Senate
13 March 1962

24th Parliament · 1st Session



The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m.. and read prayers.

page 441

QUESTION

POLIOMYELITIS

Senator O’BYRNE:
TASMANIA

– Has the Minister for Health seen a report in the Melbourne Herald “ of 10th March headed “ A SetBack in Polio Battle “? That report stated -

The polio campaign, until now almost miraculously effective, is facing a set-back. Queensland and Canberra health authorities are disturbed and are trying to plug this breach in the immunisation shield.

An article in this morning’s issue of the Sydney “ Daily Telegraph “ says that eleven new cases of poliomyelitis were reported yesterday, bringing the New South Wales total for the year to 171. Has the Minister seen a report of a statement by the British Minister of Health announcing the end of the manufacture and use of the Salk poliomyelitis vaccine and the introduction of the Sabin oral vaccine, which is considered more effective in the prevention of poliomyelitis than is the Salk vaccine? Has the Minister perused the report of the British joint committee on poliomyelitis vaccine headed by Lord Cohen of Birkenhead, which directed attention to the fact that Russia, Poland, East Germany and other countries had achieved nation-wide immunity and that last year in West Berlin and West Germany, where Salk vaccine was being used, several hundred cases of poliomyelitis were treated clinically, whereas, in the same period, not one case was treated in East Berlin or East Germany, where the Sabin vaccine was used universally? In view of the fact that the Sabin vaccine takes nine months to make and test for safety and potency, will the Minister inform the Senate whether immediate plans are being made for the Sabin oral poliomyelitis vaccine to be introduced into this country as speedily as possible?

Senator WADE:
Minister for Health · VICTORIA · CP

– I have seen the reports to which the honorable senator has referred. Before I answer his questions specifically, may I make two points. First, the standard of the Salk vaccine that we manufacture in Australia is recognized by all authorities on this matter to be the highest in the world. Secondly, we are fortunate at the present time to have ample supplies of the vaccine to cover the needs of the States. I emphasize the fact that we have ample supplies because so many people remain without protection to-day and the State governments are urging people to take the precaution of being vaccinated. I believe that we all should lend our voices to the plea to people to take all the precautions they can against poliomyelitis by way of the Salk vaccine.

Specifically answering the honorable senator’s question, I say that my department is very interested in the Sabin vaccine. Recently it sent overseas one of its leading virologists, Dr. Duxbury, who has been making extensive inquiries in the United States of America, the United Kingdom, Russia and, in fact, all European countries where that vaccine has been used. At this stage, we have not yet had his report, though he has returned home. I am hope’ ful that it will be available in the very near future. Until the report is available and has been examined by people who are in a position to consider it intelligently and constructively, I assure the Senate that my department will not depart from its Salk vaccine programme. We know that the Salk vaccine has been tried and proved. We know, also, that it takes a long time to produce the Sabin vaccine. I warn people who think they may wait for the Sabin vaccine to be available that the disease may strike in the meantime. I say to all and sundry, “ If you have any doubts about where you stand in the matter, do not hesitate to avail yourself of the facilities that exist for immunization with the Salk vaccine as a protective measure “.

page 441

QUESTION

IRON ORE

Senator VINCENT:
WESTERN AUSTRALIA

– My question, which is addressed to the Minister for National Development, concerns the discovery of a great iron ore deposit in the district in Western Australia known as the Pilbara. I mention by way of preface that Mr. Thomas M. Price, a vice-president of the Kaiser Steel Corporation, who was recently in Western Australia, has been reported as having said some interesting things about this enormous deposit. In the first place, Mr. Price is reported to have said that the- Pilbara iron ore find was one pf the massive iron ore bodies in the world. Secondly, he said that the deposit might feasibly be worked by the use of atomic power. Thirdly, he said that it would be easy to work the deposit, but that most of the ore would need to be beneficiated by some process or other before it could be converted to pig iron. Would the Minister care to comment on those three observations made by Mr. Price?

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– I saw the newspaper report referred to by Senator Vincent and read it with a good deal of interest. I read all the comments that I can about this iron ore deposit, first, because it is a discovery of great national importance, and secondly, because when I first made an announcement about it my veracity was challenged, lt was said that I was not accurate and not sincere in my comments on it. So,- I have watched it with care. I notice that Mr. Price speaks of the deposit as being of fabulous proportions. He used some such adjective to describe it. The Premier of Western Australia has likened its discovery to the discovery of gold in that State. It is certainly one of the great mineral discoveries of this era, ranking with the discovery of bauxite, the discovery of coal at Kianga, in Queensland, and not far short, perhaps, of the discovery of oil. It is a tremendous deposit of iron ore. It causes me to reflect and say how little the people of Australia really know about the mineral potentialities of this country.

Dealing with the particular points made by Senator Vincent, I read that this gentleman from overseas had spoken of the development’ of the deposit by the use of atomic power. I cannot follow the logic of that statement, although I have no doubt that he knows what he is talking about. He is a member of a big organization. I prefer not to comment on this aspect. When I think of the use of atomic power for such purposes, I ask myself which would be the most economical power - thermal, hydro or atomic. I do not know what particular association there may be between atomic power and this particular deposit. This gentleman said there were untold millions of tons of iron ore there and that it required beneficiation. I think that has yet to be proved. The reports we are receiving state that a great deal of the deposit is highgrade iron ore. Opinions about it are related to the particular areas which are inspected. The deposit covers such a big area that there is quite a variation in the quality from place to place.

page 442

QUESTION

TAXATION

Senator CANT:
WESTERN AUSTRALIA

– I ask the Minister representing the Treasurer the following questions: Is the Treasurer aware of the disabilities that are suffered by the residents of Geraldton in Western Australia because of the high cost of living in that area? Did the Treasurer recently meet a representative of the residents of Geraldton? Did that representative request the Government to give the residents of Geraldton some relief by way of taxation allowance? Did the representative of the Geraldton residents request that Geraldton be included in zone B for taxation purposes? If so, has the Government given favorable consideration to the request? If it has, will the zone B allowance be deductible from incomes in the J 961-62 tax year? If not, will the residents of Geraldton be given taxation relief in the 1962-63 tax year?

Senator PALTRIDGE:
Minister for Civil Aviation · WESTERN AUSTRALIA · LP

– I do not know whether the Treasurer recently met a representative of the people of Geraldton who requested that Geraldton be included in zone B for taxation purposes. I should imagine that, if the Treasurer did in fact meet such a representative, he would indicate his decision in the first instance to that person. The most I can do is to ask the Treasurer whether he can make available any information to Senator Cant, and I shall do that. The latter part of the question involves matters of policy which, of course, are announced when the Budget is presented. But if there is any information that could be made available to the honorable senator, I shall try to get it for him.

page 442

QUESTION

TASMANIAN SEA MONSTER

Senator MARRIOTT:
TASMANIA

– My question is addressed to the Minister in charge of the Commonwealth Scientific and Industrial Research Organization. Has every appropriate officer of the C.S.I. R.O. been alerted to assist and advise the relevant Tasmanian

State government departments in their research into the origin of the large sea monster which has been washed ashore on one of the beaches of Tasmania’s rugged west coast? What is the latest information that officers of the C.S.l.R.O. have about the origin and species of this monster? Will every opportunity be given to interested scientists throughout the world to examine photographs and portions of the flesh of the monster? Should Tasmania take any specific precautions to safeguard shipping or the fishing industry against similar sea monsters?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– I gather that the object which has been discovered on the Tasmanian beach has been there for approximately two years. It is that long since its existence first became known. It has just recently been visited by Mr. Mollison, who at the time was working for the Commonwealth Scientific and Industrial Research Organization and who brought back a sample of its flesh. The flesh will be analysed in Australia and probably abroad. At the present time consultations are going on between officers of the C.S.l.R.O. in Tasmania and the Animals and Birds Protection Board, which is the Tasmanian authority under whose jurisdiction the monster comes. That is the situation in regard to investigation of the object. The scientists are very dubious whether it is anything other than a member of a known species, but probably analysis of the flesh will give a little more information about that. I should think there is little danger of an attack by similar objects on the inhabitants, or the fauna and flora, of Tasmania.

page 443

QUESTION

WAR SERVICE HOMES

Senator COLE:
TASMANIA

– I direct a question to the Minister in charge of war service homes. Many returned servicemen have borrowed money to buy homes and are paying interest at rates that are high in comparison with the interest rate on loans from the War Service Homes Division. In many instances, they borrowed the money because of the delay by the division in granting loans or because the maximum loan was too low. Will the Government consider permitting these ex-servicemen to change over to war service homes loans, especially as the amounts they have borrowed are less than the maximum loan now allowable? Will the Minister also consider allowing ex-servicemen who are buying homes other than with war service homes advances, and who find that the homes do not meet their requirements because of increased families, to build or buy suitable homes with the aid of war service homes loans, and to sell the equity in the homes they are now buying?

Senator SPOONER:
LP

– The general purpose of the war service homes legislation is to give to an ex-serviceman who does not have a home the opportunity to acquire one. It is not to create a fund to which exservicemen may look in order to finance the purchase of homes on terms more favorable than those on which they have already obtained loans. One has to consider the question against that background. Over the years there has been such a demand by ex-servicemen who have not previously received war service homes loans and who are without homes, that we have not been able to consider extending the benefit to those who already have homes. I should think that any government would hesitate before extending the activities of the War Service Homes Division over such a wide field as that suggested.

page 443

QUESTION

DARWIN AIRPORT

Senator O’FLAHERTY:
SOUTH AUSTRALIA

– Will the Leader of the Government in the Senate request the Prime Minister to 0all the Minister for Civil Aviation and the Minister for Air into conference immediately so that he may direct both Ministers on the policy, if any, of the Government in respect of the Darwin aerodrome, over the use of which, it appears, the heads of those two departments are slangwhanging each other? If the Prime Minister cannot advise them on the matter, will he use me as an arbitrator?

Senator SPOONER__ Without hesitation, speaking for the Prime Minister, I can give Senator O’Flaherty a prompt answer in the negative to his first question. I am certain that my colleagues are quite capable of resolving any difference of opinion that may arise. I can also give a prompt answer in the negative to the second question. We do not want to make confusion worse confounded by bringing Senator O’Flaherty into the matter.

page 444

QUESTION

TIES

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA

– I ask the Minister representing the Minister for the Army: Is it a fact that the Army has placed an order for silk ties? Is it a fact also that the material for the ties is to be manufactured in England? Can the Minister inform the Senate how much silk is manufactured in this country? Does he not agree that wool has many virtues as a fibre? In view of the millions of pounds that are spent annually by the Government and Australian wool-growers on wool research and promotion, will the Minister inform the Senate of the reasons for the Army’s decision?

Senator HENTY:
Minister for Customs and Excise · TASMANIA · LP

– I was very interested to read in the newspapers that the Army Services Canteens Organization, in response to a request from officers and other ranks, had ordered ties for civilian wear. I noted that the ties were to be made of silk. I sought the advice of the Minister for the Army about this matter and he has informed me that, because of their design and motif, the ties cannot be made from material not as fine as silk. Wool would not be suitable for the purpose. I understand that it is planned eventually to have the ties made in Australia from imported raw silk. I think I have answered the matters raised by the honorable senator, but if there is still some aspect of the proposal on which he requires information 1 invite him to see me about it.

page 444

QUESTION

TOBACCO

Senator BENN:
QUEENSLAND

– Is the Acting Minister for Trade aware of the results of the recent sales of this season’s tobacco leaf al Mareeba in northern Queensland? Will the Minister comment on the price obtained for best quality leaf, compared with the price obtained in former years? Will the Minister comment also on the percentage of unsold leaf for which no bids were received? Can the Minister say whether the signs so far apparent in relation to sales are encouraging to the tobacco industry in Queensland?

Senator HENTY:
LP

– Yes, I have noticed the results of sales of Mareeba leaf. It is interesting to note that the quality of leaf grown at Mareeba has improved considerably in the last few years. I pay a great tribute to the members of the growers’ cooperative at Mareeba and to officers of the responsible State department, who have recognized that a market exists in Australia for good quality Australian-grown leaf. It is pleasing to note how the growing of good quality leaf has increased at Mareeba. Last year about 18 per cent, of all leaf grown in Australia was unsold. At the Mareeba sales the percentage of unsold leaf was about 12.6 per cent., which is a little higher than the percentage unsold at Mareeba last year. One reason for that is that portion of the Mareeba leaf offered for sale is not of the quality demanded by Australian manufacturers. The price for good quality Australian-grown leaf this year reached 192d. That is an excellent price. If my memory serves me correctly, the average price for Australian-grown leaf last year was 134d. The average price obtained at the recent Mareeba sales was 147d.

