable senators, not to men or women of any political party or any group. I am not one of those who condemn this Senate because it is a party house on many measures. That is necessary and inevitable. Democracy cannot function without political parties. That is a lesson of history. But there are certain measures - and this motion is one of them - on which this Senate should rise above parties, or act aside from party affiliations, because there can be only one opinion on them. I am sure every honorable senator wishes to make this capital a great and worthy city. Every great nation has had a city as the focal point for its civic affairs, a place for men of learning and houses of worship. I believe it was an old Jew who said, “ When I forget thee, oh Jerusalem, let my right hand forget its cunning”. Rome, Paris, London, Edinburgh and Washington are all great names. Canberra has been derided as the bush capital. I do not regard that as a term of reproach. The person who does not love the bush is not a true Australian. If the bush means isolation, the absence of the things that make for good living, we do not want that, but if the bush means a place where there is open space and than smell of the gum trees, let us have the bush. I thank heaven that we have only to walk outside the doors of Parliament House to be surrounded by some of the most magnificent trees in the world belonging to our own and other countries.
I ask every honorable senator to consider this matter very carefully. This is a moment when we can all speak as Australians. Simply by setting up a committee of inquiry, we can arrest any vicious tendencies that have crept into the growth of this city and give an impetus to every worthy tendency. I know that this House has much important business to do, and I do not wish todelay that business. I hope that this committee will be set up and that, as a result of its deliberations, this capital of ours will become and remain “ a thing of beauty and a joy forever “.
Debate (on motion by Senator McKenna) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Spooner) read a first time.
.- I move-
That the bill be now read a second time.
The bill provides for the validation of collections of customs duties under Customs Tariff Proposals No. 1 and Customs Tariff (Canadian Preference) Proposals No. 1, which were introduced into the Parliament on the 18th August, and Customs Tariff Proposals No. 2, which were introduced on the 28th October. The time of validation specified in the bill is until the 30th June, 1955. Pressure of other business in the period since the proposals were introduced and the anticipated ending of the present sittings has prevented, for a time, the introduction of the customary bills for the enactment of the proposals. Consequently, it is desirable to validate duty collections pending the introduction of the enabling bills. This is purely a machinery measure., and an opportunity for a full debate on the proposed tariff amendments will be provided as early as practicable.
Debate (on motion by Senator Courtice) adjourned.
Hill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Spooner) read a first time.
.- I move-
That the bill be now read a second time.
The circumstances surrounding this bill are the same as those associated with the Customs Tariff Validation Bill 1954. The bill now under consideration provides for the validation of collections of excise duties made under Excise Tariff Proposals No. 1 and Excise Tariff Proposals No. 2, introduced into the Parliament on the 18th August, and the 28th October, respectively. As in the case of the Customs Tariff Validation Bill, this is purely a machinery measure, and I repeat my assurance that an opportunity for a full debate on the proposed amendments will be provided as early as practicable.
Debate (on motion by Senator Courtice) adjourned.
Debate resumed (vide page 1188).
– In Northern Ireland, the Government gives a guaranteed price based on the cost of production, and the difference between that price and the world parity price is met by the Government. In 1952, the guarantee cost the Government of Northern Ireland £322,000. In New Zealand, the Linen Flax Corporation of New Zealand produces linen flax fibre. It is financed by the New Zealand Government, and any losses it incurs are borne by that Government. In France, the flax industry is heavily subsidized. The latest figures that we have show that the French Government pays a flax subsidy of over £130 a ton. In all those countries, the flax industry is regarded as having a strategic war-time value as well as a very important agricultural value. Even in Australia, the idea of a flax bounty is not new, because from 1907 to 1923 and again from 1930 to 1935 the flax industry was supported by a bounty.
The total sum involved in this bounty is not very great. The bounty will be £35 a ton. Victoria is producing 900 tons of flax a year, Western Australia 300 tons, and South Australia 300 tons. Our annual flax production is 1,500 tons, so the bounty will cost only about £52,500 a year. That is not excessive when we consider the benefits that will accrue to the industry from the payment of the bounty. The co-operative company at Blackwood in Western Australia simply cannot carry on without a subsidy. It has large commitments. It was forced to withhold the sale of some thousands of tons of flax because of uneconomic prices. It made plans for extensive alterations and modifications of its machinery that would have resulted in better production and better working conditions, but all those plans had to be thrown into the discard because of the slump in the world price of flax. Although the cost of production in Western Australia is considerably lower than in the eastern States, that advantage is offset by the very high freight charges that have to be paid by Western Australian flax mills. They pay £21 a ton to send their product from Western Australia to the other parts of Australia where it is used.
Stability of the industry is necessary in order to maintain interest in research, as well as to enable the flax mills to operate as economic units. The request made to Australia by the. British Government in 1940 to expand flax production led to an increase of flax acreage in the war years. During the war, it rose to between 70,000 and 80,000 acres, but in the post-war years, when the British markets were no longer available to us, it fell to about 10,000 acres, or about one-eighth of the war-time figure. The position was retrieved to some extent in 1953 by the international tensions produced by the Korean war, which led to a more attractive guaranteed price being offered to flax producers. As a result, the quantity of flax produced in this country rose steadily. It would appear, therefore, that if the flax-growing industry and the flax-milling industry are to be stabilized, a method must be devised whereby the price paid for flax straw will be adequately supported when the general level of prices of other agricultural products is high. As both Senator Cooke and I have said, at present the flax-growers are producing a commodity that is not so profitable to them as other commodities which they could produce. To improve the standard of flax grown extensive research by the Commonwealth Scientific and Industrial Research Organization, kindred State instrumentalities such as the various State Departments of Agriculture, the Waite Institute and universities must be continued. The results of research and extension work cannot be properly related to a moribund industry, nor could such an industry become efficient. Vast fields of investigation still remain untouched, particularly the utilization of by-products.
I regret that the flax acreage has declined so much that it will take us a long time to get back to our war-time peak of production. I congratulate the cooperative company in Western Australia which took over the job of flax production at a time when conditions were not very promising, either in the home market or in overseas markets. The company has done a very good job. It took over a mill that was built as a war-time measure, and much remains to be done in the way of modernizing its machinery and equipment. It had prepared plans for that work when the big slump of flax prices occurred, and it was unable to go on with the job. This bounty, although it is not as large as was hoped, will he welcomed by the company. It will give it an opportunity to expand its activities. It is interesting to note that a quarter of the flax acreage in Australia is situated in Western Australia. A quarter of the workers in the industry are employed in that State, a quarter are employed in South Australia, and the remainder are employed in Victoria, where there is much more scope for flax production because of the close proximity of spinning mills.
This bill will assist the flax-growers to carry on, and will protect the industry from the unpredictable fluctuations of the European market. We do not want to find again that the industry, because of events in Europe, has declined to such a degree that, if a crisis occurs, we shall have to reorientate our ideas about flax production and go to a great deal of expense to get the industry back into proper working condition. The bounty will ensure continuity of production, which is very important for both strategic and economic reasons. Therefore, I support the bill and express the hope that it will result in adequate supplies of flax being made available to the Australian people in bothpeace and war.
Question resolved in the affirmative.
Bill read a second time.
– I am greatly concerned about the proposal to limit the total amount of bounty payable in each year. Clause 8 provides -
This provision is somewhat similar to provisions that have been made in respect of other industries, to which the Government promised unstinted support. I should like the Minister for National Development (Senator Spooner) to explain the Government’s policy in relation to the payment of a bounty on scutched flax fibre produced from flax grown in Australia. The limit of £’70,000 on the amount of bounty payable in a year would not be sufficient to pay a bounty of £35 in respect of each ton of last year’s production of flax, although that production was lower than in previous years. Is it the intention of the Government to cry “ stalemate “ in relation to this important industry? It seems that the Government is saying to the producers, in effect, “If you produce this year as much flax as you produced last year, you will receive a bounty of less than £35 a ton that we promised you “. Expressed another way, the Government is saying to the producers, in effect, “ Only if you produce less this year than you produced last year, will we pay you a bounty of £35 a ton “.
