22nd Parliament · 1st Session
The President (Senator the Hon. A. M. McMullin) took the chair at 11 a.m., and read prayers.
– Has the attention of the Minister representing the Minister for External Affairs been drawn to an incredible statement by Geoffrey Reading, published in the Sydney Daily Mirror, on the 1st May, that several members of the Department of External Affairs, who had recently returned from Indonesia, had expressed the opinion that they favoured Dutch New Guinea being handed over to Indonesia? Will the Minister have inquiries made concerning the truth of this statement? If it is true, does that statement reflect the unpublished opinions of the Department of External Affairs?
– I have not seen the statement to which the honorable senator has referred, but he can take it, from me with confidence that the statement is completely untrue. As the honorable senator has called attention to the allegation that has been made, I shall have it brought to the notice of the Minister for External Affairs.
– I preface a question to the Minister for National Development by inviting his attention to an article which appeared in the Canberra Times to-day, headed “Electrical Industry Pledges Drive for Export Expansion I should like to read portion of the article by way of further preface. It stated -
The. National Electrical Industry Convention yesterday pledged its support for the Government’s policy of expansion for the export of Australian manufactured goods.
The Convention also pledged itself to increased productivity in the electrical industry. “ This Convention recognizes the cogency of the policy of the Government, and pledges its unstinted support to assist in the fulfilment of the plan “, said a motion which was passed unanimously.
The report also states that the convention pledged itself to increase production at the rate of 2$ per cent, a year over the next three years. In the light of that pledge, and the imaginative target of per cent, increase of production set by representatives of the industry which employs many hundreds of thousands of workmen, will the Minister ensure close liaison with this industry by members of the Department of National Development, wherever possible, in the great national developmental projects, especially those involving electrical equipment, such as the Snowy Mountains hydro-electric scheme ?
– I have read the report to which the honorable senator has referred and I, also, was impressed with it. The convention showed imagination in its approach to the problems facing Australia. I hope that, not only government departments, but also all other purchasers of electrical equipment, will show the same co-operative spirit in encouraging this industry in the programme it has set.
– I direct a question to the Attorney-General with reference to the recent announcement that Sir William McKell has been nominated for appointment to a commission which will frame a federal constitution for Malaya. Is that an appointment made by the Australian Government; or under whose authority is it made? Can the Minister give the Senate any information as to the circumstances of the appointment?
– My recollection is that the British Government, in pursuance of an arrangement made with the Head of State in Malaya, agreed to the appointment of a commission to consider the future constitutional set-up in Malaya. It was desired that the personnel of the commission, or some of them at least, should have knowledge of the workings of a federal constitution. There are, of course, a number of such constitutional set-ups within the British Commonwealth. As a result of the arrangement, the British Government requested the governments of various parts of the Commonwealth to suggest the names of persons who would be suitable to serve on such a commission. The Australian Government suggested Sir William McKell as a person who had had a good deal of practical experience, as well as possessing legal knowledge of the working of a federal constitution such as we have in Australia. The suggestion made by the Australian Government was accepted b”y the British Government, and, I understand, Sir William McKell will serve on the commission.
– Some weeks ago, I asked the Minister for National Development whether the Commonwealth Advisory Panel on the air transport of cattle and beef had finished its work. He said that the report of the panel was in the hands of, I think, the Treasurer. Will he how inform me whether it has been printed? If so, could I be supplied with a copy of it?
– The report has not yet been circulated. Indeed, it has been neither printed nor considered by the Government. Until it has been fully considered, it cannot be decided whether or not it should bo made a public document.
– Has the Minister representing the Treasurer seen recent press reports to the effect that Canada has unpegged the price of gold, and now permits the sale of gold to private purchasers? Has the Australian Government given any consideration to adopting the Canadian practice? Has the Australian Government any objection to the sale of gold to private purchasers? .
– I regret to say that I have not seen the newspaper reports on this important matter. In view of the importance of the honorable senator’s question, I ask him to put it on the notice-paper so that the Treasurer himself can furnish a reply to it. ,
– I address a ques tion to the Minister representing the Treasurer. In view of the appeals that have been made by both the Prime Minister and the Treasurer for an all-out effort to reduce costs throughout Australia, is the Minister aware that Broken Hill Proprietary Company Limited, whose profits over the last few years have been second only in degree of exploitation to those of General Motors-Holden’s Limited, has decided to increase the price of steel by £3 a ton, which will result in an increase of £6,000,000 in the cost of steel and steel products to consumers? Does he consider that this is an unAustralian action, and a deliberate attempt to sabotage the Australian economy ?
– To be fair, I think the honorable senator should also have mentioned that the newspaper report which contained the information h« mentions recorded that the price of Australian steel was some £20 a ton cheaper than the price at which steel could bt: imported into Australia. When the standard of living in this country and the level of costs generally are considered, I say with respect that the honorable senator, instead of criticizing this company, should congratulate it upon its achievements in producing steel of such good quality and at such reasonable prices.
– Will the Minister for Repatriation inform the Senate what progress has been made towards the erection of the Dawes-road Repatriation Hospital in South Australia of a psychiatric block for ex-servicemen suffering from war neurosis? Have the plans been completed and tenders called? ] should be glad if the Minister would inform the Senate of the exact position in respect of this most necessary work.
– On the 16th February, the honorable senator asked me a similar question, and I subsequently fur:nished him with a considered reply. T have since visited South Australia and inspected the proposed site of the new psychiatric ward for the Dawes-road Repatriation Hospital. I am unable to give the honorable senator any information additional to that which I gave him when he last wrote to me on this matter. At that time plans had been completed.
– No, I understand that they had not been completed. They were to be ready at the beginning of February.
– The plans were in the course of completion, and from what Senator Critchley has said I gather that he has probably seen the plans himself. The building will be erected in due course. It is a firm commitment for the Repatriation Department, and as soon as the Department of Works can get on with the job, the new psychiatric wing will be built.
– My question is directed to the Minister representing the Minister for External Affairs, and arises out of his reply to a previous question by Senator Wright about the circumstances surrounding the appointment of Sir William McKell to the constitutional commission in Malaya. The Minister did not make himself clear to me in explaining just what those circumstances were, and I now ask him whether it is the position that the Australian Government suggested to the British Government the name of Sir William McKell, and the British Government then made the appointment, or whether it is the position that the Australian Government suggested the name of Sir William McKell to the British Government, the British Government concurred and the Australian Government then made the appointment.
– Perhaps, I should have made my answer clearer. As I understand the position, the person who goes from Australia to be a member of this commission will in no sense represent Australia or the Australian Government. The commission, as I see it, has been appointed as the result of an agreement between the British Government and the
Head of State in Malaya. Those two authorities combined to appoint the commission. The desire was that there should serve on that commission persons from various parts of the Commonwealth, not representing the particular locality from which they came, who had had practical experience of the working of federal constitutions. It is in that capacity that Sir William McKell was suggested to the parties who desired to make the appointment, and the suggestion was accepted by them. I understand that the appointments will be made by the British Government and the Head of State in Malaya.
– My question, which is directed to the Minister representing the Prime Minister, concerns the forthcoming visit to London of Australian Victoria Cross winners and their wives. My question relates to two cases which have been brought to my notice. The first is the case of a deceased soldier whose mother is aged 85 years and is unable because of age and infirmity to make the trip and who nominated her son, who is the brother of the deceased soldier, to go in her place. His application to go was refused by the Government. The second is the case of the son of a deceased soldier whose mother has re-married, and so forfeited her right to be regarded as the next of kin of the deceased soldier. The son is now the next of kin, and I understand that his application to represent his dead father has also been refused. I ask the Minister to make inquiries about this matter.
– This matter has been given very full and most sympathetic consideration by the Government. In the scheme of things, it was essential for some limit to be placed on the numbers to be sent overseas on this very important and memorable occasion. I shall obtain for the honorable senator the details of the list, and also details concerning the degree of entitlement of those who are going. I assure her, however, that the matter has been approached most sympathetically and very generously by the Government. I shall bring the remarks of the honorable senator to the notice of the Prime Minister.
– Particularly in relation to the second case, that of the deceased soldier.
– Can the Minister for National Development say whether it is a fact that the Government has decided to subsidize the production of blue asbestos at Wittenoom Gorge? Could the Minister outline the reasons for the subsidy, the amount involved, and whether it is to be made available to other producers in the area ? If not, why not ?
– Yes, it is true that the production of blue asbestos at Wittenoom Gorge is to be subsidized by the Government. The terms of the subsidy, from memory, are that it will be for one year ending on the 30th September, and that the amount of the subsidy will be a total of £30,000 during the course of this year. The reason for thesubsidy is that this is one of the few large deposits of blue asbestos. It is one of the largest deposits, we believe, in the world, and it is certainly the largest in Australia. For some reason or other, Australian manufacturers and users of asbestos will not use the asbestos mined in “Western Australia. So, the company, which has some £2,000,000 worth of capital involved, has been forced into the position of obtaining a market for its products overseas, after having made application to the Tariff Board and the Tariff Board having decided that a protective duty should not be introduced. This is a subsidy which is not being made directly by the Commonwealth Government. It is being made by the Commonwealth Government to the Government ofWestern Australia and is matching a similar subsidy by theWestern Australian Government. It is being made only to this particular company because of the peculiar circumstances that surround the company, such as its past history, the scale of its deposits, and the efforts it has made to develop the deposits, together with the importance of maintaining the community engaged in this activity in the north ofWestern Australia.
– Has the Leader of the Government in the Senate read a statement by Mr. Justice Foster concerning the odours that come from certain industries near the Kingsford Smith aerodrome, in Sydney? As so much has been said about the need to attract visitors to this country, is the Government prepared to consider taking up with the New SouthWales Government, or the local authorities, the use of Chanel No. 5 perfume with a view to reducing, if not completely eliminating, this nuisance? Mr. Justice Foster stated that he never goes out to the aerodrome at Mascot without taking with him a little bottle of perfume, and that he sprinkles the perfume on his handkerchief. Does the Government consider it worth while to take up this matter with the State Government or the local authorities?
– I do not underestimate the importance of the matter raised by the honorable senator, but in order to put it on a proper basis, I suggest that he write to me on the subject. I shall then process it through and see whether something can be done about it.
– My question is supplementary to one that I asked earlier of the Minister representing the Treasurer. In view of the fact that the iron ore deposits of Australia are practically monopolized by the Broken Hill Proprietary Company Limited, and that they have been made available to that organization at a cost far lower than the cost of similar iron ore in any other part of the world, does the Minister consider that, having regard to this great advantage, the company should be entitled to aim an economic rabbit punch at the economy of this country by increasing the price of steel?
– Perhaps I might profitably begin my answer by debating what is an “ economic rabbit punch “. However, it is reasonable to proceed on the assumption that the Broken Hill Proprietary Company Limited increased the price of steel only because its costs of production bad increased. Its action was unavoidable. Apparently, I have a different view of the company’s action from that held by the honorable senator, but I believe that the company deserves a great deal of credit for the work that it has done and the progress that it has made. I am not pretending that the company is perfect, any more than I could pretend that either myself or the honorable senator are perfect, but it has made a very valuable contribution to the development of Australia. The honorable senator would be better advised to pay tribute to that fact rather than criticize the company. It is a somewhat impersonal organization, because it is really an amalgamation of many thousands of Australians who have invested their savings in it.
– Yesterday, the Attorney-General, in a reply to a question by the Leader of the Opposition concerning the Boilermakers’ case, said that the Government proposed to apply for leave to appeal to the Privy Council, and I understood him to say that the Government was actuated by considerations that were not directly associated with the constitution of the Commonwealth Arbitration Court. I invite the AttorneyGeneral to tell the Senate what those considerations are.
– What I said was that the implications of this decision were wider in their application than to the mere subject-matter of conciliation and arbitration. Perhaps, I can best illustrate it by stating that what the High Court decided was that not only must judicial power be vested in a court, but also that no other power could be vested in it. That is putting it quite shortly and it does raise questions in relation to acts other than the Conciliation and Arbitration Act. One could refer, perhaps, to a number of acts in which questions might arise as to whether a particular power which is given to the High Court, for example, is the exercise of judicial power as distinct from the exercise of an administrative power. I do not want to go into details on these things at the moment because, as I said yesterday, application is being made to the Privy Council for leave to appeal, and I think it is undesirable, in those circumstances, to enter into a discussion of matters of the kind that may be raised, for example, in support of that particular application.
– On the 2lst March last, Senator Hendrickson asked a question relating to the difficulties being created by the methods of the United States of America in disposing of surpluses of agricultural products. The Minister for Primary Industry has supplied the following answer to the honorable senator’s question: -
Debate resumed from the 1st May (vide page 507), on motion by Senator Spooner -
That the bill be now read a second time.
Question put. The Senate divided. (The President - Senator the Hon. A. M. McMullin.)
Majority . . . . 4
Question so resolved in the affirmative.
Bill read a second time.
– I take this opportunity to seek some information from the Minister for National Development (Senator Spooner) upon one aspect of this measure. I refer to an anomaly which has existed since the inception of the sales tax; that is, the practice of charging sales taxon the freight of an article. I know that there are reasons why sales tax is charged on freight., but they are not properly understood. Will the Minister inform the committee on this matter so that honorable senators may disseminate the information? For example, will the Minister inform the committee why a retailer who sells biscuits should charge sales tax on the freight paid on the biscuits from Perth to an inland town of Western Australia 200 or 300 miles away?
– Representations on the subject of freight in relation to sales tax have received the consideration of successive governments ever since the inception of the tax. Sales tax is not payable upon freight as such. It is an essential feature of the law, however, that the tax shall fall upon the last wholesale sale of goods, and shall be charged upon the amount for which the goods are sold.
In the case of a sale of goods by a city manufacturer or wholesale merchant to a country wholesale merchant, or to a wholesale merchant in another State, such goods would be obtained by the wholesale merchant free of tax by the quotation of his sales tax certificate, and tax would be payable by him upon the price for which he subsequently sold those goods to retailers. Naturally, all costs incurred by the wholesaler, including freight involved in getting the goods to his place of business, would be reflected in the wholesale price charged by him to the retailer.