I believe that the sales at Mareeba were partly influenced by the Government’s announcement that manufacturers of cigarettes and tobacco would be required to use a minimum of 43 per cent. Australian leaf as from next season in order to qualify for rebate. That announcement was made prior to the recent sales and indicated to manufacturers how much Australian leaf they would need to purchase. The measures announced by the Government will lead to a long maturation period because manufacturers will be required to hold increased stocks. This factor, too, has given considerable impetus to the Mareeba sales. The principal reason, however, for the success of the sales is that the growers - the co-operative and all who work in the area - have, for some two or three years past, realized the value of growing quality leaf. They have set out to produce a quality product and I am sure they are now reaping their just rewards.

page 444

QUESTION

AGRICULTURE

Senator WEDGWOOD:
VICTORIA

– My question is directed to the Minister in charge of the Commonwealth Scientific and Industrial Research Organization. Is it a fact that extensive surveys are being carried out by the organization in the north and northwest of Australia to ascertain the possibilities of establishing a permanent agricultural industry where one has never existed before?

Will the Minister say how far those surveys have progressed? What are the prospects of economically sound crop production in those areas?

Senator GORTON:
LP

– It is a fact that the Commonwealth Scientific and Industrial Research Organization, in conjunction with other authorities - though I think I can claim that the C.S.l.R.O. is playing a leading part -has carried out investigations and is carrying out investigations in, among other places, the north and north-west areas of Australia. The objects of the investigations referred to by the honorable senator are varied and include such things as studies of soil deficiencies to see what nutritive is required to be added to particular soils in particular places; studies qf grasses and herbage which would be suitable for climates in particular .places; studies of the best methods of grazing and managing such herbage, and things of that nature. It is too early yet to say -what the results of these investigations will be, but I think it can be said that encouraging results are being indicated by the surveys which the C.S.l.R.O. is carrying out.

page 445

WHEAT

Senator HENDRICKSON__ I wish to direct a question without notice to the Minister representing the Minister for Primary Industry. It has been announced that the United Nations Wheat Conference has decided to raise the price range of wheat throughout the world by 12.5d. a bushel. If this decision is incorporated in the International Wheat Agreement, what obligation is there on wheat-importing countries to pay up to 202i cents a bushel, having in mind the fact that a few years ago the United Kingdom declined to pay 1.5 dollars for wheat although she was a signatory to the International Wheat Agreement? Does this conference decision mean that exporting countries are to make wheat available to lesser-developed nations to encourage increased wheat consumption in those countries? Does this mean that some of the large producing countries can give wheat away - a practice which has already seriously affected some of Australia’s traditional markets? What countries, if any, have defaulted in their payments for the purchase of Australian wheat?

Senator WADE:
CP

– Those countries that are signatories to the International Wheat Agreement will of necessity honour their obligations under the agreement, and if they are either exporters or importers they will operate within the minimums and maximums nominated in the agreement. There is no provision in the agreement for making wheat available at cheaper rale. 5 to countries that are under-developed and in need of foodstuffs. That is a matter for individual governments. I am bound to say that in this regard the voice of the Australian Government has at last been heeded, on two counts. Our Minister for Trade has been declaring for years that the United Kingdom and other importing countries could not rightfully expect to buy cheap wheat from Australia. He has raised his voice on behalf of the Government to declare also that those who have plenty must devise ways and means of making wheat available at cheaper prices to those who are in need. Both counts reflect the leadership that Australia is giving to-day in world affairs.

page 445

QUESTION

CANBERRA

Senator WADE:
CP

– It is refreshing to find busy men with great academic knowledge taking an interest in the development of Canberra. I am bound to say that on this occasion it could well be that the picture was somewhat over-coloured. Certainly, Sir, there are few people in Canberra who would not deplore the practice to which Sir Mark made reference. Each lease granted in Canberra contains a covenant which provides for the termination of the lease if the land to which it refers is used for purposes other than those stipulated in the lease. The Government, of course, is reluctant to take the drastic action of cancelling a lease because of a minor offence. I understand that at present it is examining the position to see whether the legislation governing leases or the leases themselves should be amended in order to enable the department to deal with infringements which do not warrant the drastic action of terminating leases.

page 446

QUESTION

BOOMERANGS

Senator TANGNEY:
WESTERN AUSTRALIA

– My question ls directed to the Acting Mnister for Trade. Is he aware of an announcement in an official bulletin issued recently by the Government of Ulster that a new industry is being developed there to make boomerangs for the Australian market? Is he aware also that an announcement was made in the week-end press that the United States of America intends to engage in the same type of manufacture? Is there any restriction on the entry of such articles to Australia? If not, then, in the interests of encouraging our. natives to perpetuate their native crafts, will the Minister see what action can be taken?

Senator HENTY:
LP

– I have not seen the announcements to which the honorable senator refers. No doubt the Irish have a lot of experience in making weapons from wood. The shillelagh, perhaps-

Senator Tangney:

– This is northern Ireland.

Senator HENTY:

– I class the northern and southern Irish as one people; I make no distinction. I doubt whether the overseas manufacturers are gifted enough to be able to put into their boomerangs the power -to return, as the Australian aboriginal is able to do.

page 446

QUESTION

CANBERRA ARCHITECTURE

Senator MCCALLUM:
NEW SOUTH WALES

– I wish to ask a question of the Minister representing the Minister for the Interior. Has he noticed an article in to-day’s issue of the “ Canberra Times “, under the caption, “ Cowsheds for Campbell “, accompanied by a perspective sketch of what purports to be some shops? Are the report and the sketch correct? If so, have the Minister, and possibly the members of the National Capital

Development Commission, misunderstood a request I made some years ago that attention be paid to early colonial architecture? Dp they mistake for early colonial architecture, the architecture of the shops and shanties of 120 years ago? Have they seen the pictures by Hardy Wilson, in the corridors of this building, which show the early colonial architectural style?

Senator WADE:
CP

– I have seen the article referred to by Senator McCallum. I find the reference to cowsheds to be most amusing. On many occasions I have seen radio sets installed in cowsheds for the purpose of soothing the troubled bovine breast, but I have never yet seen a glass front to a cowshed. If I do see one, I will say that nothing further remains to be seen. The National Capital Development Commission has followed the normal practice. It has invited an architect of repute to prepare plans and specifications of shop buildings required to meet the needs of a certain locality. I can only guess at what prompted the architect to design buildings of this type, but it could be that his purpose was to achieve harmony between residential and shopping areas. There could be many reasons why he chose this type of architecture. However, it will be within the province of those who tender for the construction work to suggest alterations of the plans, and any such suggestions will ‘ be considered on their merits. I understand that the sketch referred to is true and correct; it is official.

page 446

QUESTION

CANBERRA AND THE AUSTRALIAN CAPITAL TERRITORY

Senator COOKE:
WESTERN AUSTRALIA

– My question is directed also to the Minister representing the Minister for the Interior, although the Leader of the Government may wish to comment on it. I refer to remarks made by Sir Mark Oliphant in addition to those already referred to by Senator Sir Walter Cooper. Is the Minister aware that Sir Mark said that the rules governing tidiness are totally disregarded by the builders of houses and other small units? He added -

Cement bags, luncheon papers, newspapers and packing materials blow along the streets, decorating verges and nature strips . . . Often one is ashamed to drive visitors along roads lined with rubbish of this kind - garden refuse dumped on the nature strips, or broken bottles and beer cans thrown from motor cars.

Much of this apathy arises from the feeling of impotence among Canberra’s citizens. If they are civil servants, or are vulnerable in other ways, they know it does them personally no good to complain.

We know that the conditions described by Sir Mark Oliphant exist. In the circumstances, is the Government prepared to give the 36,000 to 40,000 citizens in Canberra the right that every citizen in a democracy should have, namely, to vote for a person to represent him in the Parliament, a person who, when elected, will have a deliberative vote on all matters and, therefore, will be able to vote for or against a government, as he decides? Such a right, if given to the citizens of Canberra, would remove the feeling of electoral impotence which they definitely suffer at present. I also ask the Minister representing the Minister for the Interior, or the Leader of the Government in the Senate, whether he will take immediate steps to see that Canberra does not continue to deteriorate as it has deteriorated over the last three or four years. Will he have these matters attended to immediately and, by regulation or other government action, ensure that the city of Canberra is kept in a tidy condition?

Senator SPOONER:
LP

– I shall certainly convey to the residents of Canberra Senator Cooke’s suggestion that they should elect to Parliament a representative other than Mr. J. R. Fraser. I think that is a very good suggestion indeed. In reply to the balance of the question, I say that beauty is always in the eye of the beholder. Perhaps Sir Mark was not feeling his usual bright, smiling self when he made these comments. I do not believe that they represent the general view of the people who live in Canberra and the people who come to Canberra.

page 447

QUESTION

CIVIL AVIATION

Senator BRANSON:
WESTERN AUSTRALIA

– Is the Minister for Civil Aviation aware that a Western Australian newspaper report stated that international air traffic might enter and leave Australia via Perth instead of Darwin because of a dispute between the Department of Air and the Department of Civil Aviation? Also, is he aware that to-day’s Adelaide “Advertiser” suggested that there was no foundation for that statement? Because of the importance to Western Australian people of any decision on this matter and because of the speculation arising from these press reports, will the Minister clarify the position and tell the Senate just what is the true state of affairs?

Senator PALTRIDGE:
LP

– I have not seen either of the newspaper reports to which Senator Branson has referred. The Darwin airport is one of the comparatively few airports in Australia to which both the Royal Australian Air Force and the Department of Civil Aviation have access and at which both have established facilities. Naturally, with that sort of arrangement there is sometimes a clash of interest.

The position is that due to an increase in civil aviation traffic in recent times the Director-General of Civil Aviation, when questioned in Darwin recently by a representative of the local newspaper, acknowledged that as a result of the increase in traffic there were some deficiencies in the. civil aviation facilities provided for the public. As is the case in all joint-user projects, matters on which the users are at variance are settled by conference. The fact is that a conference between the two departments has been arranged. Indeed, it is taking place, I think, to-day. I have no doubt that the matters at issue, such as they are - I do not think they are very great - will be settled to’ the satisfaction of both departments.

I should emphasize that at present there is no plan to over-fly Darwin or to alter in any way the existing traffic pattern. Certain operational requirements may well bring about one or two minor variations; but as yet there is no plan proposed that might lead to Darwin being eliminated from the Australian pattern.

page 447

QUESTION

EUROPEAN COMMON MARKET

Senator WRIGHT:
TASMANIA

– I direct a question to the Acting Minister for Trade. What is the latest information that the Government has received with regard to the stage reached in the negotiations between Great Britain and the members of the European Economic Community? Has a decision been made whether the Australian Minister for Trade will be given access to the conference table?

Senator HENTY:
LP

– This question is of very great importance, and I should like to obtain the latest information on the position for the honorable senator. I ask him to put his question on the notice-paper. I hope to have that information for him tomorrow.

page 448

QUESTION

TELEVISION

Senator HANNAFORD:
SOUTH AUSTRALIA

– I preface my question, which is directed to the Minister representing the Postmaster-General, by stating that last week statements outlining plans for the establishment of further television stations in capital cities, including Adelaide, emanated from the PostmasterGeneral. Some of my friends who live in the country areas of South Australia are disturbed lest the station in Adelaide should take priority over the establishment of country stations. Can the Minister give an assurance that the establishment of the proposed station in Adelaide, which I understand will be a commercial station, will not be given priority over the extension of television in country districts in South Australia?

Senator WADE:
CP

– I am very happy to give the honorable senator an assurance that the extension of commercial television in the capital cities will in no way affect the right of country areas to receive an adequate television service. As a matter of fact, phase four is reaching the stage when it will soon be possible for the PostmasterGeneral to call for applications for licences. In many cases sites have been selected. The proposal to permit third stations in the capital cities will not affect the extension of television to South Australian rural areas.

page 448

QUESTION

SNOWY MOUNTAINS SCHEME

Senator SCOTT:
WESTERN AUSTRALIA

– I direct a question to the Leader of the Government in the Senate. Is it a fact that the Government has become so economical in looking after the taxpayers’ money, particularly in the last four years, that it has been able to save £9,000,000 on contracts which have been let by the Snowy Mountains Hydroelectric Authority for the ensuing four-year period? If that is so, will the Government consider the continual representations of Western Australian members of the Parliament and spend some of that £9,000,000 in developing the comprehensive water supply scheme in Western Australia, so that water may be made available to farmers in outback areas of that State who are greatly in need of it?

Senator SPOONER:
LP

– I give Senator Scott the soft answer that turneth away wrath, by saying that I do not think

Western Australia has been badly treated by the Commonwealth Government. The reduction of expenditure in connexion with the Snowy Mountains scheme results from the receipt of tender prices lower than the estimates by the engineers of the cost of the work concerned. There has been a succession of contracts, all indicating very keen competition on the part of the tenderers. I visited the area during the week-end, and calculations that I made showed that over the next few years expenditure would amount to £9,000,000 less than was expected. So, Mr. President, there are perhaps pluses as well as minuses in the Government’s economic policy.

page 448

QUESTION

APPLES

Senator O’BYRNE:

– The Acting Minister for Trade is no doubt aware that Tasmania is expecting an all-time record apple crop of 7,000,000 bushels. The Minister for Primary Industry has notified the Tasmanian Government that no additional refrigerated shipping will be available to move this bumper harvest, which is of wonderful quality and pest-free, to overseas markets. Will the Minister see what the Federal Government can do to assist Tasmania in dealing expeditiously with this newly-arisen problem, which is an exceptional one due to the dry conditions hastening the ripening of the apples and the absence of pests, and at the same time help Tasmanian apple-growers to avoid the loss of this valuable and readily saleable crop?