The importance of the flax industry to Australia is generally recognized. In his second-reading speech, the Minister acknowledged its importance from a defence point of view. If the Government is honest in this matter, it should provide for the payment of a straight-out bounty, in order to enable the flax-producers of Australia to compete with the producers of other countries. It has already been shown that they are at a disadvantage, compared with other primary producers. The growers should not be penalized by the payment of a reduced bounty per ton, if, by good management and application to their task, they can increase production. Only by assisting the industry to expand can we look forward to the time when it will be able to stand on its own economic feet and not need the bounty. I urge the Government to pay the bounty of £35 a ton on all flax produced in this’ country, without any proviso that the amount of bounty payable per ton shall be reduced below that figure if the sum available for the payment of bounty in respect of flax fibre produced in a year is insufficient for the payment in full of all valid claims. If, when an assessment is made of the industry in two years’ time, it is found that a lower bounty would be adequate, the Government could then reduce it accordingly. I urge the Government to consider removing the ceiling of £70,000 payable in respect of the bounty in any year.
. It must come as a surprise to the recipients of the flax fibre bounty to learn that so comprehensive a measure as the bill before the Senate is needed in order to deal with the matter. The bill contains 22 clauses, which cover seven printed pages. I am referring only to the length of the measure, and not criticizing its provisions. The various clauses relate to the rate of bounty payable and the limitation of the total amount of bounty in a year ; the reduction of the bounty when a producers’ profit exceeds 10 per cent, per annum; the registration of factories; obligations to keep accounts; the investigation of accounts by competent persons representing the Government; the obligation on growers to present balance-sheets; the obligation on claimants to maintain a certain quality of production; power to require persons to answer questions and produce documents; and the lodging of security by producers to ensure compliance -by them with the provisions of the legislation. “Whilst I have no doubt that the bill is the standard kind of measure applicable in such circumstances, I emphasize that it-must come as a shock to the uninitiated to learn that such a lengthy bill is needed.
I am particularly interested in the provision that if the net profit of a producer exceeds 10 per cent, of his capita! investment, the bounty ceases to be payable. There are certain rules laid down for determining the amount of his capital, and the calculation of his net profit. Clause 9 intrigues me. Subclause (4.) of that clause provides -
In making a determination under the last preceding sub-section of an amount of net profit, the Minister shall not regard any tax upon income as a deduct ion and may disallow any interest paid by the producer as a deduction.
Sub-clause (3.) of clause 9 provides, inter aiia, that the Minister may -
I quite agree that it is right and proper that the Minister should disregard income tax in determining the net profit earned by producers. The bill makes it obligatory on the Minister to disregard that factor. I direct attention, particularly, to the provision that the Minister may disallow any interest paid, by a producer as a deduction. Surely, if interest is paid on money borrowed to develop the industry, it forms a proper charge against the profits of the industry. Pursuant to the power given to the Minister to disregard that figure - he is not compelled to do so- - 1 think there should be a provision that, if he does so, he shall also ignore borrowed money in determining the amount of capital employed in the undertaking. I should be glad if the Minister would comment on this aspect of the matter.
.- Clause 10 provides-
Bounty shall not bc paid on the production of any flax fibre unless the ComptrollerGeneral is satisfied that it is of good and merchantable quality.
I think all honorable senators realize the necessity to encourage the production in Australia of flax fibre. I should like the Minister for National Development (Senator Spooner) to inform me of the formula that will be applied to determine whether flax fibre is of good and merchantable quality. Does the clause mean that the bounty shall not be paid on any fibre that the Comptroller-General doc3 not consider to be of good and merchantable quality? What safeguards does the Government intend to introduce to prevent imported flax fibre from making inroads on our industry?
– I cannot see eye to eye with all of the provisions of the bill. We must consider this subject in the light of experience. As Senator Cooke has pointed out, subclause (2.) of clause 8 provides that if the amount available for the payment of bounty in respect of flax fibre produced in a year is insufficient for the payment in full of all valid claims, the bounty payable shall be reduced. In 1940, when we were cut off from the usual sources of supply of flax fibre, we were faced with the almost herculean task of undertaking, almost overnight, the production of this important commodity. Five factories were established in Tasmania for that purpose. In the light of the difficulties with which this country was confronted during the period of World War II., I urge the Government to assist the Australian industry to the utmost, so that, in the event of a future war, we shall not he so embarrassed. Flax plays a very important part in Australia’s supply line. As we are spending so much money on defence and the amount of flax grown in Australia will be limited, it might he a good plan to specify the number of acres of flax to be grown by each farmer. The growers would then know how much they would receive by way of bounty.
In order to ensure that profit on the sale of the fibre has not exceeded 10 per cent, of the capital invested in the mill it will be necessary to trace the purchase of the flax back to the farmers. That will require an army of civil servants as large as the number of men who will be producing the flax. So the amount of money that will be saved by the limitation of the bounty to fibre on which the rate of profit does not exceed 10 per cent, of capital invested will be spent on policing that provision. It is well known that the seasons vary, and I do not think that it would be fair and just for producers to be deprived of the bounty because their rate of profit happens to be 13 per cent, in one year, regardless of the fact that it may have been only 3 per cent, in the preceding year.
– I invite the attention of the committee and the Minister for National Development (Senator Spooner) to clause 4, part of which reads as follows: - “ Flax fibre “ means tank-retted scutched flax line fibre produced from flax plants.
Am I right in assuming that any flax fibre that is not tank-retted will not receive the bounty?
I have another question with regard to the registration of factories under clause 11 of the bill. Could the Minister tell me what factories are likely to be registered, where they are situated and whether they are at present working in conjunction with the Flax Production Committee ?
.- I should like the Minister for National Development (Senator Spooner) to inform the Senate whether the bill states how the bounty of £70,000 will be distributed if the production of flax fibreis greater than the quantity in respect of which £70,000 would be payable. Are the growers to be licensed and will a certain amount of flax be allocated to the factories? Doe3 the Minister expect that the sum of £70,000 will cover the total production for next year ? If the amount of £70,000 does not prove to be sufficient to cover total production for next year will each flax-grower receive a fair share of the bounty? I have not been able to find any provision in the bill to cover this contingency.
– Clause 15 sub-clause (1.) of the bill reads as follows: -
The Comptroller General, a collector or an authorized person may, by notice in writing, require a person whom he believes to be capable of giving information, relevant to the operation of this is act, in relation to the production, storage or sale of flax fibre or other flax products to attend before him at the time and place specified in the notice and then and there to answer questions and to produce to him such accounts, books and documents in relation to the production, storage or sale of flax fibre or other flax products as are referred to in the notice.
Sub-clause (4.) of clause 15 provides -
Where a producer or a person employed by a producer has failed to attend or to answer a question, or to produce any account, book or document, when required so to do under this section, the Minister may, if he thinks fit, withhold payment of any bounty payable to the producer until the producer or that person has attended, answered the question or produced the account, book or document, as the case may be.
Clause 17 provides a penalty of £50 for a person who fails to answer a question or produce an account, book or document. Clause 19 reads as follows : -
Bounty is not payable to a producer unless he satisfies the Minister that the requirements of this Act and the regulations have been substantially complied with.
I presume that a producer who does not attend before the comptroller when required so to do, or who fails to produce documents or answer questions, and so makes himself liable to prosecution, would have been guilty of substantial noncompliance with the act. In clause 15, sub-clause (4.) appears to give the Minister discretion to pay or withhold the bounty. But under clause 19 it appears to be mandatory on the Minister to withhold payment of the bounty. There appears to be a contradiction between clause 15, sub-clause (4.) and clause 19. The Minister might be good enough to explain that position.
– By and large, the provisions of this bill have been determined by precedent. In other words, bounty legisla tion is specialized legislation. As frequently happens, the form of the legislation has been determined by the experience gained in the administration of existing legislation. I think that that statement will serve to answer some questions that have been raised such as the one concerning the authority of the Minister in relation to the quality of the product. After all, bounty legislation is aimed at assisting an industry, not only financially, but also by encouraging it to improve the quality of its products. Many of the provisions of this bill are common to other bounty legislation such as that with which the Senate dealt earlier to-day.