This subject has been exhaustively considered, but it has been found impracticable to amend the sales tax law to allow a deduction, from the sale price, of the amount of expense incurred by way of freight in getting the goods to the point of sale by a wholesale merchant. Even if it were possible to achieve some practicable basis of allowing a concession in respect of freight, this would undoubtedly give rise to requests for similar concessions onaccount of other costs.
Where goods are sold by a manufacturer or wholesale merchant direct to an interstate or country retailer or consumer, the sales tax position in regard to freight would depend upon the terms of the contract of sale. . If the goods are sold for a delivered price, the tax is payable on that delivered price, but if the sale is on f.o.b. terms, then tax is payable on a price which does not include freight.
The Commonwealth Committee on Taxation was requested to examine and report upon the question whether it is practicable and desirable to amend the law so as to exclude freight costs from the taxable value of goods. After a thorough examination of the matter, the committee reported that it was unable to recommend any departure from the existing basis of sales tax to exclude freight from the taxable sale value of goods.
Bill agreed to.
Bill reported without amendment; report, adopted.
Bill read a third time.
SALES TAX BILLS (Nos. 1 to 9) 1956.
Debate resumed from the 1st May (vide page 418), on motion by Senator SPooner -
That the bills be now rend a second time.
Question resolved in the affirmative.
Bills read a second time.
– I was surprised that the Minister for National Development (Senator Spooner), who is in charge of these bills, made no reply to the second-reading debate, particularly in view of the fact that during that debate on these important measures a number of suggestions were made and a number of questions were asked. I anticipated that the Minister would have made some reply and told us what the departmental officers thought about those suggestions. On a previous measure, Senator Vincent elicited information in answer to a query which both Senator Henty and I, and possibly other honorable senators, had raised. It was very helpful information.
In my remarks on these measures last night I suggested that the department should look into the possibility of changing the categories of sales tax to conform to what I termed the metric system, that is 10 per cent., 15 per cent., 20 per cent. and 25 per cent. It would make the administration of sales tax easier. I now take this opportunity to ask the
Minister whether that suggestion has ever been considered. For all I know, honorable senators may have put it up year after year, or it may be completely new. I would not think so. The department may have a ready answer to prove that my suggestion is futile, but I do not like to make a serious suggestion in debate and have it completely ignored.
– In respect of the answer given to Senator Vincent by the Minister for National Development (Senator Spooner), I desire to ask whether the committee of inquiry on sales tax gave consideration to the collection of sales tax at the source, that is when the article leaves the manufacturer or the original importer, instead of the present system of collecting it, after the goods pass to the wholesaler. I understand that that system is in operation in other countries; andI believe that it would be far simpler.
– It would be dearer.
– It would not be dearer, and it would entail a lot less administration.
– What about the ad ding-on of profits?
– If it were found that the rate of sales tax returned from that particular source did not supply the amount of revenue the Government required, some adjustment of the rates would overcome any loss of sales tax on the goods that at present pass from the manufacturer to the wholesaler. I under stand that the system I have suggested is in vogue in other countries. It is far simpler than the present system and would require a smaller number of officers to administer it. I ask the Minister whether the committee of inquiry gave full consideration to that matter during its investigation?
– In reply to the point raised by Senator Henty, I am advised by departmental officers that over the years that matter has been examined and reexamined and that the department has accepted the, view, which has been confirmed by successive governments, outlined in the reply I gave to the previous question. The present system is more advantageous. Although, theoretically, it might be possible to adjust the rates in order to avoid added taxation, I think we all agree that for practical purposes the further down the line the tax becomes payable, the greater becomes the risk that the amount of tax will be increased by the addition of successive costs and taxes. However, the idea of arriving at a lower rate is a bit elusive.
In regard to the point raised by Senator Marriott, I ask him to notice that the rates of tax on this occasion, as on all previous occasions, are easy of calculation, namely 25 per cent., 30 per cent., 16J per cent, and so on. I am advised by the officers of the department that over the years consideration has been given to the suggestion that has been made by the honorable senator. I admitthat it is of very great consequence to have rates of sales tax which can be readily reckoned; but it is the view of the officers who have had experience, that the present arrangement is better than the one suggested by the honorable senator.
In reply to the complaint that I did not reply to the second-reading debate, I always think, on these occasions, that open confession is good for the soul. I had material prepared to answer my political adversaries, but in regard to my political friends, a note was made of their suggestions. The common procedure adopted is to take a note of suggestions made during second-reading speeches. I am always very chary of expressing a view about suggestions that are made during a second-reading debate. In practice, of course, a Minister turns to his departmental officers for information. I am always chary about expressing views on suggestions that emanate during a debate. I remind the Opposition that a Minister’s task is to get his bill through with as favorable a reception by the Opposition as is possible. On that score, I sometimes think that discretion is the better part of valour.
– I appreciate the admission of the Minister that he had prepared a speech in reply to probable criticism from his political opponents during the secondreading debate,, but that he had neglected to anticipate points that might be raised by his. political supporters. As has been pointed out to the Minister, the people who live in the outlying districts of Western Australia suffer a considerable disability as a result of the present method of applying sales tax to certain items, because of very high freight charges. The living costs of those people are very high. Would it not be possible for a trader in Kalgoorlie, Geraldton, or Carnarvon to calculate the sales tax payable on, say, a motor truck, on the basis of the retail price, exclusive of freight, and for the purchaser of the vehicle to pay the cost of freight separately? Similarly, could not the sales tax payable on a consignment of taxable goods from Perth to Kalgoorlie be paid on the basis of Perth prices, and the freight to Kalgoorlie paid separately by the individual purchasers ?
– The answer is, of course, that “sales tax is payable under the terms of the contract. If a Perth merchant sells at f.o.b., or f.o.r., Perth, that is the price that appears on the invoice, and consequently the price on which sales tax is calculated. If a Perth merchant fixes a price c.i.f. and e. Broome, or delivered1 on rail Kalgoorlie, again that is the price that appears on the invoice and the price on which sales tax is calculated.
. E do not think that the Minister has grasped the point that I endeavoured, to make. I did not say that it would benecessary to fix a lower rate of sales tax. in order to correct the anomaly. Indeed,, it would be necessary to impose a slightly higher rate on the manufacturer or at the point of import in order to compensate for the loss of tax on the profit of the wholesale merchant. As- SenatorCooke and other honorable senators- havepointed out, due to the enormous cost of freight to the outlying States, a very real difficulty exists: In order to makethe incidence of sales tax fall equally in the different parts of Australia, I urgethe Minister to give serious consideration, to rectifying the anomaly.
Let us say that certain goods are manufactured in Victoria. If they are sold in Victoria, sales tax is levied on the retail price, which does not include freight, because freight charges are not incurred. But if the goods are sold in Tasmania, Western Australia, or Queensland, sales tax is calculated on a price which necessarily has a high freight ingredient. This problem was not so serious before the war, when freight charges and sales tax rates were much lower than they are to-day. I do not think it just for sales tax to be harsher in its incidence on people who live in the outlying parts of Australia than on those who live in the big cities just because, under the present system, the tax is calculated on prices which include freight. I do not wish to impair the revenue, and I think that by the intelligent application of sales tax at the point of manufacture or original import, the present anomalous position in Australia could be overcome - as it has been, overcome in other countries.
The Minister will appreciate that I am endeavouring to put the point of view of the people who live in the outlying areas of this country. Let us consider the case of motor vehicles which are manufactured in Melbourne. The landed price of such vehicles in Tasmania is from £50 to £60 higher than the price in Melbourne; it is from £50 to £60 higher in Queensland; and probably £100 higher in Western Australia. Then the selling price of the motor vehicle is increased by a further £30 due to the calculation of sales tax on the freight charged on the vehicle from Melbourne. The present system is operating very harshly on the people in outlying areas, and in view of the fact that freight charges have risen considerably since the war, I urge the Minister to give serious consideration to the suggestion that I have made.
.- Before the Minister replies. I should like to ask him whether he is prepared to place before the Treasurer (Sir Arthur Fadden) and the Government the significance of the remarks that have been made this morning in relation to sales tax. I urge him to do so as forcibly as he is able before consideration .is given to framing the budget.
– I am very interested in the matter under discussion. I do not think that sales tax is a good tax in any way, and when, as has been pointed out to-day,, anomalies creep in, it becomes an even worse tax than it was before. I can well understand Senator Henty’s contention that sales tax operates with undue harshness in Tasmania. Let us say that a Tasmanian merchant buys biscuits from a manufacturer in Melbourne. His customers are called upon to pay far more in sales tax on the biscuits than are the customers of a Melbourne shopkeeper who buys from the same manufacturer. I offer the following suggestion to the Government: In such cases, would it not be possible for the manufacturer to charge the wholesaler a certain price, and for the wholesaler to distribute the goods throughout Tasmania at prices based on the actual transaction, exclusive of freight, which could be adjusted separately ?
the honorable senator mean that the price charged to Tasmania would be the f .o.b. price ?
– Yes. It’ should be on a flat rate basis. It is inequitable that the purchasers of goods in Tasmania and at such places as Kalgoorlie in Western Australia should, in effect, be required to pay sales tax on the freight charges incurred in bringing the goods over long distances. I can see no justice in the present system, and I think the Government ought to try seriously to correct what is obviously a very bad anomaly.
Senator SPOONER (New South Wales - Minister for National Development) 1 12.5]. - I am not prepared to express a personal opinion on the matters that have been brought forward in the debate, because I should like to have an opportunity of examining the points raised. Perhaps I shall arrange for my colleague, the Treasurer (Sir Arthur Fadden), to send to the three senators who have initiated the debate on the matter a letter setting out the pros and cons in connexion with the arguments they have advanced.
That letter, coming from the Treasurer, will be based on. the experience of the Taxation Branch’ as well as the experience of1 all’ those involved in the matter.
– Could the Minister ma’ke such a letter available to all honorable senators ?
– I cannot say that-J shall adopt the procedure of circularizing all honorable senators. The three honorable senators, after they receive the. letter, and if they so desire, could, by some proper method, raise the matter for discussion in the Senate. Perhaps they could do that by way of questions, or on the motion for the adjournment of the Senate… I believe that it is wrong to assume that the present procedure is not the best procedure. After all, the Taxation Branch has been in operation for many, many years, and all sorts of proposals have been examined carefully. However, that does not mean that the present procedure cannot be improved ; it only means that prima facie the present system has a lot, to commend it. I suggest that we examine the matter, and advise the three. honorable senators who have raised the matter, so that if they so, (desire they can initiate further discussion and action.
– I appreciate what Senator Spooner has said. He has undertaken to have a considered opinion on their proposals supplied to Senator Henty, Senator Vincent and .Senator Marriott. [ suggest that the whole of the Senate is interested in this matter, and if Senator Spooner were to make the information that he has promised to those honorable senators available to all honorable senators, we should appreciate it greatly.
– I shall accept the suggestion of various.1 honorable senators and make a statement upon this matter in the Senate as soon” as possible.
Senator. WRIGHT (Tasmania) [12.11 J. - I_ believe that the matter initiated by Senator Henty and Senator Marriott ha.’, caught the interest of the Senate, and T rise ‘only because I wish to comment upon the course that the Minister might pursue in dealing with it. I consider that L” -.x bill comes before the Senate in which is involved a problem of the sort that we artnow discussing, and which the Minister finds insoluble, the proper thing to do is to adjourn the debate to enable the Minister to provide the Senate with a proper answer to its questions. Having said that, may I now say that it is quito obvious that the sales tax is a tax on sales, and the Taxation . Branch, in assessing that tax, would be in a hopeless position if it were to be involved in an analysisof cost items in each particular transaction. The sales tax is distributed over at least three different groups - imports, manufactures and wholesale sales. When the manufacturer passes his costs on to the wholesaler I understand that hf quotes his certificate, and the manufacturer pays no sales tax. It is the obligation of the wholesaler to pay sales tax. and he provides for that cost in his price to the retailer. Therefore, the sales tax is a tax on imports, manufactures and wholesale sales, although we call it a sales tax. ‘ That involves the final question of finding out what is the wholesale price of goods. When we have to tax the price we have to analyse the component parts of the price, and use some constituent of the price as a basis, or charge the tax on the price. The remedy might be that in the island State particularly, wholesalers should go out of business and manufacturers should sell direct to the retailers. And when we come to the question of wholesale prices in outlying areas, wholesalers should, perhaps, disappear from business and manufacturers sell direct to the retailers. But that would deny to the population of the outlying States the services of wholesalers.
I desire to add only one more thought, and that is that what Senator Henty has thoughtfully and forcefully put forward has much substance in it. The Australian Constitution provides that there shall be no discrimination between States on any matter of taxation, but by taxing on the sale price in the remotest, parts of the Commonwealth we are, in effect, nullifying that provision, although we pay service to the letter of it. If we are going to be responsible in this matter, we have to examine the alternative*.
Three honorable senators will get a letter from the Minister for National Development (Senator Spooner) in the future, giving them certain information. The Minister will arm himself with that information and endeavour to satisfy tin Senate, perhaps on the adjournment, that it should pass the bill or pass it with an amendment to the effect, perhaps, that the price upon which tax is to be levied in respect of the wholesaler should be the price, less freight. Let us test the wholething out in the Senate, or let us set up .i select committee of the Senate to investigate the matter and examine the officers concerned. That should not take more than a fortnight, and the Senate could then have the benefit of the committee’s report.
Senator HENTY (Tasmania) [12.15 j. - I desire to reply to Senator Wright. One suggestion that he made is an excellent one, and I say that the day the manufacturer can sell more cheaply to country stores in the ordinary course of business than can the wholesalers, the wholesalers will disappear. Let me illustrate with figures what this unfair application of sales tax actually means to people living in outlying parts of Queensland and Western Australia. Take, for example, a motor car that is manufactured in Victoria and sold for £1,000. The sales i ,!.: on that vehicle is £300. Therefore, the total price of the motor ear in Victoria is £1,300. Then let us consider the position in Tasmania. The motor car is sold by the manufacturer in Victoria to his agent in Tasmania for £1,000, the price at which it is sold in Victoria. The freight to Tasmania costs £100, so that the total amount becomes £1,100. The sales tax on £1,100 is £330, which brings the price of the car to £1,430 in Tasmania, as against £1,300 in Victoria. That is the point that I am making.