Senator HENTY:
LP

– So far as this matter lies within the powers of the Department of Trade and the Department of Customs and Excise, I shall certainly see what can be done along the lines suggested by the honorable senator. I understand that in Tasmania there is a responsible body which organizes the shipment of apples and has done so far many years. That body obtains statistics from the growers relating to the possible quantities available, and arranges shipping accordingly. I should imagine that that pretty competent authority, on which is represented, I understand, the apple growers and all concerned in the industry, would have been in touch with the relevant authorities to ensure that additional shipping was provided, if it had considered that the position was as Senator O’Byrne has described it.

Senator Wright:

– It did so on Monday, and it received a reply from the Minister this morning.

Senator O’Byrne:

– And there is no shipping available.

Senator HENTY:

– In the light of that fact, I certainly shall take the matter up immediately and see whether there is anything we can do to rectify the matter. If we have this fine apple crop, we want to send it to the market which will give the best return to the growers.

page 449

QUESTION

TRADE

Senator WRIGHT:

– My question also is addressed to the Acting Minister for Trade. 1 refer to the announcement that was made in Geneva during the latter part of last week, concerning the trade treaty that has been reached between, I understand, the United States of America and the European Economic Community. Will the Minister consider having prepared, not the pettifogging detailed figures which we usually see in connexion with these trade treaties, but the substance of the treaty, together with an assessment by the Australian Minister for Trade of the effect on Australian trade that the treaty may have?

Senator HENTY:
LP

– I think the honorable senator is referring to the recent tariff negotiations conducted under the General Agreement on Tariffs and Trade, affecting the United States of America, the United Kingdom and the European Economic Community, known as the Dillon round. Australia was not a party to those negotiations, although this country is affected inasmuch as the reduction of duties also involves a reduction of the mostfaavourednation duties. Duties on goods exported to the United States and the Common Market countries which come within that category are reduced accordingly. The negotiations may have some effect on our exports to the United Kingdom market, though not on exports of primary products. .

page 449

QUESTION

EMIGRATION OF SCIENTISTS

Senator BUTTFIELD:
SOUTH AUSTRALIA

asked the Minister in charge of the Commonwealth Scientific and Industrial Research Organization, upon notice -

  1. Is it a fact that, rightly or wrongly, there is public concern over the numbers of top-ranking scientists or other professionals leaving Australia to take up positions in other countries?
  2. Could the Minister inform the Senate whether the C.S.l.R.O. or the research section of the Navy has in fact lost such personnel, and, if so, how many have left Australia over the last five years?
  3. Is the reason given that of inadequate remuneration, a lack of scope or continuity of research?
  4. Are any steps being taken to regain such personnel for Australia?
  5. What steps are being taken to hold them for Australia in the future?
Senator GORTON:
LP

– The following answers are now supplied: -

  1. It is a fact that there has always been a steady drift of some top-ranking scientists and other professionals away from Australia to take positions in other countries.
  2. Interpreting top-ranking scientists as those with an established world reputation, six such men have left the C.S.l.R.O. for positions overseas during the last five years. A substantially greater number of younger scientists would also have been lost within the same period. It is relevant, however, to mention that in so far as the C.S.l.R.O. is concerned our losses of scientists to overseas positions are more than counter-balanced each year by our recruitment from overseas. This is true at all levels.
  3. While inadequate remuneration may often have been a factor, this is seldom a dominant influence in a scientist’s decision to leave Australia, and many of our best scientists remain in this country despite offers overseas of much more highly paid positions. Reasons given by those leaving C.S.l.R.O. include lack of facilities, inadequacy of laboratory accommodation, and the difficulties placed in the way of overseas travel which thus prevent a scientist from obtaining the benefit and stimulus of contact with others working in his field.
  4. Continuous efforts are made to attract such people back to Australia. The C.S.l.R.O. was successful recently in the case of a distinguished worker in radioastronomy.
  5. Efforts are naturally being made to improve the facilities and accommodation available for research in the organization’s laboratories, and also to establish means whereby greater freedom of overseas travel is available for scientists.

page 449

QUESTION

COMMONWEALTH SERUM LABORATORIES

Senator McKENNA:
TASMANIA

asked the Minister for Health, upon notice -

  1. What increases, if any, in prices of products of the Commonwealth Serum Laboratories have taken place since the appointment of the new commission?
  2. Are research activities of the Commonwealth Serum Laboratories under the commission to be maintained, extended or contracted?
Senator WADE:
CP

– I now supply these answers: -

  1. New prices as follows have been includedin the laboratories’ list selling prices since the commission assumed control of the laboratories: -

Insulin BP (100 unit), 9s. (previous price 6s. 6d.).

Insulin BP (300 unit), £1 (previous price 19s. 4d.).

Special pig insulin (40 unit), 8s. 9d. (previous price 6s. 3d.).

Tetanus antitoxin diluted (pack of 100), £9 10s. (previous price £7 10s.).

The price variations were made in pursuance of decisions given by the Director-General of Health as a result of a routine review of prices undertaken before the appointment of the commission. Apart from these four alterations there has not been any increase in the prices of the laboratories’ products since the appointment of the commission.

  1. Under the Commonwealth Serum Laboratories Act the Commonwealth Serum Laboratories Commission undertakes the research activities decided on by the commission itself in connexion with any product which the commission is authorized to produce and sell. Research activities in connexion with biological products that are not produced and sold by the commission are undertaken subject to the approval of the Minister. It is proposed that research activities will be maintained in connexion with both classes of products.

page 450

QUESTION

EXPORT OF MOTOR VEHICLES

Senator HENTY:
LP

– In answer to Senator Lillico’s question without notice on 8th March, 1962, I promised to obtain the numbers of motor cars exported from Australia during the financial year 1960-61 and during the six months period from 1st July to 31st December, 1961. The Commonwealth Statistician has advised that the numbers of motor cars, including station wagons, exported in these periods were as follows: -

page 450

IMPORT DUTIES

Senator HENTY:
LP

– On 1st March

Senator Cooke referred to Customs Tariff Proposals No. 5 and asked the reason for the imposition of temporary high tariff duties on road wheels of the disc type and whether Australian-made wheels are obtainable. I can now inform the honorable senator that those temporary duties proposed by Customs Tariff Proposals No. 5 on disc type road wheels were introduced consequent on an inquiry and report by a deputy chairman of the Tariff Board. The report was tabled in the Senate on 22nd February, 1962.

Of the four sizes of wheels listed, two sizes, 6.0 by 20 and 6.5 by 20, are now made in Australia and the duties have been imposed to provide a measure of tariff protection against imported wheels pending full-scale inquiry and report by the Tariff Board. The other two sizes, 7.0 by 20 and 7.5 by 20, are not yet being made in Australia although commercial production is expected to commence shortly. These latter two sizes are not as yet subject to the additional temporary duties as they are still being accorded concessional admission under standing by-law. When commercial production commences, consideration will be given to cancelling the by-law concession, whereupon the wheels will become subject to the additional temporary duties recommended by the deputy chairman.

Sitting suspended from 4 to 8 p.m.

page 450

GOVERNOR-GENERAL’S SPEECH

Address-in-Reply: Presentation to the Governor-General.

The PRESIDENT:

– I desire to inform the Senate that this day, accompanied by honorable senators, I waited on the Governor-General and presented to him the Address-in-Reply to His Excellency’s Speech on the occasion of the Opening of the Twenty-fourth Parliament, agreed to by the Senate on 7th March.

His Excellency was pleased to make the following reply: -

Mr. President,

Thank you for your Address-in-Reply, which you have just presented to me.

It will be my pleasure and my duty to convey to Her Most Gracious Majesty the Queen at once the Message of Loyalty from the Senate of the Commonwealth of Australia, to which the Address gives expression.

DE L’ISLE,

Governor-General.

page 450

COMMONWEALTH BANKS BILL 1962

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator PALTRIDGE:
Western Australia Minister for Civil Aviation · LP

– I move -

That the bill be now read a second time.

The Prime Minister (Mr. Menzies)) recently announced that the Government had decided to provide a further £5,000,000 for the Commonwealth Development Bank of Australia, as one of the longer term measures that were being adopted to promote Australia’s national growth. The bill now before the Senate amends the Commonwealth Banks Act 1959-1961 in order to increase the capital of the Development Bank by this amount and appropriates the funds required for the purpose.

A total amount of £10,000,000 will thus have been provided for the Development Bank during this financial year. As honorable senators will recall, one increase of £5,000,000 has already been provided for in the Commonwealth Banks Act 1961, which was enacted in October last. The combined result of these two increases will be to raise the capital of the bank to £25,857,000, in addition to which the bank has substantial reserves of its own and has also borrowed large sums from the Commonwealth Savings Bank.

The Commonwealth’s 1959 banking legislation, which established the Development Bank, endowed the bank with important functions for the assistance of primary production and industrial undertakings in ways that would supplement but not replace other sources of finance available for those purposes. A most important feature of the bank’s functions is to have regard primarily to an applicant’s prospects of achieving success rather than the amount of actual security that may be available. This brings the bank into a field where there is ample scope for fruitful operation and gives it an opportunity to make a significant contribution to Australia’s development.

Since the establishment of the Development Bank the Government has been maintaining, and will continue to maintain, a close watch on the resources of the bank in the light of its operating experience. The bank’s record in the first two years of its history has been an admirable one. In that time, the Development Bank approved loans to primary and secondary industry amounting to over £22,000,000 and, in recent months, its rate of loan approvals has been in the region of £14,000,000 per annum. Of this assistance, loans totalling nearly £16,000,000 were for a wide range of rural activities, including pasture improvement, clearing, fencing, water conservation, the erection of farm buildings, and the purchase of plant, equipment and live-stock. On the industrial side, the bank’s activities have extended to many important industries, among them the chemical, engineering, transport, food processing, textile and mining industries.

The bank has also made extensive assistance available to both primary producers and industrial undertakings for the purchase of equipment on hire-purchase terms. In addition, the bank has furnished much indirect aid through the supply of technical advice and the support of research efforts in a number of fields. It is obviously of great importance. . for. the continued development of Australia’s resources for the Development Bank to maintain this valuable contribution. The financial resources of the bank must therefore be adequate for the purpose and, after a full review of the position, the Government has decided that the capital of the bank should now be supplemented by the further £5,000,000 provided for in this bill.

The measure before the Senate is therefore a positive further step to promote the Government’s overall objectives of national growth and development, and I confidently commend the bill to the Senate.

Debate (on motion by Senator Toohey) adjourned.

SALES TAX BILLS (Nos. 1 to 9) 1962.

Second Reading

Debate resumed from 8th March (vide page 435), on motion by Senator Paltridge- -

That the bills he now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

– The Senate has already agreed to debate the nine sales tax bills together. I suggest to the Minister that it would be convenient and would save time if in this debate honorable senators were permitted to refer quite freely to the Sales Tax (Exemptions and Classifications) Bill, because that is a part of the machinery required to achieve the one purpose. Would the Minister be agreeable to that?

Senator Paltridge:

– I have no objection.

Senator McKENNA:

– I am obliged to the Minister. I think it will, in the end, save time if we follow that procedure. In effect, what the set of bills does is to reduce the sales tax in relation to motor vehicles, both commercial and non-commercial, and in relation to parts and accessories for motor vehicles of all types. On noncommercial motor vehicles, the rate of tax is to be reduced from 30 per cent, to 221 per cent, and on commercial vehicles the rate is to be reduced from 16$ per cent, to 12i per cent. A similar reduction is to take place in relation to parts and accessories for use on both commercial and noncommercial vehicles.

I could say to the Senate at once that the Opposition does not oppose the measures, and leave the matter there, but I think it would be wrong not to make a reference to the Government’s excursions into the sales tax field and to the purpose that animated it in what I might well describe as its adventures. The history of the matter is that when the Government took office in 1949, the rate of sales tax on all types of vehicles was only 8i per cent. In October, 1950 - during the Government’s first year of office - for the first time it made a distinction between commercial and non-commercial vehicles and placed what one might call private vehicles in a higher category, which attracted sales tax at the rate of 10 per cent. Sales tax on commercial vehicles remained at 8i per cent. That certainly was a modest increase at that time. But in September of the next year - less than twelve months later - sales tax on those items was varied. The tax on non-commercial vehicles was increased from 10 per cent, to 20 per cent, and on trucks and commercial vehicles from 8i per cent, to 12i per cent. As the Senate will remember, that was the period of the horror budget of 1951-52 when additional taxes amounting to hundreds of millions of pounds were imposed on the people. Two new schedules were inserted in the Sales Tax (Exemptions and Classifications) Act - the Fifth Schedule and the Sixth Schedule. The Fifth Schedule provided for sales tax as high as 50 per cent, on cos metics of all kinds and shaving gear for men - toilet requisites of that type. It also provided sales tax of 661 per cent, on many items of jewellery and furs - luxury items.