We should remember that this bill is based upon a Tariff Board inquiry into the industry. The various clauses of the bill fit into the general pattern of that inquiry. In other words, the bill provides for a complete scheme, not a partial scheme. The Tariff Board examined the industry as a whole and decided on the most practical course to take. The board has expressed the opinion that its recommendations would meet the circumstances of the industry but has indicated that if its recommendation is accepted it would review the decision and make a further recommendation at the end of “two years. That information will answer a lot of the questions that have been raised. For instance, one question was asked concerning the sum of £70,000 that has been proposed as the total amount of bounty payable. I speak subject to correction, but I think that all bounty legislation provides a maximum amount of bounty that may be paid. The bounty legislation with which the Senate dealt earlier to-day contained such a provision. Such an amount is not fixed haphazardly. It is based on the Tariff Board’s assessment of the amount that will be sufficient to cover the requirements of the scheme, bearing in mind that the matter will come before it for review in two years’ time. The proposed bounty of £35 a ton is a basic amount. It will rise or fall by £5 a ton for every £5 by which the world parity price of grade B flax rises above or falls below £330. All these circumstances must be taken into account. I have no doubt that the Tariff Board made an assessment of the probable amount of bounty payable, and it totalled about £70,000.
I agree with the Leader of the Opposition (Senator McKenna) that, in computing the expenses of the industry, only weighty considerations could cause a Minister to disallow interest paid. The legislation uses the words “ may allow “. The direction is not mandatory. Otherwise the Leader of the Opposition and I would both have trouble in justifying that position. I think the answer is that these things work out in practice. It is one of those reservations, probably, that are made to cover some exceptional circumstance although, to he quite frank, the circumstances in this instance are so exceptional that I cannot, on the spur of the moment, foresee them. One honorable senator seemed to be apprehensive that there might be some difficulties for the industry because the bill provides that the bounty shall be payable only on. flax of a. certain quality. My reply to that is that there is a similar provision in all bounty legislation. It is a precautionary provision, aimed at improving the standards of the industry, and I am advised that, in practice, it will not result in any difficulties. I have been asked whether I can give any information about the factories that will be operating. I am informed that there are factories in Victoria and Western Australia,, and that one has just been completed at Mount Gambier, in. South Australia. It is expected that the co-operative factory in Western Australia will register under this scheme.
– The story that has been told to the committee by the Minister for National Development (Senator Spooner) about the limit of £70,000 on the total bounty payment reminds me very much of that well-received comedy “ Arsenic and Old Lace” in which the old ladies, in a very genteel way, poisoned people whom they regarded as their friends. This limit on the total bounty payable is no more than a genteel way of strangling the flax industry. I do not expect the Government to agree with that of course, but I should like to make it clear to the committee that I am very dissatisfied with the Minister’s explanation. For instance, £70,000 would not have been sufficient to pay a bounty of £35 a ton on the quantity of flax recovered last year. Clearly, therefore, the sum will be quite inadequate if there is to be any increase of production. In spite of what the Minister has said about an increase or decrease of bounty payments according to a fall or rise of the world parity price, obviously the bounty will be virtually pegged at £35 a ton because there is no margin for variation. For instance, if the world parity price fell, it would not be possible to increase the bounty beyond £35 a ton. because of the limit of £70,000 imposed by this measure on the total payment. I repeat that this limit will operate as a stranglehold on the industry. This year, we are again spending £200,000,000 on defence, and we are told that flax production is an important feature of our defence programme. Yet the Government is imposing a ceiling on the bounty payments so that if production is increased, the bounty will ha ve to be reduced ! The Minister said that the Tariff Board, had recommended the payment of the bounty for a period of two years. It is true that that is not a long time to wait for a review of these proposals, but I believe that something should be done now. It is admitted that the industry has a defence significance, and that an increase of flax production is desirable, yet a stranglehold is being placed on flax-producers by the limitation of the total bounty payment of £70,000. That limit is clearly a negation of the Government’s claim of sincerity in expressing the hope that the industry will expand.
– There appears to be some misconception about flax fibre and flax straw. The quantity of flax fibre that is produced in Australia annually is 1,200 ton3. With the opening of the new mill in South Australia, the output will be increased to 1,500 tons. So, this bill really allows for an increase from 1,500 tons to 2,000 tons, or 33$ per cent., in Australia’s production of flax fibre, not flax straw. That is how the misconception has arisen. I repeat that the bounty is on flax fibre and not on flax straw.
– There has been no misconception on my part. The bill is quite clear. The sum of £70,000 is fixed on the basis of an average crop in Australia. The point that I wish to make is this: There is a certain number of flax producers in this industry, and they are prepared to carry on provided they can make a reasonable living. Under this legislation, no more than £70,000 will be paid out in any one year. Therefore, if we have a bumper crop and the bounty is to be paid on the entire production, there will not be sufficient money available to pay £35 a ton. On the other hand, if there is a drought and the yield is reduced by half, the producer will receive only £35 a ton at a time when he really needs assistance, and the total bounty payment will not be anything like £70,000. The Government obviously will get it both ways. I believe also that the Minister should give us more information about the manner in which the bounty is to be paid. Is it to be paid through the manufacturers to the farmers or will the farmers make applications direct to the comptroller? The Minister has also failed to tell us where the commission will get its army of employees to check on costs. Any one who undertakes to find the cost of producing a primary product is really taking on a job. Everybody has a different basis of assessing production costs, and the figure reached by one investigator is almost certain to be queried by another. The Government will have to establish its basis of assessing production costs. I believe that the task of assessing costs will be so expensive that it would be far preferable to fix a straightout bounty payment.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Debate resumed from the 2nd November (vide page 1129), on motion by Senator Spooner -
That the bill be now read a second time.
SenatorO’BYRNE (Tasmania) [9.12]. - One of the main purposes of this bill is to amend the War Service Homes Act to provide for an increase of the maximum loan for the financing of homes which have not been built under the provisions of the act. The maximum loan will be raised to £2,750 which is the maximum provided at present for homes built under the act. That means that provision is now being made for the financing of already erected homes. Another important feature of the bill is the extension of the provisions of the act to cover eligible ex-service men and women who reside in the Territory of Papua and New Guinea, or in Norfolk Island. It can be said that this bill is a very desirable, although perhaps belated, attempt to catch up with the very big back-log of applications by exservicemen for war service homes. I am certain that every honorable senator has had the experience over the past years of interviewing young ex-servicemen and their wives seeking assistance to obtain a war service home. To-day, large numbers of these people are living under deplorable conditions in sub-standard houses and flats. Some even occupy slum dwellings. This measure will alleviate the position to some degree. Many people have been waiting for very long periods to obtain a home of any kind, under any scheme, but particularly under the war service homes scheme.
– This is hardly a party political subject, and I shall endeavour to keep my remarks at a proper level. I think that the Government has the support of all honorable senators in this matter. I fail to see how any honorable senator could oppose the bill, although it might be said with truth that the proposed increase of the maximum advance from £2,000 to £2,750 will do no more than help to overtake the inordinate increase of building costs which has occurred during the last few years. We all know that many of the homes which will be purchased by exservicemen as a result of this increase of the maximum advance were built before the war, and although they are good homes and sturdily constructed, their original cost was no more than, say, £1,750. At the present time, many of them are valued at as much as £3,500. That is one of the effects of a period of inflation, and is a circumstance which has to be faced.
During the Minister’s second-reading speech, he stated that the demand for war service homes had eased to such an extent that it was possible to extend the provisions of the act in relation to the purchase of existing homes. I hope that that will not mean any diminution of the efforts of the War Service Homes Division to build new homes. After all, the prosperity of a nation and its standard of living can be gauged, to a large degree, by the kind of homes in which the people live. I hope that this extension of the provisions of the act will not mean a departure from the usual practice of the division to erect the maximum number of homes that it is possible to erect. I hope that the division will continue to pursue vigorously its programme of new home construction. It is possible that, because of the increased demand by ex-servicemen for existing homes, the price of houses will increase. Ex-servicemen and their dependants should be protected from exploitation by people who may regard that demand as an opportunity to dispose of houses at prices which are higher than they should be. This legislation will encourage applications by ex-servicemen who previously had not considered applying for assistance to purchase or build a home because of the long delay which has been usual between the date of application and the date of departmental approval. The Minister stated, in his second-reading speech, that even now, the period of delay is approximately sixteen months. I know of people who have had to wait considerably longer than that and whose applications have not yet been approved. I hope that efforts will be made to remove this backlag.
