Senate
14 March 1962

24th Parliament · 1st Session

  1. Senate
  2. 24th Parliament
  3. 1962

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

page 473

QUESTION

UNIFORM COMPANY LAW

Senator SANDFORD:
VICTORIA

– I ask a question of the Leader of the Government in the Senate. For a long time past we have been told that great progress has been made in negotiations between Commonwealth and State authorities on complementary uniform legislation for the control of companies and restrictive trade practices, and that finality may be expected! very soon. Will the Minister state specifically what progress, if any, has been made towards a satisfactory conclusion to the negotiations that have taken place between State and Commonwealth authorties?

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

– I know that there has been a great deal of discussion and consultation on this matter. I cannot tell Senator Sandford exactly how the matter stands at the moment or when finality may be reached. I ask the honorable senator to place his question on the notice-paper so that the Attorney-General may supply an answer to it.

page 473

QUESTION

TELEGRAM SERVICES

Senator WEDGWOOD:
VICTORIA

– Has the attention of the Minister representing the Postmaster-General been directed to a report in a Melbourne newspaper that eight 251-word hoax telegrams were transmitted, at urgent rates, in the name of the Young Liberal and Country Movement of Victoria at a reported cost of £50? What action is taken by the Postmaster-General’s Department to check the authorization of messages of the nature to which I have referred? What is the position of the Young Liberal and Country Movement in respect of the account for those telegrams? Will the Minister assure the Senate that action will be taken to ensure that a hoax of this or any other nature will in future be detected before transmission of the message?

Senator WADE:
Minister for Health · VICTORIA · CP

– I have seen the report to which the honorable senator has referred.

It reveals; in my view, a vicious fraud perpetrated on innocent people per medium of the Postmaster-General’s Department, and in the opinion of all decent people it merits the strongest condemnation. The Postmaster-General’s Department does check carefully telegrams lodged by telephone. The operator demands the name and address of the sender, which must coincide with the name and address appearing in the telephone directory. Names and addresses of senders are checked and every effort is made to ensure that the authority for the telegram is genuine. I am not in a position to say what attitude the department will take about payment for the telegrams in question, but I can tell honorable senators that every effort will be made to trace the culprits. If they are apprehended they will be prosecuted with tha utmost rigour of the law.

page 473

QUESTION

TRANS-AUSTRALIA AIRLINES

Senator KENNELLY:
VICTORIA

– I preface my question, which is directed to the Minister for Civil Aviation, by reminding the Senate that last evening the Minister stated that he was not here to give me guidance.

The PRESIDENT:

– Order!

Senator KENNELLY:

– I am reading from “ Hansard “.

The PRESIDENT:

– That is not part of your question.

Senator KENNELLY:

– I would like guidance from the Minister in a matter concerning the annual report of the Australian National Airlines Commission. Is it a fact that the Minister tabled the commission’s annual report at 9.15 p.m. on the last day of the last Parliament, only weeks before the elections? Was that action an attempt to evade discussion on an important report that was extremely critical of certain Government decisions? Will the Minister ensure that the report is tabled in sufficient time this year to enable honorable senators to discuss it prior to the adjournment of the Senate?

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

– I am delighted to have the opportunity to provide whatever guidance I can for my friend, the Deputy Leader of the Opposition. The statute places upon me an obligation to lay the report on the table within a certain number of days after 1 receive it. I think, from memory, the number of days prescribed is seven, but I am not sure. The report of Trans- Australia Airlines reached me last year, before the Senate adjourned, on the morning of the day on which 1 tabled it. I had been unable to read it before I tabled it. Indeed, I had made inquiries a couple of weeks before to find out what progress was being made with the report, because I wanted to table it, one of the reasons being the interest always shown by the Deputy Leader of the Opposition in this document. It is true that there was some comment in the report which might be regarded by the Deputy Leader of the Opposition as critical of Government policy. I might say that I have written to the Australian National Airlines Commission making it quite clear to the commission that I do not wish to inhibit it at all in what it puts in its report, but pointing to three contentious matters which it raised and putting certain views before it. I wrote that letter to the commission in the first half of December last year. I have not yet had a reply. 1 am awaiting it with interest, and I do not doubt that there will be further opportunities for the Deputy Leader of the Opposition and me to discuss the clauses of the report to which I referred, and to throw rather more light upon the factors which led to their inclusion than does the report itself in some instances.

page 474

QUESTION

AUSTRALIAN PUBLICITY OVERSEAS

Senator LILLICO:
TASMANIA

– I direct a question to the Acting Minister for Trade. I understand that as part of Australia’s publicity programme in the United Kingdom, the Department of Trade arranged a recent visit to Australia by an English television quiz contestant. Does the Acting Minister for Trade consider that Australia gains worthwhile publicity from this sort of activity?

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

– I understand that the visit was awarded as a prize associated with an English television programme. The cost to the Government was small. The total cost was shared between the Commonwealth Government, the Australian National Travel Association and Trans-Australia Airlines. This particular programme was scheduled to be shown on film for a four-minute session on television in England. It was rated so highly that it actually appeared for seven and a half minutes. The advertising rale on that session is £1,000 a minute, and as Australia got the benefit of nearly £8,000 worth of advertising, I think it was well worthwhile.

page 474

QUESTION

NAVAL DEFENCE ACT

Senator McMANUS:
VICTORIA

– I wish to ask a question of the Minister for the Navy. It refers to the anomalous situation of storemen employed under the Naval Defence Act in naval establishments who, as a result, are subject to limitations in respect of their eligibility for transfer or promotion to suitable vacancies in other Commonwealth departments. Will the Minister ask the Public Service Board to report on the possibility of including these Naval Defence Act personnel in the appropriate division of the Public Service, if necessary by legislation, especially as a safeguard against the danger of possible retrenchment?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– The position of men employed under the Naval Defence Act is different from that of men employed under the act covering other Commonwealth employees. Under the Naval Defence Act, men can be appointed to positions although they do not, in all respects, meet the requirements laid down for other Commonwealth employees. Such men, provided they are of the right age and have the necessary qualifications, can transfer to other positions in the Commonwealth Public Service but, as a general rule, they are permitted only to transfer to positions in the lower levels. They are not eligible to apply for appointment to a position in the Public Service which has been gazetted as vacant and’ which is reserved for people employed under the Public Service Act. I could bring the honorable senator’s question to the notice of the Public Service Board. However, if men employed under the Naval Defence Act were to be regarded in all respects as officers of the Fourth Division of .the Public Service, it would be necessary for. them to meet all the requirements applicable to present officers of the Fourth Division. They are not expected to meet those requirements now. Therefore, I should think there would be some difficulty in. doing what the honorable senator suggests.

page 475

QUESTION

INTERNATIONAL AFFAIRS

Senator HANNAN:
VICTORIA

– My question is directed to the Minister assisting the Minister for External Affairs. Has his attention been directed to the recently reported recall of Dr. Kroll, the West German Ambassador to Moscow? According to press reports, the ambassador was to be disciplined for attempting to urge Soviet Russia to make a separate deal with West Germany in defiance of the Western allies. Can the Minister tell the Senate whether Dr. Kroll has, in fact, been recalled by his Government for this action? If so, has he been disciplined? If he has been disciplined, what is his present appointment?

Senator GORTON:
LP

– I am not in a position to say whether Dr. Kroll’s Government has permanently recalled him, whether it intends to take any action against him or whether it has any grounds on which to do so. I think the whole matter is highly speculative and is based on speculative press reports. I cannot say anything more than that.

page 475

QUESTION

TASMANIAN SEA MONSTER

Senator O’BYRNE:
TASMANIA

– My question is directed to the Minister in charge of the Commonwealth Scientific and Industrial Research Organization. In view of the widespread interest that has been generated by the finding of an unidentified creature, known as the Monster, on the west coast of Tasmania, samples of whose flesh can be taken by any one who wishes to visit the area, will the Minister consider the offer made by a Tasmanian, Mr. P. G. Heyes, who has special Bombadier caterpillar tractors which are able to traverse country similar to that in which the carcass is now situated, and which could bring out the whole of the remains of the monster, so that an orderly assessment could be made which would put an end to speculation and prevent further deterioration of this very interesting specimen?

Senator GORTON:
LP

– I am bound to confess that during the last few days it has sometimes seemed to me that I ought to be known by a new title - Minister for Monsters. One would hope that that title would not be changed around in the same way as the title of Minister for the Navy.

I am sometimes referred to as the Navy Minister. I know that the C.S.I.R.O. is sending two scientists to examine the object on the beach. They are Mr. J. H. Calaby, a senior research officer of the Wild Life Survey Section, and Mr. A. M. Olsen, a senior research officer of the division of Fisheries and Oceanography. They are leaving for Tasmania to-morrow. They should be back by Monday, 19th March. They will be accompanied by a Tasmanian biologist either from the University of Tasmania or from the relevant Tasmanian department. They will fly in by helicopter from a place called Zeehan in Tasmania to examine this object. When all of that has been done we shall be in a far better position to know whether this object is something from outer space or something that is quite common.

page 475

QUESTION

TRADE MISSIONS

Senator WARDLAW:
TASMANIA

– Has the Acting Minister for Trade seen the report of a view expressed at a recent meeting of the cattle council of the Graziers Association of New South Wales to the effect that trade missions from Australian shores should have as one of their functions the promotion and sale of Australian live-stock, and stressing the necessity of including in such missions officers competent to offer advice about the Australian cattle industry? Can the Minister assure the Senate that this matter is already being stressed by trade missions overseas?

Senator HENTY:
LP

– These trade missions are made up of representatives of a number of industries. I am certain that any industry that wished to be represented on them, such as the cattle industry, would find a place in any mission that went overseas, if any competent cattleman or cattlemen wanted to accompany it. The cattle industry, of course, is one of the most important industries in Australia. I am sure that if inquiries about the Australian cattle industry have been made to any overseas trade mission full advice has been available from members of the mission or the head of the mission. If the industry is interested in this matter, it should take steps to see that it has on any mission that goes overseas a competent representative who can give relevant information to those -who inquire about this important Australian industry.

page 476

QUESTION

DEPARTMENT OF IMMIGRATION

Senator KENNELLY:

– My question is directed to the Minister representing the Minister for Immigration, ls it a fact that the Department of Immigration in Victoria has prepared a roneoed document for the staff instructing them on the answers that they should give to questions that might be asked about the immigration programme? If that is a fact, is this the first occasion on which such a document has been issued to the staff? What is the reason for the issue of such a document at the present time? Since this document deals with many matters raised by honorable senators, would it be possible for a copy of it to be supplied to each senator?

Senator HENTY:
LP

– I am sorry, but I missed the implication of the honorable senator’s question. He said that a roneoed document has been circulated-

Senator Kennelly:

– A roneoed document has been circulated among the staff of the Department of Immigration. It concerns questions that are likely to be asked.

Senator HENTY:

– All I can say is that I believe it is my duty to see that any honorable senator receives an answer to a question that he asks me in the Senate. I know nothing about any document that has been circulated among the staff of the department. If Senator Kennelly puts the question on the notice-paper, 1 will find out what this roneoed document is and see whether I can get some information about it. It will not inhibit any honorable senator in asking questions in this chamber, nor should there be any inhibition upon his receiving an answer.

page 476

QUESTION

NUCLEAR TESTS

Senator SCOTT:
WESTERN AUSTRALIA

– I preface my question, which is addressed to the Minister for National Development, by stating that he has been reported as saying this week that Dr. Gary Higgins, a world figure in atomic research, is in Australia at the invitation of the Australian Atomic Energy Commission. The Minister is also reported as having said that the visit by Dr. Higgins has no relationship with any project in which nuclear explosives would be used in Australia. Will the Minister say whether the use of nuclear explosives has any practical application in Australia in the near future?

Senator SPOONER:
LP

– I made a press statement on this matter a few days ago. Dr. Gary Higgins is a scientist and the professional officer in charge of the Plowshare experiments that are now being conducted in the United States of America. He has been asked to come to Australia to talk to members of the engineering profession, because the peaceful use of atomic energy offers possibilities for Australia, particularly in the construction of water storages. The experiments that have been carried out so far indicate that you begin to achieve significant economies from the use of nuclear explosives only when you are engaged in really large-scale operations. So the Australian Atomic Energy Commission has asked Dr. Higgins to come to this country. He will confer with members of the engineering profession and tell them the nature and extent of the experiments that have been carried out in other parts of the world. I have no doubt that his visit will stimulate a good deal of professional interest and thinking about this interesting and important prospective development in the use of atomic energy.

page 476

QUESTION

LUNG CANCER

Senator WRIGHT:
TASMANIA

– Has the Minister for Health given attention to a report that was published in the last few days by, I think, the Royal College of Physicians in Great Britain, in which that body advocated that a publicity campaign be conducted to warn against the danger of contracting lung cancer from cigarette smoking? Has the Minister considered taking similar action in this country?

Senator WADE:
CP

– I have seen the report to which the honorable senator refers and have asked officers of my department to prepare for me their considered opinions on the matter. This is a subject of great public interest. I am sure that I can best answer Senator Wright’s question by presenting him with the considered opinions of my expert officers, rather than by replying off the cuff and giving information which might not be authoritative.

page 476

QUESTION

PENSIONER MEDICAL SERVICES

Senator TANGNEY:
WESTERN AUSTRALIA

– Is the Minister representing the Minister for Social Services aware that many persons who have contributed to superannuation funds for a number of years are in receipt of superannuation payments not in excess of £5 a week? Also, is the Minister aware that in the event of such a superannuitant and his wife becoming eligible for the age pension, and having no other income whatsoever, they are unable to qualify for pensioner medical benefits as their income from superannuation exceeds by 12s. 6d. a week the amount allowed by the regulations governing the payment of those benefits? As it is about ten years since this restriction was first placed on the pensioner medical service, and as, in the meantime, the value of money has declined because of inflation, will the Minister consider the advisability of raising the limit of such permissible income to 1962 standards so that the pensioners will not be penalized for the thrift they exercised during their working years?

Senator SPOONER:
LP

– I remind Senator Tangney that, until this Government brought down enabling legislation, pensioners were not eligible at all for medical benefits. The provision of those benefits is one of the big improvements in social service legislation that stands to the credit of this Government. The medical benefits scheme is subject to what I call - for want of a better term - a means test. Senator Tangney suggests that the means test should be further liberalized, to which I give the reply that such matters are considered each year at budget time, when the Government decides what advances it will make in social services.

page 477

QUESTION

WHEAT

Senator LAUGHT:
SOUTH AUSTRALIA

– I direct to the Minister representing the Minister for Primary Industry a question in relation to the new international wheat agreement which appears to have been negotiated in Geneva recently. Will the negotiations result in an agreement of benefit, in the short term and in the long term, first, to the Australian wheatgrower, and secondly, to the Australian consumer? When will the agreement commence to operate and for what term will it operate? Have any terms of major importance to Australia, which Australian negotiators sought to have included, been excluded from the agreement? If so, what are they?

Senator WADE:
CP

– I am quite sure that the international wheat agreement that has just been concluded will be of great benefit to the Australian wheatgrowing industry. The existence of a wheat agreement lends great support to our stabilization plan. The stabilization plan does not necessarily hinge on a world agreement, but it does receive from an agreement the stability which is so necessary to the industry. The new agreement will commence on 1st July, 1962, and will have a duration of three years. I am not aware of any major changes that were sought by Australian interests and were refused, but the Australian Government has contended for many years now that the Australian wheatgrower, the Australian taxpayer and the Australian people, should not be called upon to supply wheat cheaply to importing countries which are well able to afford payable prices or economic prices for the product. The fact that the minimum price is to be increased by 12i pence indicates that the Australian voice was heard on this occasion.

page 477

QUESTION

SUPERANNUATION

Senator HENDRICKSON:
VICTORIA

– I direct to the Minister representing the Treasurer a question which relates to the Superannuation Act and its application to former contributors, particularly those in the low salary ranges, the majority of whom are debarred from obtaining social service benefits. Now that the New South Wales Government has decided that, in its superannuation scheme, the value of all units shall be increased to £1, will the Commonwealth Government consider following this most commendable lead?

Senator PALTRIDGE:
LP

– The question obviously has policy implications. To answer it would require a good deal of research, and a specialized knowledge of the act which I myself have not. If the honorable senator will put the question on the notice-paper, I shall see what information I can get for him.

page 477

QUESTION

TELEVISION

Senator MARRIOTT:
TASMANIA

– My question, which is directed to the Minister representing the Postmaster-General, refers to the early commencement of television services in Canberra and in other areas outside State capital cities. Has any publicity been given to the channel on which Canberra’s first television station will operate? Is it a fact that television sets from Melbourne and Sydney are being sold to Canberra residents, and that at least some of them may not be able to obtain the picture telecast when the station commences operations? Will the Postmaster-General’s Department make every effort in the future to publicize widely the channels on which new television stations are to operate and so protect purchasers against buying sets which will prove to be useless in the particular area?

Senator WADE:
CP

– The question is of great public interest to the people of Canberra. Technical knowledge, with which I am not furnished, is needed in order to reply. If the honorable senator places his question on the notice-paper, it will be answered adequately by the PostmasterGeneral.

page 478

QUESTION

AIRPORT FACILITIES

Senator WRIGHT:

– I address to the Minister for Civil Aviation a question relating to recent press controversy in southern Tasmania in which it was implied that the Minister had made proposals for the establishment of a liquor bar at the Hobart airport which were unacceptable to the Premier of Tasmania. I ask the Minister whether the legislation under which such bars are established requires strict compliance with State legislation and whether there is any proposal on the part of the Minister to establish a bar otherwise.

Senator PALTRIDGE:
LP

– It is true that I made certain proposals to the appropriate Tasmanian Minister in respect of the establishment of a cocktail lounge of a type which has’ been introduced at major airports in Australia. The honorable senator will be aware that there is one at Sydney and that more recently there has been established at Melbourne what I hope he will agree with me is a very fine lounge.

As I said, I made these proposals to the State Minister. We discussed by way of correspondence certain matters about which the State Minister sought assurances. I gave him the assurances that he sought. Unfortunately - I am expressing my own point of view, not his - he wrote to me only yesterday saying that the Tasmanian Government, apparently upon reconsideration of the matter, thought that the establishment of this facility at the Hobart airport was unnecessary. That will cause me to reconsider the whole matter. I regret the move. 1 suspect that Bass Strait, which was not wide enough to prevent the migration of the Sirex wasp from Tasmania to the mainland, also has not been wide enough to prevent a certain mainland infection from reaching Tasmania. There is provision in the act to the effect that any licence granted at an airport shall correspond as nearly as possible with a comparable type of State licence. I repeat that the matter will now require closer and quite new consideration in the light of this situation. I have not yet had time to give it that consideration.

page 478

PERSONAL EXPLANATION

The PRESIDENT:

– Is leave granted?

Senator Spooner:

– No.

Senator Dittmer:

– Cannot the word of the Government be taken? You agreed to this course and withdrew approval only just before 3 o’clock.

Senator Spooner:

– You may raise the matter during the debate on the adjournment.