I believe that this is an inequitable application of tax in relation to people who live in remote areas, and I ask the Minister, when he is replying, or when a select committee or some other body is examining this position, to consider the point that I have raised, that taxation should be levied at the source. If that were done, there would be no worry about freight, or about the matters which my legal friends in the Senate have pressed. Instead of the tax being 10 per cent, on the wholesale selling price, it would be quite easy to make it* 11 per cent, at the source” of “ manufacture, wherever that might be. To my .-mind, that is a simple and practical suggestion, and I may mention that that system is in operation in other countries. ~ If it were adopted in Australia, there would be fewer points of colle’ction of sales tax. Instead of officers having to ‘roam all over Australia checking the books of wholesalers, it would be necessary for them only to check at the points of manufacture, which would mean that the officers would be able to carry out their checks much more frequently. I shall be perfectly satisfied with whatever decision the Minister makes, but I again* ask him to give serious consideration to my suggestions. 1 l!
-(South Australia) L12.18].- This debate ha’s’ reached an interesting stage: The committee is indebted to Senator Henty for the way in which he has pointed’ ‘out the difficulties of certain sections of the Australian community in relation to the imposition of sales tax. Although the Minister has given an assurance that he intends to consider this matter, and that he will take the committee into .his confidence in view of the importance of this subject, perhaps the Minister would be prepared to move that progress be reported, so that we might have an opportunity to consider the matter at a later hour of the day. .
– In view of the statements that have been made by Senator Wright, and having regard to their wisdom, I propose to move that progress be reported. I shall do so because such a motion, ‘if adopted, would do exactly what Senator Wright wants done, by his voice at least, which is that the committee should be apprised of all the circumstances. Therefore, I move -
That the Chairman do report progress and ask leave to sit again. 1 s’
– I am sorry, but I do not feel disposed to accept the suggestion of Senator Critchley and Senator Kennelly. The position is that we are dealing with rating bills. All that we’ have before us are the rates of sales tax on particular items. These other interesting matters that have arisen are not, in truth, appropriate to the discussion.
The CHAIRMAN (Senator the Hon. A. D. Reid). - Order! The Minister is not in order in pursuing that line of discussion. The motion must be put without debate.
Question put -
That the Chairman do report progress and ask leave to sit again.
The committee divided. (The Chairman - Senator the Hon. A. D. Reid.)
Majority . . . . 2
Question so resolved in the negative.
– The Committee has just witnessed an excellent example of Govern ment members speaking hypocritically and, when given a chance to vote on the matter, voting against the- principles which they propounded. In view of this little fiasco, I now ask the Minister whether he will make a full statement on the application of sales tax, and its anomalies, in respect to freight so that honorable senators may be able to debate it. I hope that the Minister’s assurance will stand, in respect of the matter which we have been debating.
Bills agreed to.
Bills reported without requests; report adopted.
Bills read a third time.
Debate resumed from the 1st May (vide page 418), on motion by Senator
That the bil] be now read a second time.
– At the outset, I ask the Leader of the Government (Senator O’sullivan) whether he will consent to the bill relating to customs duties and the bill relating to excise payments to be debated together.
– That would be a most desirable course.
– These bills are to be considered in relation to the supplementary budget. Yesterday, I was very interested listening to speeches by Government senators on the sales tax measures, which also had to be considered in conjunction with the supplementary budget. I was amazed to hear Senator Henty speaking about- the terrible people who live in the States, because they wanted the people who live in the Commonwealth to provide all the money they require. I was somewhat concerned to know whether he considered that the people who live in the States were like the people who live in the same country as Messrs. B. and K., who went to Great Britain in recent weeks, and that the people who live in the Commonwealth were like ourselves.
Every one knows that uniform taxation is the law of this country, and, candidly, my party subscribes to it and will fight for its continuance. The State governments have to rely on the Commonwealth for revenue to carry out their duties. Some States which are now governed by Liberal party governments, such as Victoria, have objected to uniform taxation, and the State of Victoria now has a case pending in the High Court to test whether the Commonwealth has a legal right to continue uniform taxation. No doubt the matter will later be referred to the Privy Council for decision.
I have been somewhat puzzled about the timing of the introduction of these bills, as the month of April has given place to the month of May, because when the Prime Minister (Mr. Menzies) announced the Government’s proposals to increase customs and excise duties he said that the Government wanted the extra money so that the balance of payments overseas could be adjusted and, as every one desires, that inflation in Australia would be at least curbed, if not entirely arrested. Government senators now «ay that the only reason these bills are being brought down is to provide money for the people who live in the States so that they can carry on their public works programmes.
– The Prime Minister made that statement.
– The honorable senator says one thing one day, and something else the next. I remind him that previous governments of his political complexion have deserted Australia in times of need. From 1918 to 1929, nonLabour Australian governments followed a policy of borrowing from every corner of the world until at last the economy burst, and then that government handed over to the Labour government. NonLabour governments are used to handing over their responsibilities when they meet a crisis.
– That has not “been the case lately.
– It has been, ^because as the non-Labour Government ?in 192.9 handed over, so its successor handed over in 1941, and I am certain that it will not be long before the present Government hands over also.
– That is notlikely.
– It is, because the present economic situation i3 more than the Government can handle. This Government is not used to dealing with problems. It does not know the answers’.” What will honorable senators opposite tell the people next time?
– Just about the Labour party.
– We shall have no quarrel with Government supporters so long as they tell the people the truth relating to political issues. I think that all must admit that up to the present they have clouded the issue. They have put the people into tailspins. Especially was that so during the last election campaign when they used the defection of the Petrovs as an election issue. I remember well the evening when that matter broke in this chamber.
– We have had two elections since then. »n
– The Minister knows as well as I do that his party spent an immense amount of money on this question. If this country is in the unfortunate position in which the Government says it is, then it must have known prior to the last election that the economic position was not all that it should be. Surely, honorable senators opposite would not seek to tell the people that the position changed overnight. Although history becomes nauseating at times, it is just as well occasionally to recall what the position was when Labour handed over the government of this country in December, 1949.
– The people handed it to us.
– I admit that, but no honorable senator can truthfully say that the economic position of the country was not sound at the time of that handing over.
– Oh, oh, oh!
– It is all very well for the honorable senator to say that. I have said it at times when I have been stuck for an answer. In fact. I may have done worse in that I may have hesitated in my speech a little. That is an easy answer, but the point is that, I have stated a f aci.
– What, after eight years of socialism?
– This is beautiful. -A That is the type of interjection , I want. The honorable senator mentions eight years, but he must admit that the economic position of the country when we handed over the government was as good as that of any other country, with the possible exception of our sister dominion of New Zealand. Honorable senators opposite may laugh at what I say, but I challenge them to refute the facts I have put forward. The Minister has spoken of eight years of socialist rule. All I can say to that is that I am confident that the people of this country who are required to pay these extra taxes fervently wish that they had another term of so-called socialist rule. 1 .’Senator Seward. - The honorable senator, must not “ kid “ himself.
– I am certain that the honorable senator would have suffered a tremendous shock if he had thought twelve, or eighteen, months ago that two leaders of the Soviet would be entertained in Great Britain as they were a fortnight ago.
– They got some good entertainment from the Labour party over there.
– The Labour party of Great Britain, like the Labour party in Australia, has its opinions and is free to express them.
– Which Labour party?
– We never deal with scabs. We leave them to the honorable senator’s party, which, over the years, has taken to its breast’ every scab that has left this party. In his own State of Western Australia , there ‘ wad Pearce–
The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid).- Order !
– They asked for it, and I do not mind giving it to them.
The DEPUTY PRESIDENT. - Order! I ask the honorable senator to come back to the bill.
– I thank you, Mr. Deputy President, for the leniency you have shown; but I do not mind my friends interjecting, because their knowledge of the history of their own country is so meagre that one has no difficulty in answering them.
– We are only helping the honorable senator.
– I do not wish to be hard on Senator Wood, but I must remind him that I do not say things here, and then when I go outside refuse to repeat them. If I say anything here, 1 will repeat it outside. I shall not go any further into that matter.
The Government estimates that .under the measures we are discussing, it will obtain in a full year an extra £55,000,000 in revenue.
– It is not enough.
– If the honorable senator thinks that, no doubt the Government will seek more, and then, after perhaps twelve or eighteen months, we shall see history repeating itself, for, no doubt, the Government, when it finds the going a bit rough, will reduce the taxation a little just prior to election time. It will not be able to use the Russians in the next election campaign, but no doubt it will use the “ chinks “, if I may use that term. Certainly, the Government parties will endeavour to fool the people.
First, I should like to know whether the Government is certain that it will get an extra £55,000,000. It expects to obtain £29,000,000 from the extra tax on beer, £2,000,000 from the extra tax on spirits, £12,000,000 from the increased tax on tobacco and £12,000,000 from the higher petrol tax. I understand that of the additional £12,000,000 expected to be raised from the petrol tax, £4,000,000 will find its way back to the States for expenditure on roads. I am only sorry that the whole £12,000,000 is not to be expended on roads. The Government’s purpose is to reduce the spending power of the people by means of this beastly unfair taxation. No one can deny that the only fair method is to tax people according to their ability to pay. Much has been said about sales tax and about the proposed increases being only of a temporary nature; but I have never known any government, whatever its colour may be, to give away any taxation.
– What about land tax?
– The only reason why land tax was abolished was to appease the people who held properties within what might be called the golden half-mile of the big cities.
Sitting suspended from 12.45 to 2.15 p.m.
– When the sitting was suspended, I was speaking of the money that the Government proposed to raise under its economic proposals. I do not think it is sufficient for an Oppositionto oppose without giving some reason for its stand. In the first place, we oppose the Government’s proposals because we believe that the Government has deceived the people. The Government must have known all the facts about the economic situation. Surely it is not trying to tell the people that it was not aware of the state of the economy before the last general election was held? If it did not know the position, it must admit that it was incompetent. I believe that the Government and its advisers were fully aware of the position. Once again, the Government ran true to form.
If we study the history of Australia as far back as the introduction of federation, we cannot find worse deception than that practised by this Government during the last four or five months. The Opposition is of the opinion that if the Government believes in democracy, it should tell the people what it intends to do. The pronouncements of the Prime Minister (Mr. Menzies) during the election campaign were couched in many nice words. He said that the Government would carry on as it had done in the past. That statement was made after he had met his friends, the bankers, and the captains of industry. The only persons he met who did not come within that category were the representatives of the Australian Council of Trades Unions. The right honorable gentleman didnot mention a word at those conferences about the harsh measures he proposed to inflict upon the people insucha brief time. The Opposition is opposed to these measures on that score. In a democracy, any political party that hopes to gain the confidence of the people should state its policy fully because they have to make a decision upon that policy. IfthisGovernment wants office behind a veil of secrecy, it is welcome to the treasury bench.
– The Government will retain office by the vote of the electors.
– I have been wondering upon what policy the people voted at the last general election. All the Government offered was a blank cheque forthe electors to sign. The Opposition also opposes the Government’s measures because it believes the sales tax is not fair. The people with the most money do not pay the largest amount in sales tax. Ability to payshould be the test. I warn this Government that it will not raise in sales tax the amount that it expects to get.
– The honorable senator has never been a good prophet.
– I have not been a bad prophet. I invite Senator Marriott to study the last speech I made in this chamber before the Government gave us a holiday because it had no work for us to do. I asked then when the supplementary budget was to be introduced. I asked the Government what it proposed to do about the sales tax.
– The honorable senator was not being prophetic.
– If Senator Vincent knew what was going to happen,, he certainly did not tell us. I repeat that this Government will not get fromsales tax the amount that itexpects to raise. The average man has his commitments. He has a home to maintain, and it is his right to put away something for alittle gamble or a drink if he wants to do so.
I believe that there is something to be said for the average man who partakes of a drink. Although I do not come into that category, I can see nothing wrong with a man who indulges in moderation. Since the Government has increased excise duty on beer, less is being sold. The United Licensed Victuallers’’ Association in Victoria has reported that sales are down at least 15 per cent, if not 20 per cent.
– Is the honorable senator advocating the sale of more liquor?
– The point is that, if sales of liquor do not come up to the Government’s expectations, it will not get the revenue from liquor that it expects. Therefore, it will have to try some other avenue of taxation.
– The new tax was not based on the amount of liquor that was sold, but, on the amount that would be sold.
– The honorable senator is merely playing a game of Tweedledum and Tweedledee. The fact is. that the Government has increased a tax to get money, and it has given three or four different reasons for doing so. If the Government would only stick to one reason, and tell us why it has increased the tax, at least it would be doing something that it has not done before.
– This speech will be quoted against Senator Kennelly in years come.
– If it is, I shall have the answer. That is more than the honorable senator can say for himself. If the Government wanted £55,000,000 more, why did it resort to this manifestly unfair method of raising the money? If the Government wants money, the Opposition has told it how to get it.’ It can raise revenue by means of an excess profits tax. The Government has increased company tax by a shilling in the £1, irrespective of whether the companies are making huge profits or modest ones. Nobody denies that companies must make profits. If they did not make profits, nobody would be interested in them. If the Government wants this money let it curtail defence expenditure. In particular, it could save the £23,000,000 that is being spent on the St. Mary’s explosives filling factory and also the expenditure of £9,000,000 at a certain place I have read about. That latter sum seemed to come from the. skies. When is the Government going to be a little bit fair ?
One of the worst features about these bills is that they will add to costs. The Government has imposed an extra 3d. a gallon duty on petrol. In my own State, cartage charges have already gone up by 12£ per cent. It is true as my leader said yesterday, when speaking or* the main sales tax bill, that there is hardly a commodity the costs of which are not added to by an increase in transport charges. I venture to say that 90 per cent, of the commodities of this country, excluding wheat, a proportion of our wool, very heavy machinery and, possibly, our dried fruits, are transported by road.
– Seventy-five per cent.
– I would go even further than that. Even in the suburbs of the big cities, goods are transported to the shops by motor transport. We must agree that the reason for our huge exportable surpluses is that our costs are too high; and the Government ismaking them even higher. 1 point out just what these additional taxes mean to the ordinary person. If a person desires to buy a 12-oz. glass of beer he has to pay 2d. extra, but if he desires to have, what I understand is known as a nip of spirits, he has to pay only an extra id. This Government is again looking after its friends, because, I understand^ most of them drink spirits.