Senator Benn:

– Mink coats.

Senator McKENNA:

– Yes, it would include mink coats and luxury items of that sort. I pause here to remind the Senate how those extraordinarily penal rates came into being. The Government had continued capital issues control for a brief period after it took office but had abolished the control early in 1950. Into the field thus opened up came all the luxury industries - floods of them. Everybody wanted the nice things of life once more after the rigours of the war and immediate post-war period. The Government having taken off the brakes completely in the matter of capital issues control, luxury industries mushroomed all over the country. Not having properly foreseen what would happen, the Government sought to stamp out those industries by applying punitive sales tax - 50 per cent, in one case; 66$ per cent, in another. Those were extremely high rates of tax.

Senator Wright:

– On what was tax at the rate of 50 per cent, imposed?

Senator McKENNA:

– Cosmetics, shaving gear for men and items of that kind.

Senator Wright:

– What connexion have such items with motor cars?

Senator McKENNA:

– I am not suggesting that they have any connexion. In reviewing the changes in sales tax on motor cars I came to the events of 1951. Having recited what had happened with respect to motor vehicles, I paused for a moment to show the penal nature of the sales tax that the Government embarked upon at that time in the horror budget. My remarks are relevant in that they will show that the Government, instead of treating sales tax as a normal source of revenue, was treating it as an economic sledge hammer either to crush industries or to steady them down. That was done. My remarks were relevant to the extent that I have indicated. I take it that Senator Wright does not really want to be informed about all the items in the Fifth Schedule to the act that carry sales tax at 50 per cent., or about the items in the Sixth Schedule.

I have recalled what happened in 1951. By 1953 sales tax on non-commercial vehicles had dropped slightly from 20 per cent, to 161 per cent. The rate on commercial vehicles remained unaltered at 121 per cent. But that was the end of the halcyon period, because in March, 1956, when we had what has become known as the little budget, the two classifications of vehicles - commercial and non-commercial - were preserved and the tax on noncommercial vehicles was increased steeply from 1 61 per cent, to 30 per cent. That action by the Government did a tremendous amount of damage to Australia’s economy. The rate in respect of commercial vehicles and parts and accessories rose from 121 per cent, to 161 per cent. I pause here to remind the Senate that not only was sales tax on motor vehicles increased considerably in March, 1956, but taxes on petrol, tobacco and liquor were also increased. In other words, there was a wide spread of taxes imposed on the people of Australia. The Government could not be accused of focussing its attention on ‘any one industry.

Senator Scott:

– Did you say that sales tax on petrol was increased?

Senator McKENNA:

– Not sales tax; excise duty.

Senator Scott:

– We are dealing with sales tax now.

Senator McKENNA:

– That is true. Excise duties on petrol, tobacco and liquor were increased at the same time as the sales tax on motor vehicles was increased.

The PRESIDENT:

– Order! I think perhaps the honorable senator should get back to the subject of sales tax on motor vehicles.

Senator McKENNA:

– Thank you, Mr. President. I have roamed as far as I intended to roam. I thought that it was relevant to refer to the punitive taxes imposed by the Government and the use that it made of sales tax as an economic instrument.

Senator Hannaford:

– Go back further!

Senator McKENNA:

– I could go back further. How far would the honorable senator like me to go?

Senator Wright:

– To 1931. Who introduced sales tax?

Senator McKENNA:

– In the height of a depression a Labour government introduced sales tax at the rate of 21 per cent. At that time the banking institutions and a hostile Senate had denied the government an opportunity to provide funds to get the unemployed back to work. Sales tax was then decidedly a revenue-producing item. It remained a revenue-producing item until this Government, eschewing the word “ controls “, turned to such powers as it had in the taxation field and used those powers, not for revenue-raising purposes but for every imaginable social and economic purpose.

Senator Mattner:

– Did you say that you had to impose sales tax at the rate of 21 per cent, in order to get men back to work?

Senator McKENNA:

– In an effort to raise revenue to put men back to work during the depression of the ‘thirties. At all events, sales tax at that stage was merely a revenue producer, but under this Government its character has been completely changed and it is now an economic instrument.

I have taken the history of sales tax on motor cars up to March, 1956, and the little budget. I think all honorable senators will recall that in November, 1960, the rate on non-commercial vehicles was raised to 40 per cent. The rate then was almost five times as high as it was when the Government took office. It was truly a penal rate. The rate on commercial vehicles and on parts and accessories remained at 161 per cent. It is true that that increase in sales tax, coupled with other measures taken by the Government about that time, produced such a flood of unemployment in the motor manufacturing industry and its allied subsidiary industries that the Government rushed to reverse its decision. Only three months later - in February, 1961 - sales tax on non-commercial vehicles was reduced to 30 per cent. Now, after less than twelve, months - the new rate became effective as from 7th February this year - the rate in respect of non-commercial vehicles is reduced from 30 per cent, to 221 per cent, and the rate in respect of commercial vehicles is reduced to 121 per cent.

I have said enough to indicate that there was the most steep and punitive increase in sales tax on motor vehicles under this Government. I should expect it to be agreed in this chamber that a motor vehicle ought to be regarded as a necessity to-day, from every viewpoint, for every family in this country. Having regard to modern standards of living, social status, and so on, it is to be expected that every family would have a motor car as a necessity. lt is no longer in the luxury class. Yet this particular item has been selected for this punitive tax, making sure that as it is passed on it is spread over, one might Say, every individual in the land. Even now, when the tax on non-commercial motor vehicles has been dropped from 40 per cent, to 22i per cent., it is nearly three times what it was when the Government took over in 1949.

Sales tax is a flat-rate tax. It is paid by all those who use the goods involved, lt is paid at the same rate by rich and poor alike, and accordingly it is not the type of tax that the Opposition favours. We have noted with alarm - and we have protested about it in this place from time to time - that throughout the past twelve years the Government has shifted the emphasis off direct taxation more and more on to indirect, flat-rate taxation. We complain of that. We consider that it is unfair, and that the greater burden of taxation ought to rest upon the graduated income tax, where people can be assessed according to their capacity to pay. We object to it from that angle. We object to it, too, because of the fact that when restricted to one industry and the one set of activities, sales tax is too blunt an instrument. It hits too many people; it has too great an effect.

The country and the Parliament ought to have other methods more adequately shaped - precision tools - for the purpose of dealing with particular industries or particular facets of industries. For instance, if the Parliament had control over capital issues and the motor industry was developing out of line with the rest of the community, as the Government claims, the capital issues control would have enabled the Government to say to the manufacturers concerned: “ Just hold your expenditure for the time being. You are getting out of balance in making too big a demand on resources of man-power and materials.” But the Government did not do so. It had a recommendation from the Constitutional Review Committee of this Parliament, to which twelve members were appointed, six from each side. It considered that certain economic powers were badly needed by this Parliament.

The PRESIDENT:

- Senator, you are wandering very considerably from the subjectmatter of the bills. I cannot relate your remarks to sales tax.

Senator McKENNA:

Mr President, I am making it relevant on the ground that, to achieve certain economic purposes, the Government has used sales tax. I submit to you that I am entitled to say that that is not the right way to attack the problem; that there are other and better methods that should be used. I submit to you that that is completely relevant, and that it is the argument which I am briefly developing at the moment.

I am saying that it is quite wrong to use sales tax as it has been used to deal with the motor industry. If the Government had acted upon the recommendation of the committee, it would have sought power over capital issues and dealt with the whole matter more adequately and in a narrow compass. The same thing applies to hire purchase, which is an essential part of the motor industry.

Senator Vincent:

– Assuming that the Commonwealth proceeded to ask for this constitutional power and was refused, would you say that in those circumstances the Government would be right in introducing the legislation which it has introduced in relation to this matter?

Senator McKENNA:

– That proceeds on the suppositions that the Commonwealth asks for the power and that it is refused.

The PRESIDENT:

– Order! I must bring you back to the subject-matter. A passing reference is all right, Senator McKenna, but I want you to confine your remarks to the bills.

Senator McKENNA:

– May I ask, Sir, whether you consider that, the Government having chosen sales tax as an instrument of economic policy - as the Government frankly admits in the speech of the. Minister - I may not argue that other methods are more appropriate and should have been adopted?

The PRESIDENT:

– A passing reference would be permissible, but I should like the debate to be on the bills as far as possible.

Senator McKENNA:

– Very well, Sir. I shall conclude a passing reference - which, quite frankly, is all that I thought 1 was making - to these other matters by pointing out that in relation to hire purchase, which is an essential part of the motor industry, the Government was alarmed back in 1955 and asked the hire-purchase companies not to extend their advances beyond existing levels. They were then only f 1 83,000,000. The companies agreed at first to do so, and three months later repudiated their agreement. The Government did nothing until November, 1960, when it increased this sales tax. What it did then it could have done back in 1955 when it amended the sales tax laws. It said to the hirepurchase companies: “ If you continue borrowing money at high interest rates to lend to the users of motor cars, we will not allow it as a tax deduction “. I merely put the argument, Mr. President, that there is another type of control - consumer credit control - over which the Government did have the power and which the Government in fact used - but how belatedly, after all the trouble had been done. That control was applied most punitively in restricting the activities of the hire-purchase companies. It was applied for the period from November, 1960, to the end of 1961. Now the hire-purchase adjunct of the motor industry can run free. The punitive tax bas been reduced to 221 per cent, on the motor industry, which may more or less run free. What is to be the Government’s aim as to how far expansion of that industry can go under the new scheme?

I repeat that the Government made an error in not applying more precise methods, for some of which it had clear constitutional power and for others of which it could have sought power. By never addressing its mind to the recommendations of the Constitutional Review Committee, this Government has offered an affront to ail members of the committee and to the Parliament that appointed them, and re-appointed them to continue their work. There has been no consideration of the recommendations, and there cannot be any precision and effec tiveness on the part of this Government in handling economic matters until it is adequately armed with power.

What was the purpose of this sales tax and the enormous additions to it, first in 1956 and later in 1960? The purpose was, according to the Government, to lower the level of activity in the motor industry. The Government was specific about it. The Government said that there was too heavy a drain upon labour and upon material resources, particularly steel, lt was said also that the industry was making too heavy a call on imports. That was one of the matters referred to by the previous Treasurer in 1956, and the complaint was repeated by the new Treasurer in 1960. It is perfectly clear that the purpose of the little budget of 1956 and of the economic measures of November, 1960, was to reduce the level of employment in the motor trade. There is no question about that; it is admitted. It is admitted also that unemployment went much further than the Government thought it would go or desired it to go. It is quite certain that the Government desired some unemployment, but what a clumsy method was employed to achieve it. A heavy sales tax was imposed that hit everybody in the community who might want a motor vehicle. Other methods should have been tried. The imposition of sales tax at that rate was inflationary, and added to costs. It imposed hardship on a lot of people, and did not deal with the motor industry in a precise way.

Almost as these measures came into force, the Department of Labour and National Service put officers into the factories of the motor companies to take care of the people who would be unemployed. I do not say that those officers did not do good work; I merely mention the fact to show that the Government expected that there would be unemployment. Where was the clear steering from the motor industry to some other selected industries? There were no clarity, no purpose and no’ selectivity in what was done. There was only a throwing out of people from one industry, in the hope that other industries needing them would pick them up. That is not an efficient way in which to proceed. Of course, what the Government overlooked completely was the extent to which its measures would knock the industry. There was not only a bank credit squeeze and a constriction of the activities of the hirepurchase companies upon which the progress of the industry depended, but also there was the punitive sales tax of which 1 am speaking. The Government overlooked’ that there were thousands upon thousands of companies subsidiary to the main manufacturing concerns.

We saw what happened from 1956 onwards. I have quoted the figures again and again in this place. It will pay to do so again very briefly, and indicate the peak levels to which unemployment rose after the Government made its first sales tax attack on the motor industry. In 1956, a peak level of 38,000 unemployed was reached. In 1957, the peak was 59,000; in 1958, 75,000; and in 1959, 82,000. The figures climbed steadily for four years, but the Government learned nothing from that use of the sales tax. In 1960, the peak figure was 69,000.

Senator Scott:

– It went down.

Senator McKENNA:

– It was on the way down. It is interesting to note that in. October 1960, just before the heavy sales tax measures and related measures were put into operation, unemployment was at the exceedingly low level - for those years - of 34,410, and that after the measures came into operation unemployment rose to a peak of 116,000 last year. In January of this year it rose again to 131,500. That has been brought about by the economic measures of the Government, including the sales tax imposed on the motor industry. Although the pattern should have been obvious, the Government went ahead and repeated its errors in November, 1960, bringing about a most calamitous state of affairs in the Australian motor industry.