Senator Dittmer:

– You agreed that I should refer to the matter by seeking leave.

page 478

REGULATIONS AND ORDINANCES COMMITTEE

The PRESIDENT:

– I have to inform the Senate that I have received letters from the Leader of the Government in the Senate nominating Senators Laught, McKellar, Wood and Wright, and from the Leader of the Opposition in the Senate nominating Senators Arnold, Sandford and Willesee to be members of the Standing Committee on Regulations and Ordinances.

Senator Spooner:

– I ask for leave to submit a motion for the appointment of a Standing Committee on Regulations and Ordinances.

The PRESIDENT:

– Is leave granted?

Senator Dittmer:

– No.

page 478

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION (REBATE) 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:
Minister for Civil Aviation · Western Australia · LP

– I move -

That the bill be now read a second time.

By this bill, effect will be given to the Government’s decision to provide a rebate of 5 per cent of the personal income tax and social services contribution payable on incomes derived during the 1961-62 income year. The rebate will have the effect of increasing, by approximately £30,000,000, the disposable income available in the hands of the community during the last four months of the present financial year. Additional purchasing power will be available to salary and wage earners during that period by reason of the reduced tax instalment deductions that have been in operation from the beginning of this month. In order that amounts deducted from salaries and wages over the balance of this financial year may reflect the full amount of the 5 per cent, rebate, the instalments now being deducted will be approximately 15 per cent, less than those deducted during the first eight months of the financial year.

The rebate will also be reflected in provisional tax payments in respect of 1961-62 incomes, and the Senate will be asked to approve a separate measure authorizing the appropriate adjustment of provisional tax.

While the disposable incomes of taxpayers will be increased by £30,000,000 during the current financial year, the estimated cost to revenue up to 30th June next will be £25,000,000. The difference of £5,000,000 will occur because tax instalments deducted by group employers in one month are not payable to the Commissioner of Taxation until the following month. The tax instalments deducted by those employers during next June will take into account the 5 per cent, rebate, but the effect of the rebate will be felt by the revenue next financial year when the July remittances for instalments deducted during June will be £5,000,000 less than if the rebate of 5 per cent had not been allowed.

I should mention to honorable senators that the bill will require the rebate to be based upon the amount of tax payable before any other rebate or credit is allowed. This provision will ensure that the value to taxpayers of other rebates and credits to which they maye be entitled - for example, the rebate of 2s. for each £1 of Commonwealth loan interest included in taxable income - is not diminished.

Debate (on motion by Senator Cant) adjourned.

page 479

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION (PROVISIONAL TAX) BILL 1962

Bill received from the House of Representatives.

Standing Orders suspended.

Motion (by Senator Paltridge) proposed -

That the bill be now read a first time.

Senator DITTMER:
Queensland

– Mr. President, I wish to raise certain matters that affect the reliability of a certain section of the press. I speak under some stress, but I hope that I may approach this matter dispassionately. I have been under attack for longer than a week by Queensland newspapers, particularly the “Courier-Mail” and the “Sunday Mail”, and a journalist named Harold Cox. I have sought the advice of the Clerk of the Senate and his assistant. They agreed with me that a report recently published in the “ Sunday Mail “ was in bad faith and a breach of privilege. The Clerk and his assistant agreed that the persons responsible for the report, especially Harold Cox, should be called to the bar of the Senate, charged, and an answer sought to justify their actions. The gentlemen whose advice I have obtained are probably the two most outstanding living authorities on Australian Senate practice. However, I was persuaded not to proceed with a formal motion of privilege for various reasons, one of which was an effort to preserve harmony between the Parliament and the press.

I have repeatedly said that almost all working journalists are decent people who endeavour to present a factual report without bias or favour. But there are exceptions. We all know there are exceptions. Generally speaking, newspaper chiefsofstaff are responsible people. Many subeditors are responsible people. Some editors are responsible persons and some of the people who control newspapers are responsible persons. Nevertheless, many people associated with newspapers have no sense of responsibility to the Parliament, to parliamentarians and even to the people. They are not seised of a sense of responsibility - a responsibility entrusted to them to convey to the public a factual report, without fear or bias, of events that happen. These people - often malevolent and malicious - plead for the liberty of the press, which they invariably use in order to practise license.

On Tuesday, 6th March, I made certain remarks. Later, 1 sought and obtained the approval of the Leader of the Government in the Senate (Senator Spooner) to make a statement in relation to those remarks, but almost at the beginning of this sitting that approval was withdrawn. Members of the Australian Democratic Labour Party agreed that I should be allowed to make a statement. The traditional practice of the Senate has been to grant leave to make a statement to honorable senators who feel aggrieved and who feel that they are justified in making a statement or a personal explanation.

It is alleged that there is a private war on in Queensland at the present time. I had not intended to refer to the argument that has developed between Mr. Ernie Evans, the State Minister for Mines and Development, and myself through the columns of the “ Courier-Mail “, and I shall refer only briefly to it, more particularly as it affects the “ Courier-Mail “. That newspaper has readily made its columns available to Mr. Evans, and it hesitantly made them available to me on one occasion. It took that newspaper three days to publish my reply to Mr. Evans, which appeared yesterday, and I am informed that to-day it published an attack by Mr. Evans - apparently a master purveyor of red herrings, according to the report I got - but I shall not deal with it in detail because 1 have not seen to-day’s “ Courier-Mail “. However, as regards this particular issue I was advised as recently as this morning by a senior member of the staff of the University of Queensland that many of the people are incensed that there should be mendadacity and gross distortion, or at least irresponsibility associated with the reports.

On the night of Tuesday, 6th March, I was the concluding speaker in the Senate, and I spoke about oil. L had not intended to make this political, and I do not intend to do so, if at all possible, but I have to refer in some measure to politics because in my preliminary remarks I spoke of the difference between Labour’s approach to the exploration for oil and the Government’s relatively dilatory approach. I spoke of the brilliant, coldly analytical approach of the Leader of the Opposition (Senator McKenna) on many occasions when he outlined the absolute necessity for finding oil in Australia. As Leader of the Labour Party in the Senate he would naturally be speaking on behalf of the Labour Party and would be really capable of enunciating its policy. I subsequently deplored the large percentage of ownership that is now vested in the hands of overseas interests. It could ultimately amount to this: It would not matter what amount of foreign exchange Australia could save by not importing crude oil, if the oil companies saw fit not to exploit our wealth - if there is sufficient oil to justify commercial extraction - and tied it up with their international arrangements, to suit themselves, seeking to take oil out of those countries that are relatively insecure and preserving their assets - fixed assets, one might say - in a country that has people who by and large, and certainly on this side, arc not repudiationists. I made this purely factual, academic statement -

I am not a lawyer, but I have been advised by lawyers that, if the overseas interests decided not to produce oil in Australia from wells which contain commercial quantities, the government of the day would be quite justified in nationalizing the wells.

I never mentioned the Labour Party in relation to this, and our opponents on the opposite side were always, up to 9th December, 1961, confident in their forecasting that they would remain in control of the treasury bench at Canberra. I said that in those circumstances the government of the day would be quite justified in nationalizing the wells. Why? “ In order,” I said, “ to be prepared for a state of war and to facilitate mobilization of transport “. Every decent Australian whom I have met since 1 made that statement has agreed with me, and any Liberal government that did not do it if those circumstances eventuated would deserve to be thrown out of the Parliament at Canberra.

Following that, the “ Courier-Mail “ the next morning, Wednesday, 7th March, said, “ Nationalization of oil forecast “. That is all right. I do not quarrel with that, but there was an evil significance to be drawn from it. By and large over the years the syndicated press, or the more irresponsible section of it, has made of Australian readers a group of head-line readers and photolookers. It seeks to convey an evil significance through head-lines. However, I am not going to quarrel about that. The article continued -

He (Senator Dittmer) forecast in the Senate that if the Labor Party was elected and overseas interests continued to own the bulk of the shares in Australian oil, the oil industry would be nationalised.

You have just heard, Mr. President and honorable senators, what I really did say. I said nothing of the sort recorded in the “ Courier Mail “. I do not propose to delay the Senate with all that was said. These reports are available and if any honorable senator wants them to be tabled so that he may checkthem to see whether I am leaving out anything that may not be applicable or that may be against me or my party, he is quite at liberty to ask for the documents to be tabled. The newspaper report continued -

Irrespective of the Labor Party’s lack of desire to interfere, if overseas interests said they were not going to produce oil in Australia out of wells that represented commercial deposits, there was no way that the Government would not be justified in nationalising the industry.

That is not quite correct, either, because I stated certain conditions - to establish a state of preparedness for war and to mobilize transport in the event of war. This is what happened the next day, Thursday. The newspaper permitted Mr. Ernie Evans to launch an attack on me saying, in effect, that he was surprised and astonished that a man of Dr. Dittmer’s experience should make such an astounding statement. I want you to bear in mind, Mr. President and honorable senators, that when I replied to the “ Courier-Mail “ on Friday afternoon after arriving in Brisbane, I had not seen this sub-leader in that newspaper.

They continued the vendetta. And it is a vendetta by the “ Courier Mail “, because as recently as a few months ago when I addressed the Australian Workers

Union conferenceI spoke of the industries with which that union’s members were concerned.I was speaking of the possible effects of the United Kingdom joining the European Economic Community and said that it did appear that the wool and meat industries were not in imminent danger, though the lowering of prices of synthetic fibres might constitute some measure of danger, or menace, to the wool industry. The “ Courier Mail “ reported that I said that the wool and meat industries were in imminent danger, which was distinctly the opposite of what I said. I could not get a contradiction published in the “ Courier Mail “, even though I made my letters to the editor short and, as always, courteous. Further, I checked the shorthand notes, which are always taken at A.W.U. conferences, and they bore out my recollection of what I said, which was in direct conflict with what the “ Courier Mail “ recorded.

I said, further, that with the increase in mechanization and increasing unemployment that would therefore come about, there would be decreased costs and a desertion of the coastal towns of Queensland, and it would be difficult to sustain the price of sugar. The “ Courier Mail “ published exactly the opposite. It said that, with the increase in mechanization it would be difficult to justify a reduction in the price of sugar. I could not get a contradiction of that report published, either, though it was in direct conflict with what I said and sought to convey that I did not know what I was speaking about. The “ Courier Mail “ in its sub-leader of Friday, 9th March, said - “ How not to get oil “: -

  1. . Senator Dittmer has a strange notion about getting it. He has said, in effect, “ Come and be nationalised.” . . . What is done with any oil found in Queensland will notbe determined by Senator Dittmer or even by the Federal Labor Party.

In reply to the first article I telephoned the “Courier Mail”. I did not get the most responsible officer there. Public opinion, is, by and large, that he is the man who has been responsible for the vendetta for many years. I am not responsible for it. The allegation by other people is that he is responsible for it. I rang the newspaper, and a reporter was sent round to my office. I showed him a copy of “ Hansard “, and I gave him a statement. This was on Friday afternoon. As I have already said, I had not then seen the sub-leader I have mentioned. Referring to the statement, I asked the reporter, “Is that brief enough? Is it appropriate?” He said, “Yes”.

The statement did not appear in either the Saturday or the Monday issue. I contacted my solicitors, Messrs. Gordon and Massey, about what had appeared in the “ Courier-Mail “ and in the “ Sunday Mail “. I was then in possession of a copy of the “ Sunday Mail “. After contacting my solicitors, I rang the “ Courier-Mail “ and said, “ You did not publish the statement I gave you on Friday last “. The person to whom I spoke replied, “ No, it was crowded out “. I said, “ It did not appear on Monday, and I know you are always looking for news on a Monday “. In fact, they are often looking for filling - not news - for a Monday issue, because usually it is not factual news which they print then. 1 told the person to whom I was speaking that the statement had not appeared. I do not know whether my tones were persuasive or menacing, in view of the fact that I had contacted my solicitor, but the statement appeared in Tuesday’s issue. It appeared under the heading “ Senator Replies “. However, in order to vitiate any possible protection for me, the newspaper published an article above it with a large heading, “ No big oil search if Labour in, says Nicklin “. Mr. Nicklin happens to be the Premier of Queensland, and every one, including myself, would concede that he is more accepted as the person responsible for controlling the destinies of Queensland than I am.

Senator Wright:

– Hear, hear!

Senator DITTMER:

– I am not saying he has more ability. No sensible person would concede that.

Senator Wright:

– Leave others to judge that.

Senator DITTMER:

– I am under a bit of stress at present, so give me a go. I do not mind battling it out at any time with honorable senators opposite. If they want, to make it a battle now, they can come right in. The effect of publishing the article I have mentioned’ was to belittle my reply.

There are two daily newspapers published in Brisbane. I have no quarrel with one of them, the “ Telegraph “, which is owned by Queensland Newspapers Proprietary Limited. There is also the “ Courier-Mail “, with which I have dealt. Then there are the “ Sunday Mail” and the Sunday “Truth”. I take this opportunity of thanking “ Truth “ for its factual reporting. It at least has a sense of responsibility and of decent journalism. The person who wrote the article which appeared in “ Truth “ had a look at “ Hansard “ before he wrote the article. “ Truth “ came out on Sunday with a heading, “ Oil speech twisted. Senator is saved by Hansard” The article stated -

Sunday Truth, Queensland’s independent newspaper, today gives the lie to a campaign designed to embarrass the Australian Labor Party over the Queensland oil find.

Victim of the campaign is Queensland’s Senator Felix Dittmer, accused last week of having revived Labour’s “ bogey “ of nationalisation.

This newspaper then actually printed what

I had said.

Senator Wright:

– What did it say you had said?

Senator DITTMER:

– It said -

What he said was this: “ I am not a lawyer, but I have been advised by lawyers that if the overseas interests-

I have already read the “ Hansard “ report. Does the honorable senator want me to read it again?

Senator Wright:

– Not if it is the quotation from “ Hansard “.

Senator DITTMER:

– It is a quotation, and is printed in inverted commas and black type. The newspaper said* this also -

Oil and other top business groups were equally annoyed. They accused Senator Dittmer of frightening the investing market.

None of these critics can be blamed for their alarm.

That is the inference to be drawn from what was written in that rag, the “ CourierMail “. As recently as to-day, the “ Courier-Mail “ prompted Mr. Evans to launch an attack on me. If the newspaper follows its previous practice, it will be extremely difficult - almost impossible - for me to make a suitable reply. As I have said, I sincerly thank and express my appreciation of “ Truth “ for doing the decent thing in journalism - for looking at “ Hansard “ and publishing an article which, in some measure, undid the damage done by the “Sunday Mail” and “CourierMail “. Its circulation is increasing, and justifiably so, much to the annoyance of those who control the rival newspaper.

The article in the “ Sunday Mail “ appeared under the name of Harold Cox. 1 do not know him. Speaking from memory, I do not think I have ever met him. Harold Cox is a journalist of long standing. I understand that he has been the president of the Press Gallery in Canberra. That should have inculcated in him a sense of decency and responsibility. He has a responsibility to other journalists, particularly those younger and less experienced, to inculcate in them a sense of responsibility. I am sure that when I read this article, honorable senators opposite, whilst they may not agree openly with me, will agree in their hearts and minds that there is no epithet too offensive, no word too low and no phrase too vile to apply to those responsible for the publication of this article. I do not intend to go wandering into the realm of dirt, nor to indulge in muck-raking. I propose to deal with these articles as they concern me. I do not propose to go into a great speech on the malevolence of the press and its machinations. I do not propose to go into the question of there being vested more and more in fewer and fewer hands the control of mass propaganda media which influence the opinions of the people and affect the protection of their rights and the destiny of the nation. Every one knows that the control of propaganda, whether it be disseminated by newspapers, by sound over the radio, or by sight and sound over television, it is becoming more and more, for worse and worse, vested in the hands of fewer and fewer.

On Sunday, 11th March, an article was published in the “ Sunday Mail “ under the name of Harold Cox. I take it that the Harold Cox I have mentioned and the Harold Cox who wrote this article are identical. The article was headed “ Harold Cox’s Canberra Comment “.

Senator Kennelly:

– I can tell you who knows him well - the Prime Minister.

Senator DITTMER:

– The Prime Minister had a conflict with him, and I imagine he dealt with him ably enough. I believe that was some years ago. Other parliamentarians, in turn, should take him on. Harold Cox writes a weekly column for the “ Sunday Mail “, and has done so for years. He did not see fit to include what he had to say about me in his column. He put it in a special frame. I should like you, Mr. President, and other honorable senators to have a look at the article. As you can see, special prominence was given to the offensive phrase which, in the opinion of two outstanding authorities on Australian Senate practice, constituted a breach of privilege, in that it was a case of reporting in bad faith. The word “ silly “ is printed in letters twice as large as those used in the other words. The whole phrase, “ How silly can you get? “, is in large black letters. The article stated -

Nothing could do more to restrain and limit the progress of Queensland than talk such as Senator Felix Dittmer (Labour, Queensland) indulged in last week.

He told the Senate on Thursday-

I did not make a speech on Thursday. I spoke on Tuesday. I did make a few interjections on Thursday, but I made no speech on that day. I certainly did not speak or interject about oil. The article reads -

He told the Senate on Thursday the nationalization of the dawning Australian oil industry was a project high on Labour’s programme.

I did not say anything of the sort -

The oil strikes have brought Queensland to the edge of the biggest forward move in its history.

There is nothing to quarrel about in that -

For twenty years it has been notorious that one of the biggest of all deterrents to the overseas investment that Australia so badly needs is fear of nationalization policies, which the Labour Party preaches.

The anti-Labour parties have been in control of the treasury bench for more than twelve years now. Yet he talks about the menace of Labour’s nationalization programme.

Senator Maher:

– You spoke on two days - Tuesday and Wednesday.

Senator DITTMER:

– Yes, but I did not mention oil and I did not speak on Thursday. I am dealing with the reference to Thursday. That is what I condemn. The article continued -

A great deal more overseas capital than has ever yet been received will be needed if Queensland is to fulfill its future.

I have no quarrel with that -

Senator Dittmer based his nationally damaging statement on the odd presumption that if oil is proved in commercial quantities in Australia, “ overseas interests “ will promptly seal the wells.

I did not say that at all. 1 did not presume that they would do that. It might not suit them commercially. If it did not suit them commercially, they certainly would not seal the wells, but they might not exploit them to their full capacity if that was not justified commercially or if, for example, they were in danger of losing their assets in less secure lands, particularly in the Middle East. Most people justifiably, and not necessarily because of the Government in power, have a high regard for Australians. They respect Australians’ integrity, honesty and desire not to be repudiationists. So, the overseas interests would realize that their assets here were secure.

Those are the statements that were made. Alongside that article was a photograph of a man. I do not think I have seen that photograph before. Somebody must have rummaged through all the photographs that the newspaper had of me. I will not say that it was not published previously, but I do not think it could have been. It is a photograph of a man standing with his face and shoulders showing, his arms upstretched, his fists clenched, his upper lip curled up and his lower jaw thrust forward. In other words, it is a picture of a stand-over man. That is what it would seek to convey. We have to take photographs in relation to the environmental circumstances. The inference to be drawn here is that of a standover man entrusted with political authority, who will take property from those people who own it. I am certain that that photograph was taken when I was addressing a street-corner meeting and sincerely emphasizing a point in the interests of the people. But, of course, when taken out of its true context and its correct environment and placed elsewhere, it conveys a different meaning altogether.