– The honorablesenator only thinks that:
– The honorable senator who has interjected knowsthat to be true. A packet of cigarettes is 3d. dearer. It is no wonder that a number of us have discarded the smokinghabit. The same observation applies to tobacco. The Government can kill the goose that lays the golden egg by imposing taxes that are much too heavy. 1 say to my friend, Senator Marriott, that with the help of God I hope, in twelve months’ time, to be able to prove to the Senate that the Government did not get its estimated £55,000,000. All the indications at present are that it will not. As I have said, the ordinary individual, whether he be a farmer or engaged in any other industry, has to pay an extra 3d. a gallon on the petrol he uses, whereas the aviation companies are not required to pay anything extra. The Government is giving another sop to Australian National Airways Proprietary Limited. That is the reason it has exempted aviation spirit. Surely, it has bolstered that company quite enough. It was not long ago when the Government had so much money-*-
– I thought the honorable senator was against increased costs ?
– The Government had so much money some years ago that it was able to give Australian National Airways Proprietary Limited the right to use £4,000,000. It bolstered the company at that time and to-day, because Australian National Airways Proprietary Limited is owned by the shipping companies, which no doubt have some influence at. election times, and certainly when budgets are being framed-
– The honorable senator ought to know.
– I have had some experience with budgets.
– I bet the honorable senator has.
– At least, I have never received anything from shipping companies. If the Government, wants this money, it could easily get it without putting on these harsh taxes. Irrespective of a person’s income he has to pay the same amount of tax when he uses any of the commodities covered by these bills. Whether he is on the base rate. a. little over, or whether he receives a wage such as honorable senators receive, he still has to pay sales tax at the same rate. That is unfair. I recognize that the Government needs to get the money because, in order to keep itself on the right side of the chair, it has let things get out of its grasp. The Labour party, year after year, advised the Government hot to relax controls, but its reply was that it would let things go and enjoy beautiful freedom. To-day, the only freedom the worker has is to starve when the boss cannot make a profit out of him.
– The honorable senator is dating himself. He is living in a past generation now.
– What I am saying is true. The honorable senator who has been interjecting will not be over-keen in six or nine months time to submit the argument that he has been submitting in recent days. He knows as well as I do that this supplementary budget will not rectify the position. If the Government goes on as it has commenced, much more drastic methods will have to be adopted; but when those measures are introduced, all I say to the Government is, “ “ At least, take something off your own friends I am just as much concerned about the economic position of this country as is any honorable senator on the other side of the chamber. I even advise the Government in a spirit of generosity - as a rule I do not give much away in this game - that when it introduces further measures - of course no one can really predict what the next few months will bring from an economic point of view - it should not single out, as seemingly it has done in this measure, one section of the community. Of course, the Government, having ruined the loan market, realizes that investors in the 3-J per cent, and 3^ per cent, loans approaching maturity will not re-invest their money in Commonwealth loans. A further reason why they will not do so is that the hire-purchase companies- are offering rates of interest of 6 per cent., 7 per cent, and even more for money. I have never believed that average persons have invested in Commonwealth loans only for the interest paid by the Govern? ment. In the first place, they have invested in government loans because they considered that method of investment to be safe and they believed that if, through, unforeseen circumstances, they were forced to sell their securities they would not lose more than 1 per cent, or 2 per cent. But the market for the 3^ per cent, bonds which will mature in 1961 and 1962 has fallen to an all-time low. of £82 per £100 bond. In these circumstances, bow can the Government expect the holders of those bonds to reinvest their money with the Government? On a previous occasion I urged the Government to consider introducing in this country the method of raising money for public works that is in operation in both the United States of America and Canada, under which an investor can gel back his “ stake “ whenever he wants it. Of course, Labour did that in this country during war-time. It will be recalled that the Labour Government sold war savings certificates for 16s. each. If the investor held a. certificate for seven years, he received back £1 for it, but if he held it’ for only one year, he received back 36s. 6d. “Was not that system preferable to the present system of raising money, under which some investors in Commonwealth bonds have lost £18 per £100 bond - and in some instances, considerably more than that? I have discussed this matter with Dr. Coombs, who asked me what I thought would happen if there was a slump. I replied that I thought that in such times the nation should use bank credit or treasury-bills.
– But every one would then want to cash in.
– I wonder whether they would. That system works very well, in what is probably the strongest capitalist country in the world to-day, whose loans are in operation continuously. Unless the Government guarantees to the ordinary people that they *vill be able to get back at any time the money ..they, invest in government loans, I doubt very much whether future loans issues will be successful. . Senator Henty. - Does the honorable senator mean the contract date, or at any earlier time?
– I mean that they must be guaranteed repayment on demand - that is, at any time between the date of issue and the date of maturity: Of course, I do not say for a moment that a person who invests £500” in a government loan for only one year should receive the same rate of interest as he would for five years. During thenext few years, huge government loanswill fall due for repayment. Peopleinvested in those loans because all political parties asked them to do so.
– They will receiveback the full amount invested.
– That is true, but I am concerned particularly about the loss that is sustained by holders who are forced to sell their bonds before maturity. Let us consider the case of a bondholder who unfortunately dies, and whose estate has to be wound up. Because of the depressed state of the bond market, hi* estate will sustain a heavy loss.
All of us, during the next few years, will bc caused a great deal of strain and worry. Labour opposes these two measures because it believes that, in introducing them, the Government is only playing politics. In the main, the Government is inflicting hardship on the average members of the community, but is not hurting its friends. “We believe that the economic position is a lot worse than the people know at the moment, and I am apprehensive about the next budget. As far as taxation is concerned, I hope that the Government will be guided, as was the Labour Government during the war years., by the principle that those who have mom should pay the most in taxes. If theGovernment applies that principle, it will not encounter from this side of the chamber the strong opposition that we have expressed to the two bills now before uh.
– I listened with a great deal of interest to Senator Kennelly’s opinions as to the probable effect on the economy of this country of the two measures now before the chamber. “What the honorable senator failed dismally to appreciate was that the additional revenue that will be derived under the bills, will be applied towards the redemption of loans that were raised some years ago to carry on Australia’s war effort. During the financial year 1957-58, loans raised during wartime totalling about £250,000,000 will fall due for repayment, and it is not expected that all of the holders will reinvest their money in Commonwealth loans. As the Government will be unable to obtain all of the money needed for State developmental works from the loan market, it will be necessary to raise additional revenue from other sources. Therefore, this Government, as a responsible government, decided that it would have to increase the customs duties on certain goods, and the excise on other goods such as beer.
It is very interesting to know - and L hope, that Senator Kennelly who is an advocate of Labour policy, and believes implicitly in it, will listen carefully - that the only time the excise on beer has been reduced in the history of this country was when a Liberal- Australian Country party government reduced it. I am sure that Senator Kennelly will bo interested in the statistics on this matter, and if we look at those figures we shall find that in the bad days of 1930 Mr. Scullin assumed office as the Prime Minister of a Labour government. He then increased the excise on beer by 2d. a gallon. His action on that occasion followed the action of the preceding Bruce-Page Government of reducing, in 1929, the excise on beer by 2d. a gallon. Therefore, although the Bruce-Page Government of the depression year of 1929 tried to look after the people who were working in this country by reducing the excise on beer by 2d. a gallon, its successor, the Scullin Government, increased the excise by 2d. a gallon. It is interesting to note that the Scullin Government did not last long, and in 1932 it was succeeded by the Lyons Government, which lasted till 1939. In 1933, that Government reduced the excise on beer by 3d. a gallon.
Beer is consumed throughout Australia by all the workers, whether they are producing capital or not and whether they are bank managers or authors, or writers- of comic articles like Senator Brown. All those people who drink beer have enjoyed a decrease of price through the reduction of excise by anti-Labour governments, but Labour governments have never reduced the excise on beer. I repeat that in the 50 years from 1901 to 1956 the only governments that haveever reduced the excise on beer have been anti-Labour governments. In view of those facts, how can honorable senator? of the Opposition rise now in the year 1956 and castigate this’ Government for increasing the excise on beer. r
Some honorable senators have asked why the Government is now increasing’ certain charges, including excise. I say to them that this Government is ‘ a responsible government, and it knows thatafter the end of this financial year we shall have to raise a proportion of £252,000,000 to pay back the people who invested in the Commonwealth during World War II. Next year many of those people will require their money, and the Government, with an eye to the future, has decided to make provision to pay them off. One of the ways in which the Government is to raise the necessary funds is the increase of the excise on beer by 2s. 7d. a gallon. What more pleasant way can a person pay his taxes than by going into a hotel with afriend and buying a couple of glasses of beer. Moreover, by so doing, he is helping to pay off those people who, invested their money in Australia during the dark days of war. I ask Senator Kennelly to carefully consider that argument.
– He does not drink. ‘
– Perhaps the argument would apply to him with more force on that account. Perhaps he would like to go into an hotel with a friend and buy his friend a glass of beer, knowing that part of the money he paid for the beer would help pay off the people who have invested in the Commonwealth.^
– I see that the honor- able senator will stop inflation, somehow.
– I may, but Senator Grant certainly will not. Senator Grant interjects in this chamber time after time and sounds like a cockatoo. Every’-time and all the time he speaks,. .he seems to say the same thing but because of his Scots brogue we cannot understand what he says. I suggest that he should learn the English language and then we will know what he is talking about.
– Why does not Senator Scott say something worth while*?
– I shall endeavour to tell the honorable senator something worth while if he will only listen. Excise on beer has been reduced only by antiLabour governments. Let us now consider the increase of the petrol tax by 3d. a gallon, and the effect of that increase on transport costs in Australia. That is a” very interesting matter, because I believe that our transport problems within Australia’ are solely responsible for the necessity to increase our production and lower our general costs. If we do not have efficient transport, the people of the outback will not be able to produce and send to the seaboard the goods that we must export. If we cannot export sufficient goods, then we cannot import all the articles that are necessary for our continuing prosperity.
It is well known that this Government has been most liberal in its treatment of the States with regard to road allocations out of the petrol tax proceeds. In 1947-48, the Labour Government of the day gave the .States about £7,000,000 or £8,000,000 out of the proceeds of the petrol tax for expenditure on roads. This financial year, because we have devised better methods, the States will be given between £24,000,000 and £27,000,000. Notwithstanding the fact that the .Commonwealth has allocated so much money to the States, through its desire to improve road transport facilities the Commonwealth has increased the tax on petro] in order to give about another £4,000,000 from these proceeds to the States for expenditure on roads.
– Would the honorable senator give the cost of a mile of road to-day, compared with that of 1947 ?
– Yes. A mile of bitumen road which was constructed recently in the area from which I come - the south-west of Western Australia - by local government authorities, not by the Labour Government of Western Australia which squanders money, cost less than 3s. a yard to put down, and the quantity of bitumen was 1,600 cubic yards. Senator Kennelly may work out for himself what the cost for a mile would be at that rate.
– That is not the cost of construction of a mile of road.
– The cost of construction of a mile of road to-day is approximately £5,000.- I refer to construction, including the laying of gravel and bitumen, by a responsible authority in Western Australia, not by the Government of Victoria, the State from which Senator Kennelly comes. It is interesting to note that, notwithstanding the fact that this Government has been generousto the States in the past and has provided at least four times - probably five times - the amount of money provided by previousLabour governments for the development of roads under the federal aid roads grants, of the £4,000,000 to be granted to the States from duty on petrol, Western Australia will receive approximately £750,000.
A question was asked in the House of Representatives recently concerning the manner in which the Labour Government of Western Australia had expended the sums of money that it had received under the Federal Aid Roads Agreement. Although the government of that State has decided to use part of that money to build a narrow bridge across the Swan River at the Narrows, it is interesting that the Government, as at the 30th June, 1955, had unexpended the sum of £1,300,000. That amount had accumulated from year to year. That position must indicate to any federal government,, whether it be Liberal or Labour, that the Commonwealth Parliament has been making more money available to Western Australia than the Labour Government of that State has been able to expend. Recently, when I happened to be in the northern part of Western Australia, T read in the Northern Times newspaper a statement by the Minister for the North-West, Mr. Strickland, on behalf of the West Australian Government, which was completely untrue, and I suggest that he knew it was untrue when he made it. He said that by the 30th June, 1956, the State Government would have, unexpended, a quarter of the total taxation reimbursement from the federal aid roads grant. That is how they get round it. That is how the Australian Labour party plays the political game in Western Australia.
I do not mind Labour doing that, if it can get away with it, but surely it indicates that the -party is completely unscrupulous. Yet, Senator Kennelly has seen fit to rise in his place and question the sincerity of the Commonwealth Government in imposing additional taxes. Have honorable senators ever heard of anything so ridiculous ? We are imposing these additional taxes because first, by doing so we shall enable the Australian people to live within their income; and secondly, to enable the Government to repay those people who invested in government loans during the war years. How foolish the Government would be if it were to say, “ We will not increase excise on beer, or raise customs duties and taxation, because such measures would be unpopular “. Some people, inspired no doubt by the Australian Labour party, have said that when the Government introduced these measures it thought that they would be popular. The Government thought that the introduction of these measures was the proper thing in the interests of Australia, and having decided that matter, and although it knew that the measures would be unpopular and would not win votes for the Government parties, nevertheless it decided to go ahead with them. Honorable senators opposite should at least give us credit for knowing that the measures would be unpopular when we introduced them.
Sometimes it is the responsibility of a government to introduce unpopular measures for the benefit of the nation. The recently announced measures are of that kind. I remind honorable senators opposite that the Prime Minister (Mr. Menzies) has said that he expects that by the 30th June, thanks to the import restrictions that have been imposed, we shall at least be able to balance our export-import position. As our exports are down by a couple of hundred million pounds, we must at least restrict purchases outside Australia by that amount if we intend to keep going. That is o,ne of the purposes of the Government’s economic measures. I suggest that, although the Labour party may be enjoying a certain degree of kudos because of the unpopularity of these measures of the Government, in a year’s time, when the people understand their full significance, they will appreciate that the Government has done the right thing.