The Treasurer, speaking in another place, has said that if the production and sales by the motor industry are kept at the present levels for the remainder of this financial year, the Government will lose £4,500,000 in revenue, but he expects that, with the reduction of the sales tax from 30 per cent, to 221 per cent., there will be more sales, and probably not very much revenue, if any, will be lost. Sales tax collections on motor vehicles figure very largely in the total revenue from the sales tax. In the last financial year, out of a total sales tax collection of £173,000,000, some £77,000,000 came from the tax on motor vehicles and spare parts. The application of sales tax to motor vehicles is a very important element in the revenues of the Commonwealth. We will have no firm idea of the loss or the gain to the national revenue arising from this measure until we reach the end of the year.

We of the Opposition, of course, are delighted to see the sales tax come down. That is in line with our policy. We will not oppose the measures, but we think the Government should have gone further. It has a long way to go before it brings us back to its starting point. The Government should be prepared to help an industry that is vital to our defence and essential to our economy. It is only during the last twelve or thirteen years that the motor industry has become an Australian industry, based upon Australian workmen and Australian materials.

Senator Kendall:

– And American capital.

Senator McKENNA:

– Yes. It is based upon American capital very largely. That has its advantages and disadvantages. It is not without disadvantage that overseas capital has been made available to the industry, but, from the national viewpoint, it is important that we have such a fundamental industry. 1 have expressed the view in this place that we should use the motor industry to develop our export trade. It is important that we keep our costs of production down. One way in which both purposes would be achieved would be to give this industry every encouragement by a reduction of taxes. Let the industry go in for greater production, thus getting its costs down and enabling it to go into the export field. It has commenced to move into this field, but, with encouragement, it could go further. This is a great industry, and one of the greatest employers of labour in the country. The Government seems to have overlooked that factor. It has treated the industry in recent years as though it were the villain of the piece in Australia and the cause of all our economic ills, but the real cause of the trouble is the Government’s bad judgment of the economic position. The Government offered what it thought were remedies, but they went too far. Then the Government was too slow in introducing further remedial measures.

There is no consolation in the future for the Opposition or the motor industry, I would say, looking at what has been done now. This reduction of sales tax has been announced by the Government as a part of temporary measures to restore employment. What will happen when this objective has been achieved? The brakes are off the hire-purchase companies, and a move towards full employment is under way. Is the motor industry to go full tilt ahead until the Government decides to halt it again? What is wrong with the Government’s approach to the matter now is that there is no clear statement of policy so that the motor industry can know where it is going for the next few years.

Senator Buttfield:

– Do you mean that the Government should plan production for the motor industry?

Senator McKENNA:

– No. It should lay down an objective. It should make a general policy statement, saying how far it wants the industry to develop. Within that policy, the industry would have to accommodate itself. That is the kind of leadership that is demanded from governments in the economic position in which Australia, unfortunately, always finds itself.

I say to the honorable senator, through you, Mr. President, that at this stage the industry is entitled to be told whether we are to have a repetition of increases from 8i per cent, to 20 per cent, to 40 per cent, and then reductions to 30 per cent, and to 22i per cent. Is the rate to stay at 22i per cent, now? Is the industry free to open up and produce at full capacity with its present plant resources? Is the Government in favour of the industry expanding its productive capacity to take up migration and the slack in employment? Of course, they are great problems.

The industry alone is not responsible for providing employment for migrants. It is entitled to some kind of leadership from this Government. It is entitled to be told what the picture for the industry is, as the Government sees it, down the next four or five years. All that the Opposition and the industry can see at the moment is one more spasmodic step. We do not know when the next one will be taken or in which direction it will go. That is really at the base of the lack of confidence throughout the Australian motor industry to-day. Motor vehicle registrations are picking up slightly, but they are not picking up at any great pace.

Senator Scott:

– Have you read this morning’s newspapers?

Senator Laught:

– To-day’s newspapers indicate that they are picking up.

Senator McKENNA:

– I have here the figures issued to-day by the Commonwealth Statistician.

Senator Scott:

– They are almost record figures, with the exception of one month.

Senator McKENNA:

– The month of January is an exceedingly dead month for a number of reasons. It is the postChristmasNew Year-holiday period and there are many holidays in it. Invariably, January, if I may so describe it, is the deadest mon.th in the year.

Senator Scott:

– I was talking about the February figures.

Senator McKENNA:

– The honorable senator says that the figure for January is an all-time record.

Senator Scott:

– The February figure.

Senator McKENNA:

– The February figure is no better than the figure for last September. In February there were 22,228 registrations. Last October there were 22,210 registrations. We are looking at the progress month by month.

Senator Scott:

– What was the figure in February, 1961?

Senator McKENNA:

– It was a great improvement on the February, 1962, figure.

Senator Scott:

– About 5,000 more.

Senator McKENNA:

– The figure was 16,900 in February, 1961, and 22,228 in February, 1962. Yes, there was an improvement of about 5,000. Of course, the honorable senator should recall that in February, 1961, we had in operation not only the 40 per cent, sales tax, which was killing the market with the thought that it Would soon be reduced, but also the banking restrictions and the restrictions in the hire-purchase field. So the market was at its lowest. That was .the zero point. If the honorable senator wants a proper comparison, let him go back to November and December, 1960, before the economic measures implemented by the Government that he supports came into operation.

Senator Scott:

– What about February, 1960?

Senator McKENNA:

– Let me take November, 1960, before the Government’s economic measures operated. The registrations at that time were 31,890; yet the honorable senator is cheering because the figure for February this year is about 22,000. All I am saying is that, whilst there are signs of an improving market, it is improving very slowly and there is no reason for enthusiasm about the rate at which registrations are increasing. 1 say that one of the main reasons why there is not more life in the motor industry to-day is the absence of a view of the” future. I ask the Government, even at this stage, to give some kind of indication of what lies ahead for the motor industry.

I shall make only one more comment before I conclude, The Government has announced that this series of acts will be operative from 7th February and sales tax at the new rate is being collected already. From my perusal of the act, I believe that the Government is doing that without any legal authority until this bill is passed. Something like that is done in respect of customs duty, but it is done under the authority of an act of Parliament which says that nobody can recover the duty imposed from the time the papers are laid on the table of the House if a validating bill is passed within six months of that time. The customs duty is collected by force of law; but this sales tax at the reduced rate is being collected by bluff and bluff alone from 7th February until this bill becomes law. The operation of the new act will be retrospective to that date. I am suggesting to the Minister that the law on that point ought to be tidied up.

Senator LAUGHT:
South Australia

– I rise to support the bill, Mr. President. I listened with very great interest to the Leader of the Opposition (Senator McKenna). I believe that a fair conclusion to draw is that he made only passing reference to the bill. Most of his references in the 39 minutes for which he occupied the time of the Senate were to economic matters of the past. Many of his remarks had no reference at all to sales tax. Therefore, I believe the Senate would do well to consider what is contained in the bill. In effect, the rate of sales tax on cars, station wagons and other passenger vehicles is being reduced from 30 per cent, to 22i per cent., and on commercial motor vehicles, motor cycles and motor vehicle parts and accessories from 16i per cent, to the general rate of 12i per cent. 1

As the second-reading speech of the Minister for Civil Aviation (Senator Paltridge) clearly points out, this fiscal measure is part of the Government’s plans to take immediate action to reduce a measure of unemployment that was very prominent in the community a month or so ago when these plans were first put to the people. It is interesting to know that at the present time nearly 600,000 people, of the total Australian work force of 3,875,000 people, are engaged in the motor vehicle industry. By that term I include the manufacture of accessories and parts. So, one can see that a large proportion of the Australian work force is engaged in this industry. I believe that the quick action of the Government in bringing forward (his bill will do a good deal to help to solve the unemployment problem. A little later I will discuss some figures that have become available to us to-day.

I understand that in 1960-61 about £74,000,000 was collected in sales tax on motor vehicles. That amount represented about 44 per cent, of the total revenue from sales tax. So, one can see that any bill relating to the sales tax on motor vehicles will have quite an impact on sales tax generally. No revenue estimates were given in the Minister’s second-reading speech. I believe, Sir, that the Government expects that if sales of motor vehicles do not increase the loss of revenue for the remainder of this financial year will be of the order of £5,000,000. However, from figures that I will cite to the Senate it is quite obvious that sales of new motor vehicles have increased markedly. It may well be that no loss of revenue will occur.

I believe it is a pity that the Minister, in his second-reading speech, did not give a forecast of the effect of this measure on sales tax collections. When a Minister brings before the Senate a measure relating to movements in taxation, I believe that he should always let the Senate know what effect the measure is expected to have on the revenue for the year which has already been considered by the Senate in earlier debates. After all, we considered the estimates in relation to sales tax some months ago, when the rate of tax imposed on motor vehicles was different from that contemplated in this bill. 1 wish to refer to some statistics that came into my possession this morning and which indicate the results that the measure before us already is having. As Senator McKenna rightly pointed out, the new rate of tax has operated since 7th February. During the month of February, 22,228 new motor vehicles were registered throughout the Commonwealth, which means that registrations proceeded at the rate of more than 250,000 a year. For a population of approximately 10,500,000, that is a very high rate indeed. What gratifies me as a South Australian is that during February, registrations in South Australia rose to 2,051, from the January figure of 1,553, or a rise of 30 per cent, in one month. It would appear from the statistics for my own State that the reduction of tax is already having a marked effect on motor vehicle registrations.

An interesting forecast with regard to the future of the motor industry in Australia is contained in the announcement that twenty new models of motor vehicles will make their appearance on the Australian market this year. In my view, that shows real confidence on the part of the industry, now that the Government has announced the reduction in sales tax.

Senator Toohey:

– It shows a real ability to take punishment.

Senator LAUGHT:

– The fact that the manufacturers propose to put on the market so many new models shows a real confidence in the future of the industry. Apparently, it is obvious to them that the people are proposing to buy new vehicles.

The importance of the motor industry to Australia is evidenced by the fact that

Australia is the fourth most highly motorized country in the world. As a matter of fact, in this country of long distances road transport is carrying a quarter of the total goods tonnage. To give some idea of the importance of the motor vehicle industry to State revenues, 1 point out that the States collect £50,000,000 annually in licence fees and similar fees. So, it is most desirable that there should be stability in the industry in the future. I have made inquiries into the motor industry in South Australia and they disclose that General Motors-Holden’s Proprietary Limited, at its works at Elizabeth, north of the city of Adelaide, has an expansion programme which is proceeding at a rate planned some two years ago. That rate has not been affected in any way by the recession which occurred in the motor industry a year or so ago. I understand that the company’s plan is going ahead in a perfectly normal way.

Senator Wright:

– How much is it investing per annum in the plan?

Senator LAUGHT:

– I understand that the total cost is about £12,000,000.

Senator Wright:

– Over what period?

Senator LAUGHT:

– Over a period of about three years, I should imagine.

Senator Wright:

– And is that economic?

Senator LAUGHT:

– According to the company it is a significant plan. If the company had a less optimistic view of the future prospects of the industry, possibly it would have curtailed its plans, but I have been assured by executives of the company that it is not curtailing its plans in any way.

I understand that the Chrysler motor works near Adelaide is putting on new employees each week. One only has to read the advertisements appearing in the Adelaide newspapers, inserted by organizations manufacturing motor bodies and by the ancillary industries associated with the motor trade in South Australia, to know that they are calling for patternmakers, toolmakers and general employees. Those advertisements clearly indicate that the organizations concerned are planning for increased production in the future. I understand that throughout Australia there are about 4,000 manufacturers of components for the motor industry. Consequently, this taxation relief will be spread very widely, not just to the companies that are assembling motor vehicles, but also to the many companies that are manufacturing motor vehicle components.

An interesting feature of the measure before the Senate is that the Government is proposing to abolish one category of sales tax. The 30 per cent, category is being reduced and replaced by a 221 per cent, category, but the 161 per cent, category is being eliminated altogether. I commend the Government for that proposal, because there have been too many categories of sales tax. In a system in which there are six or seven different categories of sales tax there is a good deal of unnecessary accounting. It should be the aim of the Government to reduce the number of categories wherever possible, and this measure will reduce the number by one.

I could engage in a discussion of many matters related to sales tax, but I shall content myself with one comment, and that is that I believe the Government should give very close consideration to the disadvantage suffered by people living in the country and in places like Tasmania, where sales tax virtually is levied on freight to the point at which a vehicle finally is sold. That is something to which the Government should give its attention. It is not covered by the bill before us, and I know that there arc great difficulties associated with the matter; nevertheless. I think that it should be the subject of study and further consideration. I have much pleasure in supporting the bill. I think it is right in every direction and will h0 j, pood deal to restore confidence and employment in the motor industry.

Senator BENN:
Queensland

.- The Leader of the Opposition (Senator McKenna) has already indicated in the Senate that we, the members of the Opposition, will not oppose the bill. Nevertheless, I feel that it is necessary for me to have something to say about sales tax and its incidence. The Australian Labour Party will always support legislation which has for its purpose the reduction or extirpation of sales tax rates. We believe that sales tax should be eliminated entirely from the taxation structure of the Commonwealth. We hold that belief because we regard sales tax as basically an unfair tax. The poorest person in the community has to pay the same rate of tax as the wealthiest person. Therefore, we say that sales tax is unjust.