The only interpretation that we can place on this matter is that I have been subjected to vilification. An endeavour has been made to hold me up to ridicule and an attempt has been made to destroy or diminish the chances of my political party. I had intended to rise and ask leave of the Senate to make a statement simply because I, like other decent people, was incensed at this mendacious and irresponsible journalism; but, for some reason, the Government, after having agreed, saw fit not to permit me to do that. So, I have taken this opportunity. I do not regret having taken up the time of honorable senators on this matter because each and every one of them, in the process of time, may be subjected to such vilification and be held up to similar ridicule. Despite the desires, machinations and irresponsibility of the press and Harold Cox, I doubt whether this article has impaired the high opinion held of me by most people in Queensland.

In summing up, I say that I intended to rise previously not only in an endeavour to protect myself for the sake of my family and myself, but also in an endeavour to protect and preserve the rights and privileges of senators. If this Harold Cox is identical with the man who wrote previous articles, he has tried previously to decry many parliamentarians. He has railed against their privileges. He has railed against anything reasonable that they have obtained. Either he is one of the greatest malevolent distorters of fact of whom I have ever heard, or he is an idiotic journalist. In a man who has held such high positions, particularly in Canberra, and who has been in journalism for so long and has been held in high regard for many years, I cannot understand these habits. Perhaps he is under direction; I would not know. It is amazing just how such people can proceed. Even to-day I will take this matter further, if I so desire. In the process of time I will seek my opportunity, and the Leader of the Government in the Senate will then have to take special measures if he wants to stop me from dealing with the matter.

In relation to the “ Hansard “ report, which is vitally concerned with these statements that I am making, this morning’s “ Courier Mail “ implied that I had doctored my “ Hansard “ proofs. The “ Hansard “ staff knows that I alter them very rarely. In fact, I read them very rarely because I have such confidence in the “Hansard” staff. If I make a mistake when speaking and the “ Hansard ** staff has reported me correctly, I will not correct that mistake. I must accept the responsibility if I make a wrong statement in this chamber. I hope that I will always be man enough to accept that responsibility. Incidentally, for the information of honorable senators and yourself, Mr. President, I have here the “ Hansard “ proof of that particular speech and 1 have not made one alteration on it. The whole of it is here and available for perusal by any honorable senator. There is no alteration at all.

Summing up the position, I say that 1 would be recreant if I did not thank the “ Truth “, its editor, its staff and the particular journalist who was interested enough and responsible enough to look up “ Hansard “ and then write a factual report. I would also be recreant to my responsibility to myself and fellow senators if I did not condemn the “ Courier-Mail “, the “ Sunday Mail “, the article, the setting up of it and Harold Cox. I agree with the Clerk and the Assistant Clerk that the people responsible have committed a breach of privilege and that they should be brought to the bar of the Senate to give senators at least the opportunity to either acquit them or convict them. I think that that would have been much better, in their own interests. It also would have been better for honorable senators. I would not have been bitter if, say, honorable senators had found them not guilty. Personally, I would have found them guilty, but the point is that that was my opinion before I came down. It is still my opinion and it has been confirmed by the authorities. Other people may disagree - other senators, more particularly - and they are entitled to do so.

This incident shows, Sir, the necessity to set up a privileges committee in the Senate such as that which exists in the House of Representatives, so that I or any other senator who felt aggrieved, or who considered that the privileges of the Senate had been abused or the rights and privileges of senators infringed, would have the right to appeal to the committee. I have no hesitation in saying that the references I have mentioned are some of the most outstanding examples of irresponsible journalism that I have ever read. They are vicious. If Harold Cox is not mendacious, then he is at least irresponsible, and the best that can be said for him is that he is grossly careless.

Senator WRIGHT:
Tasmania

.- Senator Dittmer has taken advantage of the Standing Orders to give expression, while taxation bills are before the Senate, to a complaint that he has been misrepresented by the newspapers in regard to a debate in which he engaged in this chamber last week. In making his remarks he enjoyed the traditional and historical freedom of speech that British parliaments have established as essential for the parliamentary representatives of the people in discussing public affairs and, if necessary, in defending their integrity. But, Mr. President, an honorable senator would be recreant to that tradition if he stood in this place and irresponsibly used words of abuse that were not in every syllable justified by the facts, because nobody brings this Parliament into greater contempt than the man who stands here and exercises his historical privilege of freedom of speech to refer to people outside, without justification, as mendacious, low, contemptible and idiotic. An honorable senator who makes use of those expressions without justification deserves the censure of every responsible member of this House.

The complaint that Senator Dittmer makes is that Queensland newspapers have stated that the substance of his speech last week was that if a federal Labour government came into power the oil industries of this Commonwealth could expect the government to nationalize them should overseas interests induce those concerned not to produce oil from the wells. That is a statement which is justified by a proper reading of the record. Senator Dittmer does his case no credit by putting his complaint before this chamber and purposefully suppressing his introductory statements to the one part of the record that he quoted. It is plainly to be understood from the record of his speech in “ Hansard “, by all those who run and read, that what Senator Dittmer was saying was that we could expect, if the trend shown in the South Australian and New South Wales elections was continued, that a Labour government would come to power in Canberra in the near future. He went on to say that if and when Labour was returned to the treasury bench, oil was one product with which there would be no tinkering, irrespective of the absence of any desire “ on our part “ - that of the Australian Labour Party - to interfere with the actions or wishes of other people.

Senator Dittmer then went on to say that he was not a lawyer - he confessed that - but that fact notwithstanding, he had been advised by lawyers that if the overseas interests decided not to produce oil in Australia from wells which contained commercial quantities, the government of the day would be quite justified in nationalizing the wells. So, Mr. President, you have the statement On the record, the unquestioned record, taken down by faithful shorthand recorders as senators speak.

Senator Armstrong:

– Why not read it all and be faithful, too?

Senator WRIGHT:

– Senator Armstrong has just come in and, fortified no doubt in his absence, he wants me to go back over the earlier part of my speech, and that is what 1 intend to do. I shall read the whole passage. I will then make my points, and Senator Armstrong can make his comments in due course if he wishes. Senator Dittmer stated -

If we are to take cognizance of the results of last Saturday’s elections in New South Wales and South Australia, it does seem inevitable that Labour will be returned to the treasury bench in the near future-

That means in the federal sphere, does it not? It means that the Australian Labour Party will be in office here in Canberra in the near future, does it not? The very next words used by the honorable senator were -

But if and when Labour is returned to the treasury bench, oil is one product with which there will be no tinkering, irrespective of the absence of any desire on our part-

I interpret that to mean, on the part of the Australian Labour Party - to interfere with the actions or wishes of other people.

Senator Dittmer went on to say ;

I am not a lawyer, but I have been advised by lawyers that, if the overseas interests decided not to produce oil in Australia from wells which contain commercial quantities, the government of the day would be quite justified in nationalizing the wells in order to be prepared for a state of war and to facilitate mobilization of transport.

In response to Senator Armstrong’s request, 1 have read the whole passage.

Senator Armstrong:

– Well, make your comments now.

Senator WRIGHT:

– I am about to make my comments and to submit them to intelligent judgment. The first thing that Senator Dittmer was saying was that if the trend shown in the elections in New South Wales and South Australia could be taken as a guide, the Australian Labour Party would be returned to power in the federal sphere in the near future. He then went on to say that if and when Labour was returned to the treasury bench, oil would be one product with which there would be no question of tinkering. Then he made himself doubly plain by saying that he had been advised by lawyers that the government of the day would be quite justified in nationalizing the wells. Now, I say: How silly can you get? We have from the other side the proposition that Senator Dittmer is claiming there to refer to the government of the day and to speak for a Liberal Party government in suggesting the nationalization of oil wells. How silly can they get when they try to put that over the Australian Parliament or people? The fact is that Senator Dittmer allows his thoughts to effervesce here, and some of his colleagues, mindful of the urgency of not allowing the Australian people really to get an insight into Labour’s nationalization policy, flinch from those words that he spoke in the debate here last week. But the record confirms indisputably that what he was saying was that when the Australian Labour Party came to government in Canberra in the near future, there was one product - that is. oil - with which the Labour Party would not hesitate to interfere, one product with which the Labour Party would not hesitate to tinker.

Senator O’Byrne:

– You are reading what Cox said, which is quite incorrect.

Senator WRIGHT:

– The substance of what Mr. Cox wrote, as it was read in the chamber this afternoon, was indisputably justified on the record of the speech. Senator Dittmer said -

  1. . the government of the day-

That is, the Labour government that was to come to power in the near future - . . would be quite justified in nationalizing the wells-

Senator Dittmer:

– What was the end of that sentence?

Senator WRIGHT:

– I ask you, and especially Senator Dittmer: How silly can you get7

Senator McKENNA:
Leader of the Opposition · Tasmania

– Senator Dittmer has very properly taken an opportunity to direct attention to what has been, in the view that I take, a grievous misreporting of his statement in this place. There can be no doubt about the fact that it was a grievous misreport. The Senate has had placed before it, both by Senator Dittmer and, even more fully, by Senator Wright, exactly what Senator Dittmer did say. We are advised by the honorable senator that there was no alteration to his proof. I was present when he spoke on Tuesday of last week, and I remember well the words that he used.

Senator Wright, just now, in commenting upon the words uttered by Senator Dittmer, sought to make some capital out of the fact that Senator Dittmer said -

But if and when Labour is returned to the treasury bench, oil is one product with which there will be no tinkering . . .

Senator Wright did not emphasize the words that immediately followed that.

Senator Wright:

– Yes, I did.

Senator McKENNA:

– You did not emphasize them. You read them, of course. Senator Dittmer said -

  1. . irrespective of the absence of any desire on our part-

That is, on the part of the Labour Party - to interfere with the actions or wishes of other people.

The very negation of confiscation is expressed in those words. Then he went on to say that he was not a lawyer, but that he had been advised by lawyers - it is very important to notice this condition -

  1. . that, if the overseas interests decided not to produce oil in Australia from wells which contain commercial quantities, the government of the day would be quite justified in nationalizing the wells in order to be prepared for a state of war and to facilitate mobilization of transport.

There is no argument but that that is what the honorable senator said. Let us look at what the “ Courier-Mail “ had to say. First of all, there is the heading in big letters on 7th March, “ Nationalization of Oil Forecast “. That is a distortion. That is untrue. Then -

A senator forecast last night <he possibility of nationalization of Australia’s oil industry. He is Senator Dittmer (Labour, Queensland). He forecast in the Senate-

Now we come to the condition that the newspaper postulated - that if the Labour Party was elected-

The honorable senator did not say that.

Senator Wright:

– He said that it would come to power, he thought, in the near future.

Senator McKENNA:

– This puts it far more directly, and gives it an entirely different connotation from that which the honorable senator gave it. The newspaper article reads -

  1. . that H the Labour Party was elected and overseas interests continued to own the bulk of the shares in Australian oil . . .

The honorable senator never even posed that thought at all. He said -

  1. . if the overseas interests decided not to produce oil in Australia from wells which contain commercial quantities . . .

He made not the slightest reference to the ownership of the shares in the companies controlling the oil wells. That is a complete distortion, misstatement and misquotation of what the honorable senator did say.

Senator O’Byrne:

– False and misleading.

Senator McKENNA:

– It is false and misleading. I do not know how the newspaper ever reached the stage where it could publish that as a true presentation of what the honorable senator said. On the face of it, it is completely incorrect. Of course, the heading, “ Nationalization of Oil Forecast “, grows out of the incorrect statement. It presents a thoroughly false picture, and it puts the honorable senator in a completely false light.

Next we come, in the “ Courier-Mail “ of 11th March, under the signature “Harold Cox” to the heading, “How silly can you get?” That is a most insulting heading again. It continues -

Nothing could do more to restrain and limit the progress of Queensland than talk such as Senator Felix Dittmer (Labour, Qld.) indulged in last week. He told the Senate on Thursday–

That is an untruth. He did not speak on Thursday; he spoke on the Tuesday.

Senator Wright:

– What rubbish!

Senator McKENNA:

– It shows how careless they are with facts. The article reads -

He told the Senate on Thursday the nationalization of the dawning Australian oil industry was a project high on Labour’s programme.

What a fanciful commentary that was on what Senator Dittmer said! He said nothing like that at all, and the whole article is based upon that distortion.

They are the two main complaints by Senator Dittmer. The third, of course, is that on Friday he presented to the “ Courier-Mail “ an exact statement of what in fact he did say and a refutation of the article. The “ Courier-Mail “ did not see fit to give him an opportunity to have his statement published on Saturday, nor on Monday, and only after he had made reference to a consultation with his solicitors did his explanation appear on Tuesday.

I think it is completely clear that the honorable senator has been very badly dealt with. There is the gross misstatement, first, in the “ Courier-Mail “; and, secondly, an equally gross, though different misstatement under the signature, “ Harold Cox “. Thirdly, there is the refusal of the “ Courier-Mail “ to publish his explanation and correction for three long days afterwards. I should say that the honorable senator, in expressing himself here to-day, has been moderate. He would have been quite entitled to submit a motion alleging breach of privilege when his speech was so twisted and distorted. I think that he showed very great restraint in every way in confining himself to strictures upon the “ Courier-Mail “ and the article-writer who wrote under the caption, “How silly can you get?” I think that he has been grievously abused. He is entitled to resent it in the terms that he has employed. I certainly do not join with Senator Wright in taking Senator Dittmer to task for the terms that he used in resenting what was grievous ill-treatment. If I had been subjected to it, I might have been even more forthright and forceful in expressing my view of it. This is the type of thing that does newspapers no credit. It certainly does not indicate respect for the Senate.

To-day it is a Labor senator who is put in this embarrassing situation by a grievous misreporting of what he said; but to-morrow it may be any other honorable senator. I put it to every member of the Senate that Senator Dittmer’s position today may well be his or hers to-morrow. It behoves us to take a good deal of notice of what Senator Dittmer has said. I hope that out of this incident at least there will come an apology from the people who have offended. That is the very least that can be done in decency. Now that the matter has been ventilated and cleared and errors have been clearly shown, I hope those concerned will make amends by doing the honorable and decent thing. I hope they will acknowledge their error and make an apology in public to the honorable senator.

Senator MAHER:
Queensland

– Mr. President, I find it rather difficult to understand how Senator Dittmer has got himself into such a flurry with the press-. When all is said and done, all of us who are in political life thrive on criticism; it is the one thing that makes the Parliament tick. If there were no harsh, vigorous and severe criticism out in the open, many things would be hidden away.

Senator Dittmer:

– I do not mind criticism, as long as it is fair.

The PRESIDENT:

– Order!

Senator MAHER:

– A democratic senator should be the last to create such a storm against the press because it has entered into a vigorous criticism of what he said and the implications thereof. The implications of what Senator Dittmer had to say were dangerous. No matter how guarded and how qualified a reference to nationalization of the oil industry is stated it is a highly dangerous exercise. I am surprised that a member of parliament of Senator Dittmer’s long experience in Queensland and here should make such an error of judgment.

All of us have to bear up under the burden of very severe public criticism from time to time. The Leader of the Government in the Senate (Senator Spooner) has had to take his share, and so has the Leader of the Opposition (Senator McKenna). They accept that as part of the day’s work and do not get stirred up in the way that I regret Senator Dittmer has on this occasion.

The honorable senator complains about the nature of the criticism. I point out that the very suggestion of nationalization concerns him particularly, because the Australian Labour Party is so deeply involved in policies for the nationalization of industry that any reference by a member of the Parliament to the nationalization of oil wells could cause investors in Australia at this period of time to take fright and to button up because they fear that some future government - the threat is present in the speech delivered by the honorable senator - might step in and natonalize their investments.

That is particularly true of investors from the United States of America who have been subjected to the nationalization of oil wells in certain countries, notably Hungary. In Hungary, without any compensation whatsoever, the Communists just took over the whole of the Americans’ investment and confiscated the oil wells they had developed and the great business undertakings they had established. Having had those experiences, Americans are very sensitive to anything said by an Australian senator. As we all know, in America a senator ranks very highly in the public estimation; he is looked upon as being a sober-minded, responsible citizen and ‘ does not make foolish statements. For Americans here to read a statement by a senator of the Commonwealth in which it is implied that in certain circumstances the oil wells of this country could be nationalized by another government is not helpful to the search for oil in Australia.

That fear could be held not only by American investors but also by our own investors in Australia who might ask, “ What is the use of investing our money in the search for oil here if, with a change of government, we would have the threat of nationalization hanging over us? “ The fact that Labour is committed to these policies of socialization - it stands for the nationalization of banking and believes in democratic socialism, which means that by degrees all industry is to be taken over by the State - does not make a very good impression upon our own Australian investors.

After listening to the very effective speech that was delivered by Senator Wright, anything I have to say will not gild the lily. But let me point out the threat that Senator Dittmer’s words convey to us all. The honorable senator said -

I am not a lawyer, but I have been advised by lawyers that, if the overseas interests-

The interests in a friendly country which applied their techniques and threw their money into the search for oil, and which opened up for Australia the prospect of great riches - decided not to produce oil in Australia from wells which contained commercial quantities, the government of the day would be quite justified in nationalizing the wells in order to be prepared for a state of war and to facilitate mobilization of transport.

Why make such a statement? Do honorable senators think that, if this country were involved in war, the Commonwealth and the various States could not take the requisite action to command the use of oil? Would any oil company be so stupid as to shut down the production of oil when the country was involved in war, or indeed at any other stage in times of peace? After investing its money in the search for oil, finding it and getting into commercial production, where would be the sense in a company shutting down the well in order to serve some interest in another part of the world in which it may have investments? There would be no point in doing that.

As I understand the situation, in Queensland the State Government issues licences to the companies concerned in the search for oil. If oil is discovered, the State Government can withdraw those licences if there is a sufficiently important reason to warrant such drastic action. Power lies in the hands of the Queensland Government to deal with any recalcitrant company that has invested in oil in that State. There is not the slightest doubt that in the circumstances mentioned by Senator Dittmer, that is in time of war, with the need for the mobilization of transport, the Commonwealth and the State governments would command the necessary power to deal with the situation. Why then should there be this threat of nationalization? It is on this point that the honorable senator has left his flank wide open to the severest criticism by those who stand for the preservation of the national interest. This threat of the nationalization of oil wells could frighten investors, particularly Americans who are not used to conditions here, into believing that in the future they might have to suffer the confiscation of their property just as they had to suffer the confiscation of their property in Communist countries. That threat is the great danger in the very foolish speech delivered last week by Senator Dittmer. Only a consciousness that he blundered badly has caused him to become disturbed at the nature of the criticism that his remarks have attracted. He now appreciates that he went too far, said more than he should have said and created concern amongst the Australian people.

When Senator Dittmer rose to speak this afternoon I thought he would take the opportunity to clarify what he said last Week by completely repudiating any suggestion of confiscation or nationalization of oil wells in this country. If he had made a clean breast of the matter and said: “ I made an error; I am prepared to repudiate any thought of nationalization of the oil wells “, I would have had a forgiving spirit, but he did not make any such declaration. Accordingly he earns my criticism as well as that delivered against him by Senator Wright.