This is not the first time that unpopular action, has been taken by this Government. The Senate will remember that in 1951 the Government introduced measures in this Parliament that were highly unpopular. One of ‘them was the 20 per cent, wool deduction scheme which was opposed by honorable senators opposite because they said that we were ruining the wool barons of Australia. That statement was made in this chamber by an honorable senator, but as he is not present at the moment, I shall not name him. I had the pleasure of travelling throughout Western Australia explaining the purpose of that measure at the time. I do not think that any government since federation has been more unpopular with the woolgrowers than was this Government in those days. I remember when, with some of my colleagues in the Senate, I met at Williams 460 woolgrowers who were all prepared to vote for the Labour party and who would not even listen to us. Indeed, they booed us from the time we commenced to speak. Even when we explained matters to them, they still would not accept our .explanations. Birt within twelve months they had agreed that the action of the Government was right. I believe that the measures that we have introduced now, although they may be unpopular, will receive the approval of the Australian people within the next twelve months.
– By whom will the Government replace Petrov?
– By the best looking fellow it can find, and although I will not mention the name of the. honorable senator whom I have in mind because it might do him harm, I know of one representative in this House “ from Victoria who would be suitable. If I mentioned his name, the people in Victoria would not know him.
– The reason I topped the poll is because I am so good looking !
– The reason that the honorable senator topped the poll is that the people did not know him. I invite the honorable senator to come to the little State of Western Australia where the electors are” few, and show himself in the various areas there. If he then submitted’ himself for election he would not be at the top of the poll but would hit the bottom. Recently, I made an extensive tour of Western Australia.
– Did the carriers at Broome tell the honorable senator what they thought about the petrol tax?
– No. I was in the north-west of Western Australia, and found that the increase of the tax on beer had had a delayed action in those areas. The night that I arrived at one small town I found that the hotels had sold all the beer they had in stock, and the increased prices were to operate from the following day. I stayed in that place for five days, and I heard from the people complaints exactly similar to those made by honorable senators opposite about the increased tax on beer. They must have written to the people in that area. However, when I explained to the people why the Government brought down these measures, pointing out it was necessary to be able to repay loans falling due in the next financial year, those people in the outback areas of Western Australia realized that the Government had done the right thine. Because the Government desires to look after the workers, it decided that if a person buys a pint of beer in a public bar it will be cheaper than the same quantity purchased in a saloon bar. The Government is not interested in looking after the capitalists. Honorable senators opposite must represent t, -m, because some, in the past, have received 9 per cent, on their investments.
– The honorable senator’s explanation to the electors of Western Australia decided them to vote for Mr. Hawke and the Australian Labour party.
– If Senator Hendrickson would like to come into an hotel with im: at any time he will find that a pint pot of beer costs 2s. 4d. in the public bar, but for, people with money, who drink in the saloon bar - the capitalists -two middies which hold the equivalent of ‘one pint, cost 2s. 9d., which is 5d. more. That shows that the Government is’ willing to help the worker to obtain bis beer as cheaply as possible. I do not. remember that the Labour party has ever tried to look after the beerconsuming public by reducing the excise duty on beer. If it has, I challenge the next speaker from the Opposition side to say when. No Labour government has ever reduced the excise duty on beer; only a Liberal-Australian Country party government did that.
– What about the latest increase in the price of beer?
– The greatest increase in the excise duty on beer prior to this last one was imposed by the Chifley Labour Government in 1942 - ls. 7d. a gallon.
– What is it now?
– The total excise on beer is 9s. lOd. a gallon. I do not know of a more pleasant way of paying tax and providing money to repay loans in which people invested during war time, than by paying a little extra for each glass of beer. I have pleasure in supporting the action taken by the Government. It knows full well that although these measures are at first unpopular, within the next two years its action will be justified because the inflationary spiral will be arrested.
Senator SHEEHAN (Victoria) [3.12 J. - Honorable senators have listened with considerable interest to the honorable senator who has just made his contribution to this most important discussion. The bill before the Senate is one of the measures put forward by the Government for the purpose of rescuing the Commonwealth of Australia from the perilous economic position into which it has drifted. Members of Parliament and the people of Australia have been regaled with many words and statistics from Government supporters not only in thi? House, but also in another place. Now. . an honorable senator from the State of Western Australia has given the real reason why this particular piece of legislation is before the Senate.
Senator Scott, in his innocence, not being so well versed in the art of deception as are other spokesmen for the Government, has given the people of Australia the answer for which they have been looking. Just prior to the federal general elections, which were precipitated by the Government before their time, certain references were made to the economic problems of this country, and it was expected that the Government would at least take the people of Australia into its confidence, and announce the measures it should take if Australia were to continue to develop and progress. Hut the people listened in vain for any statesmanlike statement. Instead, they were faced with an election. Not a word was said about proposals to remedy the economic position, but the public was told that it was necessary to have an election for the House of Representatives eighteen months before it was due, and for the- Senate six months before its term expired, in order that the Government might receive a mandate for future action. But there was not one word to the people of Australia of any such proposition. As I have said, Senator Scott, in his innocence, and not being so well trained in the art of deception as is the leading spokesman for the Government, tells us to-day that it is necessary to take an extra 2d. a glass from the beer drinker because the people of Australia so lack confidence in the Government that they will no longer invest in loans by which the Government seeks to obtain the money required to carry on the work of the nation.
Senator Scott suggests that, because £250,000,000 of loan money that was raised during the regime of the Labour Government and which the people contributed most splendidly has to be redeemed, we are faced with a state of national emergency which warrants the introduction of measures such as the one before us this afternoon. The truth of the matter is that the Government has lost the confidence of the people. But can any sane man or woman in this chamber tell me that the measure that we are now debating will place the economy of this country on a stable footing? What will it do to curb the inflationary trend that seems to be ever present in Australia? The Prime Minister (Mr. Menzies), in “his financial statement, estimates that the new beer tax will yield an additional £29,300,000 in a full year at the current rate of clearances. What a wonderful contribution to balancing the economy of Australia! Furthermore,. this £29,300,000 is to be levied from that section of the community least able to bear it, the working men who are in receipt of either the- basic wage or a few shillings over, the most poorly-paid section, of the community. Like ‘ everything else, this additional cost is passed on to them. We see no indication from the wealthy brewing interests or the hotel interests of the country -that they will bear some share of this increased taxation to help the Government meet the present crisis. They merely pass it. on to the consumer, just as the sales tax that we discussed yesterday is passed on. Those wealthy interests would never think of doing anything to help bear the burden. The brewers will continue to play for exorbitant profits in order to pay huge dividends to their shareholders, as will the retailers of the other goods on which the Government has increased the sales tax. They will contribute nothing towards balancing the economy of the nation. They are a class by themselves?
The mess in which the economy of the nation is placed to-day has been brought about by the action of such people over the years. We have enjoyed an era of full employment during which the Australian people have by their efforts increased the production and wealth of the country; but all their endeavours to improve their own conditions have been handicapped by the manufacturing classes who seek to wring as much as they can from the working section of the community in order to build up huge dividends. Because, under our system of wage determinations, salaries and wage? are looked upon as cost ‘ ingredients, we, found that the prices of. commodities had to be increased. No effort was made’ by those people who could have done something to control inflation, if they had been satisfied with reasonable profits and’ dividends, to correct the position. They’ merely allowed it to go on and on aiia” the position now is that we are afraid of our present prosperity.
Yesterday, Senator Cameron very correctly pointed out to the Senate, and.f to the Government, if it is prepared’ to do a little thinking, that the cost of production was never lower than it is to-day. We continually hear our friends opposite, and those outside who think like them, asking for increased production. We have had that increased production everywhere for years now. Our wheat-growers have produced as never before in the history of the country. There has never been such a great production of wool; and our primary producers in general have never been so active. To suit its own ends, the Government boasts about the number of houses that have been built during its regime and compares it with the number erected when the Labour Government was in office. Whenever it thinks it can score off the previous Government, it will talk about the wonderful things that are being achieved. If there are more houses being built, if more goods are *being produced, is that not an indication that production in this country has increased over recent years? Of course, it is. Despite that increased production, we are now afraid of the future and the (Government has decided to take an extra 2d. from the working man for every glass of beer he drinks. That is its method of attempting to solve the problem.
I do not intend to traverse the whole of the ramifications of this problem, but I must emphasize that I am extremely disappointed at the action taken by the Government. After all, whether we agree or disagree with its politics, we are residents of this country, we are Australians, and we have got to submit to existing conditions. What does it matter whether I am a minister or whether somebody else is a minister? What does it matter whether we are on this or the other side of the chamber? We are all justified in looking to the responsible people who have been entrusted with the Government of the country to do something about the situation. I have seen many budgets introduced into this chamber. The first was that introduced by the present Prime Minister when he was Treasurer. The amount involved in that budget was £100,000,000. That was only in 1938-39. What is the amount to-day? What is it likely to be next year? The Government is not taking the people into its confidence. In an attempt to hide the dissension in the Government’s ranks, some honorable senators on the Government side have stated that the Scullin Labour Government introduced the sales tax.
– That is right.
– Of course it is right. Nobody has denied that statement. Senator Scott said that the Scullin Labour Government had increased the excise on beer by 2d. a gallon. This Government has increased the excise on beer by 2d. on a 6-oz. glass. Let us examine the situation in which the Scullin Labour Government was placed, lt inherited a bankrupt treasury as a result of the activities of the anti-Labour government which had preceded it for a number of years, with its tragic Treasurer, Sir Earle Page. Some of the followers of the government of that time withdrew their support, and the Scullin Labour Government had thrust upon it the task of governing Australia when it had a minority in the Senate and a bankrupt treasury. It had to find money to carry on the affairs of the nation. Australia had reached its lowest economic depths, and I hope that we do not sink so low again.. The Labour Government had to resort to all sorts of expedients. It could not get loans overseas because the anti-Labour governments had lost the confidence, not only of the Australian community, but also of overseas investors. Therefore, the Scullin Government introduced a sales tax. It was imported from Canada where, I believe, it originated. It was imposed in Australia to meet a crisis. That was also the reason why the Scullin Labour Government increased the excise duty on beer. To-day, in marked contrast, there is unbounded prosperity. This Government has increased taxes on wine, beer, spirits and petrol. What a difference between the actions of this Government and the statesmanship of the Scullin Government which worked to rehabilitate Australia! Honorable senators on this side of the chamber, and the community generally, are aghast at the actions of the Government. Even the press, which is generally friendly to the Government, ia still condemning it, and is asking the Government to give the people a lead, and not to tinker with national problems.
I was disappointed when the Prime Minister announced that he would add 2d. to the price of a glass of beer, and would increase sales tax on many items. I do not propose to go over all the arguments that could be advanced, but I hope that the Government, in the interests of Australia, will be more straightforward with the people. Possibly, the Government has not told the full story because it is afraid to tackle the problem from the correct angle. It knows that it might hurt its friends who have put it in office. It is afraid to grapple with excess profits and the problem of reducing the cost of production, because it knows that the wage ingredient is a minor element in the scheme of things. If an improvement is not evident soon, the people will rise against this Government when the next opportunity is afforded them. Unfortunately, another Labour government will then be given the task of retrieving the nation from the mess into which this Government has put it.
– I do not speak often in this Senate now as the years are catching up with me, but I have listened with deep interest to the arguments that have been advanced on the Government’s economic proposals. In my opinion, many of those diverse arguments were astray. In some instances, honorable senators’ knowledge of economics was fallacious. In our democracy, some political parties are prone to mislead and dupe the people in order to gain office. When we, as an Australian democracy, are battling against worldwide communism, it is regrettable that the Prime Minister (Mr. Menzies) should use his great oratorical powers to deceive the people. Every honorable senator on the Government side must admit that the people were deliberately misled, not by direct statements, but by the failure of the Government to disclose the truth about the economic situation. Now, when the effects of the Government’s maladministration are catching up with it, the Government has introduced economic measures to try to save the country from inflation, and the dire effects of innate weaknesses in the capitalist system. Personally, I think it would have been better and manlier if the truth had been told last December by the Prime Minister and those behind him. The Leader of the Opposition in another place (Dr. Evatt) did tell the people of Australia what was coming. He stated that one of the reasons for the election was that it was known by inside circles of government that a crisis was looming.
I do not wish to make party political capital out of the present economic distress, which is comparatively mild compared with what it will be if our informants are correct. I would be pleased if the Government by these measures were able to overcome the economic difficulties that have arisen as a result of the policies that it has pursued because it believes in private enterprise. I have spent a lifetime in the Labour movement - 55 years - and I have studied economics. I am convinced, as one who is taught in these matters, that it is impossible under modern capitalist conditions for any country to solve the economic contradictions of that system by merely allowing its economy to develop on a free enterprise basis. For a time, when a country is being developed speedily, undoubtedly capitalism can meet all its commitments and can avoid social disturbances. In its rapid development it is able to give security to the whole of the people. But immediately those contradictions begin to show themselves in the economic system we have the absurd position of all capitalist governments throughout the world seeking to follow a line of action which inevitably leads to economic and social trouble. I believe that the policy of the Labour party is correct and that in order to avoid these crises we, as a people, must take out of the turmoil of capitalist competition certain industries and convert them to State industries under the control of the government in the interests of the people. By so doing, we take them out of the financial competitive market.
Much of our trouble to-day is due to our financial methods and because social tensions are aggravated by capitalist financial methods in the buying and selling of shares and the excessive development of costs of shares that give a greater return. Honorable senators know what I mean. I could give some simple illustrations, but I do not want to take up too much time. In the struggles under capitalism an intensive fight is going on between the rentier class, the financial class, the industrial class and so on. Certain social tensions are developed as a result of these struggles, so much so that disturbances occur in the- ranks of the workers. If we are to avoid these social disturbances we must take economic, political and legislative action which will tend to reduce the fundamental faults in the capitalist system which intensify these social tensions. I believe that Labour’s policy of taking certain industries out of the pool of disturbing financial activity and placing them in the hands of the people will go a long way towards minimizing the disturbances which give rise to the crises of to-day.
It must be admitted that we will not be successful in meeting the present situation by drinking more beer, as our friend Senator Scott has said. He told us how nice it will be to go into a bar with a wowser because the wowser will shout us a beer thinking that by so doing he will help to overcome our economic troubles. It reminds me of a story told by the late Randolph Bedford, who was an eminent writer and politician in Queensland. He said he was a member of a certain club which, unfortunately, fell upon evil days and found that its balance-sheet was in the red with the bank. Randolph, undoubtedly a man of deep erudition and foresight, said, “We will call the executive together and put the proposition to them to sack all the teetotallers in the club “. They did so, and in three weeks the drinkers drank the club back to prosperity. Our friend Senator Scott this afternoon told us that by putting this imposition on the worker’s beer we will help to solve the economic problem. .The suggestion was made that by the excessive drinking of beer we would get the country out of its trouble.