Let me trace very briefly the history of this tax. It was introduced in 1930, when a flat rate of 2i per cent, was adopted. The revenue derived in that year was £3,400,000. To-day, if a certain form of tax yielded a revenue of only £3,400,000, we would say that it was a mere bagatelle and would not be worth bothering about. Of course, in 1930 that was quite a large sum, especially when it is appreciated that the tax was introduced te obtain funds to relieve unemployment. When wc come forward another ten years we obtain a different picture. By 1939-40 the rate of sales tax had increased to 6 per cent. It was still a flat rate. The sum obtained in revenue was £12,100,000. I mention these facts to show that a tax can be introduced for a worth-while purpose but later be used purely as an instrument of taxation, with startling results. When sales tax was introduced in 1930 the sum raised represented 6.9 per cent, of the total sum collected in taxes. The amount of £12,100,000 collected in 1939-40 represented 13.5 per cent, of total tax collections.

If we come forward another ten years, we get a rather interesting picture. In 1949-50 a sum of £42,400,000 was collected by way of sales tax. We know that during the war all taxes were increased for the purpose of providing the main weapon with which any country fights a war - that is, finance. The sum raised in 1949-50 represented only 8.3 per cent, of total tax collections. Over the years rates of sales tax have fluctuated from as low as 5 per cent, to 25 per cent., and new categories have been introduced. In 1960-61 sales tax collections amounted to £173.000.000.

The ACTING DEPUTY PRESIDENT (Senator McKellar) - Order! The honorable senator ‘<= setting away from the bills.

Senator BENN:

– I am coming to the point of the bills.

The ACTING DEPUTY PRESIDENT. - You have been a long time coming to it.

Senator BENN:

– I have been getting the door open, and I am about to enter the vehicle. When all is said and done, I am speaking about sales tax. I shall be coming to the point of the bills in about half a second. I feel sure you will agree, Mr. Acting Deputy President, that I am not off the beam.

The ACTING DEPUTY PRESIDENT. - Well, you have been off the beam.

Senator BENN:

– It has been estimated that in the current year sales tax collections will amount to £160,000,000. When we traverse the country we meet groups of people who ask why we do not advocate a reduction of the rates of sales tax that are applicable to the industry in which they are engaged. We cannot give those people a satisfactory reply. Of course I tell them that we on this side stand for the complete extirpation of sales tax, but I have enough common sense to know that any party which assumes the reins of government - we were very nearly elected-

The ACTING DEPUTY PRESIDENT. - Order! The honorable senator is indulging in a discussion of sales tax generally.

Senator BENN:

– No, I am not.

The ACTING DEPUTY PRESIDENT. - You are.

Senator BENN:

– I am coming to the point.

The ACTING DEPUTY PRESIDENT. - Order! The honorable senator must come straight to the point, and not wait half a second to do so either.

Senator BENN:

– Well, Mr. Acting Deputy President, I shall open the door and get into the vehicle. Senator Laught said that the reduction of the rate of sales tax on motor vehicles would result in the sale of more vehicles and in improved employment opportunities. Am I on the beam now, Mr. Acting Deputy President-

The ACTING DEPUTY PRESIDENT. -Yes.

Senator BENN:

– Am I on the beam now in repeating what Senator Laught has said? The honorable senator did not give us any evidence to support his statement that more vehicles would be sold and there would be greater opportunities for employment in the industry. I cannot conceive of any person who has the necessary capital to purchase a new motor vehicle hesitating about the purchase because of the rate of sales tax applicable. I just cannot conceive of the rate of tax being a substantial reason for not buying a new motor vehicle.

While speaking on this point, let me say that, while I know that sales tax does not operate in respect of second-hand cars, the bugbear in the motor trade to-day is the number of second-hand vehicles on the market. I should say that what hinders a person purchasing a new vehicle is the low trade-in value of the car he already has. The average person who buys a new car is not worried about the rate of sales tax that is applicable. People follow certain schemes in the buying and selling of cars. For example, many people sell their car when it has travelled 25,000 or 35,000 miles and purchase a new one, and they are not concerned in the slightest degree about the rate of sales tax applicable to the new vehicle. People regard it as being an economic proposition to buy a new car and to pass the old one on to somebody else to pay for repairs and so on. As I said a while ago, no evidence has been submitted in support of the assertion that the increase in the sale of motor vehicles in February as compared with January was in any way the result of a decrease in the rate of sales tax. I am not convinced that that is the position, and I do not know who can submit any evidence on the point.

I had started to say a little earlier that when we travel around the country we meet people who want the industry in which they are engaged to be treated favorably in respect of sales tax. I know it would be an impossibility for any government, whether it be a government that has been in office for some time or a new government, which we hope soon to become, to prune away the whole of its collections of sales tax. It would be hard to do that in a period of twelve months, two years, or even four or five years. After a form of taxation is established, it is hard to depart from it and to relinquish the field entirely. Of course, we support any reduction in sales tax. For that reason, I have nothing more to say about the measures.

Senator LILLICO:
Tasmania

– I rise to support the measures. I appreciate full well the importance of the motor car industry to Australia. As Senator Laught has pointed out, it is a big employer of labour and for its operations it draws materials from other industries that employ labour. It is, therefore, of great importance to our economy. I cannot help comparing the position in this country with that in the neighbouring dominion, New Zealand, where, under the latest economic measures; a deposit of 75 per cent, is required on a new vehicle, and the purchaser is given two years to pay for the vehicle. Those are very severe conditions, which have given rise to a tremendous racket in the sale of second-hand motor cars. Many secondhand cars in the dominion are bringing more than their cost price in the old country. When we consider these matters, we realize that by comparison Australia, because of its resources of steel and because of other factors, is in a most favorable position.

No one likes sales tax. In fact, one could vituperate for a very long time against all forms of taxation. Ever since we have had responsible government and demands have grown for services and other things, governments have devised ways and means by which money can be extracted from the people. One could deliver quite a speech in opposition to all those ways and means, simply because there are anomalies in all forms of taxation. Senator McKenna said that he did not favour the Government’s collecting so much of its revenue by indirect taxation, and that it should get as much revenue as possible .from direct taxation, because this was based on the ability of the taxpayer to pay. .

Let me say that there is a limit to that form of taxation. A stage can be reached when it just becomes a penalty on the industrious man, who keeps the wheels of industry going. I recall that people in various walks of life, during the regime of the Chifley Government, cut down their production because of excessive income tax. They said that they did not see why they should have to work seven days a week, as some of them did - particularly dairymen - if they had to give such a substantial proportion of their income away to the Commonwealth Government. I repeat that there is a limit to the distance we can go along the road of direct taxation.

This reduction in sales tax was introduced to correct a position that existed in the motor car industry. Senator Benn said that in his opinion it had had no effect. He did not see how the reduction could be responsible for the sale of any more motor cars. But only to-day we read in all the main newspapers that last month registrations of new motor cars in Australia rose to 22,228, only 1,000 below the peak of 23,230 in February 1960. One report continues -

To stimulate the motor industry the Federal Government cut car sales tax from 30 per cent, to 22i per cent, on February 7th. The effect of the cut is shown in official figures released by the Commonwealth Statistician, Mr. Archer, to-day.

So, in fact, last month new car registrations were only 1,000 fewer than those in the peak month of February, 1960, which was. the year when the most unpopular increase , in sales tax on motor cars was applied. Whatever may be the opinion of theSenate on that measure, it is appropriate that we should be reminded that at that time we were faced with a balanceofpayments problem and that, in order to keep motor cars on the road in Australia, we were paying at the rate of about £200,000,000 per annum for imports of fuel, steel and other commodities. We know that the balance-of-payments position has improved since then. It is now necessary that the production of motor cars be increased in order to provide greater opportunities of employment, which are desired by everybody.

Senator McKenna referred this evening to the first introduction of sales tax. I call it to mind quite well. Sales tax was first introduced by the Scullin Government about 1930. As with all measures of its kind, it was claimed that this was only a temporary expedient, but since then sales tax has been levied by successive governments of all political complexions. It was levied by the Chifley Government, the Curtin Government and the Menzies Government and it has become an integral part of our taxation system.

While it is true, I believe, that sales tax, in the first years of its operation, was used principally as a revenue-producing expedient, there is no doubt whatever that it has developed into a method of providing conditions which the Government thinks fit to be provided in the economy. It has been used as an economic weapon. That raises the point whether sales tax is more desirable than the direct method advocated by Senator McKenna - capital issues control, with its consequential interference in private enterprise and all that goes with it.

Apart from the power, it is very arguable whether capital issues control is a better method. Experience during the war years and afterwards of prices control, land sales control and many other controls was that they only provided an incentive for the people to break the law.

Senator O’Byrne:

– Dishonest people!

Senator LILLICO:

– Well, there are a great many of them in the community. If you look at the economic measures that have been adopted in the Mother Country and in the Dominions, you will find that taxation measures similar to the legislation now before the Senate are used not so much to raise revenue as to provide a means by which capital investment can be channelled into the right quarters. I believe that method is infinitely better than the direct and arbitrary method that would be used by a Socialist government. This Government has been castigated for not seeking the power necessary to direct investment into the channels that it thinks desirable. I remind the Senate that since federation numerous proposed laws covering a variety of subjects-

The ACTING DEPUTY PRESIDENT. - Order! The honorable senator is getting away from the subject-matter of the bills before the Senate.

Senator LILLICO:

– I was referring to Senator McKenna’s remarks about the desirability or otherwise of seeking power to control the position in the direct way that is so dear to the Labour Party. The aim of this private enterprise Government should be to bring about the desired result by conditioning the economy. Despite the increase in sales tax on motor cars over the years - despite the penalty that Senator McKenna would say has been imposed on the motor-car industry - ownership of motor cars in Australia in the past ten or twelve years has increased from the ratio of one car to every ten persons to about one car to every four or five persons. If the number of cars registered continues to increase, as to-day’s newspaper reports seems to indicate it will increase, surely saturation point, as far as the Commonwealth is concerned, must soon be reached.

Senator Ormonde:

– Then you dampen down again.

Senator LILLICO:

– I was coming to that. You must reach a stage where the population simply has enough cars for its requirements. With the industry in Aus- , tralia geared to produce more cars than we can use in the Commonwealth, what will we do with the surplus? It is essential that we encourage in every way possible the export of motor cars. If this is not done there will be another crisis . in the motor-car industry in this country, because there is a limit to the number of cars that 10,500,000 people can use. Only a few days ago the Acting Minister for Trade (Senator Henty) told us that conditions relating to the export of cars from this country were encouraging. They need to be encouraging. If we cannot draw off our surplus production - undoubtedly production will increase - we will have another crisis in the motor-car industry.

I would gladly traverse the ground covered by Senator McKenna, who referred to the need for constitutional reform in order to have sufficient power to control the situation by the direct method of capital issues control, but if I did that I fear that I would infringe your ruling, Sir. I support the bill. I hope that this is but the first of many bills designed to reduce sales tax.

Senator COLE:
Leader of the Australian Democratic Labour Party · Tasmania

– One of these bills deals with the reduction of the sales tax applying to motor cars and spare parts, lt gives honorable senators an opportunity to speak about the sales tax generally. The Australian Democratic Labour Party holds the view that the sales tax is not an equitable tax. My party would like to see this tax abolished completely from Australia’s fiscal policy. My party would prefer to see revenue raised by direct taxation, which is fair to everybody.

I congratulate Senator Lillico on his gallant attempt to get the Government out of the sticky position in which it finds itself. It is ironical that the Government should now be reducing sales tax, having in mind what it did in 1960. At that tiue, when the sales tax on motor vehicles was increased from 30 per cent, to 40 per cent., the Government was told in no uncertain terms that its action would have a very detrimental affect on our economy. The actions of honorable senators now in affably giving reasons why the sales tax on motor vehicles should be reduced are in direct contrast with their actions in 1960. The party that I represent is of the opinion that sales tax in all forms should be abolished because it is a sectional tax.

When the sales tax on motor vehicles was increased to 40 per cent, in 1960 the Government was warned that the increase would lead to economic hardship, not only in the motor-car industry itself but also in associated industries. The Government was warned that its actions would have a serious effect on the people generally. But the Government did not heed those warnings. Instead, it took the advice of theorists and statisticians. It paid no regard to the effect the increase would have on the people.

When dealing with matters such as this one must consider all angles. It was well known in 1960 that vast amounts of money were being channelled into the motor industry and its tributaries, with the result that other industries were not expanding at a sufficiently fast rate. The Government’s method of dealing with the matter started the present deterioration in employment in this country. I do not think that the motor industry should have been attacked to the extent that it was in 1960. That is why I am pleased that the Govern-‘ ment has brought in these measures, which will permit a greater expansion of that industry. Australia needs industries such as this for its defence. Our defence potential must be built up, especially in these troublous times. The motor industry is one of the industries that can be switched in a few weeks to defence efforts if the occasion arises. The occasion could arise, and the more industries such as this, which can be run economically, of course, that can be encouraged in this country the better it will be for Australia. 1 know that the motor industry may have caused the Government a great deal of worry because other industries in Australia were not expanding as they should. Certainly, those other industries should be encouraged by various means, including the use of the Commonwealth’s taxing powers, but whatever is done the Government should not discourage an in dustry in Australia that has the defence potential of the motor industry. This industry would have expanded, even with the burden of high sales tax, but not to the extent to which it will now expand. Honorable senators should not lose sight of the fact that the sales tax is paid not by the motor car manufacturer but by the buyer. He is the person from whom the Government is taking the money. High sales tax does not affect those who have a great deal of money, or more than the average; but high sales tax stops the ordinary wageearner from having a motor car which is a necessity in this modern world.