Senator SPOONER:
New South WalesVicePresident of the Executive Council and Minister for National Development · LP

– I acknowledge the courtesy of Senator Armstrong in allowing me to rise at this stage. I have an urgent appointment to keep outside the chamber.

Senator Hendrickson:

– You must wish that you had given Senator Dittmer leave to make a statement.

Senator SPOONER:

– That is the point that I want to refer to now. Senator Dittmer claimed that I had gone back on an arrangement made with him. The fact of the matter is that I discovered to-day that the circumstances surrounding this matter were quite different from those that I understood to exist yesterday. When I spoke to Senator McKenna yesterday I did not know that there was considerable opposition to Senator Dittmer’s point of view on this matter. I thought that this was simply a case of an honorable senator making a statement, and that there the matter would rest. We all have heard the opposition to Senator Dittmer’s statement, and I am sure that everybody agrees that to have dealt with this matter by way of a personal explanation would have been most inappropriate. We now know that four or five honorable senators would have been obliged to ask for leave to make a statement in reply to the one made by Senator Dittmer. Yesterday, I did not know the full circumstances surrounding this matter, and I was not in a position to let Senator McKenna know my views to-day until the bells were ringing for the meeting of the Senate. If I had known all the facts earlier I would have been in touch earlier with Senator McKenna. When I became aware of the opposition that had developed in relation to this matter I did not have time to communicate with Senator McKenna. I think everybody will agree that to deal with this matter by way of personal explanation would not be appropriate. The more appropriate way would be to raise the matter on the motion for the adjournment of the Senate. Frankly, if I had been as quick off the mark as was Senator McKenna, I, too, would have realized that this matter could be dealt with on the motion for the first reading of this income tax bill. It did not seem right to me for this matter to be dealt with by senator after senator asking for leave to make a statement.

Senator Kennelly:

– Did you know that Senator Maher would speak on this matter?

Senator SPOONER:

– Yes, I knew that other honorable senators wished to speak. I have a feeling that still other honorable senators will speak. I think Senator Armstrong wants to speak. I do not want to be accused of a lack of bona fides. The only point I make is that the circumstances that have been unfolded to me to-day differ from the circumstances as I knew them yesterday. I have not even read the newspaper reports.

Senator Hendrickson:

– You will agree that Senator Dittmer was right.

Senator SPOONER:

– I agree that the honorable senator should have an opportunity to state his point of view. I agree that other honorable senators should have opportunities to state contrary points of view. My only purpose in speaking now is to ensure that the Senate does not think harshly of me for holding the view that the way in which it was proposed to deal with this matter yesterday was not in accordance with usual Senate practice and procedure in view of the facts that have become known to me to-day.

Senator ARMSTRONG (New South Wales) [4.5 lj. - Senator Maher’s remarks were completely inapplicable to the issue raised by Senator Dittmer. The issue here is not an objection because an honorable senator has been criticized. The objection is that an honorable senator has been deliberately misrepresented. I agree that all of us must be prepared to take criticism. The Leader of the Government (Senator Spooner) and the Leader of the Opposition (Senator McK.er.na) are at times criticized in the newspapers. Newspaper criticism is part of the hurly-burly of a politician’s life. I do not think any honorable senator complains about newspaper criticism. It is accepted as part of his life. He knows that yesterday’s newspaper is the hardest thing in the world to find. Senator Dittmer did not complain about being criticized. The complaint here is that Senator Dittmer was blatantly misrepresented, and that that misrepresentation must have been known to th epersons responsible because of the close affiliation of the Brisbane newspapers. The “ Courier-Mail “ printed in detail an extract from “ Hansard “ that had been made available by Senator Dittmer. But in printing that “ Hansard “ extract the “ Courier-Mail “ placed it in the letterpress in such a manner that it had very little value at all. The headlines to the article dealt with the original charges of nationalization and beneath them was printed an apology to Senator Dittmer. As I have said, because of the manner in which the article was set out in the newspaper, the “ Hansard “ extract was of very little value. No credit is due to the proprietors of the “ CourierMail “ for the manner in which they published the exact statements ‘ made by Senator Dittmer.

Senator Maher has suggested that even to talk about nationalization was an error of judgment on Senator Dittmer’s part. Apparently, in Senator Maher’s eyes, it is a crime even to think about nationalization. “ Nationalization “ has become a dirty word. This Government and its supporters are anxious to publicize any reference to nationalization in the hope that the people will forget for a brief half-hour the thorough maladministration of the Go vernment, the lack of employment and the crippling of industries throughout the Commonwealth. This is a diversionary tactic. No reasonable men, not even the American investing capitalists who have been referred to, could take objection to what Senator Dittmer said and button up because of his remarks. Senator Dittmer said in the Senate on Tuesday of last week - . . if the overseas interests decided not to produce oil in Australia from wells which contain commercial quantities, the government of the day would be quite justified in nationalizing the wells. . . .

In other words, if the interests that find commercial oil in Australia decide, for their own purposes, not to produce oil, what should the Queensland Government or the Commonwealth Government do? Should we sit back and do nothing? I will deal later with Senator Wright, who is interjecting now. His speech was the most dishonest advocacy that I have ever heard in this Senate. If the commercial interests which have found oil decide not to produce it, who decides that the oil shall be produced? Surely that is a decision of government. There is not one man in a hundred in the community who, after reading that statement, would not completely agree with what Senator Dittmer said. Yet Government senators are frightened that they will button up and fly away, and that the investment will disappear. Do not worry about that. You can see what is happening in Australia to-day - they are anxious indeed to invest in oil in Australia; they have the smell of commercial oil, and the profit from commercial oil will go to those who invest.

Senator Maher:

– If there is a threat of nationalization they will button up.

Senator ARMSTRONG:

– Would you suggest that the oil industry should not be nationalized under the conditions to which Senator Dittmer has pointed? - It has happened in other parts of the world. I would say that what Senator Dittmer has said is normal. It is a problem that has been faced in many other parts of the world. Those interests from overseas that are drilling for oil in Australia - and I hope they find it in commercial quantities - would be in the1 most favorable position to extract oil, from a profit point of view, from other countries in the world. We know the circumstances under which drilling for oil and its exploitation are allowed throughout the Middle East. The country of origin takes up to 60 per cent, of the profit before the oil is allowed to go out of the country. That might not be nationalization, but it becomes a bit of a play on terms when a country takes 60 per cent, and leaves 40 per cent, for the company to set up its tremendous edifices, to drill and to export, and yet maintain a very high profit.

I was rather sorry for Senator Maher in his approach to this matter, lt showed almost that he had been beaten into the ground by years of what he calls this type of press criticism. He feels apparently that a senator is a big man in America, but a senator in Australia is also a big man if he stands up for what he believes and in the electorate that returned him to this place. But he is not a big man in Australia if he allows the press to misrepresent him deliberately and does not lift his voice in anger against it. That is when he becomes a small man. Although the press of this country is powerful and effective, while senators stand up and fight back the standard and the status of senators will be upheld. Senator Maher said that Senator Dittmer should have made a clean breast of it, in which case he, Senator Maher, would have been back on his side.

I would say, just to finalize this position, that 1 was amazed listening to Senator Wright. He must have repeated this thing about nationalization four or five times before he could bear to bring himself to complete all of the quotation of the honorable senator from Queensland. That statement goes on to say - . . if the overseas interests decided not to produce oil in Australia from wells which contain commercial quantities, the government of the day would be quite justified in nationalizing the wells in order to be prepared for a stale of war and to facilitate mobilizaton of transport.

Do you think Senator Wright would willingly come to that? There he was, with all the evidence in front of him, making a case by trying to suppress the most important part of the evidence. The Bar Council would not be very proud of you to-day, senator, and as a member of the Opposition here I have never heard such a dishonest advocacy of a case such as I heard from you this afternoon.

Senator Wright:

– Mr. President, the honorable senator is not entitled to make offensive imputations against me, and I ask for an unequivocal withdrawal of his state.ment that my advocacy was dishonest.

The ACTING DEPUTY PRESIDENT (Senator McKellar). - Order! Senator Armstrong, you will make a withdrawal. I was about to call on you to withdraw.

Senator ARMSTRONG:

– I will not make a withdrawal, Sir. What I said was that this was a case placed in a dishonest fashion; and there is not a senator here who will not agree with that. There is no reason for withdrawal, and I will not withdraw.

The ACTING DEPUTY PRESIDENT.

Order! I ask you again, Senator Armstrong, to withdraw.

Senator ARMSTRONG:

– I shall not withdraw. There is nothing to withdraw.

The ACTING DEPUTY PRESIDENT. - I have no option, Senator Armstrong, if you refuse to obey the order of the Chair, but to name you. I ask you again, for the third time, Senator Armstrong, to obey the Chair and to withdraw.

Senator ARMSTRONG:

- Sir, I said that the case made by Senator Wright was a dishonest case. I cannot withdraw that.

The ACTING DEPUTY PRESIDENT. - Order! I name the honorable senator.

Senator Paltridge:

– Mr. President, under Standing Order No. 440, I call on Senator Armstrong to make an explanation of his conduct.

Senator ARMSTRONG:

– The explanation of my conduct is, Sir, that you, with me, heard the case made by Senator Wright. Senator Dittmer had said that a Labour government would be out to nationalize the oil industry in Australia. Senator Dittmer said nothing of the kind. Senator Dittmer completely and clearly qualified what he said, and it was only after interjection by me, repeated to Senator Wright, that Senator Wright finally read the concluding item of Senator Dittmer’s statement, which clearly showed that what Senator Dittmer had said was not what Senator Wright imputed to him. So, arising from that, Senator Wright, who has been trained all his life in the use of evidence, deliberately misapplied the evidence in front of him to such a degree that in my opinion he made a dishonest case in attacking Senator Dittmer.

Motion (by Senator Paltridge) put -

That Senator Armstrong be suspended from the sitting of the Senate.

The Senate divided. (The President - Senator The Hon. Sir Alister McMullin.)

AYES: 31

NOES: 25

Majority . . . . 6

AYES

NOES

Question so resolved in the affirmative. (Senator Armstrong thereupon withdrew from the chamber.)

Senator SCOTT:
Western Australia

– I rise in this debate because I believe that, if the “ Hansard “ report of what Senator Dittmer said is correct, his statement could have a grave effect on the oil exploration industry of Australia. There is no doubt in my mind that the newspapers of Queensland, which took up the statement made by Senator Dittmer, were fairly accurate in saying that he believed that the oil industry in Australia would be nationalized after certain events occurred. I want to be quite fair to Senator Dittmer, so I shall read the report of his statement. It is to be found at page 364 of “ Hansard “ for 6th March. Speaking on the motion for the adoption of the Address-in-Reply to the Governor-General’s Speech, Senator Dittmer said -

I am a modest person. I simply postulate conditions. If we are to take cognizance of the results of last Saturday’s elections in New South Wales and South Australia, it does seem inevitable that Labour will be returned to the treasury bench in the near future. But if and when Labour is returned to the treasury bench, oil is one product with which there will be no tinkering -

Senator Tangney:

– What is wrong with that?

Senator SCOTT:

– I shall read on and deal with that interjection in a moment. The honorable senator continued - irrespective of the absence of any desire on our part to interfere with the actions or wishes of other people. I am not a lawyer, but I have been advised by lawyers that, if the overseas interests decided not to produce oil in Australia from wells which contain commercial quantities, the government of the day would be quite justified in nationalizing the wells in order to be prepared for a state of war and to facilitate mobilization of transport.

I am reading Senator Dittmer’s speech word for word; I am not tinkering at it. He went on -

I repeat that the Government has been remiss in not taking a much greater interest in the production of oil.

The word “ tinkering “, in the context in which it is used, simply means that the Australian Labour Party would not stand for any private interest in the oil industry. It would, in its own way, go out and search for oil and then nationalize the oil wells of Australia at the first convenient opportunity. You have only to look at the nationalization policy of the Labour Party. It goes back to 1921. The Australian Labour Party said that its policy was the nationalization of production, distribution and exchange.

Senator Branson:

– The party has no such policy now, according to the policy speech of its leader at the last election.

Senator SCOTT:

– That is still Labour’s policy, but, in order to play it down, the leader of the party promised, in his policy speech to the electors of Australia, that if his party was returned to office it would not nationalize anything in Australia within a period of three years.

Senator Ormonde:

– Fair enough.

Senator SCOTT:

– That was fair enough, but the nationalization policy was bashed at us in the Senate on 6th March by Senator Dittmer, who said, in effect, that it would not be long before the Labour Party became the government, and that when it became the government it would not stand for any tinkering at the oil industry. At the end of the paragraph I have quoted, the honorable senator said -

I repeat that the Government has been remiss in not taking a much greater interest in the production of oil.

That is, in the production of oil in Australia. In view of that statement by the honorable senator, I think we should consider what this Government has been doing to help in the search for oil in Australia. It is doing ten or twenty times as much as the Australian Labour Party ever thought of doing. Speaking off the cuff, I would say that at this moment, for every £1 that is spent on the search for oil in Australia, between 10s. and 15s. is found by the Government, by way of tax concessions to companies that wish to explore for oil and by way of drilling subsidies on a £1 for £1 basis. I would say that this Government cannot go any further. According to Senator Dittmer, the Labour Party would not stand for any tinkering at the oil industry and would go further than this Government has gone. I suggest that, to go further, it would have to nationalize the oil industry. It is that to which Senator Dittmer referred in his speech, on Tuesday, 6th March.

No doubt he does object to the comments on his statement in the press. Probably the reason why he objects is that pressure has been brought to bear on him by his colleagues within his party. They have, no doubt, said to him, “ We are trying to play down nationalization, and here you are, bringing it out into the open. The press has got hold of your statement and publicized it throughout the length and breadth of Queensland. That will lose us thousands of votes. You should not get us into a position where the press can tell the truth about our policy.” Honorable senators opposite can try to refute what I am saying if they care to do so. If nationalization is hot the policy of the Labour Party, why wa9 it that the leader of the party, in his policy speech at the recent election said, in effect, “ If you elect us, we will promise you that within the next three years we will not nationalize anything in Australia “?

Senator Dittmer has let the cat out of the bag. I believe that it is quite right that the press should report correctly the proceedings of this chamber. The press report, as far as I have read it, is not completely inaccurate. The article in the “ Sunday Mail “ under the heading “ How silly can you get? “ was reported to have been written by Mr. Harold Cox. The article mentioned that the nationalization of oil is high in Labour’s list.’ ‘ It must be. I do not say that Labour will go back on its word. I would not say that for a moment. I do not believe that Mr. Calwell, the parliamentary leader of the Australian Labour Party, for whom I have the utmost respect, would do that. I alsohave the utmost respect for members of the Labour Party. I say in sincerity that if Mr. Calwell said - he did say this in his policy speech - that the Labour Party, if it were elected as the government, would not nationalize anything for a period of three years, that promise would be honored by the Labour Party. 1 do not doubt that for a moment.

Senator Gorton:

– I do.

Senator SCOTT:

– The Minister doubts it. However, I would trust the Labour Party as far as that is concerned. But Senator Dittmer rose in his place in this chamber in the debate on the AddressinReply to the Governor-General’s Speech and stated that the Labour Party no longer would tinker at the oil industry, but would get straight into it and have a go itself.

The reason why I am particularly perturbed by the “ Hansard “ report of Senator Dittmer’s speech is that we have now found oil at the Moonie No. 1 and the Moonie No. 2 wells. We have found oil in what I believe - the Government does not believe this at the moment - will later prove to be commercial quantities. Over the years we have endeavoured to attract capital from overseas countries to help us in the gigantic search for oil that is taking place over vast areas of this continent. But what happens? Various statements are made in the Senate. One statement was made previously by a member of the Opposition, but I will not mention it because it is not relevant. On this occasion this type of stuff is thrown up which, if publicized overseas, no doubt would stop the flow of capital to Australia to help us in the vital search for this important commodity.

We have seen what has happened in overseas countries. We have seen what has happened to American capital, for instance, in Cuba where the oil refining companies have been taken over by the Cuban Government. A lot of money has been lost there and in the Middle East. Senator Armstrong said that companies operating in the Middle East are almost nationalized at the moment. So, if the people who have money to invest want to invest it in countries that are free and politically free from nationalization, the mere mention of that word by a prominent member of the Opposition will frighten that money away from the search for oil in Australia. The Government has done everything that is humanly possible to encourage capital from overseas to come into the search for oil.

We must remember that the States have their rights. They allocate the leases. I understand that they receive a royalty of 10 per cent, on all the oil that is found. There are big profits to be made by the States and a big profit for Australia in its balance of payments - namely, a saving of about £130,000,000 a year. That could be stopped by the statement of an irresponsible senator, I believe, when he says that the Labour Party would take steps, under certain conditions, to nationalize the Australian oil industry. I believe that is most unfortunate.

I also believe that the newspapers have been right in highlighting the honorable senator’s speech. If we make speeches in the Senate, they should be publicized. We are always saying that we do not receive enough publicity. In this instance the honorable senator is receiving a little publicity and he is taking exception to it because, I believe, inadvertently he let the cat out of the bag. He has gone back to the Labour Party’s old policy which he thinks is safe and in which he really believes. I suggest that he believes that we should have more nationalization, particularly of important Australian industries. Therefore, Sir, I have much pleasure in supporting my colleagues, Senator Wright and Senator Maher, in the statements that they have made on this important subject.

Senator KENNELLY:
Victoria

– This debate arose from a press report. Some of us have various ways of dealing with the press; but when a senator takes objection to a report and believes that he has been wilfully misreported, I think he has justification for bringing the case to the notice of the Senate. I, like Senator Armstrong, was amazed at the case submitted by one who should have known better. God has given some people more academic brains than He has given to others. God has also given those people the opportunity to develop those brains. Unfortunately, seemingly, the honorable senator forgot the third point, namely, to be a little bit honest in the case that is submitted.

Senator Wright:

– Mr. President, it is obvious that the honorable senator is making a reference to me and is asserting that my case, as submitted, lacked honesty. I ask the honorable senator to withdraw that implication.

The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! The honorable senator will withdraw that expression.

Senator KENNELLY:

– Mr. President, if the honorable senator who has just risen, Senator Wright, is so good a judge that, without my mentioning his name when saying that he put up a dishonest case, he takes objection to my statement, all that I can say is that, as I mentioned no name at all, I shall withdraw.

Senator Wright:

– Mr. President, I submit that that is not a withdrawal. The honorable senator is imputing that my objection is prompted by my own conscience and that I am so good a judge as to know that I put up a dishonest case. I ask that that imputation be withdrawn unequivocally.

Senator O’BYRNE:
TASMANIA · ALP

– He did not mention your name. He might not have meant you.

Senator Wright:

– The suggestion made by Senator Kennelly and echoed by his Whip is that he did not mention a name, but some of us are gifted with a little intelligence, and judgment can be used. An indirect implication by innuendo is just as much within the Standing Orders as a direct statement.