Senator Anderson also spoke on this measure and put forward some curious economic theories.- He suggested the position would be improved by increasing the ‘price of beer because the result would be. -to reduce the purchasing power of the people and, added to the other actions that are being taken, that would reduce inflation. I should like to point out to Senator Anderson that last night I bought the Melbourne Herald. Incidentally, it is a remarkable fact that some of the greatest critics of the Government’s present action are those who usually support the Government. I have seen a number of criticisms in financial newspapers and in the daily press. I am reminded that I have only three minutes left. I could finish my speech now or I could go on for three minutes, or three hours. At one meeting I attended I told the audience that if I went for more than five minutes I would give ?10 to the nearest hospital. At the end of the meeting they wanted me. to continue as they were so interested in what I was saying. I had been telling them some stories. When I concluded an old lady said to me, “ You had better write your cheque out, you have gone ten seconds over your time “. I said, “ Listen, sister, ten seconds is neither here nor there, but I will write out a cheque for ?10 and if I do it again, I will sign it “. However, to revert to what I was saying a moment ago, this statement in the Melbourne Herald summarizes the opinions of the opponents of this measure who, in many instances, are supporters of the Government -
Costs Keep on Going Up.
Further warnings are being given that the use of import controls and higher taxes can acid tu Australia’s inflationary pressures.
Mark you, although I, as a member of the Australian Labour party, have been saying that, this article appears in the Melbourne Herald. It goes on -
The president of the Associated Chambers of Commerce, Mr. Coles, yesterday told the annual conference of his organization that it was hard to see a deflationary result from recent tax increases, which sharply raised transport costs.
That is precisely what honorable senators of this side of the chamber have been saying. The article proceeds -
So far, the Federal Government’s supplementary budget measures have merely aimed at diverting some spending power from private needs to public works. Costs are rising as the effect of new tax burdens is felt.
And listen to this - it has been mentioned here to-day -
Meanwhile, to-day’s increase in the price of steel, needed to pay for a big expansion of plant, will mean higher building and engineering charges over a wide range.
Action to offset these cost pressures is still awaited.
I shall not continue my speech, because I know that honorable senators have been working hard this week and are eager to return to their homes. The article concludes with these words -
A positive policy by the Government should come without delay.
That is what the Opposition has been saying. Of course, I do not blame the honorable senators who sit on the Government side of the chamber, because they are the products of their environment, of a certain system, and consequently they act and vote in a certain way. I am not attacking them personally. But I want to say that the policy that has been applied by this Government has landed it in a parlous position, and according to inside information that I have received from supporters of the Government, they expect things to get worse. The speech that was delivered by Senator Kennelly, who is the Deputy Leader of the Opposition, was thoroughly enjoyable. It brought back to me memories of the old days when the Senate was a lively organization. I say in conclusion that the Government should study more deeply the economics of the present situation, and realize that it will have to get Australia off the present basis, which allows private enterprise to play ducks and drakes with the economy.
Question put -
That the bill be now read a second time.
The Senate divided. (The President - Senator the Hon. A. M. McMullin.)
Majority . . . . 5
Question so resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from the 1st May (vide page 418), on motion by Senator O’Sullivan -
That the bill be now read a second time.
Question put. The Senate divided. (The President - Senator the Hon. A. M. McMullin.)
Question so resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Bill received from the House of Representatives.
Motion (by Senator Spooner) put -
That so much of the Standing Orders be suspended as would prevent the bill being passed through all its stages without delay.
The Senate divided. (The President - Senator the Hon. A. M. McMullin.)
Majority . . . . 4
Question so resolved in the affirmative.
Bill (on motion by Senator Spooner; read a first time.
– I move -
That the bill be now read a second time.
– I rise to order.I understood, Mr. President, that you declared a moment ago that the Standing Orders had not been suspended to enable the bill to proceed without delay. The Minister, having moved that the bill be read a first time, is now proceeding to the second reading. Of course, he is not free to do that. I take it, sir, that you did rule that the motion for the suspension of Standing Orders was not carried, there not being the proper majority?
– On contingent notice, all that is needed is a bare majority.
– I regret thatI was not listening before you made your decision. May I ask how you ruled on the motion for the suspension of Standing Orders ?
– I said, “There being 26 ‘Ayes’ and 22 ‘Noes’, the question is resolved in the affirmative “.
– Then you rely on the contingent notice?
– That is why the notice is given.
– The purpose of this bill is to establish a Fisheries Development Trust Account, into which the profits from the sale of the Australian Whaling Commission’s business at Carnarvon will be paid. The funds in this account will be used as a revolving source of finance for approved developmental projects in the fishing industry. These projects may include investigation of the commercial possibilities of new fisheries, the making of investments or granting of loans to fishing enterprises that are soundly based but require investment funds, and, if necessary, the undertaking of enterprises .on similar lines to the establishment of the Australian Whaling Commission. In all cases the Government would desire to liquidate its investment in any undertaking as soon as private investors were willing to take it up. As investment in one undertaking is liquidated, the funds released will be invested in another sector of the fishing industry in which it is considered that it can make the greatest contribution to fisheries development. The fund will not be restricted to one project, as was the case with whaling, but will be used to stimulate private investment in a number of developmental projects. It will thus make an effective contribution to a broad expansion of the fishing industries.
The Australian Whaling Commission was .set up by a previous Government with an investment of £1,375,000. The venture was a great success, and, in five years of full operations, the commission made profits of about £1,000,000, besides paying interest on advances and making substantial provision for depreciation. From these profits, the greater part of the original treasury advances have been repaid, and funds are available for repaying most of the remainder. The sale of the commission’s business will, therefore, leave a substantial credit balance in hand. Normally, this would be paid into Consolidated Revenue, but the Government has decided that the profits which have been made from the Government’s whaling operations will be placed in a special trust account to assist in a special way the development of the fishing industry, lt will thus serve the purposes of developing Australia’s resources, of earning overseas exchange and reducing expenditure on imports, and of introducing improved techniques of fishing.
There is a significant gap between our demand for imported goods and the return from our exports, which is used to finance these goods. In the present circumstances, special consideration must be given to industries which increase exports or provide goods which would otherwise need to be imported. In the last financial year we imported fish and fish products valued at £5,612,000, and we exported goods of the same kind, excluding whale oil, valued at £1,865,000. The development of the .fishing industry should lead to both a reduction of imports and an expansion of exports.
Before proceeding further, I consider that a reference should be made to the operations of the Australian Whaling Commission. The Australian Whaling Commission was established by the Labour Government in 1949 and had a trial run in 1950. Full scale operations began in 1951, when the station had a quota of 600 whales, which has since been reduced to 500 to conserve overall whale stocks. As a result, the station has plant to treat a greater number of whales than it is permitted to take, but in spite of this, its financial record has been outstanding. In addition, the development of whaling has been stimulated. In J951 there were only two whaling stations in Australia, but there are now five, including three in Western Australia, and a licence has been granted for a further .station at Norfolk Island. The industry is now well established, and every whale that can be taken, having regard to our policy of safeguarding whale stocks, is being taken and will continue to be taken when the Commonwealth ceases production. In these circumstances, no reason exists for the Government to continue in a whaling enterprise.
As the Australian Whaling Commission’s assets are vested in the commission by the Whaling Industry Act 1949-1952, repealing legislation will be introduced at a later stage to transfer these assets to the Commonwealth. The sale cannot be completed until this legislation “has been passed. The funds received from the sale of the Australian Whaling Commission will be used to develop those fishing industries which have not yet been able to attract the capita] required for their development. The reason for this may be found in an examination of the development of fisheries in Australia.
The first fisheries developed in Australia were the freshwater and estuaries fisheries, and they were sufficient for Australia’s requirements until World War I. The demand for additional supplies led to the development of trawling, and production increased very rapidly in the 1’920’s, reaching a peak of 70,000,000 lb. in 1929. Then the trawling beds began to show signs of over-fishing, and production began to decline. There was some improvement after World War II., as the fishing beds had been rested, but signs of over-fishing in eastern Australia again have appeared. It is clear that significant progress can come only from the development of new fisheries or new areas.
The two main requirements for an expansion of the industry are large-scale investment and the application of new techniques of fishing, which in themselves often require substantial investment. As fishing has generally been conducted on a small scale, fishermen themselves have not sufficient funds for investment, and outside resources are difficult to obtain because of the uncertainty of returns from small scale operations. About £10,000,000 is invested in the Australian.fishing fleets, shore installations and factories, and a further £3,500,000 in the whaling industry, but this is much less than is required if resources are to be developed to the full. The only large-scale investment for many years has been in the whaling industry, and this has resulted mainly from the Commonwealth Government’s initiative in this field. The chief scope for expansion is in fisheries which in the past have been operated only on a small scale or with techniques not suitable for large-scale development. The most promising of these is the tuna industry.
Large tuna fisheries have been established by other countries, particularly the United States of America and Japan, but Australian resources were not investigated until recent years. The present Government hired tuna clippers and overseas specialists both to determine whether tuna were available in commercial quantities and to demonstrate modern methods of catching them. It has been proved that very large quantities of tuna are available off the coasts of Australia, and many Australian fishermen have been trained in catching them, and have actually landed large catches. Some hundreds of tons of frozen tuna have been exported to the United States and have been accepted readily there as being at least equal to tuna imported from other parts of the world. Small commercial exports of canned tuna have been made to the United
Kingdom, and there are excellent opportunities for this trade if the industry can be established on a sufficiently large scale. The Australian tuna industry can be expanded successfully in competition with other suppliers only if it is organized as a reasonably large-scale industry. The cost of fishing itself is reduced very greatly if the fleet contains a mother ship and a number of fishing vessels which can be concentrated quickly where the tuna is available. A considerable investment is required, but experience in other countries has shown that this can be justified. It is the purpose of the Trust Fund to give sufficient backing to private industry to make this development possible.
Another recent development of great importance has been the discovery of large stocks of prawns in the coastal waters of eastern Australia. These prawns are in greater concentrations and are of larger size than those previously taken in estuaries. New grounds are still being discovered, and it is already certain that the stocks are vast. Production increased from 4,000,000 lb. to almost 7,000,000 lb. during the past twelve months and the catch has been limited mainly by the markets which are still geared to the relatively small quantities available previously. There is the same scope for development of an export market for this industry as was the case with crayfish, but even larger investment is required because of the technical problems associated with the processing of prawns. Investment is required in prawn trawlers equipped to work in deep water. For this purpose they require special apparatus for detecting concentrations of prawns and snap-freezing machinery to enable the prawns to be held in a suitable condition. There is a very large market in the United States for prawns processed under specified conditions.
Both tuna and prawns are high quality products, and sell at a price level appropriate to this, but there is also considerable scope for the development of lower quality fish, both for direct consumption and for the production of fish meal and oil.
In recent years imports of fish wen about equal to the total production of local fisheries and many of these imported fish can be replaced by fish available in Australian waters. The chief varieties suitable for development, apart from tuna, are pilchards, barracouta and Australian salmon. Great quantities of pilchards appear at times off the Australian coast, but further investigational work is needed to determine when the main supplies are likely to be available, and whether, regular supplies might be obtained. The quality of canned salmon and barracouta produced in Australia has not been high, but better products are now possible with improved methods of canning, particularly of barracouta. Large quantities of barracouta are marketed in Australia at present, but stocks are available for much more intensive fishing if a higher quality product leads to an increased demand.
In addition to the development of new fisheries, there is scope for extending some of the older fisheries to new areas. Research by the Commonwealth Scientific and Industrial Research Organization has demonstrated that a profitable trawling industry could be developed in the Great Australian Bight. A tentative attempt was made to develop this fishery, but the equipment available was not suitable. Because of the remoteness of this area from its main markets, it would be necessary to use large trawlers which could remain at sea for lengthy periods, and which could also deliver the fish to market in reasonable time. Suitable shore installations would also be required, and the venture could hope to be successful only if undertaken on a large scale. The development of this fishery would stimulate settlement in under-developed areas in Western Australia and South Australia. There are also opportunities for the development of fisheries off the coasts of northern and Western Australia provided the ‘problems of marketing and transport are overcome.
It may also be necessary to investigate the possibility of developing marine products which have not previously been produced in Australia. For example, during the war years, imports of agar, which is made from seaweed, were cut off. Agar is used as a culture medium in labora tories and also for canning and in pharmaceutical products, and it was necessary to develop its manufacture in Australia as a matter of urgency during the war years. The further development of this and similar marine products will be investigated.
If the fishing industry in Australia is to progress, provision must be made for replacing obsolete equipment. I am informed that no additional steam trawlers have been purchased by Australian fishermen since the 1920’s, with the exception of two second-hand boats obtained ten years ago from New Zealand. In the United Kingdom, trawler owners are encouraged to modernize their vessels by means of subsidies and loans, and in South Africa loans are made available. The investment of government funds in commercial concerns has been used in South Africa by the South African Fisheries Development Corporation over the past seven years and has resulted in a tremendous increase in fish production and exports. It has also overcome the inability of the fisheries industries to attract private capital in the required amounts.
The trust fund will he used primarily for investment in commercial fishing concerns in those cases where, despite the fact that proven opportunities for tho development of sound fishing enterprises have been demonstrated, private enterprise is not able, or willing, to provide investment funds of the magnitude required. This unwillingness may be due to inability to face, necessary establishment risks or to lack of finance. In all cases, it would be the intention to withdraw government investment as soon a = the project has been soundly established, and Australian interests have demonstrated their capacity and willingness to continue the development. This would be done in such a way as not to prejudice the stability of any undertaking.
At a time when it is necessary to increase exports and to replace imports, the fishing industry can be made to play its part. It is confidently expected that the stimulus given to the fishing industry by the Fisheries Development Trust Account will increase exports of fish products, particularly to dollar markets, and permit replacement of imports of frozen and canned fish, thus providing a substantial saving in foreign exchange. In addition, it will provide for the exploitation of resources at present unused, as well as the more efficient development of existing fisheries. It may well be the means of bringing prosperity to an industry which has previously lacked investment funds to develop its potentialities to the full. I commend this bill to the favorable consideration of the Senate.