One aspect of the motor industry that could be brought to light here and about which the Government could do something is the racketeering in spare parts. Either State governments or the Commonwealth Government should do something to stop the exorbitant prices that are charged for spare parts. I believe that if a person buys at the retail price all the parts of a Holden car and is a good enough mechanic to put them together himself it will cost him in the neighbourhood of £6,000 to build his own car. That is one aspect of the industry that the Government should look into.

Senator Hannan:

– Would that be caused by restrictive trade practices?

Senator COLE:

– I do not know what it is caused by, though probably it results from the exorbitant profits that are made by each of the organizations through which the spare parts pass before they reach the customer.

I support the bill because it lowers the sales tax on motor vehicles. I should like to see sales tax on other items in every-day use wiped out, and direct taxation, which is fairer to everybody, applied to a greater degree in this country.

Senator SCOTT:
Western Australia

– I support these measures, which are part of the Government’s economic policy to create once again the employment which we are all so anxious to have in Australia. The bills are designed to step up the sales of motor vehicles and parts, commercial and otherwise, throughout the country. It is proposed to achieve this objective by reducing the sales tax on motor cars and station wagons from 30 per cent, to 224 per cent., and on commercial vehicles from 16$ per cent, to 12i per cent.

I was one of those on this side of the Senate who supported the Government when legislation was introduced to increase the sales tax on motor vehicles from 30 per cent, to 40 per cent. No doubt it seems strange to Senator Cole. He wonders why certain people on the Government side can support measures to reduce sales tax when not so long ago they supported bills in the Senate to increase sales tax on motor cars from 30 per cent, to 40 per cent. However, when sales tax on motor cars was increased the state of the economy was totally different from what it is now. In November, 1960, the overseas balances which are so vital to Australia’s trading ability were less than £300,000,000. They were in a dangerous condition, and employment was reaching a stage where no people were offering for jobs that were becoming vacant throughout Australia. The Leader of the Opposition (Senator McKenna) has said that, in November, I960, the number of people registered as unemployed was in the vicinity of an all-time record low level of 34,000. The figure dropped from 82,000 in 1959 to 69,000 early in 1960, and to 34,000 in October-November of that year.

Senator Cole:

– I do not believe those figures.

Senator SCOTT:

– I am sorry, but these are the figures that were quoted by-

The ACTING DEPUTY PRESIDENT (Senator Anderson). - Order! The honorable senator must link his remarks with the sales tax bills. This is not a general economic debate.

Senator SCOTT:

– I am very sorry, Sir. I shall obey your ruling, but I am only trying-

The ACTING DEPUTY PRESIDENT. - If you link your remarks with the sales tax bills you will be in order.

Senator SCOTT:

– The Government decided to increase the sales tax on motor vehicles because unemployment was down to the dangerously low level of 34,000. The level had been 82,000 or 69,000 about twelve months before. I do not want to engage in an economic debate. I shall leave the matter at that, because I know I am treading on dangerous ground. I was merely endeavouring to reply to the last speaker, who quoted certain figures to support his argument on the sales tax.

The ACTING DEPUTY PRESIDENT. - You are perfectly entitled to reply to the remarks of another speaker, but you must not engage in a general economic discussion.

Senator SCOTT:

– I am trying to develop my argument, and I know, Sir, that you will correct me if I overstep the mark. I shall be only too pleased to abide by your ruling. The point I am making is that our overseas balances were reaching a state of emergency. They had fallen to under £300,000,000. At the same time we had over-full employment. It was necessary for a responsible government to look at the industries that were causing that state of affairs and to endeavour to rectify it. The major industry that was causing the Government grave concern was the motor car industry. In its wisdom, the Government decided to increase the sales tax on motor vehicles from 30 per cent, to 40 per cent. Why did it decide on that increase, and why did I support the measure in this chamber? I gave the measure considerable consideration before deciding to support the Government. I found that the motor vehicle industry was costing this country, by way of imports of motor vehicles, parts and accessories, as well as imports of motor spirit and oil, in the vicinity of £200,000,000 a year. Perhaps I should say the cost was running then at the rate of £200,000.000 a year, compared with a rate, some nine or twelve months previously, of £150,000,000 a year. The motor industry had imposed an additional strain on the economy of this country to the extent of £50.000.000 a vear. The Government, in its wisdom, decided to check the sales of motor vehicles bv increasing the sales tax from 30 ner cent tn An ner cent.

The Government found that this measure had more than the desired effect and was creating a little unemployment in the country. The number of people registered as unemployed rose According to the January figures, the number is now 131.000. Then the Government, acting in a responsible manner, took steps to correct the position. One of those steps was a reduction of the sales tax on motor vehicles from 40 per cent, to 30 per cent, and then to 221 per cent.

Senator Cole:

– It does not work so quickly in reverse.

Senator SCOTT:

– That is a very sensible interjection. I admit that such a method does not work so quickly in reverse. Who in this chamber can assess what effect a measure will have? We must wait to see what happens. If the Government had known twelve months ago what was going to happen, it might not have kept the 40 per cent, sales tax on for as long as it did. No one could anticipate the full effect of an increase from 30 per cent, to 40 per cent. I do not know whether that amount of increase was necessary at the time, but the Government made the increase with a desire to correct the state of the economy. It now desires to correct the economy again and is reducing the sales tax on motor vehicles. That is one of the measures necessary to put the economy into a position in which the majority of the people now unemployed can find employment.

Unlike the Labour Party, the Government is in a position of responsibility. The Labour Party has said that it would do away with sales tax altogether. That was stated by a prominent member of the party in this chamber to-night. The Government is endeavouring to put the economy into such a condition that we will have full employment. Since the Government notified the general public that the reduced rate of sales tax would come into effect as from 7th February of this year, the number of registrations of motor vehicles has increased. There were 5,000 more registrations in February of this year than in February, 1961. The number is within 1,000 of the number for February, 1960.

Santor Cole. - Would that not be because of the introduction of Falcons and other new cars?

Senator SCOTT:

– The introduction of new types of vehicles is going on all the time. Since the Falcon was introduced, other new cars have come from overseas. Recently I visited a motor show in Perth that went on for over a week. The new vehicles on show created a great deal of interest in Western Australia, and I have no doubt that large numbers of orders for cars were placed.

Senator Paltridge:

– The city of light!

Senator SCOTT:

– Yes, in the city of light. I repeat that registrations in February pf this year came to within 1,000 of the figure for the record month of February, 1960. I am convinced that the measures the Government has taken will encourage the motor car industry to re-employ many of the people now out of work who are qualified to work in that industry. To-night we were told that the motor industry was responsible for the employment of about 600,000 people. If that is so, we can see quite quickly that the reduction in the rate of sales tax, as provided in this legislation, will encourage the people who are manufacturing motor cars in Australia to employ many people who at the present time are unemployed and anxious to obtain work in that industry.

Let us consider briefly the growth of this industry in Australia. The first motor car was manufactured here in 1948. I believe that was the year of the advent of the Holden motor car. Now many motor vehicles are manufactured in Australia for sale in Australia, and the industry has gone so far that it is now able to export its products to many other countries. I believe that Australia is now exporting cars to more than twenty countries. Perhaps I am getting away from the measures under consideration, Mr. President. I will get back to them.

I believe that this legislation, as a measure designed to step up employment in Australia, will have the desired effect. At the moment we are not worried about our overseas balances. They have increased from less than £300,000,000 to much more than £500,000,000 because of the measures that the Government has taken. We are living in a very stable economy. We hope that the measures taken by the Government will improve the employment position. We are confident that they will. We are confident that the number of people unemployed will be well under 100,000 within three or four months-

The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! I trust, senator, that you are making only a passing reference to that matter.

Senator SCOTT:

– Yes, Mr. President. I was just concluding my remarks on the bill by saying that these bills, which reduce the rate of sales tax on motor vehicles from 30 per cent, to 221 per cent., will have the desired effect of reducing the number of people unemployed from the present figure of 131,000 to well under 100,000. 1 believe that by the end of this year, because of this and the other measures taken by the Government, the unemployment position will be well in hand.

Senator KENNELLY:
Victoria

.- May I say with great respect, Mr. President, that during your temporary absence from the Senate on other duties some most remarkable statements have been made. The flexibility of both tongue and mind of honorable senators on the Government side of the chamber amazes me. They can find reasons why they should vote for a rate of 40 per cent, sales tax on motor cars in one month, and then find very valid reasons why they should reduce the rate to 30 per cent, in another month. At the general election the people, particularly those engaged in the motor industry, were not friendly towards the Government. People engaged in the motor industry played some part in certain electorates in causing the Government anxiety, although not with as much success in one electorate as they thought they would have.

After the election the Government met representatives of the motor industry and was told what any sensible person ought to know, namely, that the industry would sell more motor cars if they were £50 or £60 cheaper. That is what this reduction in sales tax means on a Holden or Falcon car. I have no reason to give the makers of those cars an advertisement, but that is what this reduction means. More cars will be sold to people who have the cash to buy them and others who can obtain money from the hire-purchase companies.

I do not want to say that the increase of sales tax to 40 per cent, that this Government brought in a short while ago did not have an effect on motor car sales. It did. Sales declined greatly. Much as I. opposed that increase and welcome this reduction, J still believe that this industry has to be kept under constant observation.

Senator Maher:

– The industry had . just . about reached saturation point at the time the Government’s economic measures were taken.

Senator KENNELLY:

– If any economic measures have been proved to be useless, they are those to which the honorable senator refers. Some people claim- rightly so, I must admit - that the measures did alter Australia’s balance-of-payments position. If Senator Scott wants to convey that the Australian motor car industry employs 600,000 people, we had better look at the figures and find out exactly how many people it employs. If unemployment can increase from 34,000, which was the figure given by Senator Scott as the number of people registered for employment at the time of the increase of sales tax to 40 per cent., to 131,000 in the first month of this year, with all the hurt, anguish and suffering that that increase in unemployment brings not only to the people who are unemployed but also to their dependants, the Government would be well advised to have another serious look at the position before it takes any other such measures to right the economy.

I said, Mr. President, that when you were otherwise engaged some very remarkable statements were made in the Senate. One honorable senator said that it was quite all right to have controls by subterfuge. Honorable senators opposite say that we cannot have controls whereby an industry can be told how fbr it can expand or how much credit it can expect to receive. Such is supposed to be too much akin to Labour policy. But those honorable senators said that it was quite all right to act by subterfuge and suddenly increase the rate of sales tax from 30 per cent, to 40 per cent., thus reducing activity in this industry. That is what the increased tax did or helped to do. I personally believe that no one could honestly support control by subterfuge, because that must harm the industry. The leader of the Australian Labour Party said, “ Tell this industry how far it can go. Not only do those who have their money in the industry want to know, but, what is more, the people who are employed in it also want to know. We can only sell so many cars in this country. You had better get together.” Do not let me hear a Government supporter from Queensland oppose controls, because all Queensland members of the Parliament know how far the sugar industry would go if it were not controlled as it is to-day. The growers are told that they may grow so much sugar and no more.

All that the motor industry, or any other industry for that matter, wants to know, is how far it may go. The industry asks, in effect, “ How many motor cars can we make? What is the capacity of the market? “ When the industry is told the answers to those questions, we will have a stable motor industry. When the Government took office in 1949, the rate of sales tax on motor vehicles was 8i per cent. From that point it rose to a peak of 40 per cent. Then the rate was reduced to 30 per cent. A general election came along, the motor industry supported Australian Labour Party candidates in certain electorates, the Government lost some seats, and ran for cover. It decided to reduce sales tax on motor vehicles. The industry does not want that so much as an indication of how far it may go.

Senator Scott’s line of argument was that the rate of tax on motor vehicles was increased to rectify the balance of payments position. I am not arguing that that was not an important consideration at the time, but my belief is that the European Common Market unfortunately will have much graver effects on our balance of payments position. I hope I am wrong in saying that, but I do not think I shall be. If I am not, are we going to say to the motor industry, “ The rate of tax on motor cars is to be 40 per cent again “ ? Do not think I am worried so much about the Holden company or the people who have money invested in it, although I think they are entitled to a fair return. I am more concerned for those who work in the motor industry. It is the duty of the Government, and a part of the responsibility that it bears, to tell the 100,000 people who are directly employed in the industry how far the industry may go. If the Government does that it will be doing a service. It would be better to adopt a direct approach than to resort to the subterfuge that honorable senators opposite seem to support. You cannot run a big industry, Mr. Acting Deputy President, and provide constant work for the people engaged in it, if sales tax is to be increased every now and then.