Any person who has served in the defence forces outside the Commonwealth, and in certain prescribed battle areas, is eligible to apply for a war service home. I am certain that many people have not even bothered to consult the War Service Homes Division regarding their eligibility. I hope that this widening of the provisions of the act will encourage people, who are eligible to apply for homes, to make application.
It is the responsibility of the Australian Government and the people of Australia generally to see that promises which were made in good faith during the war are honoured. I stress the importance of recognizing that responsibility whenever I speak about matters which affect ex-servicemen, because, very often, the passage of time lessens the importance of such things. If we keep them in the forefront of our minds, justice will be done.
This bill provides that an eligible exserviceman may purchase an existing home which is valued at more than the maximum advance of £2,750. As a matter of fact, the limit will be removed completely. If an ex-serviceman proposed to purchase a home at the cost of £3,500, he would be obliged to provide the difference between the maximum advance of £2,750 and £3,500. I am not certain whether he also would be obliged to have a deposit of £275 over and above that amount, and perhaps the Minister would be good enough to clear that matter up when he is replying to the debate.
As the Minister stressed during his second-reading speech, the main purpose of the War Service Homes Act is to provide homes of good value, which will be a sound investment and within the resources’ of the applicants. During the period tha t has elapsed since the end of World War II., there have been acute shortages of various building materials. Unfortunately, the keen demand for houses has been exploited by certain . building contractors and others, whose main objective has been the pursuit of profit, rather than service to the community. Complaints have been made, at various times, about the standard of workmanship in houses erected for the War Service Homes Division, but I commend the division for its general supervision of construction. It has tried very hard, in rather difficult circumstances, to achieve the best possible standard of construction. I know that the division has had a struggle in that connexion, and I am also aware that continual vigilance has been necessary. In my opinion, the War Service Homes Division has done very well, in the circumstances.
This bill provides also for the discharge of mortgages on war service homes, which I think is rather an important provision. It means that eligible people who purchase homes on which mortgages are held will be able to apply for those mortgages to be discharged by the War Service Homes Division. This provision may also lead to a rush of exservicemen to commit themselves and then expect the War .Service Homes Division to deal immediately with their applications. The stipulation of a date from which such applications shall commence is a wise precaution.
As every one knows, home-building is a tremendously important factor in our economy. Even now, there are shortages of various building materials, such as cement, bricks and tiles. The increased demand for homes, as a result of this amendment of the act, will result in increased demand for building materials. The Tasmanian Legislative Council recently decided against further extension of rent control in that State. I hope that something will he done to meet the position of tenants who find their rents increased, as they almost certainly will he.
– Does the honorable senator suggest that rent control has been lifted in respect of domestic dwellings?
– The control has been progressively lifted during the past three or four years. The Tasmanian Legislative Council has removed control of rents of business premises, and there is no guarantee that the control of house rents will not be removed as well.
The Minister said in his second-reading speech that the powers of the Australian Government to provide homes were limited. I hope that there will be no diminution of the rate of home-building. The States have often been the butt of the Australian Government when housing has been discussed. Usually it has been said that the States are responsible for the State housing schemes. That is correct, but the Australian Government also has some responsibility to make certain that the States have adequate funds in the form of loans and grants to carry out their housing programmes. I believe that the Australian Government can do much to increase the number of houses that are built in Australia. In Tasmania, under the Agricultural Bank housing scheme, it has been the practice to allot half the number of available houses to ex-servicemen -and half to civilians. The allocation of homes on that basis relieves the Australian Government of a measure of responsibility under the war service homes scheme. I do not mind how a man gets a home or where it is, so long as he and his family are decently housed. I believe that we have a responsibility to help persons to get homes and, in particular, to provide houses for ex-servicemen.
Reference has been made to the fact that sixteen months elapses from the time an application for a war service home is received until the War Service Homes Division begins processing the case. The word “ processing “ is unpalatable to many persons because of their experiences with the Public Service. I appeal to the War Service Homes Division to make a more efficient approach to the handling of applications now that it has an opportunity to accelerate the provision of homes. I hope that the delay in dealing with applications and valuations of existing houses, and in the discussion of applications, and the preparation of plans and specifications for new houses, will be shortened. The delay will be minimized, to some extent, under the provisions of this bill, and I hope that the staff in the various States will go ahead more rapidly now that many reasons for delays in the processing of cases are to be removed. In the past, the minimum delay has been two years, and I am certain that that period -could he reduced considerably. The bill also deals with the payment of purchase money and the repayment of advances. I ‘am pleased to note that in cases where the purchaser or borrower is a widow or the widowed mother of an Australian serviceman, she may have 50 years for repayment. Ex-service men and women are to have 45 years for repayment. ‘ Those are desirable provisions, and I welcome them. The task of the borrowers will be made less difficult, particularly in these days of high prices for homes.
The provisions of the bill are to be made applicable to residents of the Territory of Papua and New Guinea and Norfolk Island. The extension of the scheme to those territories will be welcomed by many men who have done their duty during the war, and have gone to
Papua and New Guinea virtually as pioneers to help to justify Australia’s mandate over the Territory. I am pleased that an opportunity is to be given to them to settle down and obtain a home under appropriate terms. The bill meets the approval of all honorable senators on the Opposition side, because it is in line with their objective of honouring the responsibility that Australia ha3 to ite ex-service men and women, and providing good standard homes for all Australians, because contented and well-housed families are the basis of society. Anything that can be done towards that end will receive my support.
– I rise to support the War Service Homes .Bill. The measure does not call for keen debate because it is not controversial. Senator O’Byrne, who led the debate for the Opposition, has indicated clearly that the Opposition supports the bill. I propose to be fairly brief. The bill makes provision for three important changes in the war service homos scheme. First, it provides for an increase of the maximum loan to finance the purchase of homes that have been built, to a maximum of £2,750. That is the maximum that is provided for homes built under the provisions of the principal act. Secondly, the bill provides for an. extension of the provisions of the War Service Homes Act to the Territory of Papua and New Guinea and to Norfolk Island. Thirdly, it provides for the removal of the administrative limit of £3,500 on the total purchase price of an existing property.
I listened carefully to Senator O’Byrne, and found my opinions at variance with his On only one specific point. He said he hoped that the provision of an additional. £750 for financing the purchase of existing homes would not lead to exploitation, and that ex-service men and women would not have to pay more for the properties than they were worth. The fact is that the War Service Homes Division will ensure that that does not happen, because it will insist on a valuation of the properties. I know from experience that valuation is not an exact science, but honorable senators can be assured that the division will fix a reasonable price in each case. If - an ex-serviceman, in ignorance of property matters, is being exploited, the division will quickly tell him so, and inform him what is a fair price.
This bill provides further evidence of the present Government’s thought and care for the needs of ex-servicemen. The bill is in line with the record that this Government has consistently established since it has been in office. The budget and other bills that have been before the Parliament during this sessional period, have provided fresh benefits for ex-servicemen. The provision of war service homes is closely related to those benefits. I do not propose to canvass all the additional benefits that this Government has provided for ex-servicemen, but in connexion with war service homes, I emphasize that this Government is facing up to its obligations, and is doing more and more for exservicemen to help them obtain houses. In the budget for the current financial year, the vote for the War Service Homes Division was increased to £30,000,000. That represented an increase of £3,100,000 on the amount provided in 1953-54. A review of the provision that has been made for war service homes since this Government was first elected to office shows that there has been a regular increase to meet the demands of ex-servicemen for houses. I have prepared comparative figures for the period from the 1st July, 1945, to the 31st December, 1949, when the previous Labour Government was in office, and for the period from the 1st January, 1950, to the 30th June, 1954, during the term of office of this Government. In each case the period extends over four and a half years. In the first period, under the Labour Government, 5,898 homes were built and 11,048 were financed, a total of 16,946. Expenditure was £122,659,986. During the four years of office of this Government, 22,021 homes were built and 39,162 were financed, making a total of 61,183, on which the expenditure was £116,537,662. This Government has provided approximately four times as many homes as were provided in a comparable period by the previous Government, and its expenditure for that purpose has been five times as great as that of its predecessor.