Debate (on motion by Senator Tangney) adjourned.
Bill received from the House of Representatives.
Motion (by Senator Spooner) put -
That so much of the Standing Orders be suspended as would prevent the bill being passed through all its stages without delay.
The Senate divided. (The President - Senator the Hon. A. M. McMullin.)
Majority . . . . 4
Question so resolved in the affirmative.
Bill (on motion by Senator Spooner) read a first time;
.- I move-
That the bill be now read a second time.
The purpose of this bill, which is complementary to theFishing Industry Bill 1956, is to repeal the legislation which established the Australian Whaling Commission and to vest control of the commission’s business in the Commonwealth. This will enable the Government to sell the commission’s assets. Eight offers were received for the commission’s whaling station at Carnarvon, Western Australia, and the highest of these, £880,000 by the Nor’ West Whaling Company, was accepted, subject to the passing of the necessary legislation and to the satisfactory completion of detailed negotiations for the sale. This offer was considered acceptable, in the light of all the offers received, and in comparison with valuations of the business as a going concern.
In transferring the commission’s business to the Commonwealth, provision is made in the legislation far the Government to assume responsibility for the commission’s liabilities and assets. After liabilities have been met, and the balance outstanding on advances from the Treasury have been repaid, the funds remaining will be paid into a trust account. The amount available for the trust account is expected to be about £750,000, and will be used to finance schemes designed to foster the development of the Australian fishing industry. I commend this bill to the favorable consideration of the Senate.
Debate (on motion by Senator Tangney) adjourned.
Debate resumed from the 1st May (vide page 419), on motion by Senator Spooner -
That the bill be now read a second time.
– The Opposition offers no objection to this bill. We consider that it should be supported because it. is reallyonly a machinery measure which will give certain pension rights to officers who have transferred from State departments to the Commonwealth Public Service. As many of these officers are public servants from my own State, I am very pleased that they are to receive some measure of justice. One difference between the Commonwealth superannuation scheme and that of the State from which these, officers come is the fact that wives and children of public servants will be included in the Commonwealth scheme; and that is as it should be.
One point that I should have liked the Government to consider when drafting the measure is the fact that no attempt has been made to increase the benefits now payable under the superannuation scheme. In 1922, when the Commonwealth Superannuation Act was first introduced, the basic wage was about £4 a week. At that time, the value of a unit of superannuation was 10s., whilst the average amount of benefit received by retired officers was in the vicinity of £8, which was £4 above the then existing basic wage. Since then, the cost of living has gone up considerably. The basic wage has increased by over 200 per cent. ; it is now in the vicinity of £13. Yet, there has not been any corresponding increase in the rate of superannuation pension. Instead of receiving an amount equivalent to £4 above the basic wage, retired officers are now being paid about £4 below it. It is true that the value of units in the superannuation scheme has risen from 10s. to 17s. 6d. each, but this is not commensurate with the rise in the other1 costs that I have mentioned.
It will be noted also that the pensions have been, adjusted at various times between 1922 and 1955 under State legislation passed during that period. The majority of these officers have been transferred from the Western Australian State public service^ and all their pension rates have flowed from the Superannuation Act 1S71, which has been amended by the Western Australian Government at various times in order to grant increases. It was amended in 1948, 1951 and 1954, and: the Commonwealth has granted corresponding increases in the amounts payable under Section 57 of the Commonwealth Superannuation Act. Last year, m Western Australia, there was a further n,mendment increasing the average rate of pension by £26 per annum, the increase to take effect as from the 12th November, 1955. The Commonwealth Governmnent is now bringing this act- into’ line with the State act. Although it has granted increases I should like to know whether, they are to date from the beginning, of the year, or from the date when this bill becomes law. In any case, the Opposition will not oppose the bill, but will support it and wish it a speedy passage through the House.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining, stages, without amendment or debate.
Debate resumed from the 1st May (vide page 419), on motion by Senator Spooner -
That the bill be now read a second time.
– This bill is similar to the previous measure, and it will not be opposed by the Opposition. It is really a machinery bill. While those public servants who come under this bill could normally keep their pension rights under existing law, it is as well that there should be some additional safeguard such as that provided in this measure. The pension rights which originated in the State law? are preserved under section 84 of the Commonwealth Constitution, particularly for those public servants who were transferred from State Services to the Commonwealth Public Service. The pensions have been adjusted, when there have been increases, under the terms of the Superannuation Act 1922-1955. Successive governments have seen fit to vary the pension rates under State legislation.
I should like to suggest that, in all branches of the Public Service and in industry where superannuation is involved, more consideration should bc paid by the Government to the sacrifice which is often involved by public servants and employees generally in paying for their superannuation in order that they and their wives and families may be adequately safeguarded. Under some other legislation, particularly social services legislation, persons who have scraped and saved to pay for their superannuation are not so well served. With the means test as it is, they would be much better off if they had spent everything, and then became eligible under the general pension laws. At present, they cannot become eligible for an age pension because they had the foresight, as they thought, to acquire superannuation rights for themselves and their families.
Medical and hospital treatment, which is available to age and invalid pensioners free of cost, is constantly increasing, but superannuated persons must pay in full for those services, and that is a grave injustice to many public servants. Throughout their working lives, they have paid into various superannuation schemes, often when they could not afford it, only to find, on retirement, that they are worse off than they would have been had they spent all their money, and not made provision for their old age. While that is not strictly relevant to the bill that is before the Senate, we should not allow this measure to pass without some comment. Persons who make payments towards their retiring allowances should not be victimized on that account, and prevented from receiving social service benefits which are open to other members of the community.
– The officers concerned with this measure have never made any contribution to a superannuation fund.
– I stand corrected there, but my remarks apply to other branches of the Public Service and to voluntary contributors to superannuation benefits. I also point out again that the Western Australian Government increased pensions by a flat rate from the 12th November, 1955. I should like to know whether this Government could make the implementation of this legislation coincidental with that date.
– The bill provides that it shall become operative from the ] 2th November last.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 1st May (vide page 421), on motion by Senator Spooner -
That the bill be now read a second time.
– The Opposition has pleasure in supporting the measure before the Senate. The second-reading speech of the Minister for National Development (Senator Spooner) was quite comprehensive. At the outset, he pointed out that the Commonwealth had power over census and statistics. This, as he indicated indirectly, is a very interesting example of the exercise of a concurrent jurisdiction by the Commonwealth and the States, because in the fields of census and statistics both the Commonwealth and the States are active. The position i3 conditioned by section 109 of the Constitution which provides that, in the event of any conflict between State and Federal laws in a matter where concurrent jurisdiction 13 present, the federal law shall prevail. I am not aware that any conflict has ever occurred in this area. The Minister pointed out in his argument the need for an arrangement for joint activity and for one authority to collect statistics. I agree with his contention that there never was a time in Australian history when up-to-date and accurate statistics in every field of business, and in economic activity particularly, were more needed.
The Minister referred to the fact that accurate statistics cannot be obtained when six separate States are not preparing data upon a similar basis. Of course, it is a difficult matter to get the States to be interested in common fields and to amass their data on a perfectly common basis. He pointed out that improvements have been achieved, in part, by establishing Commonwealth statistical offices in some of the capital cities. And he referred to the fact that the statistical coverage in several States has been deteriorating, and worse still, that there is a possibility of a complete break-down in some statistical fields, particularly in those of primary and secondary production. Of course, that would be a very great tragedy not only for the economy and the country at large, but also for those who are engaged in primary and secondary industry. He paid proper tribute to Mr. Chifley’s Government for seeing the difficulties and endeavouring to negotiate with the States a joint, combined statistical service.
I have no hesitation in congratulating the Government upon the fact that it has achieved the measure of success that the Minister’s second-reading speech indicates. The more enlightened State of Tasmania saw the light at the end of World War I., and from that date there has been one statistical service in Tasmania. That very excellent pattern is now about to be followed, as the Minister indicated, in Western Australia. A draft agreement has been accepted by the State Government and the Commonwealth and it now only awaits implementing legislation by both Governments. He referred also to the position in New South Wales and South Australia where again broad agreement has been reached and only some details need to be filled in.
The thing that 1 am concerned about is that no reference at all is made in the Minister’s speech to what is happening as between the Commonwealth, on one hand, and Queensland and Victoria on the other. I realize there may be difficulties. I know there are State rivalries, and I have no doubt that negotiations are proceeding in some form or other. How- . ever, the complete absence of any reference to either of those States concerned my colleagues from both Queensland and Victoria and they have asked me to draw particular attention to it. When I say that, I do not in the least want to put the Minister in a position where he might jeopardize the prospects of some agreement with those States. It is quite important that he should not aggravate any difficulties that are being experienced with those States. The Opposition would be quite content with n statement that, endeavours are being made to reach an agreement and that such further information as the Minister feels he can safely give to the Senate on that point will be given.
The bill itself indicates that the usual safeguards are provided for officers who may be invited to transfer from a State service to the Commonwealth service.” All the safeguards regarding sick leave, furlough, pay, classification and the rest appear to be contained in the bill. The key clause, of course, is clause 5 which permits the making of arrangements and the conclusion of an agreement by the Governor-General with the Governor of a State to achieve the purpose of one statistical activity in each State to be operated by the Commonwealth. There is a deal of flexibility about that clause. Perhaps, too often we find written into these agreements rigid, fixed terms and I recognize that there could be variations between one State and another and that it is desirable to have a degree of flexibility in the agreement. There is no need to have an agreement between the Commonwealth and the States that will conform verbatim to a form or even to a pattern. We have no objection to the fact that there’ is a good deal of flexibility in the clause. We regard it as a good feature of the bill.
I take the opportunity, perhaps inadequately, to compliment the Commonwealth Statistician and his officers, first, upon the magnificent job that they do in preparing statistics, having regard to their great difficulties, and upon the speed with which they make them available. I have no doubt that there could be improvements, but equally I have no doubt that the Commonwealth Statistician and his officers are making their best endeavours to achieve perfection. Secondly, I desire to express on behalf of myself and my colleagues my thanks to the Statistician and his officers for the way in which they are always ready to co-operate with a member of this Parliament. They not only recognize that their function is to acquire information, not merely for the sake of acquiring it and filing it, but they are also anxious to disseminate it and to supply information which any member of the Parliament may require. I pay my tribute to their readiness and courtesy on all occasions when information is sought. I am sure that every member of the Senate will join with me in those expressions’. Finally, I offer congratulations to the Government upon the measure, and on the degree of success that has been achieved in the main purposes which the bill contemplates. I express my best wishes for the success of the negotiations with the remaining two States.
– I welcome the opportunity of supporting the bill. I appreciate the remarks of the Leader of the Opposition (Senator McKenna) in relation to it. There is no need for me to cover the clauses because the Leader- of the Opposition has done very well in that respect. This, appears to me to be another example of the growing co-operation between the States and the Commonwealth. It is a further example of our national growth at the present time, and what pleases me is- that in no way does it take away any power or privilege that has hitherto belonged to the States;in no way does it harm any of the States. This, integration, to use the word used in the second-reading speech of the Minister for National Development (Senator Spooner), is something that I welcome very much. It is, of course, a bill for the- purpose of integrating statistical services. Tasmania, apparently, has been the- pilot State over the years because this integrated statistical service has been in operation in Tasmania- for some time.
There have been difficulties since 1901 in the matter of statistics, because, as is well known in the Senate, the fathers of the- Constitution saw to it that this power was written into the Constitution. The idea of an integrated service has been impeded, I think, by the absence of effective means of ensuring uniformity of State data. Difficulty has been experienced in arranging with each of the- six States and the- Territories for a method- of collecting data on the same basis. As is well known, tremendous development bas taken place! in the Commonwealth and a lot of new phases of enterprise, have arisen; and the States, apparently, have not kept up to date with these: additional phases of enterprise and have made noi attempt, in many instances, to> take account of additional factors in their, statistical work.
It is interesting to recall that the word “ statistics^ “ is derived from the word “state-“, and in the beginning, statistics often referred to matters of state - economic and fiscal matters.. But now,, of course,, this science covers a. tabulation of facts on many other matters not connected with the state. As the basic concept on which all statistical work ultimately rests is that of the aggregate, it is better, as I see it, that there be an aggregate of six Australian States, with all of the work done by one department rather than within the separate States.
There was a- very interesting talk on the national radio on the 27th April by Professor Kendall, of the London School of Economics. He was the. guest of honour on that occasion, and his. talk showed) how necessary it was to discover the habits of people, and the wants and preferences of man in this, new social environment in which we find ourselves. He gave some interesting examples. One that I recall showed how the statistical approach has saved government revenue in many ways. After the last war. instead of the British Government minting all the war medals to which the members of the services in the United Kingdom were entitled, the statisticians took a survey which showed that only one-third of those entitled to medals wanted them, and so the authorities minted only one-third of the number at first proposed. That is an example of the use of the statistical method- to save revenue.
I am very glad that the Parliament is paying some intention to this integrated service. After all, statistics are the raw material of all manner of social and economic judgments, and as this nation is fast developing the idea of the welfare state, one sees how important the profession of statistician is becoming. Therefore, I am very pleased to see this bill before the chamber.
Unlike the Leader of the Opposition (Senator McKenna), I am inclined to think that Australian statistics have not been kept up to date, or at least as up to date as I should like them to be. I have before me Part IX. of the Commonwealth Year-Booh, No. 40, of 1954.
I pause, at thi& juncture to compliment the Commonwealth Bureau of Census and Statistics on issuing, the Year-Book in parts instead of waiting until, the complete volume is ready for issue. Despite this fact, however, Part IX. of the 1954 Year-Book to which I have referred, contains data in respect of wineries and distilleries only for the years 1938-39 to 1.950-51. That data is well over two years old by the time the book is issued. I hope that this integrated service, which is now under consideration, will obviate some of that time lag. Another interesting factor about the example that I have picked at random is that for the States of Western Australia and Tasmania, the material particulars are not available on any of the subjects related to wineries and. distilleries. The relevant, footnote reads -
Not available for publication; figures are included in total for Australia.