I heard an honorable senator opposite say that sales tax was introduced in 1930. I know that that is so, but I point out that if the political predecessors of the present Government parties had allowed the government of that day to have a £20,000,000 fiduciary issue - £12,000,000 to feed the unemployed and £8,000,000 to keep farmers on their blocks - there would have been no sales tax. But, of course, that was not done. Without making a long speech on this subject, I say that the Minister should be able in his reply to tell not only the members of the Senate, but also the people outside who are directly concerned with the industry, what the Government proposes to do and for how long the rate of tax will remain at 30 per cent. Is the industry to be in a state of uncertainty? After all, it is an important one in Victoria. Are the people who work at the Ford factory at Geelong to sell their houses and go to live at Broadmeadows? Are their jobs to remain in the custody of this Government and to be governed by fluctuations in the rates of sales tax?

The Minister in charge of these bills may not be able to answer my question now, but I think it is his responsibility to answer it before the Parliament rises for the recess. The people employed in the industry are entitled to know whether the Government intends to alter the rate again. Admittedly, it will not be easy for the Minister to answer the question, but he should endeavour to do so because of the need to preserve the stability .of the industry and to ensure continuity of employment in it. The rate of tax should not be reduced in accordance with somebody’s whim and then increased again because there is a reduction in votes cast for the Government parties. Of course, at election time we always forget the bad things. We like to look to the future with a great deal of hope. I say again that it is the responsibility of the Government to tell the people in the industry where they stand.

Question resolved in the affirmative.

Bills read a second time.

In committee:

The TEMPORARY CHAIRMAN (Senator McKellar:
NEW SOUTH WALES

– Is it the wish of the committee that the bills be taken as a whole?

Senator Kennelly:

– No. I am sorry, Mr. Temporary Chaiman, if I have misunderstood you. I do not care which bill is used for the purpose, but I want to try to extract from the Minister an idea of the future policy of the Government in this respect. I want to be fair to the Minister, and I shall be quite happy if he says that he is not in a position to make a statement. 1 recognize that perhaps he did not expect such a question to be asked. If he gives an assurance to the people of this country that the motor industry will receive a statement of policy from the Government prior to the Parliament rising for the recess, I shall be quite prepared to say, “ Go right ahead “.

The TEMPORARY CHAIRMAN:

– I think your wish would Tse met if we took the bills together as a whole. You would then have the right to ask the question to which you have referred.

The bills.

Senator KENNELLY:
Victoria

– Does it mean, Mr. Temporary Chairman

Senator Paltridge:

– I am not here to give you guidance, but you will have another opportunity, if you wish to persist in this.

Senator KENNELLY:

– I will persist.

Senator Paltridge:

– You will have another opportunity. You are holding up the work of the committee.

Senator KENNELLY:

– Never mind about holding it up. We do not adjourn until half-past ten.

Senator Paltridge:

– I do not care how long you take.

Senator KENNELLY:

– You do not mind, and I do not. We are not here just to pass as quickly as possible a bill which affects the livelihood of a lot of people in the city in which I live. All I am asking on behalf of those people is this: Can an assurance be given-

Senator Paltridge:

Mr. Temporary Chairman, I am compelled to take a point of order. The bills are now being considered in committee. The honorable senator should relate his remarks to a specific clause.

The TEMPORARY CHAIRMAN:

Order! I think Senator Kennelly will get the information he wants if he relates his question to a particular clause.

Senator KENNELLY:

– The committee has already agreed that the bills be taken as a whole.

The TEMPORARY CHAIRMAN:

That is so. The honorable senator may still select a particular clause and pursue his question.

Senator KENNELLY:

– I relate my remarks to clause 2 of any of the nine bills. I now ask: Can the Minister assure the committee that there will be no alteration of the rate of sales tax on motor cars within the foreseeable future? I know that is a rather wide question, but I am concerned about the people who are put in and out of work at the whim of this Government in implementing its policy relating to sales tax on motor cars. Why has the Government selected this industry for this treatment? The motor vehicle industry is one of the largest secondary industry employers, if not the largest, in the nation, yet it is used as an economic football by this Government. People in Victoria were brought from Geelong because the Ford motor company established a factory at Broadmeadows. When the company commenced to manufacture the Falcon motor car there, the Prime Minister (Mr. Menzies) went along and made a glowing speech. He almost outrivals the Premier of Victoria in opening things. But employment opportunities there did not last for long; men were put of work.

Does the Government propose to give the people employed in this industry any warning? Does it propose to say, “ As far as we can see, you will be all right for twelve months “? If it did that, it would be doing better than it has done in the past. It has a duty to give such an assurance. I would not ask for this assurance were it not for the fact that the Government is so keen to alter the rate of tax. The Government raised it to 40 per cent., then reduced it to 30 per cent., and is now reducing it to 22-j- per cent. The employment of the workers should not be subject to the whim of you people opposite who speak about your glorious free enterprise. In another industry you believe in the maintenance of fair competition; and we shall have something to say about that in the future. But in the motor industry there are no State or Commonwealth enterprises. The employees should at least be told how long they can expect sales tax to remain at the present rate.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

Mr. Temporary Chairman, with respect, and believing myself to be out of order, I desire to reply to the only pertinent part of Senator Kennelly’s rather lengthy speech. He started by asking for a statement on Government policy and ended, as he must inevitably have ended when addressing himseilf to a subject of this kind and after having pursued the line that he pursued, by asking in specific terms for an assurance that there would be no variation of the rates of sales tax on motor vehicles within the foreseeable future. I put it to Senator Kennelly that, as a matter of practical administration, it would be quite impossible for any government to give an assurance of the kind that he seeks. What the Opposition has lost sight of in its consideration of the sales tax on cars is that it is very easy to go back over a number of years and say, as did the Leader of the Opposition (Senator McKenna). that in a certain year the Government imposed a certain increase and that on a subsequent occasion it reduced the rate of sales tax. Of course we have done that. But so did the Labour Government, and if there is ever another Labour government it will do precisely the same.

Sales tax can be considered only against the background of the economic conditions that exist at the time the variation rs effected. Senator Kennelly asked me whether on behalf of the Government I would give an assurance that there would be no variation in sales tax on motor cars within the foreseeable future. No, I will give no such assurance. The assurance I give is this: The Government will keep this industry under close and continuing observation and will apply to it the rate of sales tax which is considered to be appropriate to the economic circumstances of the time.

Senator Kennelly:

– Am I to assume from the Minister’s speech that the Government is using the sales tax on motor cars as an economic weapon rather than as a means of collecting revenue?

Senator PALTRIDGE:

– The purpose of the sales tax. as well as the rate, will vary as the conditions of the time demand.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I should like to address to the Minister questions relating to two matters. Is the Minister in a position to give to the motor industry and its employees any indication about the degree of production that will be regarded as being acceptable to the Government over the next few years? Will he indicate whether the present levels are to be maintained or increased and, if they are to be increased, to what extent? I am asking only for a broad indication.

I now ask a question which I raised at another stage of the proceedings: Does the Government contemplate ever considering the recommendations of the Constitutional Review Committee relating to economic powers, one of which is sought to be served by these bills?

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– I am somewhat at a loss to know how the implementation of the Constitutional Review Committee’s report is applicable to the consideration of these bills at the committee stage.

Senator McKenna:

– I shall explain it to you, if you like.

Senator PALTRIDGE:

– I say to the honorable senator, with what I trust he will accept as my usual courtesy, that I cannot answer the question. It is a matter of Government policy - to be decided at a time the Government considers appropriate - as to whether and, if so, to what extent a referendum should be held in connexion with the implementation of the recommendations of the Constitutional Review Committee. The honorable senator asked whether the Government would give a direction or an indication to the motor industry as to the degree of production that it would accept as desirable. I think that that states the question fairly. During Senator McKenna’s speech at the secondreading stage - I may be out of order in going back to that debate - he referred, not surprisingly, to direct controls - to consumer credit controls and capital issues control. Inevitably he got to the point of asking what sort of direction or what sort of instruction the Government would give, and what sort of quantitative control it would impose on this industry.

I have indicated that the Government will watch the position very closely and will keep closely in contact with this industry, so that it will be aware of the sales tax that is appropriate at any time and in any circumstances. I do not believe that this Government will ever adopt an administrative procedure which means, either directly or indirectly, that it will place a quantitative limit on output. I ask the committee to consider that for one minute. What would be the position if we said the limit was to be 300,000 cars a year? How would that production be divided up? Who would do it? I say that that is a socialistic way of doing things which is not acceptable to this Government. The right way is to keep close and continuing contact with the industry in respect of indirect taxes such as this.

Senator KENNELLY:
Victoria

– Do I take it that the Government would rather control this industry by subterfuge, by using the sales tax, than by the straightout method by which, in conjunction with the Queensland Government, it controls the sugar industry of this nation?

Senator McKENNA:
Leader of the Opposition · Tasmania

.- Before the Minister answers, I point out to him that the Treasurer (Mr. Harold Holt), in introducing the measures in November, 1960, said he had decided on steps in relation to the motor car industry because its production in the preceding September quarter had been at the rate of 330,000 vehicles per annum. The Treasurer selected the figure of production that he considered excessive in the circumstances. Is the industry not entitled to say to the Treasurer, “ What is your outlook on the matter to-day? What is your outlook for the immediate future? “ The Government has already taken a figure and expressed the view that it was too great in the circumstances. Therefore, is there anything unusual in the Opposition asking what is the Government’s outlook on production for a limited period ahead - one year, two 3’ears, or three years if possible?

Surely the Minister must see that the development of the economy of the industry and the security of the employees in the industry depend upon some knowledge in that particular. It is not as though the Government has washed its hands of quoting a figure. The Treasurer gave one figure which he said was excessive. Is it excessive to-day? What is the figure that the Government has in mind? Is the industry to be left wondering when. the next; bomb is to be dropped on it or exploded from underneath it, as has happened with,, the various forms of control? The Govern.ment will show a complete lack of appreciation of the importance of this industry to the nation, to the people who have invested their money in it, and to those who are employed in it, unless some indication for the future is given.

I do not ask the Minister to state the pattern of sales tax for the future. I appreciate the difficulty of that. But a figure having already been stated, some general idea ought to” be given to the industry along the lines that I have suggested.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– The Leader of the Opposition (Senator McKenna), does not put the position quite as the Treasurer (Mr. Harold Holt) put it when introducing the measure referred to. The Leader of the Opposition picks out of the Treasurer’s speech a production figure that was quoted, and says that that was too large. He overlooks the essential facts that go along with, the figure of 330,000. This brings me back to the point that I was making earlier. The Treasurer said that 330,000 was an excessive annual production. In the circumstances existing at the time - a chronic balance of payments situation and roaring inflation - it was. But that does not mean - and the Treasurer did not say that it meant - that in all circumstances a production of 330,000 cars per annum would be excessive.

Senator ARMSTRONG:
New South Wales

– It seems to me that the question is not that of a quota but of stability in the motor industry. I do not know whether stability will be achieved by the Minister giving an indication that sales tax will not be altered for twelve months or so. I do not think that that is the answer we all want. Unfortunately, the Government, by deliberate policy, decided to transfer labour from the motor industry. After four months or so, it realized the very serious mistake which had been made. It is now trying, by reducing the sales tax, to move labour back into the industry. The question is not whether the sales tax is high or low. It is a question of a consistent policy for the motor industry. This is a case of the Government once more becoming frightened of prosperity, of too many people having motor cars.

The TEMPORARY CHAIRMAN:

Order! The honorable senator is delivering a speech more appropriate to a secondreading debate. We are in committee, and I ask that his remarks be confined to the matter before the Chair.

Senator ARMSTRONG:

– I am dealing with clause 2, which previous speakers have been discussing. The Minister said that he, for one, would never advocate putting a restriction on the number of motor cars produced. After all, the whole purpose of import licensing is to maintain the level of production of certain industries and the volume of certain items in the community. The Government will have to face up to allowing the motor industry to produce as many cars as it can sell or to applying some sort of quantitative restriction to the industry. I do not like such restrictions. My own feeling is that the industry should make as many vehicles as it can sell. Sales tax is being used deliberately to stop the industry from selling as many vehicles as it would normally sell. Senator Paltridge’s only promise to the Opposition and to the country is that the Government will watch the position very closely The Government has been doing that for a long while. It has been short-sighted. Too many things that it has not seen have been happening before its eyes. I should say that the Government is perhaps the worst watcher of all time.

Consideration interrupted.

The TEMPORARY CHAIRMAN:

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

That the Chairman do now leave the chair and report to the Senate.

Question resolved in the affirmative. (The Chairman having reported accordingly) -

page 472

ADJOURNMENT

The PRESIDENT (Senator The Hon. Sir Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Senate do now adjourn.

Question resolved in the affirmative.

Senate adjourned at 10.31 p.m.

Cite as: Australia, Senate, Debates, 13 March 1962, viewed 22 October 2017, <http://historichansard.net/senate/1962/19620313_senate_24_s21/>.