The provision of war service homes is only a part, though an essential part, of the Government’s overall housing effort. We must hear in mind that the Commonwealth has provided approximately £200,000,000 for the purposes of the Commonwealth and State Housing Agreement. In this year, £32,000,000 has been appropriated for expenditure under the agreement. I mention that fact, because the agreement provides that the Commonwealth and the States must agree on the percentage of houses built under the agreement that will be made available to ex-servicemen. I understand the present position is that about 60 per cent, of the houses built by the New South Wales Housing Commission with money provided by the Commonwealth are occupied by ex-servicemen. So this Government, in addition to providing money, through the War Service Homes Division, for men who aspire to own their houses, is providing money, under the Commonwealth and State Housing Agreement, for rented houses for ex-servicemen. The figures show that during this financial year the Commonwealth has provided about £60,000,000 for housing purposes, £32,000,000 to the States under the Commonwealth and State Housing Agreement and the remainder through the War Service Homes Division and the Commonwealth Bank.
But the fact of the matter is that to-day the solution of the housing problem depends, not so much on finance as on building materials. It is on record that the Premier of New South Wales, dealing with housing in a speech delivered in the State Parliament, made the point that, even if his Government were given further finance for home building, it was doubtful whether the money could bc used, because the problem was one of building materials rather than of finance. As Senator O’Byrne has made some reference to rented houses, and as I have made the point that, even in that field, the Government is making a substantial effort, under the Commonwealth and State Housing Agreement, to cater for the needs of ex-servicemen, it is perhaps appropriate to refer to another matter in connexion with home building. It has been estimated that at present we require about 60,000 new dwellings each year to meet the requirements of new families and immigrants and to replace old dwel- lings. Of course, there is a backlog, which has to be taken into account. That backlog is being overtaken at the rate of about 15,000 to 20,000 houses a year. Statistics show that at the end of the financial year 1948-49, 65,658 houses were under construction. At the end of the year 1949-50, the figure had risen to 68,918. At the end of the year 1951-52 it was 86,504, and at the end of the year 1952-53 it was 72,928. I do not want to analyse the figures in detail, but an analysis shows that, in the June quarter of 1954, we were operating on the basis of building approximately 80,000 homes a year. As we need to build about 60,000 a year to meet normal requirements, we are making up the backlog at the rate of about 20,000 a year.
I think it should be placed on record that the War Service Homes Division probably was the first big governmental home-building instrumentality in Australia to tackle a problem that was causing grave concern. I refer to contracts on a rise-and-fall basis, which were first entered into in the period of inflation. The rise-and-fall provision in contracts had some disastrous consequences, particularly in group housing projects and other big building projects, because it gave rise to a colossal overhead expense, caused by the necessity to employ a large staff for checking purposes. Generally speaking, it meant that anybody who had a house built did not know for certain until the last sound of the bugle, as it were, exactly what the house would cost him. It is to the credit of the War Service Homes Division that it was the first government instrumentality in the Commonwealth to stand out against riseandfall contracts and insist that firm prices should be quoted for the construction of houses. By taking that stand, the division did a great deal to stabilize building costs and put building contracts on such a basis that government instrumentalities, building societies and other lending authorities knew, when they let contracts, what the actual cost of the houses would be. That was a very good thing. I want to sound a note of warning. It has come to my notice that in New South Wales there is a tendency for builders to try to slip back into the rise-and-fall technique. In the interests of ex-servicemen who want to huy their houses, that tendency should be resisted firmly.
The bill proposes to increase from £2,000 to £2,750 the limit of loans made for the purchase of existing houses. That is in conformity with the policy enunciated by the Prime Minister during the general election campaign, and it is further evidence of the sincerity of the Government. The maximum loan for an existing house will in future be comparable with the maximum loans made in respect of houses to be built and for the discharge of mortgages. The increase will tend, as Senator O’Byrne pointed out, to channel a good deal of the activity in regard to ex-servicemen’s homes into the purchase of existing dwellings. I have already made the point that ex-servicemen who wish to purchase existing dwellings will be protected by the division, which will make loans only in respect of houses that are worth the money asked for them. The increase will tend to shift the emphasis from housebuilding to the purchase of existing houses. If it tends to ease the pressure on building materials, to that extent it will be a good thing.
The removal of the valuation limit of £3,500 is also an excellent idea, because the limit has operated harshly against some sections of ex-servicemen. The principle that was applied, in effect, was that the division should deal first with the most urgent cases. It took the view that, if an ex-serviceman had enough money to acquire an equity of 40 per cent, or more in a house, it was better to deal with other and more urgent cases first. That principle was the reverse of the business principle that good security is desirable. Under normal circumstances, a man who has a large equity in the house on which he wants to borrow money is regarded by lending authorities as a good risk. In the normal course of business, such borrowers are encouraged, but the War Service Homes Division has discouraged them. If an exserviceman wanted to buy a property worth over £3,500, he could only borrow’ £2,000 from the division in any event. That meant that he had to have an equity in the property of at least 40 per cent. The division took the view that if he had such an equity, his case was not an urgent one. I think the removal of the limit is an excellent idea. There are many ex-servicemen who desire to buy houses worth considerably more than £3,500. An ordinary modern, small brick cottage in a good suburb, at any rate in the County of Cumberland, might reasonably be expected to cost at least £3,500, and it could well cost £4,500 or £5,000. But, because of the limit that was imposed, if an ex-serviceman wanted to buy a house worth over £3,500, he was debarred from obtaining finance from the War Service Homes Division. If he went to the division and asked for finance to buy a house valued at £3,200, the division would lend him approximately £2,000, but if the property that he wanted to buy was worth £3,600, the division refused to supply the finance. Consequently, a certain amount of resentment was created in the minds of some ex-servicemen. They said that their right, as ex-servicemen, to obtain finance from the War Service Homes Division, was their heritage. When finance was refused, they felt they were being victimized. Now the Government proposes to abolish the limit, thereby recognizing that every ex-serviceman has the right to ask the War Service Homes Division for finance for a house, irrespective of the price. If the valuation of the house is correct and if his financial position justifies him in buying a house in that price range, he qualifies for finance from the division.
There is only one other matter to which I want to refer. I have referred to it previously in this chamber, but as a New South Wales senator, I feel I should refer to it again. The extraordinary position has arisen that New South Wales, the mother State of the Commonwealth, and the State with the largest population as well as the greatest number of ex-servicemen, has not received financial assistance for housing commensurate with that position. The current report of the Director of War Service Homes shows that there were 368,326 enlistments from New South Wales, 279,920 from Victoria, 140,02S from Queensland, 83,558 from South Australia, 90,144 from Western Australia, and 30,532 from Tasmania. There is no significance in those figures other than the relationship that they bear to the populations of the States. I have before me particulars in relation to the number of homes that had been provided by the War Service Homes Division as at the end of October, 1953. The numbers provided were as follows : - Victoria, 21,916 ; New South Wales, 10,082; Queensland, 12,500. I direct attention, particularly, to the fact that 25 per cent more homes were provided by the division in Queensland than in New South Wales, although the enlistments from New South “Wales were about two and a half times as many as from Queensland. Until recently, there was a considerable waiting period for housing loans, particularly in New South Wales. Senator O’Byrne said that the average was about two years. It may not have been quite so long as that in all cases. Many exservicemen who applied to the War Service Homes Division for housing loans were discouraged when they were informed of the lengthy waiting period, and sought financial accommodation from outside organizations. As the building society movement was flourishing in New South Wales, it was possible for ex-servicemen to obtain financial accommodation readily, with a minimum of administrative bother, but loans from such organizations bore interest at the rate of 4f per cent., compared with 3f per cent, charged by the War Service Homes Division. Furthermore, repayments to building societies were spread over periods of 22£ years or 28 years, compared with 40-year terms for war service homes loans. After the war, many ex-servicemen who had young families wanted to obtain homes quickly in order to settle down and obtain a stake in the country. It was unfortunate that such lengthy delays were necessary in connexion with the granting of war service homes loans, thus necessitating their making other financial arrangements.