We know from our own observations that there are persons employed in wineries in Western Australia, yet in this part of the 1954 Year-Booh statistics in relation to’ them are not available. I do hope that, with the advent of the integrated service, statistics on these and similar matters will be available.
I desire now to direct the attention of the Senate to certain departmental activities in South Australia. I read in yesterday’s issue of the Adelaide Advertiser that the ninth floor of a building in the course of erection, the Da Costa building in Grenfell-street, Adelaide, will be used by this new department. The building is to be truly a magnificent structure, but I consider that the ninth floor of a building is not the correct place for the statistical department in South Australia. The Commonwealth should have its> own building in Adelaide for important government work. Here is a tremendously important government department, which will become even more important as the years go by. It seems to me to be wrong and short-sighted of the Commonwealth not to provide its own buildings in the City of Adelaide. There has been much adverse comment recently i:n city council circles in Adelaide about Commonwealth activities being carried on in various buildings scattered throughout the City of Adelaide, upon which, of course, rates are not .paid. I rather frown on tha decision of the Government to put this important department away up on the ninth floor of a building instead of providing its own building or buildings for the department in South Australia. I hope the Minister for the Navy (Senator O’Sullivan), who is now at the table, will bring to the notice of the Cabinet the facts I have mentioned and the views that I. have expressed.
While we are dealing with the subject of statistics, I think the time- is opportune for me to inform the Senate that the South Australian Government prepares a very small pocket-book, which fits into the waistcoat pocket, in which, expressed in very simple language, are particulars relating to the main statistics of the State of South Australia. It rejoices in the name of The Statesman Pocket Book. Of course, I always receive copies of new editions. The Commonwealth could very well consider the printing of a small synopsis of statistics for use by people in a hurry. I conclude by expressing the hope that when the new statistical arrangements settle down, the Commonwealth will consider producing a very small pocket-book of statistics of this nature. I believe that it will be possible to do so< after the integrated service gets going.
Question resolved- in. the affirmative.
Bil] read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 1st May (vide page 422), on- motion by Senator o’sullivan-
That the bill be now read a second time.
– This measure has its origin in claims lodged with the Public Service Arbitrator by various Public Service organizations some time prior to the end of 1954. Quite a number of organizations had lodged plaints, hut they were suspended for a considerable time by the Public Service
Arbitrator, who was awaiting a declaration by the Commonwealth Court of Conciliation and Arbitration in what is known as the Metal Trades case, where a guiding principle was sought to be established in determining what marginal increases should be given to men engaged in the metal trades.
In November, 1954, a judgment of the Full Bench of the Commonwealth Arbitration Court was given, and I believe that it is common knowledge that the court then awarded margins at the rate of two and a half times those that had operated in 1937. The hearing of the Public Service organizations’ plaints before the Public Service Arbitrator was then immediately begun. The hearing had not proceeded far when the Public Service Board, acknowledging the need for some marginal increases, of its own volition and freewill and without in any way prejudicing the proceedings then pending before the Arbitrator, gave certain substantial increases of salaries which operated from the 23rd December, 1954. The hearing then proceeded for some months, and about the middle of 1955 the Public Service Arbitrator made what he intended should be an award, in which he followed exactly the principle adopted by the Commonwealth Arbitration Court in the Metal Trades case. He awarded to public servants the two and a half times formula, which the court had prescribed.
There was an appeal, against the form of the award, to the Commonwealth Arbitration Court, and the court held that what purported to be an award of the Public Service Arbitrator was, in form, only a general formation of a principle, and was not in fact or in law an award. Accordingly, the Arbitrator had to reconsider the matter and put his award in a different form. When he did put it into a proper form, the Public Service Board exercised its right of appeal and took the matter to the Commonwealth Arbitration Court. The proceedings there were somewhat protracted, but in December last, almost exactly a year after the Public Service Arbitrator had begun the hearing of the plaints, the Commonwealth Arbitration Court announced its decision. It rejected the award of the Public Service Arbitrator adopting the two and a. half times formula for margins, and gave certain increases in various sections of the Service. It generally provided for what I might term a better tapering off of the marginal distinctions between different classes of employees. The matter rested there.
The Public Service Board then gave consideration to the nature of the award and its effect, and found that the machinery in the Public Service Act did not permit the board to proceed with increases of the type and order prescribed by the Commonwealth. Arbitration Court without throwing positions open, without calling for applications and without giving rights of appeal and so on. So this bill is designed to by-pass the whole of that awkward and technical procedure, and, in effect, it will effect a reclassification of the Service instead of opening up the very difficulties that I have indicated. I believe that that is a good purpose. There is no point in going through all the machinery of the Public Service Act as it stands at present merely to implement an award of the court, coupled with certain ex gratia payments and arrangements that the Public Service Board has thought fit to extend to the members of some organizations who did not receive any specific or direct benefit from the award of the Commonwealth Arbitration Court.
It is important to note, because it neither appears in the bill nor is it stated in the second-reading speech of the Minister, that the Public Service Board - not by any law but by purely administrative action - has made retrospective to the 23rd December, 1954, the terms of the award promulgated by the Commonwealth Arbitration Court in December, 1955. One must, as a matter of wage justice, approve of that particular approach to the position, and I understand that even if persons had retired from the Service during the year prior to December, 1955, they were paid a proportionate increase of salary due to them from the 23rd December, 1954, to the date of their retirement. That is a very proper provision, but it leaves open one aspect of this matter that has disturbed the Opposition, and which has disturbed me in particular. That is, that although those who retired during the year before the making of the award will have received the benefit of the December, 1955, award, they have not been given the opportunity to contribute for more units of pension to which they would have been entitled on the new salary base. That sounds rather complicated, but I do not think that I can put it in any simpler terms. In order to illustrate my meaning I shall put a case to honorable senators. Assume that a man retired from the service in July, 1955. After the award of the Commonwealth Arbitration Court in December, he was paid his increased salary from December, 1954, to July, 1955. In fact he got whatever increase was granted by the court during that period. That increase of salary would have entitled him, had he got it while he was still in the Service, to take up 30 units of superannuation. He could not do that then, and he cannot do it now because he has left the Service. The ability to take up extra superannuation units might make a substantial difference to a man who has retired.
The Minister for the Navy (Senator O’Sullivan) has just passed a note across to me to the effect that the particular matter I have just put to honorable senators is now under consideration by the Government. I am happy to learn that, and I hope that- favorable consideration will be given to it. The fact that it is under consideration disposes me to feel that the Government is aware of the justice of the claim that I have made on behalf of the Opposition in respect of this particular type of retired person. In view of the assurance from the Minister, I shall not pursue that topic any further.
I desire to conclude with a comment on one other matter. The Opposition has always objected to appeals being lodged against the decision of the Public Service Arbitrator. The present Government introduced the system of appeals to the Commonwealth Court of Conciliation and Arbitration, and while one cannot complain about the fact that whatever award was made ultimately on appeal by the Commonwealth Arbitration Court was given retrospective effect in respect of payment, there still remains the fact that there was a long delay and there was a great cutting down of the wage rates which the Public Service Arbitrator had prescribed. I wish to make it clear that, so far as the Public Service is concerned, the provision for appeals introduced by this Government into the arbitral system has operated very much to the financial detriment of public servants throughout Australia. In conclusion, the Opposition offers no objection to the measure because it will permit of reclassification and will save a lot of administrative troubles. In addition, it will enable the benefits to be conferred on a simpler, more efficient and more effective basis. Subject to the comments that I have made on the general subject of appeals, the Opposition accords its support to the measure.
– The measure before the Senate is of great interest. As the Leader of the Opposition (Senator McKenna) has indicated, the Opposition does not oppose the bill, but the subject-matter of it has been of concern to honorable senators on this side of the chamber, and to public servants, for several years. The fact is that this Government has impeded the endeavours of its servants to obtain wages commensurate with rising costs of living and conditions in private enterprise. There are many brilliant young men who are not now in the Public Service because the Government was slow to recognize the need to pay public servants adequately. I remind the Government that those men had received a basic education which was probably not far short of university standard, but they were allowed to take employment with private enterprise and, in some instances, to leave Australia altogether. The Government has done a disservice to Australia by impeding wage justice for public servants. After all, the brilliant young men who leave the Service have been educated by the Government. In many instances, they have received scholarships which have enabled them to acquire the benefits of an education system which is perhaps superior to that of any other country of the world. Such expenditure is incurred with a view to retaining in Australia the services of well-trained and well-educated Australians who are versed in the requirements of this nation. The parsimony of the Government has lost us many brilliant young men.
We of the Opposition have found that the Government usually begs the question of wage justice. It has tried to make the presentation of logs of claims to arbitrators or appeals courts so expensive that the Public Service employee organizations often bog down in the process, lt is true that twelve months’ retrospectivity was granted in relation to margins, but during the period that the margins did not operate, great damage and injustice were done. Supporters of the Government have said many times that there are few people in Australia who work for standard award rates, but of course that is not the case with public servants. Each public servant has a certain classification or status in the department in which he works. In addition, he is committed to a superannuation scheme, and by virtue of the position that he has established over a period of years, a career public servant cannot afford to jettison all those things. He, therefore, is obliged to endure injustice in relation to his wages if he is asked by the Government to do so.
In respect of government instrumentalities, there are awards which apply to practically every section of the community. For instance, there are awards for technicians, tradesmen, statisticians, clerks and legal men, and classifications have to be provided for all of them. One might be pardoned for thinking that if the Government really considered conciliation to be better than arbitration, it would not force the Public Service organizations to have to resort to arbitration in order to retain the provisions of an award which they had won legitimately by conciliation . with the appointed representative of the Government. Because the Government took that action, the anomalies to which the Leader of the Opposition referred have become apparent. After the Leader of the Opposition had raised those matters, the Minister for the Navy (Senator O’sullivan) informed us that persons who were due to retire during the period covered by the retrospective payment would receive an opportunity to sub scribe for the increased number .of units of superannuation that they would have been allowed to take out had they enjoyed the higher salary in . the first place.
– I make no promise about what the result will be. All I am saying is that the matter is being examined.
– I do not think that the Leader of the Government meant to obscure the position. The Leader of the Opposition made out an excellent case concerning the injustice that is being done in this respect, and ike offered to the Government the full support of the Opposition in removing the injustice. Now, the Leader of the Government says that the Government will consider the matter.
– I said that it was being considered.
– That is an .example of the manner in which the Government so often disappoints us. Since 1949, the Government has been considering putting value back into the fi.
– I know that the honorable senator is battling to try to find something to say, but he should not bring up “that matter-
– Senator Vincent has contributed nothing to this debate. Since that is the ease, I suggest that he should use his brains while other honorable senators are speaking.
– Order ! The honorable senator will get on with the matter under discussion.
– Thank you, Mr. President. I appreciate your ruling that interjections are disorderly. The Opposition is really concerned about this matter of pensions, and although the Minister has said that the matter will be considered, I should like to know whether he can give us an idea of the methods which the Government will use to determine the matter. Will it bc the subject of a Cabinet decision, or will it be an act of grace by the ‘Government ? Will the Government say to these people, “ We know of the delays that have occurred and of the impediments that we have put in the way of your obtaining wage justice, and now we will give you ex gratia consideration regarding the pensions to which, morally and legally, you are entitled “? Will this be a matter of negotiation, arbitration, or determination by some board, such as the Superannuation Board ?
– The Government would not agree; it would appeal. That is its form.
– That is what I am afraid of. This is a bad case of a government dealing with its servants, making them fight appeals of this nature. A vital factor which must be taken into consideration is the long delay in hearing logs of claims which have been prepared and lodged for hearing. I have discussed this matter on previous occasions in the Senate. Representatives of the workers concerned spend a great deal of time, for which they are paid by contributions of the members of the union, in preparing evidence of living costs, rents, travelling expenses and hotel expenses, and all the details required to support a log of claims. But if a hearing cannot be arranged by the court for three years - and such delays are not unknown - all that evidence which has been so carefully prepared has to be scrapped, because it is out of date, and a new log compiled. Public servants, who have a just claim for increase in salaries, feel disappointed and frustrated at the delay in having their claims determined because, although the cost of living increases, their salaries remain at the same level. If it were impossible for an early hearing to be arranged, the Government might grant a rise of fi a week to offset the increased cost of living until the hearing could take place.
Delays in hearing have been brought about, not by the parties seeking a new award, but by the Government’s resistance of it. I hope that this measure will remove such delay, which is the main factor underlying the destruction of confidence in the arbitration system. Some unions are sufficiently vigorous to bring about a stoppage of work and a hold-up of industry until their claims are heard. As a result of such extreme action the Government is obliged to agree to an immediate hearing, and when that happens a great deal is said about the stoppage being inspired by Communists. The Go vernment entirely overlooks the fact that in the majority of cases the worker has been denied wage justice because his case has not been heard owing to court congestion or to connivance between the court and the employer, and the position is aggravated by inordinate delay. But if an industrial disturbance or stoppage of work is the only way to secure a speedy hearing of a claim, it is not to be wondered at if there is an inclination on the part of the workers to resort to that extreme. They would rather take action of that kind than remain unheard for years.
The Government should view the industrial field in its entirety and take all possible action to ensure that claims shall receive the earliest possible hearing and delays shall be avoided. It is essential that when awards are made, the evidence may be up to date and the rates granted have a practical relation to current cost of living. Unfortunately, when hearings do take place the quintessence of argument by the parties and consideration of the courts is related to wages only and the important factor of working conditions is by-passed. Wages and working conditions go hand in hand and unless conditions are considered they will deteriorate and much of the value of increased wages will be lost. It is only proper that provision should be made for awards to have retrospective application.
If the Government takes action to see that workers receive proper wage justice and are granted adequate working conditions, it will find that industrial disputes will disappear and the rate of production for which it longs will be far more satisfactory. It is only natural that if a worker is unhappy in his job because of inadequate wages and unsatisfactory conditions, he will’ not give of. his best. The result is industrial unrest, sometimes leading to stoppages, simply because the workers are driven to a point where they must be heard. I hope that this measure will have the effect of removing the causes of these unhappy, and unnecessary occurrences.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Senate adjourned at 5.34 p.m.
Cite as: Australia, Senate, Debates, 3 May 1956, viewed 22 October 2017, <http://historichansard.net/senate/1956/19560503_senate_22_s7/>.