The PRESIDENT:

– Order! The point of order is not upheld. I call Senator Kennelly.

Senator KENNELLY:

– I believe that a person who is gifted with training should at least read the full passage in its context. I personally may take a different view of what the press says about me, and plenty has been said over the years. However, when some one takes exception to a press report, it ill becomes a person not to read the full text of the statement.

Senator Wright:

– I read the full statement.

Senator KENNELLY:

– Wait a minute. I will make my speech in my own way, and I will not walk out.

Senator Wright:

– As long as you make it fairly-

The PRESIDENT:

– Order!

Senator KENNELLY:

– What Senator Dittmer said has been read and re-read. It was certainly read by Senator Wright, after Senator Armstrong had asked for the whole of the passage to be read. The fact is that Senator Dittmer said that if certain events took place-that is what it means - and the people who owned the oil would not permit oil to be produced, and if this country were in a state of war, something ought to be done about it.

Senator Wright:

– He referred to the coming to power of a Labour government.

Senator KENNELLY:

– I do not want you to be so frightened about that.

The PRESIDENT:

– Order! Senator Kennelly, if you address your remarks to me it will be better.

Senator KENNELLY:

– I shall have great pleasure in addressing my remarks to you, Mr. President. I take objection, on behalf of Senator Dittmer, because it amazes me to see honorable senators on the Government side rally to the cause of one Cox. I remember an occasion in this House when they did not rally to his cause - when, in another place, he was designated a liar by the Prime Minister (Mr. Menzies). Honorable senators opposite did not rush to his defence then. Just as he was wrong then, so he is wrong now. That is the point.

Senator Wright:

– What kind of logic is that?

Senator KENNELLY:

– It is not logic to one who is so eminent in other spheres as Senator Wright is, but of course, the honorable senator sees fit at times only to go a certain way in reading from what was actually said, in order to base an argument.

Is a person to be maligned and not have the opportunity to protest? Should we not object when others, for purely political reasons, rush to the defence of the press after a person has been maligned by it? I took the word of the Minister leading the Government in this chamber for the reason why he had changed his mind. I asked him whether he knew there were to be a lot of speakers. Oh yes, he knew. I still took his word, but in the meantime I saw the Whip of the party go up and have a word with Senator Maher. I saw Senator Wright go over and have a word with the Deputy Leader of the Government (Senator Paltridge), and I saw the Whip also have a word with Senator Scott, who has just spoken. Yet, being as I am, and not wishing ever to deny a man’s word, I still took the word of the Leader of the Government (Senator Spooner) for the reason why a promise that was made could not be upheld.

Senator Henty:

– You can still take his word. You need not worry about that.

Senator KENNELLY:

– I say that I am still accepting it, but one is allowed to say that it is remarkable at times how things dovetail. I do not know what was said to other people outside this chamber about this matter coming up. No one knew except one member of this House that the matter would be raised by the method by which it was raised.

Senator Kendall:

– We certainly did not know.

Senator KENNELLY:

– I know you did not.

Senator Wright:

– How can you say that?

Senator KENNELLY:

– Because I think that no one would be foolish enough to deny, at one moment, the right of a senator to bring a matter up, knowing full well that he would be able to state his case within a couple of minutes, on the motion that a bill be read a first time. To judge by your last interjection, I sometimes give you more credit than you deserve, because even you would not have denied Senator Dittmer the right to make a statement.

Senator Wright:

– Talk to the President. He may understand you.

Senator KENNELLY:

– Yes. I know that you will not. It is remarkable, from my point of view, that the position arose as it did.

I say that it is wrong for the newspapers to malign members of the Parliament as they do. If there is one thing lacking in this country it is competition in the means by which the news is sent out to the people of the nation, whether it is the press, the radio or television. In the main, those mediums are controlled by about four men. While they demand freedom, all they practise is licence. If a person is hurt by the press in the way in which Senator Dittmer has been hurt, he should have the right to raise the matter in the Parliament. I see nothing at all wrong with what he said. He was referring to circumstances in which certain conditions were operating. I should be surprised if the present Government, if it was in office at a time when such conditions were operating, did not take steps to see that the nation had oil. Of course it would, whether it did so in the way that Senator Dittmer spoke about or whether it commandeered oil under war-time powers. It certainly would not leave the nation without oil.

Senator Scott implied that Senator Dittmer had let the cat out of the bag. We have no cat to let out. In any event, if there ever was a bag, it was not tied. We stated quite honestly, during the recent general election campaign, the policy of this party.

Senator Henty:

– But it was tied for three years, was it not?

Senator KENNELLY:

– No, it was not. The Government honoured an obligation, which I believe it bore, and appointed a committee to consider constitutional reform. That committee deliberated for some time and produced recommendations that were unanimous on almost all the questions with which it was concerned. This party wants the Government to give effect to the recommendations of the committee because we believe that if the Government does so, a great step forward will be taken in the interests of the people.

The time may well come when an honorable senator on the Government side of the chamber feels aggrieved by something that the press has published, and I hope that if that time arrives, the honorable senator concerned will have a perfect right to state his case here.

Senator Wright:

– Each case depends on its merits.

Senator KENNELLY:

– As I have said, if an honorable senator on the opposite side of the chamber believes that he has been unfairly treated - particularly in a press report, because of the huge ramifications of the press - I hope that other honorable senators opposite will get up and protest. I admit that that is not likely to happen, because in the main the supporters of the Government are prepared to be the lackeys of the press and to do what it wants. If that were not so, they would not be here. Therefore, perhaps, there is very little chance of an honorable senator opposite being placed in the position in which Senator Dittmer now finds himself. Nevertheless, I am delighted that ways and means were found to permit him to state his case in the Senate.

Senator TOOHEY:
South Australia

– I enter this debate because in the Senate this afternoon we have witnessed something which I hope we shall not witness on any occasion in the future. We have been dealing with a situation wherein a member of the Senate of the Australian Commonwealth considers that he has been grossly misreported in the press, and has brought the circumstances to the notice of the Senate. Instead of dealing with the question of whether or not there has been misrepresentation, the Government, I regret to say, has seen fit to make a political issue of the situation. In so doing, it has set for the future a pattern which I fear may be followed by people who feel that they have been aggrieved by the attitude adopted by the Government this afternoon.

Let us recount some of the events that have occurred this afternoon in the Senate. First, Senator Dittmer sought an opportunity to make an explanation in regard to certain statements that have been made about him in the Queensland press. We were under the impression that an arrange* ment had been made between Senator Dittmer and the Leader of the Government in the Senate (Senator Spooner) that Senator Dittmer should have an opportunity to make an explanation. Apparently, the Leader of the Government - I feel that his explanation was a fair one - was caught in a situation wherein he could not honour the undertaking that he had given to Senator Dittmer. But the significant point is that the Leader of the Government was caught in that peculiar situation, without doubt and without question, because his colleagues on the Government side wanted to make a political issue of the matter. There was no doubt from the remarks of Senator Wright, who devoted himself almost entirely to the merits or demerits of nationalization, that he was not concerned in any way with whether Senator Dittmer had been grossly misreported.

Senator Wright:

– That is the only question to which I addressed myself.

Senator TOOHEY:

– If I mentioned your name, 1 am sorry. I substitute for it the name of Senator Scott, who was the senator I meant.

Senator Wright:

– If your mind was wandering, make clear what you did mean.

Senator TOOHEY:

– I was under the impression that I mentioned Senator Scott, not Senator Wright. I apologize to Senator Wright, and thank him for the remark that preceded the apology. Senator Scott, throughout his contribution to the debate, discussed the merits and demerits of nationalization, and said little about the real issue that ought to have been the concern of the Senate this afternoon - that is, whether or not Senator Dittmer had been grossly misreported by the press.

Senator Paltridge:

– He is entitled to speak on” any matter at all, relevant or irrelevant to the bill before the Senate.

Senator TOOHEY:

– That is quite true. All I am suggesting is that what he said was completely irrelevant. I do not in any way question his right to speak on any subject.

Senator Wright:

– Is it not pertinent to remind the public of the purpose of nationalization?

The PRESIDENT:

– Order!

Senator Cant:

– He has had his say. Throw him out. He would not be allowed to do that in court.

The PRESIDENT:

– Order! Honorable senators on both sides must maintain silence, and Senator Toohey will continue.

Senator TOOHEY:

– It is quite obvious that Senator Wright is upset. I think he realizes that he has, perhaps, trespassed on the temper of the Senate this afternoon. I want to make some reference to Senator Maher’s contribution, but before I do so we ought to have a look at the Government’s activities this afternoon. Senator Spooner said that he had discussed this matter with Government supporters and some of them had expressed a desire to speak. Why did they express a desire to speak? Were they concerned in any way with whether the prestige of the Senate had been assailed by the alleged misreporting of Senator Dittmer’s remarks, or were they concerned with making some political capital out of the situation? It is significant that Senator Maher indicated to the Leader of the Government that he wished to speak.

Senator Maher:

– Only at the last minute.

Senator TOOHEY:

– I see, only at the last minute.

The PRESIDENT:

– Order! Senator Toohey, if you address your remarks to me, you will be much better off.

Senator TOOHEY:

– I appreciate the fact, Mr. President. I am sorry. Senator Maher, only at the last minute, decided that he wanted to have something to say on the matter. The other Government supporters who spoke, I repeat, did little or nothing but deal with the merits or demerits of nationalization. They made only passing references to the real substance of what we ought to have been debating, that is, whether or not Senator Dittmer had been grossly misreported by the Brisbane press. Senator Maher, I think, said that we must be prepared to be criticized. That is a fair comment, provided the criticism is justified and has some relation to truth. I should like to ask Senator Maher, through you, Mr. President, when was the last time the press criticized him.

Senator Maher:

– Not very long ago.

Senator TOOHEY:

– I should be surprised if the press ever criticized the honorable senator, because one has to do something in this world to merit criticism. I am afraid that Senator Maher has not set the Thames on fire, and I do not think that the press would be very much concerned one way or the other about what his activities might be. I take the strongest exception to the course that the debate has run. If we are to debate an issue such as this purely to gain political capital, and if we are to disregard the question whether or not a senator has been misreported by the press, let us be honest and say that we shall not have any concern in the future for the forms and dignities of the Senate, because that is what it means.

Just as Senator Armstrong did, I want to go into the question of what Senator Dittmer actually did say. It is important that we should have a proper appreciation of what the senator said about oil. He did not, at any stage of his contribution to the debate - and “ Hansard “ proves it - say that either he or the Labour Party would nationalize oil in Australia. What he did say was - and Senator Maher agreed with the proposition - that in the event of certain things happening - for instance, if oil were discovered and overseas interests decided that it would not be used-

Senator Maher:

– A most remote, impossible happening, I should say.

Senator TOOHEY:

– Let us assume that it is a remotely possible happening. Let us assume that it is extremely unlikely. Surely no honorable senator is prevented from postulating a likely happening, or even an unlikely happening, and indicating what ought to be done in such an eventuality. If we are to be restricted to such a degree, we may as well give up debating altogether. The point I make is that at no stage of Senator Dittmer’s contribution - this is supported by “ Hansard “ - did he say that either he or the Labour Party believed that the oil of Australia should be nationalized. In the event of a certain remote circumstance, as Senator Maher wholeheartedly agreed, something would have to be done. It comes to a question of what would be done. Of necessity, government action would have to be taken. I think Senator Maher realizes that.

Senator Henty:

– You do not have to nationalize the industry.

Senator TOOHEY:

– What did Senator Maher mean? He said that something would have to be done. He must know, and the Minister must know, as we all know, that if anything were to be done, it would have to be on the government level, because no one else would have authority to do it.

Senator Maher:

– There is a difference between taking action like that and outright nationalization.

Senator TOOHEY:

– The honorable senator has already said that in that even tuality something would have to be done. He said, “We all know that”. That is what a Government supporter said. I do not know what he had in mind.

Sitting suspended from S.4S to 8 p.m.

Senator TOOHEY:

– When the sitting was suspended I was dealing with a statement by Senator Maher to the effect that, if the circumstances outlined by Senator Dittmer did occur - that is, if oil were found in this country but were not utilized - something drastic would have to be done. However, he did not say what should be done. I do not intend to pursue that matter further.

I wish to repeat what I said at the beginning of my speech because I think it is important enough to be re-stated. When a senator claims that he has been grossly misreported in the press, the Senate should concern itself solely with whether he has or has not been misreported.

Senator Wright:

– We shall deal with the issue on its merits.

Senator TOOHEY:

– Well, I will agree to that. I do not know what that interjection is supposed to prove, but I accept the suggestion that we should concern ourselves with debating the issue on its merits. If the Senate allows party politics to enter into the question, there will not be much hope in the future of a considered view being reached. Perhaps we all can learn something from what has happened this afternoon. Perhaps in the future we can all aim to divorce party political bias from our minds and deal with the matter in the sane and considered way in which it ought to be dealt with. At least this ought to be said about what has occurred: A statement was made which obviously was not a true portrayal of what a senator said in this place, and three days elapsed before the newspaper concerned was prepared to do anything about a retraction. Every honorable senator who is prepared to adopt a sane and considered view of the situation will say that such an attitude is not right, that this incident should not have occurred, and that it reflects little credit on the newspaper concerned.

We should bear in mind that the person under whose name the statement was made is rarely, if ever, seen in this chamber. The recording of statements made by honorable senators obviously is left to some other employee of the newspaper concerned and is relayed to the first party to whom I referred, who then becomes an authority on what was said in the Senate. That is a highly unsatisfactory state of affairs. Obviously, it contributed to the situation Which brought about this debate.

I say finally, Sir, that we would not want to see a repetition of what has happened in the Senate this afternoon. I repeat the hope that, when in the future we consider whether the press has dealt fairly with the proceedings of the Senate and treated individual members of it properly and fairly, we will look at the matter objectively and will try to divorce our minds from party politics. I hope that in the final analysis we will be able to arrive at a conclusion that is fair to the senator concerned and to the press.

Question resolved in the affirmative.

Bill read a first time.

Second Reading

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

– I move -

That the bill be now read a second time.

This bill is a companion measure to the bill proposing a rebate of 5 per cent, of the personal tax payable on incomes of the current year 1961-62. It contains provisions of a technical nature which are designed to authorize an appropriate reduction in the provisional tax payable in respect of the 1961-62 income year.

As the law now stands, the provisional tax payable in respect of income of the 1961-62 year is, in general, equal to the tax on income of the previous year, 1960- 61. A 5 per cent, rebate was not authorized for 1960-61, and ascertainment of provisional tax for 1961-62 on the basis of the existing law would not make allowance for the 5 per cent, rebate now proposed. The bill will enable the rebate to be taken into account in determining the 1961- 62 provisional tax.

Many notices of assessment showing provisional tax payable for 1961-62 had issued before the Government decided that a rebate of tax should be allowed, and in these cases the provisional tax was necessarily calculated without account being taken of the rebate. The bill will enable a reduction of the provisional tax to be made in these cases. In a small number of cases, provisional tax ascertained without allowance of the rebate has been paid and, when this bill becomes law, existing taxation provisions will authorize a refund of any excess payments made.

As honorable senators are aware, taxpayers may self-assess the provisional tax payable and the bill will enable the rebate of 5 per cent, to be reflected in the provisional tax of persons exercising this right to self-assess in respect of the 1-961-62 income year. I commend the bril to the Senate.

Debate (on motion by Senator Cant) adjourned.

page 500

STATES GRANTS 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:
Minister for Civil Aviation · Western Australia · LP

– =1 move -

That the bill be now read a second time.

The purpose of this bill is to amend the States Grants Act 1959 in order to give effect to certain decisions of the Government arising out of the recent Premiers Conference. In order to enable honorable senators to appreciate fully the circumstances giving rise to the proposed bill, I think it would be useful if I explained, as briefly as possible, the operation of the 1959 act.

The States Grants Act 1959 embodied the agreement which emerged from the Premiers Conference of June, 1959. That agreement substituted a system of financial assistance grants for the system of tax reimbursement grants then operating. In essence, the act provided for a specified financial assistance grant to be paid to each State in 1959-60, the first year of its opera, tion, and, in each year thereafter, a grant for each State to be ascertained by taking the grant paid to that State in the preceding year and varying it according to:

  1. The increase in population in the State during the preceding financial year; and
  2. The percentage increase, if any, in average wages for Australia as a whole during the preceding financial year.

In order to provide for some degree of improvement in the standards of services provided by State governments, the percentage increase, if any, in the average wages figure was to be increased by onetenth. This has become known as the betterment factor.

In order to make the position quite clear to honorable senators, it might be desirable if I sum up the operation of the act in the following way. The grant to be paid to, say, Victoria in the financial year 1961-62, is arrived at first by taking the amount paid to that State in 1960-61, dividing this amount by the population of Victoria at 1st July, 1960, and multiplying it by the population of Victoria at 1st July, 1961. The resulting sum is then increased by 1.1 times the percentage increase, if any, in the level of average wages for Australia as a whole during 1960-61.

For most years of its intended period of operation, the population figures used in calculating the grants would necessarily have to be those estimated by the statistician. The act provides, however, that in any year in which a census is taken, the population of a State as at 1st July of that year, for the purpose of the act, is to be the population as revealed by the latest census results available at the time when the calculation of the grant is made. It is laid down in the act that the grant payable in any financial year is to be determined by the statistician not later than 31st December of that financial year.

Since a State government must have some idea of the grant which it is to receive in a financial year before it can prepare its budget for that year, and since it is customary for revenue grants to be paid by the Commonwealth in the form of monthly advances from the commencement of the financial year, the statistician prepares a preliminary estimate of the grants in advance of the commencement of the year, usually during the preceding May or June. This estimate is, of course, based on the best estimates then available of likely movements in population and average wages for the year preceding the year in which the grant is payable. The final determination of the grants, which is made some six months or so later, normally varies only slightly from the preliminary estimate even though more accurate population and average wages figures are used. The monthly advances are, of course, adjusted to accord with the final determination.

Having outlined the procedures adopted in arriving at the amount of the grants, I now come to the purposes of this amendment. The amending bill has been drafted to give effect to two decisions reached at the recent Premiers Conference to take account of the results of the census conducted in June, 1961. It would, I think, be convenient to take these two aspects of the bill separately.

The first is dealt with in clause 3 of the bill and the schedule referred to in that clause, and provides for specified amounts to be paid to three States in addition to the grants payable to them in 1961-62 in accordance with the final determination made by the statistician in December last.

The reason for these additional payments is that the census of last year revealed the existence of substantial errors in the statistician’s estimates of the populations of some States during the inter.censal period, that is, between 1954, when the preceding census was taken, and 1961. As a result, the estimates of all State populations as at 1st July, 1961, on which the preliminary estimates of the grants for 1961-62 were based, proved to be greater or less than the figures based on the census and substantially so in the case of two States - Victoria and Queensland.