I should ‘ like the Minister to explain to me the basis on which money is allocated for the purposes of the division in the various States. As the amount that it allocated for the purposes of the division in New South Wales is disproportionate to the number of ex-servicemen in thai, State, I consider that the New South Wales allocation should be increased to enable the division in. New South Wales to take over mortgages on existing homes, and thus give to the ex-servicemen concerned the benefits of a lower rate of interest and a longer period for repayment. I am speaking in the light of my personal experience in this matter. After the war, I applied to the War Service Homes Division for a housing loan, but when I was informed of the probable lengthy waiting period involved, I obtained financial accommodation from a building society. I should say that I received excellent treatment from the society, and was thus able to obtain a home fairly readily. However, I point “out that many ex-servicemen who did as I did are paying higher rates of interest on their housing loans than would have been payable on war service homes loans. In addition, their instalments of principal and interest are greater than for war service homes loans because of the shorter term for repayment. I consider that more money should be made available to the War Service Homes Division in New South Wales for the purpose that I have mentioned. I conclude, by congratulating the Government on the progress that this bill represents in relation to war service home’s loans. It gives effect to the promise that was made by the Prime Minister (Mr. Menzies) in his policy speech during the la.st general election campaign to increase the maximum amount of a war service homes loan for the purchase of an existing house.
Debate (on motion by Senator McLeay) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator McLEAY read a first time.
Senator McLEAY (South Australia -
Minister for Shipping and Transport) [10.8]. - I move-
That the bill be now read a second time.
The purpose of this bill is to approve an agreement made between the Commonwealth and the State of South Australia relating to the conversion to standard gauge of the 3-ft. 6-in. gauge railway between Leigh Creek North Coalfield and Marree, and to provide for the conversion to he effected by the Commonwealth Railways Commissioner.
The Commonwealth Railways Commissioner recommended to my predecessor in 1949 that, as soon as the standard gauge railway to Leigh Creek had been completed, the conversion of the Leigh Creek to Marree section to 4-ft. 8½-in. gauge should be commenced. I believe that honorable senators will agree, on the facts that I shall outline, that this work is amply justified.
It is provided in the agreement between the Commonwealth and the State of South Australia, which was authorized by the Railway Standardization (South Australia) Agreement Act 1949, that the Commonwealth shall undertake, amongst other things, the conversion to standard gauge of the 3-ft. 6-in. gauge Commonwealth Railways line from Port Augusta to Alice Springs. The railway referred to in this bill is a part of that railway. The State has, by legislation, approved the agreement, and thus given the consent required by the Constitution for the proposed conversion, provided it was effected on the existing route. However, in order to ensure that the new standard gauge track will have the most economically efficient gradients and curvature, the Commonwealth Railways Commissioner requires power to make deviations not exceeding 5 miles on either side of the existing route. This is a necessary and standard procedure. The State has executed an agreement with the Common wealth, in which it undertakes to give its consent to the proposed conversion, with power to make deviations up to the limits defined. The agreement referred to in this bill provides, also, that the State will grant to the Commonwealth, free of charge: (a) any Crown lands, and any leased lands of the Crown in respect of which the Commonwealth shall have acquired the rights of the lessees; and (b) any stone, soil and gravel, upon any Crown lands, or leased lauds of the Crown, from which the State has a right to take the same; certified by the Commonwealth Railways Commissioner to be required by the Commonweal th in connexion with the conversion of the railway, or the maintenance or working of the railway upon the altered gauge. Such rights were granted to the Commonwealth by the State in respect of the railway that is at present under construction to Leigh Creek North coal-field. The need for this conversion is best demonstrated, first, by consideration of the economics of retaining the existing line in 3-ft. -6-in. gauge. If the standard gauge track were terminated at Leigh Creek North, the position would be as follows: -
The following are the most important physical advantages that conversion would bring: -
In addition, of course, the conversion would be a further step towards the fulfilment of the Commonwealth’s undertakings in the Railway Standardization Agreement of 1949 with the State of South Australia.
As the cattle industry is of primary importance in the development of the inland, the best transport system that can be economically justified should be provided. A royal commission was appointed under the provisions of the Port Augusta to Alice Springs Railway (Alteration of Route) Act 1950, under the chairmanship of His Honour Mr. Justice Wolff. I should like to read some extracts from the report and finding of that commission -
It is estimated that Australia consumes about 88 per cent. of its beef production. Of the surplus, about one-half is suitable for export as carcase beef, and the remainder is canned either for export or for the retail trade. At the present time between 80 per cent. and 90 per cent. of the cattle coming down from the north are so badly bruised that they are not fit for export.
Mr. W. A. Beattie, Agricultural Economist and Senior Research Officer attached to the Commonwealth Scientific and Industrial Research Organization, expressed the opinion that poor transport facilities are responsible for great numbers of cattle being sent to the abattoirs as fat cattle when they are only in store condition. Cattle loaded in fat condition reach the market with loss of bloom through the long and arduous journey and are only suitable as stores, yet they pass as “ fats “. The export of the carcase does not enhance Australian prestige abroad. So, even cattle which escape injury in transit are prejudicially affected by the journey.
Northern cattle should be spelled at Marree or Farina - preferably Marree. Suggestions were made that Telford would be suitable, but the noise of trains, mining and aircraft would disturb these wild cattle. In America there has been a rule in vogue since 1902 that cattle must be spelled once in every 28 hours unless the journey can be completed in 36 hours.
The time taken in travelling cattle by rail from Alice Springs to Stirling North is 47 hours. This is far too long without a spell. Add to this the time the cattle are waiting in trucks after loading at Alice Springs, which may be some 12 hours, and an appreciation can be got of the severe effect which the rigors of the journey have on their condition. The total time from Alice Springs to Dry Creeck is 85 hours. This includes a 24-hour spell at Stirling North, 2½ hours travel from Stirling North to Port Pirie, 2 hours occupied in transfer at Port Pirie Junction, and 9½ hours travel from Port Pirie to Dry Creek. These times arc the best that can be expected under present conditions, and in practice they are often exceeded.
The North-South line now carries approximately 100,000 head of cattle a year for the Adelaide markets. Since the line was extended from Oodnadatta in 1929 the cattle traffic from Alice Springs has more than doubled. It can be demonstrated that while the average number of cattle in the Alice Springs district has increased to approximately 300 per cent. more than pre-war, the average in the Northern Territory is only about 12 per cent. more. This virtual stagnation may be traced to lack of transport.
The probable increase in cattle traffic from Alice Springs alone would warrant serious attention to better and more speedy transport. We think the foregoing remarks show how necessary it is to ensure that adequate, safe, and speedy transport is provided to foster this important industry.
A great deal of the bruising of cattle occurs during loading and unloading to and from railway vehicles. The elimination of one transfer point between Alice Springs and Adelaide will very materially reduce the incidence of bruising, and, of course, the time for the journey.
The standard of construction proposed for the conversion is as follows: - Ruling grade, 1 in 120; ballast, a minimum of 6 inches, consolidated; rails, 94 lb. to the yard, welded. The conversion of this railway, if authorized by the Parliament will be undertaken in conjunction with the completion of the railway now being constructed to Leigh Creek North Coalfield. Plant, materials and men will be used to best advantage on the two projects, and it would be inconvenient and of no value to account for expenditure on the two works separately. Funds totalling £11,000,000 have been appropriated under the Stirling North to Brachina Railway Act 1952. Provision has been made in the bill for this appropriation to be amalgamated with the one required for that conversion, which amounts to £1,241,000, so that the maximum appropriation for the two projects would be £12,241,000.
In conclusion, Mr. President, I wish to emphasize two important considerations. The existing narrow-gauge track is urgently in need of rehabilitation, and the cost of this and the provision of transfer facilities at Leigh Creek would total £821,000 if the extension to Marree be not authorized by Parliament. The second point is that, if this bill is passed now, it will be possible to effect appreciable savings in construction costs by the use of men, plant and equipment now in the field for the work in progress, and by extending current contracts for such work as the supply of ballast, rock cutting and concrete work. I submit to honorable senators that this project is thoroughly justified economically, and I commend the bill to their favorable consideration.
Debate (on motion by Senator Armstrong) adjourned.
Debate resumed (vide page 1204).
– The Opposition does not propose to delay the passing of the War Service Homes Bill unnecessarily, because it believes that it should facilitate the passage of any legislation which will result in the improvement of the housing of the people. I wish only to make some broad comments on housing generally and on war service homes in particular. Every honorable senator has been bombarded with questions from ex-servicemen for the purpose of expediting their applications for housing finance from the War Service Homes Division. I have had extensive dealings with the War Service Homes Division and I have the highest praise for the efficiency and courteousness of the officers of the division. Naturally, those officers have to be guided by the legislation and regulations that govern their activities.
Housing is a subject of the utmost importance to this country. Tens of thousands of our kith and kin are living under slum conditions. Tens of thousands of ex-servicemen have had applications for finance for the building or purchasing of houses with the War Service Homes Division for many months. Some of them are distraught and many of them are suffering financial loss because of the delay in dealing with their applications. The Government should lay down a national policy in regard to housing generally. Last week the Senate discussed a housing bill relating to an arrangement between the Commonwealth and the States. This legislation before the Senate is in a similar category to that because it proposes that the Commonwealth shall make money available for the construction of houses. Last week, an honorable senator opposite said that the Government could only obtain such loan funds as were provided by the Australian Loan Council. What is the Australian Loan Council ? The Australian Loan Council, in the final analysis, is the Australian Government. I ask honorable senators opposite not to try to delude the people on that subject. The Australian Loan Council is composed of the Premiers of the States and the Commonwealth Treasurer presided over by the Prime Minister. Theoretically, the States have a majority, but we know from experience that the decision of the Commonwealth is final. At the last Australian Loan Council meeting, every Premier voted against the Commonwealth, yet the Commonwealth’s decision prevailed. We know from experience that it does not matter what the Premiers say, the amount of money made available by the Australian Loan Council depends on the amount that the Australian Government is prepared to make available. In spite of the demands of the Premiers for a stun of £250,000,000, the Prime Minister and the Treasurer were adamant that the States would have to be satisfied with the sum of £200,000,000.
In relation to the financing of war service homes, I suggest that if a person was prepared to risk his life in the service of this country he should be entitled to the best possible conditions that we can give him. I suggest that money should he made available through the Commonwealth Bank on a nominal deposit and at a nominal rate of interest to ex-servicemen and others. Will honorable senators opposite not agree that every house built in Australia is a national asset? Silence indicates assent. They will agree, also, that every home built in Australia becomes an immediate revenue producer. Again, silence indicates assent. It is perfectly obvious that every home that we can build at a low rate of interest and on a nominal deposit will be an asset to the country. The greatest contribution to defence is made by a contented and well-housed people. Senator Anderson said last week, and he repeated to-night, that finance was not a problem. What an amazing statement! I think I will ask the Prime Minister (Mr. Menzies) to make Senator Anderson available to tour Australia with me to disillusion the tens of thousands of people throughout the Commonwealth who are under the impression that lack of finance is the principal impediment to home building. Thousands of people are desperately in need of homes. Thousands of people are living under slum conditions and suffering hardships that no human being should he asked to suffer. The only thing that is stopping them from purchasing decent homes is the lack of finance. Yet Senator Anderson has the temerity and the stupidity to say that finance is not a bar to home building ! The Opposition does not want to delay the passage of this bill because, at least it will be of some benefit to applicants for war service homes by increasing to £2,750 the maximum loan for the financing of homes which have not been built under the provisions of the War Service Homes Act. The Minister said in his second-reading speech -
In hia interests-
That means the interests of the exserviceman precautions are taken to see that the price is reasonable.
We are living in days of inflation. Honorable senators opposite cannot deny that since they were elected to office in 1949, prices have risen astronomically. I ask the Government, therefore, what precautions it has taken to ensure that the new maximum loan will not be made the minimum building cost. Obviously, if a builder knows that the maximum loan has been increased from £2,000 to £2,750, there will be a tendency for him to make his minimum price £2,750. Where is there a safeguard in this measure to prevent that? There is none. The Government obviously has not a clue to indicate how it should go about preventing exploitation by builders. The only thing I can suggest in this regard is that the Government is completely dishonest. I invite Government supporters to be sincere, and to be honest with themselves. What are they doing to ensure that costs will bc kept in check? Unless something is done to prevent costs from rising still further, the increased loan provided for in this legislation will not benefit the purchaser of a war service home. It is my considered opinion that, through the Commonwealth Bank, money could be made available to ex-servicemen to build homes in which to raise their families - the best, immigrants that we can have. There is no reason why advances should not be made for home-building purposes on a very nominal deposit, and at a low rate of interest. It could be done, and it should be done. If honorable senators opposite were honest in their protestations of loyalty, and in their professed concern for ex-servicemen, they would see that ex-servicemen received a greater measure of justice in home building than they re receiving to-day.
– Obviously, a measure which provided £30,000,000 of the taxpayers’ money would he worthy of close consideration by any upper chamber of a parliament. The debate on this measure, I believe, reflects an almost acknowledged trait of the Australian character. The Senate has decided to back the favourite, and the favourite, in this instance, is the policy of the Menzies Government in respect of war services homes which, I remind Senator Sandford, are “rising fast “ throughout Australia to-day. The hill, will increase the maximum loan for the financing of homes which have not been built under the provisions of the War Service Homes Act, to £2,750. This reflects another important feature of the policy that was put to the people by the present Government parties and approved in 1949. We believe in home-ownership. We are opposed to the Labour policy as voiced by Mr. J. Dedman when he called people who own homes “ little capitalists “. Therefore, I support the legislation because it will help more ex-servicemen to become the owners of homes. The war service homes scheme has proved outstandingly popular, and it has been greatly broadened by the application of this Government’s policy. To-day, war service homes are so popular that even the increased financial allocations that this Government has made have been unable to meet the demand. Officials estimate - and I have no reason to doubt them - that 25,000 applications for war service homes are being made each year. This bill will provide, it is hoped, for the building of 6,040 homes in the present financial year. It will finance the purchase of 3,520 existing homes for ex-servicemen. They will be new homes built by private contractors, “ spec “ builders, and so on, and approved by the War Service Homes Division. The measure will also enable the purchase of 2,000 old homes, making a total in all of 12,160 homes. On the basis of an average of four people to each home, we in this Parliament are agreeing to legislation that will result in home ownership for 50,000 Australians in the current financial year. That is a step of which any government could be proud. Largely as the result of the increased allocations that have been made by this Government for war service homes, more homes for ex-servicemen will be in the course of construction at the end of this financial year than ever before in our history.
There is another aspect of the bill that I should like to stress. The Government has decided to remove the limit of £3,500 on the total purchase price of an existing house that an ex-serviceman may wish to purchase. I remind the Senate, too, that this Government has, since it came into office, made available for homes for exservicemen and war widows, a total of £147,000,000, including this year’s allocation. Last year, the provision was £28,000,000. This year it has been increased to £30,000,000. In addition there is a little more than £1,000,000 which remained unexpended at the end of last year. I shall refer to that matter later. Senator Sandford suggested that the Loan Council was ruled by the Prime Minister and the Treasurer of the Commonwealth - two people ruling five Premiers! He implied that the Australian Government had kept down the amount of money available for home building. I remind him that the Premiers of South Australia and Western Australia, and I think also the Premier of Tasmania, voted with the representatives of the Australian Government to decide the amount of loan money available in Australia to-day. Again, Senator Sandford is wrong. The £30,000,000 which has been made available to exservicemen and war widows under the war service homes building programme of this Government has come out of revenue, not from loan funds.
I think that any government, however wise or generous it may be, can learn from the most simple member of the Parliament, and, perhaps, even from the newest member. I wish to make two suggestions to the Government and the War Service Homes Division in respect of war service homes policy in the coming year. I referred, a little while ago, to the fact that, of the £2S,000,000 voted, approximately £1,000,000 was left over at the end of the last financial year. I say that, although the division should not be extravagant, it should be generous and sympathetic in dealing with applications for assistance under this legislation, and it should do all that it possibly can to expend the money that this Parliament votes wholeheartedly, with all political parties supporting the appropriation. I hope that, in dealing with cases which require ministerial approval, the Minister for Social Services (Mr. McMahon) will be very sympathetic. If a case goes through the ordinary processes and ultimately reaches him, it goes to him as the final arbiter. For that reason, I hope that he will be sympathetic, and even generous, in making a decision. If he finds that, in the course of his duty, he has to say, “ No “ to an application which has come so near to being approved, I hope that he will not refuse it outright, but will say to his officers, “ Bring it forward in the month of MayBy then, we shall know how the money is being expended in respect of cases which, have been approved “.