I should add here that there are very great difficulties in the way of accurate estimates of States populations between censuses. Although the statistician’s estimates of the population of Australia as a whole are remarkably accurate in inter.censal years, it is extremely difficult to record accurately all movements of people between States. The statistician has formulated plans for improving this aspect of the State population estimates, and we shall be seeking the co-operation of the States where necessary in that regard

The effect of the census results on the grants for 1961-62 would have been relatively minor had the 1959 act allowed the statistician, in determining the grants, to use census-revised estimates of populations at 1st July, 1960 in conjunction with the census results for 1st July, 1961. The movements in populations during 1960-61 estimated for use in ascertaining the preliminary estimates of grants in May, 1961, were not very different from the movements disclosed by combining the census results with census-revised estimates of State populations at 1st July, 1960.

The Commonwealth proposed to th-3 States at the Premiers’ Conference of June, 1961. that the act be amended to enable the statistician to use census-revised estimates of populations at 1st July, 1960, in his final determination of the grants for this year. Had this proposal been accepted, the grants as finally determined would not, for the reason I have already mentioned, have differed significantly from the preliminary estimates made in May, 1961, upon the basis of which States had framed their budgets for 1961-62.

We were not, however, able to secure the unanimous agreement of State governments to this course of action, and although some States, which originally opposed the suggestion, later changed their minds about it, there was never unanimity on the point. We did not feel justified in taking unilateral action, and the question was therefore deferred pending further discussions with the Premiers in the New Year.

When the statistician’s final determination of the grants was made in December last, the grant for Queensland proved to be £984,000 in excess of the preliminary estimate, while that for Victoria was £1,058,000 less than the preliminary estimate. Of the other States, both New South Wales and South Australia received more than the preliminary estimate, whilst Western Australia and Tasmania received less. These other four States were, however, affected to a much smaller extent than either Queensland or Victoria.

The Commonwealth Government could have proceeded to pay the grants as finally determined, in accordance with the act, and left it at that. We recognized, however, that to do so would have created difficulties for the three States whose grants would thereby have been reduced. In the current economic circumstances, and in view of the fact that the budgetary plans of these States had been based on the amounts represented by the preliminary estimates, we decided to pay them additional amounts which took into account the final figure for the increase in average wages during 1960-61. The additional amounts which resulted are those set out in the schedule to the bill. When added to the grants finally determined by the statistician, they represent a close approximation to the grants which these three States would have received had the 1961 census not been held. The remaining States - New South Wales, Queensland and South Australia - will of course be paid the higher grants finally determined in their case by the statistician.

I come now to the other aspect of the amending bill. This is contained in clause 4 of the bill, and provides that the amount which is to be regarded as the grant paid to Victoria in 1961-62, for the purpose of calculating the grant for that State in 1962-63, is to be £72,730,000. As I explained earlier, the grant paid to a State in any particular year forms the base amount used in calculating the grant for that State in the succeeding year.

We have felt it necessary, in view of the large amount by which the final determination of Victoria’s grant for the current year was affected as a result of the operation of the present act, to write into the base for the determination of its grant for 1962-63 some part of the difference involved. If that were not done, Victoria would be penalized as a result of the quite fortuitous errors in population estimates during the inter-censal period. It did not appear to us that Victoria could fairly expect the whole of the additional amount, as shown in the schedule, to be thus included in the base grant, and the Commonwealth therefore proposed a compromise which was accepted by the Premier of that State when it was put to him at the recent Premiers’ Conference.

The total amount which would be paid to Victoria this year, under the States Grants Act 1959, is £71,991,000. When the amount of £1,024,000 shown in the schedule to this act is added to that amount, the total amount which it is intended should be paid to Victoria this year is £73,015,000. The amount to be regarded as the grant payable to that State in 1961-62, for the purpose of calculating its grant in 1962-63 is, as I have said, £72,730,000. This last amount has been determined by calculating the grant which would have been payable to Victoria in 1961-62 had the population figures used in the calculation of its grants since the base year - 1959-60 - been revised on the basis of the recent census. That is, census-revised estimates of the Victorian population back to 1st July, 1959, have been applied to the 1959-60 base year amount to produce the amount given as being theoretically payable to that State in this financial year.

We conceived this as being justified, in the case of Victoria, because of the very large amount involved. To have paid merely an additional amount in this financial year and left it at that without adjusting the base amount under the legislation would have deprived Victoria of substantial amounts of the order of £1,000,000 in the remaining three years covered by the agreement.

In the case of the other two States, Western Australia and Tasmania, this action has not been taken, for two reasons. First, the amounts involved are much smaller. What is more important, however, since the budgets of these two States are the subject of annual review by the Commonwealth Grants Commission, there seemed to be little real purpose in adjusting the financial assistance grants to those States, because that would only serve to affect the level of the special grants payable to them. I commend the bill to honorable senators.

Debate (on motion by Senator McKenna) adjourned.

page 503

QUESTION

TARIFF BOARD

Report

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

– I lay on the table of the Senate a report by a deputy chairman of the Tariff Board on the question of whether temporary duties should be imposed on Taximeters.

page 503

COMMONWEALTH BANKS BILL 1962

Second Reading

Debate resumed from 13th March (vide page 451), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator TOOHEY:
South Australia

– This bill provides for an additional £5,000,000 capital for the Commonwealth

Development Bank, which is one of the arms of the Commonwealth Banking Corporation. The bank was created in January, 1960, and honorable senators are familiar with the manner in which it was created and are well aware of the circumstances. However, there are two things that we should recall in regard to the Development Bank, because they are important as the Senate will agree. The first is that it is a bank which departs very radically from the normal functions and processes of banking as we know them, inasmuch as assets are not the dominating factor in deciding whether an applicant should be advanced a loan. The process by which the Development Bank decides whether it will finance an applicant is concerned mainly with whether, in the opinion of the governor or the board of the bank, the business of the applicant is likely to succeed. Security is not a dominant factor. Because of that fact, the bank has a unique place in the economic structure of our country, the importance of which is not lost sight of by senators on either side.

The Opposition does not oppose this measure, but we feel that certain things should be said because of the importance of the operations and the functions of the bank, and because of certain events since similar legislation was last before the Senate. The other important thing we should recall is that when the bank was first formed it had a capital of approximately £16,000,000, which was the then capital of the old Mortgage Bank and the Industrial Finance Department of the Commonwealth Bank, both of which went out of existence when the Development Bank was formed. In October, 1961 - not so very long ago - a bill was before this chamber for the addition of £5,000,000 to the capital of the bank. That bill ultimately received the assent of the Senate and made the capital of the bank in the vicinity of £21,000,000. It is important that we should recount some of the things that were said in debate when this subject was last before the Senate in 1961. From my reading of extracts from “ Hansard “ I do not want it to be inferred that I suggest that all of the’ prophecies that have since been proved correct were made exclusively by the Opposition. I intend to read also from the speech of a member of the Government who concurred in the views which I expressed on that occasion. When I spoke to the bill on 24th October, 1961, I read the following newspaper report: -

Figures issued to-day by the Commonwealth Statistician, Mr. Carver, show that personal advances by the trading banks at the end of June comprised only 14 per cent, of the banks’ total advances.

A year earlier the figure was 16 per cent.

At the end of June last year the banks’ loans to home buyers and builders amounted to 9.3 per cent, of the total advances. This June they were 8.2 per cent.

I then said -

The bill that we are now discussing provides for an increase of £5,000,000 in the funds of the Commonwealth Development Bank. The Government is of the opinion that that increase of funds should meet requirements for the next twelve months. We of the Opposition do not accept that view. The article to which I have just referred - I think the views expressed in it are correct - shows that the banks are playing a much smaller role in personal advances than they did a decade ago. I am referring, of course, to the private trading banks. This means that the Development Bank must of necessity extend its activities if the gap is to be bridged. For this reason, and for other reasons, the Government should have trebled the amount that is being provided to the Development Bank under this bill, thus enabling the bank to fulfil the very real and very necessary function of expanding rural and secondary industry.

I made that statement in October, 1961 - less than six months ago - pointing out that it was the Opposition’s view that the £5,000,000 then provided by the Government would not meet the expanding requirements of the bank and the expanding needs of its customers, who are engaged mainly in rural activity. Though the functions of the Development Bank include helping people in small industrial undertakings, it deals mainly, because of certain restrictions in that field, with rural development. We of the Opposition were united in our contention that the £5,000,000 provided in 1961 was nowhere near enough to enable the Development Bank to carry out its functions properly. Our contention has been proved to be right. I said that we did not have an exclusive right to say that we were correct on that occasion. I recall that Senator Drake-Brockman, who followed me in the debate then, said -

I should like to have seen this increase of the bank’s capital raised to £10,000,000 or even £15,000,000. I should also like to have seen the scope of the bank made more elastic to enable it to help young men and women who take up land but who find they cannot get over the hump.

I concede quite readily that Senator DrakeBrockman was asking, as the members of the Opposition were asking, that the amount of £5,000,000 should be greatly increased. In fact, Opposition members and Senator Drake-Brockman advocated that the amount should be trebled. Now, less than six months later, the Government finds it necessary to do the very thing that we on this side of the chamber and, to be fair, some honorable senators on the Government side said should have been done. The Opposition is now making a plea to the Government to consider increasing the amount of £5,000,000 suggested in the present bill.

The contention that the £5,000,000 which was added to the bank’s capital in 1961 was unlikely to be sufficient for the bank’s needs was supported in the report dealing generally with the Commonwealth Banking Corporation and in the report dealing specifically with the Development Bank. In the general report, the corporation had this to say -

In order to enable the Development Bank to continue to carry out the functions laid down for it by Parliament, it will be necessary to augment its funds substantially.

That was written before the 1961 decision to add another £5,000,000 to the capital of the Development Bank. It is obvious that those who were in control of the Commonwealth Banking Corporation were aware that the Development Bank would have many calls upon its resources, and that it would need a considerable amount of finance if it was to meet the needs for which it was originally established.

When we look at the report dealing with the Development Bank itself, we find the contention made even more clearly that inadequate finance could very likely prove a restrictive embarrassment to the bank’s operation. I quote from the report as follows: -

The clear need to plan the Organization necessary to deal with the increasing requirements for assistance and service is fully recognized by the bank. Steps are being taken continuously to improve operating techniques in dealing with these day-to-day demands. At the same time, the need to plan for the necessary control and supervision of loans is not being overlooked as the volume and spread of the bank’s business increase.

Full use of the bank’s present resources is being made, and it is already clear that in the national interest the present resources will require to be augmented substantially.

Senator Paltridge:

– And they were.

Senator TOOHEY:

– They were augmented by £5,000,000 by the bill of 1961, but it was the contention of the Opposition, supported by at least one honorable senator opposite, if not by more, that that amount would not be sufficient to meet the expanding needs of the bank. That has been proved to be so, because six months later the Government finds it necessary to come back to the Senate with a bill to increase the capital of the bank by another £5,000,000. Surely we should not restrict this bank’s activities by placing it in the position that it will not know, from month to month, what capital it will have to meet the ever-increasing demands made upon it. Surely we should not tolerate the situation that this section of the Commonwealth Bank, which is doing such a splendid job, is limited in its scope at this point of time.

It is interesting to consider the nature of some of the advances made by the bank. In the year 1960-61 it made advances amounting to £24,900,000. Of that amount, £10,800,000 was advanced by way of loans and the remaining £14,100,000 was advanced for the financing of equipment on hire purchase. It seems to me that there is a growing need in the field of primary production for loans for the purchase of equipment for clearing, fencing and other such activities. I should like to know whether any applications for hire-purchase assistance have been turned down by the bank. I should like to know whether a lack of funds has prevented some people from receiving assistance in this field. The fact that £14,100,000 was advanced for acquiring equipment on hire purchase shows clearly that there is a very big demand in this field. That brings into bold relief something that is a problem in our economic life to-day. The trading banks have entered the hire-purchase field in a big way. Because of the lucrative nature of the hire-purchase business the banks have departed from their normal banking functions, particularly in regard to loans. It is a much more attractive proposition from the viewpoint of the banks to lend money at high interest rates in the hire-purchase field than it is to lend money at the normal interest rates.

Every honorable senator knows - this knowledge is not exclusive to this side of the chamber - that the private trading banks have entered very heavily into the field of hire-purchase finance and have found it to be an extremely lucrative field. It is the Opposition’s belief that we should protect the interests of the people of Australia more adequately, particularly the interests of those engaged in primary production, by providing the Development Bank with adequate funds so as to ensure that no person with a valid claim for financial assistance to purchase equipment for primary production, will be turned away by the bank. I think that sooner or later the government of this country, and perhaps the governments of other countries, will have to face up to the altered economic situation arising from the system of hire purchase. I do not think we can highlight that point enough. The statistics show that in this country, as in other countries of the Western world, people have regarded hire purchase as just a routine part of their life. They have built their home economy completely around it. I am not saying that everybody does that, but I am saying that a very large section of our community uses the “ poor man’s overdraft “, as it has been called so often.

I believe that governments have a considerable responsibility in this matter. At various times in the last two or three years the outstanding hire-purchase debt in Australia has been about £500,000,000. It is quite obvious, of course, that on such huge sums of money some people are making a tremendous profit. I am not suggesting that it is not legitimate to make profit. We on this side of the chamber have never suggested that. But we do believe that when such huge amounts of money are being regulated by banking institutions and other organizations a grave situation is likely to develop in which the general public is not likely to get a fair go. I do not think that any of us can argue with truth or justice that the Australian people to-day are getting a fair go in their transactions with the hire-purchase companies.

From time to time it is argued that the Commonwealth has no jurisdiction in this matter; but I have argued in this chamber before - I will continue to argue it until some understanding or some unanimity on this matter is achieved - that the Government should call a conference of the States to see whether we can achieve some uniformity of action, not to give people an advantage over hire-purchase companies but to protect purchasers and create a situation in which the use of the “ poor man’s overdraft “ would not place an intolerable burden on the family man.

It may be convenient to say that the Commonwealth Government has not the constitutional power to do anything in this matter. We can comfort ourselves in this way and dismiss the matter from our minds; but if we have any real concern for the welfare of the people we just cannot leave it at that. At least we should be able to start something moving in this field. It is interesting to see that as at 30th June, 1961, of the £39,800,000 outstanding to the Development Bank £21,000,000 was in loans and £18,000,000 was for the purchase of equipment on hire purchase. Those figures indicate quite clearly that hire purchase is becoming quite a feature of the bank’s activities.

I come now to what I consider is a very valid point in support of our contention that the £5,000,000 additional capital prescribed in this bill is not enough. In Australia to-day the newspapers in the capital cities in particular, and no doubt in many of the country centres, carry full-page advertisements exhorting the people to spend, to have faith in the future, to invest their money in some concern or to spend it on some commodity that they require. Of course, that has not always been the position. I remember that only a few years ago some newspapers were asking the people to save every penny they could. Now we are living in different times and different circumstances.

Senator Dittmer:

– And after different election results, too.

Senator TOOHEY:

– That, of course, is true; but I am not dealing with that question. I want to confine my remarks to the Development Bank because if the Government will accept our advice on this matter it will be able to help the people. I have no doubt that the newspapers are not publishing these advertisements entirely of their own volition. I am not saying that they are wrong in the course that they are taking. I am not criticizing them in any way. But I am not unmindful of the possibility that they have the Government’s blessing because the Government wants the people to loosen their purse-strings. It wants money to flow back into the community. In effect, it wants a revival of the position that existed about eighteen months or two years ago before certain measures were taken by this Government.

There is nothing unnatural about the newspapers taking the action that they are taking or about that action having the support of the Government. The Government wants the people to spend, lt is exhorting the people to circulate their money through the community as quickly as possible so that confidence can be restored. I suggest that there is a golden opportunity for the Government to set a practical example in this field by admitting that whilst this amount of £5,000,000 may, on a conservative estimate, meet the very immediate needs of the Development Bank it is almost certain that the Government will have to come back to the Parliament, perhaps in three or four months’ time, and add another £1,000,000 or £2,000,000 to the bank’s capital.

I see that the Minister for Civil Aviation (Senator Paltridge) is shaking his head as if to indicate that he does not think the Government will have to do that.

Senator Paltridge:

– I never speculate and I do not think any one else should.

Senator TOOHEY:

– That means that you do not agree with these newspaper advertisements which exhort the people to invest or spend their money. I thought they had the Government’s blessing. As I said, I can see nothing wrong with such advertisements because, if confidence is to be restored, we have to try to set the ball rolling.

The point I was making is that here is a chance for the Government to set an example by saying, “ We concede that what the Opposition said in 1961, namely that an additional £5,000,000 was not sufficient, has now been proved right”. The error cannot be disputed, because now, less than six months after the last bill was brought down to increase the capital of this bank, it has been necessary to bring in another bill to increase the capital by a similar amount. It is perfectly obvious that the Government was too conservative in 1961. It is equally obvious that the Government is being too conservative in 1962 when it adds only another £5,000,000. That contention is borne out not only by my own observation but also by the report that I have read to the Senate and by the fact that some honorable senators on the Government side in October, 1961, were of the opinion that the additional £5,000,000 would be insufficient and that further action would be needed in the not too distant future. Senator DrakeBrockman, whom I mentioned earlier, was one who agreed with that contention.

I conclude by saying that the Opposition does not oppose the measure. Like the supporters of the Government, we believe that the bank has a great future. We agree with the Government that it is already doing great things in developing the rural industries of Australia. Let us not have any division of thought on that point. There is no criticism whatever in what I have had to say this evening of the intentions of the Government regarding this bank. The only criticism that is implied in the Opposition’s views on this matter is that the amount that the Government is prescribing for the bank from time to time limits its operations. That must continue while we put in £1,000,000 or so every three or four months. In such circumstances it is not possible for the officers of the bank adequately to plan ahead, or to plan in the way that they want to be able to plan, according to the passages from the report of the Commonwealth Banking Corporation that I have read to the Senate. I hope, Sir, that in our future consideration of this matter we will not deal in relatively trifling sums, but will give the bank an opportunity to carry out its true function, which is to play a major part in the future development of this country.

Senator McKELLAR:
New South Wales

– I have much pleasure in supporting the bill. I derived a great deal of satisfaction from listening to Senator Toohey expounding the views of the Opposition in his very moderate speech. It is evident to all of us that the Development Bank needs additional capital. In keeping with Government policy, which has been reiterated from time to time, additional capital is now being provided. The Development Bank unquestionably is doing good work. I have had the opportunity to have a pretty good look at its operations during the last eighteen months or so, because the subject of rural finance has engaged my attention, as it has that of some of my colleagues, including Senator Drake-Brockman. It is a subject that is of paramount importance to primary producers. It is mainly for that reason that I have been taking such a keen interest in it. Wherever I go in New South Wales I make it a point to speak to the managers of the local trading banks and the Commonwealth Bank to ascertain how the Government’s policy has been working out so far as the people who rely on export industries are concerned, and to see whether they have been receiving sufficient financial assistance.