I picture the situation in which a number of such cases will be put up by the head of the division, and the Minister will be told, as he could have been told this year, “ We are going to have a little over £1,000,000 to spare at the end of this year, but these borderline cases will use up some of the money that the Parliament has voted. They are definitely not cases that you can rule out without argument. The Parliament has voted the money, and it is obvious that the applications which can be regarded as proper for advances cannot use up all the money that has been voted. Therefore, we havebrought back to you these borderlinecases so that you may agree to them and let these people, who have hoped and waited for assistance, be given suchassistance. There is not a person in Australia who would deny them the right toa loan under the legislation “. My motto, if I may have one, in regard to this legislation - although it is not my motto in regard to all legislation - is “ Obey the act, but spend the money that Parliament votes before the end of the financial year is reached”.
In 1951, the Parliament agreed to deletion from the act of a provision relating to the taking over of existing mortgages. I believe that, since 1951, it is not possible for an ex-serviceman or a war widow to go to the War Service Homes Division and ask it to take over a mortgage which was held by a trading bank or some other private instrumentality. I know that the Government is sympathetic in this matter, but I hope that it will be able, next year or the year after, to bring that section back into the act. In many instances, because the vendor wants a quick decision, ex-servicemen who propose to purchase homes arrange a mortgage through private enterprise, with a lawyer, a -bank or some other lending authority. An ex-serviceman who does that then says, “ I am an ex-serviceman. Because of my service during the war, I am entitled to help from the War Service Homes Division “. When he conies to the division and seeks help, he is told, “ In 1951, for very good and just reasons, the Parliament of Australia deleted from the legislation the provision under which you might have received help “. I hope that that provision will come hack, but I also hope that the War Service Homes Division and the Government will do all that they possibly can to publicize the fact that an exserviceman purchaser of a home cannot obtain help from the War Service Homes Division, under our present legislation, if he enters into an agreement to purchase and arranges a mortgage, but does not tell the division about it beforehand.
I consider that the points I have raised ave important, and I hope that they will be heeded. Having referred very little to Senator Sandford, I now wish to agree with him in paying a sincere tribute to the work of the officers of the division. I speak not only from my own small association with them, but also from information which has been given to me by ex-servicemen and war widows who have dealt with the division, particularly in Hobart, and who have vouched for the fact that its officers are applying the legislation justly and dealing with those who seek help and advice with the greatest courtesy. I think we can ask no more than that from the public servants of the Commonwealth. I support the bill.
– I sincerely thank honorable senators for the manner in which this bill has been received to-night. I have no doubt that all honorable senators will agree that the general trend of the debate has been in support of the bill. It is true that there has been some criticism, but generally speaking, honorable senators on both sides of the Senate have indicated their support of the measure.
Question resolved in the affirmative.
Bill read a second time.
Senator WRIGHT (Tasmania) [10.54J. - In relation to the new provision to increase the maximum advance to £2,750, can the Minister say how soon the deputy directors in the States will be able to make such loans available to applicants who apply now for financial assistance? I seek that information because I have been asked by two or three applicants to ascertain it.
– I understand that, at the present time, there is a waiting list in respect of applications which have been made already. The additional amount to be provided under the provisions of this bill will be made available immediately after the bill receives the Royal assent.
– I wish to ask a question on the same lines as that asked by Senator Wright. I have in mind applicants who have everything ready to commence building, and who have had their application lodged with the division for some time. I wish to know whether this sixmonthly period will date from the 1st November, or from the time when the original application for a loan was made to the division.
– No alteration at all will be made in respect of present building applications. They will take the ordinary priority, and each new application will go to the bottom of the list. I understand that the only alteration will be in relation to applications for assistance to purchase existing homes. From the 1st. November, the waiting time in respect of such applications will be six months.
– An applicant might, therefore, lose his chance to purchase a home.
– Is there not some provision in the act to enable an exserviceman who proposes to purchase an existing home to be given an indication whether his application will be considered favorably or otherwise? I suggest that such a provision would enable him to make temporary arrangements regarding the purchase of the home. I think that if he were given to understand that, in due course, his application would be successful, much of the difficulty would be overcome.
– I understand that, at the present time, approval to grant temporary finance in relation to the purchase of an existing home cannot be given. The waiting period has been fixed at six mouths from the 1st November, but I arn informed that the Government is looking into that matter. It is felt that it is not quite fail” that a man who wishes to purchase an existing home should receive a higher priority than does a man who is prepared to build a home. At the present time, the purchaser of an existing home has a much more favorable priority than has the man who is prepared to build his home, and who bas to wait perhaps twelve months for financial assistance.
– Order ! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That tIle Chairman do now leave the chair and report to the Senate.
Question resolved in the negative.
In committee: Consideration resumed.
– The War Services Homes Division will not approve of temporary finance to enable an exserviceman to buy an existing home at a later date, and it will not promise that if an ex-serviceman obtains finance for a period pending the completion of the sale, it will take over the home later. The difficulty is that the vendor of the home might not be prepared to wait six months for payment of the money or for a decision. That phase of the matter is being investigated.
– A normal settlement in the case of the sale of a house might take three to four months if it involves searches and other procedure, but I believe that there should be some guarantee in relation to the purchase of a house in such cases as those that have been mentioned. A simple device is for the buyer to take possession of the home temporarily as a tenant and pay rent. Such provision can be made in New South Wales. It is a common practice for a person to enter into immediate possession, to ensure protection of the property, and pay a nominal rent. If the War Service Homes Division would give a valuation and a guarantee that in six months’ time it would lend a given amount, an ex-serviceman could probably take over a property on a rental basis. The vendor would not be losing much in terms of time because a settlement often takes some months.
– The arguments that have been advanced do not take into account the fact that in every contract of sale there are two parties - the vendor and the purchaser. I do not believe that many vendors of property would be ready to wait six months for their money under present market conditions. Many of the older homes are a better proposition than new houses because of the quality of the building. It seems unfair that an exserviceman who has a chance to get a home and has to make up his mind on the spot, is prevented from doing so hecause of this financial difficulty. I should like the Government to give some consideration to the case of potential buyers who are able to raise money temporarily through a bank. That should not prevent them from obtaining the money from the War Service Homes Division when the waiting period of six months has expired. I know personally of three or four cases in which an immediate decision had to be given. The owners wanted an immediate settlement. I doubt whether there are many persons in the community so public spirited that they will wait for a sum probably exceeding £3,000, for six months when other people with the money are willing to buy. Ex-servicemen are being placed at a serious disadvantage. Despite what Senator Anderson has said, I doubt whether many settlements are delayed for months when the money is available. It does not take long to make an inspection and provide the money for the purchase of a home. In the case of properties that are already built, there shoudnot be a time lag operating against ex-servicemen.
.- The War Service Homes Division is quite willing to give a valuation if the purchaser desires one. The buyer has to pay a normal fee in such cases. The division will give an indication whether the price is a fair one, but it will not guarantee that, at the end of six months, it will take over the property. If the price is reasonable, there is no reason to suppose that the division will not do so, but there must be a waiting time of six months.
– The exservicemen cannot buy on promises.
SenatorCOOPER. - Senator Anderson has suggested that potential buyers could pay rent. Last year 2,600 purchased houses on such terms. They possibly rented the house during the waiting time. The vendors were willing to wait.
– Honorable senators have been referring to one of the most unfortunate provisions of the legislation. I know an ex-serviceman who found a suitable house three times, but the vendors would not wait six, eight or twelve months for their money. I mentioned the matter to the Minister for Social Services (Mr. McMahon) and he told me that the War Service Homes Division would guarantee to take over a bank mortgage if one could be obtained when the buyer’s turn for finance arrived.
– That is not correct in the case of an existing second-hand house, but the matter is being examined.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
The following papers were presented .: -
Lands Acquisition Act - Land, &c, acquired for -
Commonwealth Scientific and Industrial Research Organization purposes - Deniliquin, New South Wales.
Defence purposes -
Newington, New South Wales.
Gosford, New South Wales.
Senate adjourned at 11.10 p.m.
Cite as: Australia, Senate, Debates, 3 November 1954, viewed 22 October 2017, <http://historichansard.net/senate/1954/19541103_senate_21_s4/>.