For some time after the Development Bank commenced to operate there was doubt in the minds of prospective borrowers as to its policy. We know now that before the bank says “ Yea “ or “ Nay “ to an application, one of the main considerations is whether the property concerned is capable of being developed. I am speaking of rural projects. In addition, the applicant must be of a suitable type. Emphasis is placed on the ability of the person concerned to make a success of the project that he proposes to undertake or has already undertaken. I think that is fair enough. Naturally, since the bank is an institution with capital at its disposal, it has to ensure as best it can that there is a reasonable chance of having the money that it advances returned to it at some future date. Therefore, it is necessary for the borrower to be able to show the bank not only that he is capable of making a success of the project but also that he has some equity in it. Unfortunately, there are people in the community who are of the opinion that they do not need to have equity in the projects they propose to undertake or, perhaps, that only a little equity is necessary. I am afraid that quite a number of applications by people who hold that idea have been rejected.

Recently, I was in a country district where I spoke to the manager of a bank. He informed me that he had lent out in his district something like £200,000 of the Development Bank’s funds. Last winter, when I was in Alice Springs, I found that the bank had been playing its part in that area, too. Throughout Australia the bank has been lending money for development, not only of rural schemes but also of many other projects which showed prospects of future success.

It has been stated at various times that the Development Bank is in competition with the trading banks. That is correct only to a very limited degree. After all, we must remember that before an applicant can succeed in obtaining a loan from the bank, he has to prove that he has not been able to obtain finance on reasonable terms from any other organization or institution. That shows that the Development Bank is not, in the true sense, in competition with the trading banks.

There is no question that there is what might be called a gap in the financial arrangements available to the primary producer to-day. On the other hand, there is the Development Bank, which will lend money for projects which are capable of being developed. On the other hand, he may have recourse to the trading banks, which, over the last two years or so, have adopted a policy of short-term lending. In many instances, that policy has been coupled with the requirement by the trading banks of pretty heavy repayments. That policy may be all right for many industries, but it is certainly not so for the primary industries. As we all know, primary producers need loans on long terms of, say, ten years, fifteen years or even twenty years, and at interest rates as low as possible. The policy of lending for three years or five years, which is so common to-day, while satisfactory in some circumstances, is not a suitable one to help the man on the land.

That brings me to the question: What has brought about this change in lending policy? I am afraid that our policy, which was designed to help the primary producers, has not worked out in the way that we hoped it would. We all remember, I think, that restrictions were placed on the trading banks regarding the time for which they could borrow money. It is obvious, Mr. Acting Deputy President, that you cannot borrow short and lend long. To that extent, perhaps, the system that was evolved has acted to the detriment of the people whom we desired to help. I hope that very shortly we shall see a considerable easing of the restrictions that have been placed on the trading banks.

In another connexion, too, a policy that was adopted in good faith by the Government has not worked out in the way that it was desired it should. I am referring to the emergence of what has come to be known as the fringe banking system. The restrictions that were placed on the trading banks gave rise to this other banking system, and although the credit squeeze, as we call it, has certainly clipped’ the wings of many organizations which operate within the fringe banking system, I am afraid that quite a deal of damage has been done by them. I therefore hope that in the very near future the restrictions which have applied to the trading banks for so long will be lifted to a very considerable degree.

I want to make it quite clear that I am not carrying the torch for any trading bank. The trading banks have done a very good job for Australia in the past. To enable them to do the job that we hope they will do in the future, it will be necessary to give them far greater freedom than they have had during the last two or three years. We should provide greater flexibility in regard to interest rates and we should also allow these banks to come back into the field of lending for fairly long terms. The banks are quite eager to do that. I intend to devote most of my remarks to the aspect of primary production, although 1 know that that covers only one phase of the Development Bank’s activities. Primary producers must have longer terms. This is where the Development Bank comes in. It lends for periods up to twenty years, at the comparatively moderate rate of 6 per cent.

Senator O’Byrne:

– Seven per cent.

Senator McKELLAR:

– Six per cent. I am quite sure that the trading banks would be ready to come back into this field if they were released from the restrictions placed upon them. Years ago it was common to arrange for overdrafts from trading banks. Admittedly, the money was on call; but provided the borrower was making a go of his undertaking, the loan was allowed to run for a considerable time. I admit that it is desirable to have a turnover in finance and that it is quite a good idea to have a requirement for repayment at reasonable intervals. That is an encouragement to the borrower to be thrifty and to work his property well. As against that, there is the possibility of running into droughts and bad seasons, which militate against repayments of amounts when due. Here again, I pay a tribute to the trading banks. On the whole, if they find that a client is not in a position to repay, as a result of vagaries of seasons or prices, they stick to him provided he is worthy of support.

Our primary producers to-day are bewildered. They read in the newspapers that banks have plenty of money, but for some time past they have been told by the banks to reduce their overdrafts. They cannot understand it. I hope that within the next few months we shall see a very different policy in respect of trading banks. In order to get the desired result, we need only to release them from restrictions in the manner that I have mentioned. Another fact’or that has given rise to quite a deal of dissatisfaction is the averaging rate that trading banks were asked to operate. This requirement was applied in the hope of assisting primary producers and others engaged in export industries to obtain finance at a lower rate than that applying to more speculative industries. I understand that it has been almost impossible to apply the system on a workable basis. I am of opinion that to-day we could well do without this provision. The banks have seen the folly of lending money to speculative enterprises such as we have seen in the past three or four years.

I am quite certain that the banks desire to spread their lending over as wide a field as possible. In any event, that is only sane finance, although banks are faced with the knowledge that returns from primary industries, particularly from wool, are at present very low indeed. The majority of wool growers to-day are receiving returns equal to only 2 or 3 per cent, of the capital investment. That does not offer a very attractive inducement. If the restrictions placed on the banks are eased or, as I hope, in some cases lifted, we shall see a far better system evolved. There is no doubt that the trading bank system is not what it was ten or fifteen years ago. We have seen large wool brokers forced into a role that was never intended for them, that is, the financing of many of their clients. I understand that to-day wool brokers have out about £120,000,000 and that one company has out over £20,000,000 - nearly as much as the Development Bank has out on loan. We must have a very close look at the position and see whether we cannot alter this trend that has appeared, particularly during the last two or three years. It is not in the interests of the country, the primary producers, or of the concerns I have mentioned.

Some years ago insurance companies lent large sums of money to rural producers, but this practice has gone by the board. By way of contrast, we have seen insurance companies investing £3,000,000 £4,000,000 or £5,000,000 in buildings in capital cities, no doubt believing that in the interests of their shareholders it is their duty to obtain as high a return from their money as possible, and that it is easier and less expensive to keep an eye on the money, or on the buildings, than on money lent to primary producers. This is a short-sighted policy, as I have already told some of these institutions. After all, it is useless to put money into buildings on a get-rich-quick basis. When primary producers cease to be prosperous, the rest of the community soon ceases to be prosperous. These institutions would be better off by lending to the primary producers, even if they had to accept lower rates of interest. The economy would be placed on a sounder footing and there would be a greater spread of capital. I realize that this is not easy. It would be useless for one company to do it whilst others were investing in the way I have just mentioned and getting higher returns. The company lending to rural producers would probably suffer. If these companies were to invest money in this field, it would need to be on a mutual and wide-spread basis. I hope that it will be possible. If we are all to be prosperous, we must look to the prosperity of our rural industries.

I have dealt with long-term lending. As I mentioned a few weeks ago, there seems to be a tendency for finance in Australia to follow the American system, with money being lent for 60 or 90 days. That is certainly most unsatisfactory to the primary producer. I sincerely hope no effort will be made to persevere with that type of lending.

Senator Toohey said that the Australian Labour Party was very keen to ensure that adequate finance was available for primary producers, and he looked to the Development Bank to provide that finance, lt is simply not possible for the Development Bank to provide it. It has not the funds, and I suppose it never will have, to satisfy all those people who are in need of finance. It is just too big a job for this institution. The trading banks have any amount of money in their pockets, shall I say, which they are eager to lend. I am quite certain they would lend it if we removed some of the restrictions that have been placed upon them over the past three or four years.

I have made quite a number of inquiries and I am quite certain that, if the average man on the land could get long-term finance - I mean for a period of from five to twenty years - he would be quite prepared to accept an adjustment of interest rates. If he could get long-term finance, he would be enabled to adopt a long-range system of working his property. Let me refer to another aspect of this matter, which is very material. In addition to being circumscribed by short-term loans from the trading banks, a primary producer who needs machinery and goes to his bank for the necessary finance is often advised to go to the hire-purchase section and purchase the machinery through that department. He invariably has to pay a high rate of interest on that transaction. I believe that, if he were able to obtain long-term finance, he would be able to budget within the limits of that loan and would not need to go to the hirepurchase section and have to pay a higher rate of interest. Even if he were called upon to pay a higher rate of interest on a long-term loan than on short-term finance, he would be better off perhaps than if he had to pay a lower rate on a short-term loan and had to pay a high rate to the hire-purchase section of the bank to purchase any extra machinery he wanted.

I said earlier that I believed the Development Bank was well conducted. I say that with some knowledge of its activities. Members of the staff whom I have seen in action are efficient and go about their task in a very businesslike and thorough manner. On the whole, I think they are doing a very good job. Of course, that standard would not have been achieved overnight. First, the staff had to be recruited and in some cases trained. I asked one of the bank’s officials just recently whether he was of the opinion that the staff they now have was adequate and efficient enough to meet the bank’s requirements. He said that they were just about in that position, but that previously they were not as it had taken quite a number of years either to recruit or to train the necessary staff. I was very pleased to have that assurance.

Probably the rate at which applications are made will increase. At least until just recently, the rural section of the bank lent far more money than did any other section. Some one said just recently that use should be made of the bank to finance some of the oil exploration activities. I shudder at the thought of that being done. Although such lending would assist in the development of Australia, how far would £20,000,000 go in the sinking of oil wells? I sincerely hope that the -bank’s funds will not be used for that purpose. In fact, I am certain they will not be.

Quite a number of senators wish to speak after me and I do not want to steal their thunder; I know some of them have pet ideas on this subject. I content myself, therefore, with saying that I was very glad indeed to see this measure introduced. I give it my wholehearted support.

Senator O’BYRNE:
Tasmania

– Mr. Acting Deputy President, I was very pleased to hear the views of Senator McKellar, who represents the Australian Country Party in the Senate. It seems rather significant that he should offer considerable praise to the Commonwealth Development Bank. He realizes its importance to the primary producer. It is also of great significance that he should have directed the attention of honorable senators to the state of mind of primary producers. He said that they were bewildered and were being told by the orthodox banking institutions to reduce their overdrafts. He went on to say that there was doubt in the minds of the primary producers about the policy which the banks were really following. This is an admission that the man on the land has been given a very poor deal by the orthodox banking institutions. By “ the orthodox banking institutions “, I mean the private banks, which have gone into the hire-purchase field as hard as they could, and to a certain extent the Commonwealth Trading Bank, which has been restricted by the policy of this Government. It has been my view all along that the Government adopts the policy - it is followed by the private banking organizations - of providing an umbrella on the fine day and taking it away on the rainy day. That has been the policy of this Government for as long as it has been in office and has had control of the finances of this country.

Senator Wright:

– That is sheer nonsense.

Senator O’BYRNE:

– It is not nonsense at all. Senator McKellar virtually said that. He used slightly different language.

Senator McKellar:

– That may be your interpretation, but I did not say that.

Senator O’BYRNE:

– These were your words: “ The primary producers are bewildered “.

Senator Wright:

– Quite so.

Senator O’BYRNE:

– You continued, “ They are asked to reduce their overdrafts “.

Senator Wright:

– Quite so.

Senator O’BYRNE:

– Surely that means they are asked to do so at a time when they have a responsibility to assist this country to develop its primary production to enable us to export more. People like Senator McKellar who understand the nature of farming know that primary production is not a get-rich-quick part of the economy. It takes time for the land to produce a return. In the process, all sorts of vicissitudes have to be overcome. Senator McKellar spoke of the ravages of drought. There is no doubt about the fact that among the greatest enemies of primary production in Australia are the climatic conditions which exist in great areas of our pastoral lands. Drought can make a grievous assault on the financial stability of any farmer. It comes slowly and certainly takes a great toll of his property. I contend that any worth-while banking system should assist the farmer in time of drought. When he is battling against the forces of nature he does not want to be faced with the economic difficulties that confront the rest of the community. The Development Bank charges interest at the rate of 7 per cent.-

Senator McKellar:

– The rate is 6 per cent.

Senator O’BYRNE:

– The report of the Commonwealth Banking Corporation, at page 36, sets out rates of interest charged by the Development Bank in respect of rural loans and industrial loans. The table on page 36 shows that the rates charged by the bank and by the former Mortgage Bank Department and Industrial Finance Department have ranged from 4i per cent, in 1945, 41 per cent, in 1955, 5 per cent, in 1956, 6 per cent, in 1960 to 7 per cent, in 1961.

Senator Wright:

– You have not read the footnote.

Senator O’BYRNE:

– The footnote reads -

Maximum rate; average rate not to exceed 6 per cent.

But 7 per cent, is charged on some loans. The farmer who has been hit by drought cannot get any return from his land until he gets a break from the seasons. He then has to repay interest on his loan before he starts to reduce the loan itself. In principle that is wrong.

About 80 per cent, of our national income is derived from the land. The Development Bank should direct its energies towards maintaining that rate of production and, in the future, increasing it. Senator McKellar praised the operation of the Development Bank but criticized to some extent the Government for not being more generous to the bank. The Government, in providing £5,000,000 for the bank under this bill, is behaving in a parsimonious manner in view of the situation confronting primary producers and the challenge to them to increase production. I have often stated that the old ways of developing the land must be discarded. We must turn to science for means to improve our pastures.

Scientific methods of water conservation and irrigation will enable us to grow two blades of grass where one grew before and to raise two sheep where previously one only could be raised. In some areas the wheat yield has been increased tenfold and even fifteenfold by the application of new farming methods. Mediocre grazing land has been turned into valuable wheatgrowing land by the application of scientific methods.

It has been admitted that the orthodox financial institutions are not anxious to finance developmental projects on properties. If a man wishes to carry out large scale development on his property he cannot obtain finance from brokers or the private banks. His only avenue of finance is an institution such as the Development Bank.

Referring to the Commonwealth Development Bank, the report to which I have previously referred reads -

The year ended 30th June, 1961, represented the first complete year of operation for the Commonwealth Development Bank, as such. From its commencement on 14th January, 1960, it has experienced a significant and growing demand throughout Australia for the facilities and services which it was formed to provide.

We admit that there is a growing demand for the bank’s services, but to what extent will £5,000,000 meet the situation? The Government is not being realistic in providing £5,000,000 for the tremendous amount of developmental work that is required in our primary producing areas. The report continues -

The clear need to plan the organization necessary to deal with the increasing requirements for assistance and service is fully recognized by the Bank. Steps are being taken continuously to improve operating techniques in dealing with these day-to-day demands.

Under the heading “ Purpose and Lending Policy “ the report reads -

The main purpose of the Commonwealth Development Bank is to provide finance for the purposes of primary production and for the establishment or development of industrial undertakings, particularly small undertakings, in cases where, in the opinion of the Bank, the granting of assistance is desirable and finance would not otherwise be available on reasonable and suitable terms and conditions.

Senator McKellar admitted that primary producers were bewidered when they attempted to obtain finance from brokers or the private banks. He admitted also that the private banks were asking primary producers to reduce their overdrafts.

A debate on banking always highlights the fundamental difference between Government supporters and honorable senators on this side of the chamber so far as political and economic philosophies are concerned.

Senator Wright:

– Which party inaugurated the Development Bank?

Senator O’BYRNE:

– The Australian Labour Party founded the Commonwealth Bank. Although the Commonwealth Bank has been divided and the divisions given various names, the principle remains the same. I gain tremendous pleasure from hearing Government supporters praise this great institution and admit, as I have claimed over the years I have been here, that the private banking system will not meet the challenge. The private banking institutions are not interested in development of Australia. They are in business solely for profit. When the profits from ordinary banking business are not sufficiently high, they turn their attention to something more lucrative. The private banks have gone into the hire-purchase field. They are chasing hire-purchase business like a dog chases a rabbit. They hope to get bigger and quicker profits from hire purchase operations. I am reminded by a colleague that the amalgamation of the Mortgage Bank Department and the Industrial Finance Department of the Commonwealth Bank resulted in the formation of the Development Bank and that the two departments to which I have referred were established as a result of the efforts of Mr. John Dedman. Great credit is due to Mr. Dedman for foreseeing the need for a sound banking system to assist this country’s development.

Senator Gorton:

– You know that Labour did not start this bank.

Senator O’BYRNE:

– It is only a branch of the Commonwealth Banking Corporation. When the Labour Party was in power it started an industrial finance section of the bank, but that was crippled by this Government, allowing the private banks to go into the field of hire purchase. If the Commonwealth Bank had stayed in that field it could very well have acted as a brake against the tremendous increase in interest rates that has occurred down the years. It is useless to ask, “ Who started the bank? “ This Government merely gave it its name.

Senator Paltridge:

– And a new charter.

Senator O’BYRNE:

– The charter is exactly the same as that written into the charter of the Commonwealth Bank when it was first set up to serve the interests of the Australian people. That still should be, and still is in principle, its charter. However, instead of the Government maintaining that ideal and that policy, it has restricted the activities of the bank. The Development Bank is unable to compete with the other banks. What a ridiculous idea thar it. It is restrained from competing with other banks, though this Government is supposed to be keen on competition. If the Development Bank were allowed to operate as an ordinary bank, and receive deposits and have sufficient capital, it could possibly put the other banks out of business.

Senator Paltridge:

– Which bank are you talking about now?

Senator O’BYRNE:

– The Development Bank.

Senator Paltridge:

– You want to put it into competition with the other banks?

Senator O’BYRNE:

– If it were given free rein and could accept deposits and become an ordinary bank, particularly as a co-operative bank for primary producers, it could build up tremendous goodwill in the community and do a wonderful job for the primary producers. I suppose, for that matter, there is nothing wrong with any bank going into this field. The report of the Commonwealth Development Bank shows that last year it made a profit of £611,590. In the previous year it made a profit of £582,035, which shows that the bank, even with its limited capital and the work that it has been able to do, is making a handsome return to the reserve fund.

The further amount of £5,000,000 that is to be made available would not develop a hundred large-scale properties that could be developed in this country. Properties of 50,000 acres, which could be top-dressed, sub-divided, and turned to greater production would require an advance of at least £5 an acre to develop them to anything like an adequate standard. The additional £5,000,000 will not scrape the surface of the demands and the needs of primary producers. More than half of the funds of the Development Bank is used to provide assistance for the purchase of equipment and machinery for secondary industries. It is my view that this type of business should be done through the Commonwealth Trading Bank, and that the Development Bank should be doing exactly what its name implies - developing the natural resources of this country. I am reminded that when speaking in the debate on the Commonwealth Banks Bill on 26th February, 1959, the Treasurer (Mr. Harold Holt) said -

The Commonwealth Banking Corporation, under its own separate board, will be the controlling body for three banks - the Commonwealth Trading Bank, the Commonwealth Savings Bank and the Commonwealth Development Bank.

Senator Wright:

– You speak as if that is news to you.

Senator O’BYRNE:

– It just bears out what I have been saying. Senator Gorton, before he left the chamber, asked, “ Who started this bank? “ The Treasurer then said -

The last mentioned of these banks will be constituted as an amalgamation, with some increase of resources and some change of responsibility, of the present Mortgage Bank and the Industrial Finance Departments of the Commonwealth Bank.

Both those instrumentalities were set up by a Labour government and were carried on as sections of the Commonwealth Bank, so there is no doubt about who started the Development Bank. It has been only a matter of a change of name. Another matter to which I direct the attention of the Senate is the advances made by the Development Bank to primary producers. Loans in the rural field from £1 to £2,000 have been made to 493 applicants and have totalled £715,000. Loans from £2,001 to £5,000 have been made to 908 applicants to the extent of £3,130,000. Loans from £5,001 to £10,000 have been made to 386 applicants to the extent of £2,664.000. In the larger groups, loans from £10,001 to £20,000 have been made to 65 applicants totalling £903,000, and loans from £20,001 to £50,000 have been made to 24 applicants totalling £655,000. Though the bulk of the loans have been under £10.000, the numbers that have been assisted have been relatively very small and quite inadequate for the tremendous job that confronts this country in increasing primary production.

Despite the fact that the bank’s report states there is a significant growing demand for the services which the bank was formed to provide, a very strong influence is growing in the pastoral industries, in the form of increased invisible costs. The graziers’ journal, “ Muster “, of Wednesday, 7th March, 1962, had this to say -

During the last eleven years, “ invisible “ cost items - those items which show no tangible return to the producer - have come to loom larger and larger in the primary producer’s accounts.

Over the period such items have increased in cost by 150% while the visible items, machines, fencing and building materials, fertiliser, etc., have increased by 118%.

The Commonwealth Development Bank claims to be assisting primary producers in the purchase of building materials for new buildings, machinery, fencing, fertilizers, and for water conservation projects, and so on. Unfortunately, the costs of all these improvements are increasing all the time and, as is stated in this article, have increased by 118 p’er cent, over the last eleven years. At the same time - though honorable senators on the Government side dispute this fact - the average interest rate has been approximately 6 per cent. This means that in a five-year term the primary producers are paying at least 30 per cent., at the rate of 6 per cent., which is added to the increase. Over a ten-year term - unless the interest is calculated on a daily balance; I am not quite certain how repayments are made to the bank - the cost could be 50 per cent, or 60 per cent, more, with interest and redemption. The burden which has been pla’ced on the backs of the primary producers is increasing to such an extent that they are fighting a losing battle with costs. We on this side of the chamber believe that the £5,000,000 that is to be made available to the Development Bank will be quite inadequate to meet the needs that will arise as a result of increasing production in this country. If the man on the land is given the assistance of scientists of the Commonwealth Scientific and Industrial Research Organization and of other people engaged in research for improving production techniques, he will certainly produce the goods. We have the potential for production. There is a vast area on our eastern seaboard* where the rainfall is good and reliable and where much greater production could flow from the proper development and husbanding of the land. In the inland areas, many problems arise from a lack of water and from huge tracts of land not being subdivided. With the aid of the C.S.I.R.O. and other bodies, and with finance from the Development Bank, these problems could easily be solved.

The Opposition contends that the extra amount to be made available to the Development Bank, although it may enable the bank to help a few more people during the coming year, is not nearly sufficient. The operations of this bank have proved that such an institution is of paramount importance to the community to-day. However, an institution such as this, designed to assist men on the land - and, for that matter, the industrial section of the com.munity - must be adequately financed and capitalized before it can do the job it was set up to do. At present, it is trying to do a man-sized -job with a boy’s resources, and that can never be successful.

Because this bill follows a line that the Opposition has continually advocated in this Parliament, we will support it. The Commonwealth Bank, by its constitution, and by the way in which it has conducted its affairs, has proved to the people of Australia that their own bank is always working in their interests. The time will come when the people will ask their Government to allow the Development Bank to carry out its true function - to get on with the job of developing Australia and helping the Australian people to reach their true estate. We on this side of the chamber support the bill because, to some degree, the additional capital will assist the Development Bank to play its part in the job that still lies ahead of us here in Australia.

Senator WRIGHT:
Tasmania

– As has been said during the debate, we are dealing with a bill to add a further £5,000,000 to the capital of the Development Bank. The Opposition seems to resent that we on this side of the House have the honour of having created the Development Bank. The MenziesFaddenMcEwen Administration can be proud that it brought the banking legislation of this country into a state of stability, giving some degree of equity to both government and private banking. There was some earnest concern at the time the Development Bank was introduced into the government banking system. I have always been enthusiastic about this bank, because I believe that the primary industries of’ Australia are entitled to a special form of financial assistance appropriate to the circumstances in which those industries operate. They have to contend with the vagaries of the seasons and of climate and with droughts and bush fires, to say nothing of overseas and internal markets. It is quite obvious that land cannot be developed in the short periods for which trading bank loans are made available. The addition to the banking system of Australia of the Development Bank is an indelible, historical record. It is a contribution of which this Government can be proud. It is true that so far the capital of the bank has been minimal, but I have no doubt that increased capital will follow proper demands for expansion.

Let us take a moment to notice how easy it is for the Parliament of this country to appropriate money raised by a levy on other people’s resources and, without any effort on the part of the Development Bank, to add that money to the capital of the bank. It is in this connexion that there is a cardinal distinction between the political philosophy of those on this side of the chamber and those on the Opposition side. Honorable senators opposite cannot rid themselves of their obsession. When they see something big, they want to nationalize it. Whether it be in the field of oil or the field of banking, Senator Dittmer or Senator O’Byrne still pursues the fantasy that the ultimate solution of any problem is nationalization. I remind them that from the great unit of the primary industries came the yeomen to defeat their government when it advocated a policy of nationalizing the trading banks. The farmers are not fools. They often are irked by some of the conditions of bank finance, but they know that their indepen dence, is guaranteed by the continuation of a free banking system.. ,. :

Senator Ormonde:

– That is not what Senator McKellar said.

Senator WRIGHT:

– Let Senator McKellar speak for himself. I listened to him with interest, and I believe that that theme ran through his whole speech.

We maintain that it is imperative to preserve the private sector of the banking system as a source pf finance, in efficient competition with government banking. I wish . to make a suggestion that I trust the Minister will examine. I want him to consider the possibility of taking into account the’ money which the central bank holds on special account from the’ private trading banks, in pursuance, I believe, of the outmoded idea that thereby the Reserve Bank of Australia is controlling credit policy. These funds amount to £200,000,000 or £250,000,000. I suggest that the money be made available to the trading banks so that they can create a development bank to work in co-operation with the Commonwealth Development Banks. Then, not merely £21,000,000 or £26,000,000 of capital will be available from the Commonwealth Development Bank. We will have a private development bank geared to the same policy of financing, and the two banks together can double the efficiency of one.

Senator Toohey:

– Would that not be a radical departure from the policy of the trading banks?

Senator WRIGHT:

– I believe it would be, but why not advocate it, nevertheless? The resources of the trading banks are limited to the capital that they can gain from the public and what they can earn. They are not the masters of their resources. They have to utilize them in accordance with Reserve Bank policy. That means that the banking system does not finance long-term loans, but that the financial institutions finance long-term loans and bank finance is available as an auxiliary to be turned over, as I understand the modern banking outlook, at the rate of once every eighteen months or two years. I have said enough about that matter.

This Development Bank, in the first annual report that it has been able to give us, has reassured many of us that it is progressing quite faithfully in accordance with the spirit and performance that we had in mind, when it was created. I had great misgivings lest it should show favour to secondary industries and not really serve the primary industries. But I am glad to find that of the £21,000,000 in outstanding loans at the end of the last financial year, £10,700,000 represented rural loans and £10,300,000 represented industrial loans.

I am also glad to notice that this bank has not gone in for big business predominantly either in the industrial section or the rural sector. With the concurrence of honorable senators I incorporate the following table in “ Hansard “:-

That table shows that by far the greatest number of advances made by this bank are between £2,000 and £5,000 and that quite a considerable number of loans are less than £2,000. I do not agree altogether with the people who say that a man who is to enjoy the benefit of a bank advance should have substantial equity. I have in mind the young man who wants to start. This bank will help him to fulfil his aspirations.

It was laid down - this was a thoroughly new feature for which this Government can take exclusive credit - that the criterion for the Development Bank advancing credit would be not the value of assets but the credit-worthiness of the borrower - his integrity and his reliability, and the likelihood of economic success of his project, whether industrial or rural. Here an inroad was made into the conservative outlook under which bank finance is available only to the man with assets. The Government provided a bank, the charter of which was to advance money to help the man of personal integrity, energy and sense, who had a worth-while project. We believe in those qualities, and therefore we consider that we should give a man who has them a chance by providing bank finance.

I come now to the rate of interest at which this bank advances money. I regret that Senator O’Byrne sought to convey the impression to people who were listening in this chamber and outside it, that this bank was demanding 7 per cent, interest. I am very pleased to notice that the average rate of interest is 6 per cent. But

I hasten to say at once that that is altogether too high a rate on money advanced for the purposes for which the Development Bank advances money. This is not the first time that I have directed attention in this chamber to the difference between the rate of interest at which a suburban home builder borrows money under the Commonwealth and State Housing Agreement, namely about4¼ per cent., and the rate at which money is advanced to rural and industrial developers under this system.

I want the Government to consider earnestly reducing this rate to 4 per cent. That view is supported by every consideration - psychological, economic and national. I am thinking of the psychology of the man who is developing a project on money borrowed at 4 per cent, and of his economic contribution to the export industries. I have no doubt that the Development Bank has an eye to that aspect. If the General Agreement on Tariffs and Trade prevents this Government giving subsidies to export industries, that agreement contains nothing to prevent the Government giving preferential interest rates to export producers. The developers who contribute to our export earnings are in dire need of assistance. So, I plead for early consideration of a reduction of the interest rate on advances made by the Development Bank.

My last word on this bill, Mr. President, is this: I have voiced the satisfaction that I feel in finding that the advances to the rural sector are just a little more than 50 per cent of the total advances. Many of the advances to the rural sector take the form of the odious method of finance that Senator O’Byrne deprecates, namely hire-purchase finance. In the half-year from July, 1961, to January, 1962, hirepurchase finance from the Development Bank totalled £9,400,000.

Senator O’Byrne:

– At 6 per cent.?

Senator WRIGHT:

– I do not know what the interest rate is. I have not been able to inquire into that. I will be interested to do so.

Senator Paltridge:

– It is 4i per cent, flat.

Senator WRIGHT:

– That is very attractive. Surely that is the right kind of finance. We must realize that the rural industries, from the point of view of their value to the economy, are to-day in a very disadvantageous position, and this will militate very seriously against the contribution they can make to our export income unless some positive, early step is taken to correct the position.

I believe that means are available, through the Development Bank, to make the specific contribution that is needed to redress in some degree the disequilibrium that has developed between the rural industries and other industries. Despite the fact that primary production has increased by about 50 per cent, during the last ten or twelve years, the primary industries are still receiving, in money terms, approximately the same amount of income that they were receiving twelve years ago. When that is translated into terms of purchasing value, it means that they are receiving to-day only about five-eighths or three-quarters of the income they were receiving twelve years ago, although they have increased their production by 50 per cent. The country cannot afford such inequality in the economy. The primary industries are still responsible for about 80 per cent, of our export earnings.

I shall not speak at greater length on this topic to-night. I shall seek the earliest opportunity to bring the matter before the Senate again. My friends of the Opposition seem to have a new-found concern for the farmers of Australia, due, I believe, to the fact that they have an eye to voting potential; but let them understand that the real challenge which faces the primary industries is that of costs, a factor which, of course, the Opposition exploits on every possible pretext. I support this bill, which aims to contribute £5,000,000 to the capital of the Development Bank. I hope there is some practicability in the suggestion that the establishment of a private development bank can be assisted by the release of special accounts. I hope, too, that the rate of interest on rural and industrial loans can be reduced from 6 per cent, to 4 per cent. If that can be done, we will find a spirit of real development accompanying every £1 of finance that comes from this bank.

Senator SHEEHAN:
Victoria

.- As previous Opposition speakers have indicated, we on this side of the Senate support the bill. I regret that Senator Wright should have been the only speaker so far to introduce a note of discord in the debate. He suggested that the Opposition resented the fact that it had fallen to the lot of the Government to introduce into our banking system an organization known as the Development Bank. Whatever might be the name of the present institution, I think that those who are familiar with the banking philosophy of the Australian Labour Party will know quite well that it was with the idea of assisting and developing our industries that the party guided the great Commonwealth Bank. It was only with the advent of a government of the type now in office that the function of the Commonwealth Bank was interfered with.

In order to allay the fears of our primary producers, the present Government established the Development Bank. If supporters of the Australian Country Party in this chamber and in another place were able to forget their allegiance to the Government and speak freely, I wonder whether they would be so eulogistic of the Government and of this proposal as they make out. I am of the opinion that the proposal of the Government to add £5,000,000 to the capital of the bank is just another of its frantic efforts to get out of the tailspin which it is in at the moment. The Government hopes that it may once again delude our primary producers into thinking that it has their interests at heart.

The Minister for Civil Aviation (Senator Paltridge) said in his second-reading speech -

The Commonwealth’s 19S9 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 prospect 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 the opportunity to make a significant contribution to Australia’s development.

Let us analyse that passage. We have there a definite statement by the Minister that the bank was established to supplement but not to replace other sources of finance available to industry. What were the other sources available? Senator McKellar gave us a very good illustration of those sources when, in the course of his remarks earlier to-night, he indicated what was happening in regard to the big pastoral organizations. He showed how they were coming together. He suggested that the insurance companies, in the interests of their policy-holders, had to look for the highest rates of interest that they could possibly obtain. Is any one so naive as to believe that the insurance companies, with their enormous profits, hand out to policy-holders bonuses which are equivalent to the earning capacity of the companies? Have honorable senators opposite ever thought of the enormous reserves that are being accumulated as a result of the. contributions by policy-holders to those institutions, and the moiety that is handed out yearly in the shape of bonuses?

Of course, Mr. President, the fact is that by means of the interlocking of various interests, whether they be in pastoral, industrial or other fields, and interlocking of directorships, vast sums of money are ploughed into industries in which the organizations concerned are interested and are not distributed to policy-holders, nor are they made available to primary industries where the risks may be greater and where climatic conditions and fluctuations in world market prices have to be taken into account. Senator McKellar made a very interesting admission. It is true that to-day the money invested in wool production is not earning 3 per cent. Do honorable senators opposite think that financial institutions controlling vast sums of money will invest in those activities when the lucrative field of hire purchase is available to them? Surely to goodness those who are alleged to represent primary producers are not so foolish as to believe that.

If the Development Bank were provided with sufficient capital, it could do the work for which it was established. During the debates on the banking legislation, the Opposition stated that the measly amount of capital being made available would not be sufficient. Under the bank’s constitution, the bank may accept deposits. But is it allowed to accept deposits? Certainly, it is not encouraged to do so. Has the Government ever suggested to the Development Bank that it should open its doors to any one who might care to make a deposit? Certainly not. That is in accordance with Liberal philosophy. I know that it would be Country Party philosophy to have deposits and to earn interest on the money deposited, but our friends in the Country Party corner are in a minority and cannot get their way in that scheme of things.

Somebody suggested that a wonderful start had been given to the bank as it has had to have two blood transfusions, each of £5,000,000, since it was formed only a year or two ago. But that fact indicates that the bank has not been able to fulfil its functions. When the great Commonwealth Bank, which has enormous assets to-day, was founded by the Labour Party, it did not have the capital that the Development Bank has. But what did it do? It explored all the avenues of banking, and to-day it stands pre-eminent because it was allowed to function as a bank and not as a subsidiary, directed, controlled or hobbled as the Development Bank is to-day.

Looking at the Development Bank’s report, what do we find? Only small amounts have been loaned, although many of the requirements of rural producers have been financed, through hire purchase, by other organizations. Primary producers cannot go to the Development Bank and obtain the accommodation and assistance that they desire. If the bank is to help our rural industries, a complete change must take place. It must be placed in a position not only to make long-term loans but also to make considerable advances to primary producers and other people in business who require accommodation. We are told that to restore the economy and eliminate unemployment certain things must be done.

Industry, especially primary industry, must be stimulated. Whence is the money to come, when this organization cannot do its job effectively?

Primary industries to-day are faced with the greatest problem they have faced for many years, I should say throughout their history, despite the floods and droughts of the past. They know what is taking place on the other side of the world. The Minister for Trade (Mr. McEwen) has been forced to beg assistance from the United States Government to obtain a market for our rural industries. That has never happened before in our history. It has happened because we appreciate that in the very near future one of our greatest markets will be lost to us for ever. As surely as night follows day, we shall lose that market upon the entry of the United Kingdom to the European Common Market. I believe that the United Kingdom is being forced into taking that action not only because of economic conditions in Europe but also because of economic conditions now affecting the United States of America. America is feeling her load rather heavy and is looking for some one to give a hand. She has been very liberal with her dollars in giving assistance to various countries, but she cannot carry on alone indefinitely. So a new economic set-up is to be established in Europe.

America is reducing tariffs. What are the consequences to this country? It will not be very many years before these developments take place. What will our primary industries do if, in the interim, no new market is found? There will be no finance to help them to carry on. This is a primary-producing country; about 80 per cent, of our overseas income is derived from primary industry. What will be the position when our industries face this crisis? What have we? We have a development bank with a capital of about £25,000,000. That is the organization on which, according to Senator Wright and one or two others, the primary industries will depend. A transfusion of something more than £5,000,000 will be required. We shall need to place all our financial resources at the disposal of the nation if we are to carry on. We have potential markets to the north and in the Middle East, but we know the financial position of the countries in- those areas.

They are looking for long-term arrangements. They are looking for long periods over which to pay for the primary produce they want to purchase- from Australia. Has the Development Bank the financial ability to help our primary producers in this crisis? This bank should be a wonderful institution. It should be allowed to function as a bank. It should be able to accept people’s deposits and enable them to earn interest, and should be able -to perform all ordinary banking functions so that Australia’s economy may be developed.

The Government has taken good care to protect the interests of the big financial institutions - the private banks, as we call them. “ Free enterprise banks “ is the nom-de-plume under which they trade. But there is as much free enterprise in the activities of these banks as there would be under a totalitarian government. They are allowed to engage in free enterprise only when it suits the Government. Many of them spent a lot of money to woo the electors in their efforts, which were successful, to defeat the Chifley scheme to nationalize the banks. Those banks have since awakened; they realize that everything is not as rosy as they thought it would- be, and they are not as liberal as they once were.

Senator McKellar reminded me of a man who wants to punch but is afraid to do so. I believe that if he had let himself go he would have told this Government off in good and sufficient terms. But, because of the groggy state of the Government, it would not have done for him to do that. If ever the members of the Australian Country Party have had an opportunity to go for a knockout blow and make this Government function in the interests of the rural community and the people of Australia generally, they have it now. If members of the Country Party were to deliver the punch they are capable of delivering, they might get somewhere. But while they sit back in the corner and offer praise, then offer moderate criticism, and finally vote with the Government, they will get nowhere.

The Opposition’s quarrel, if there is a quarrel in relation to this measure, is not that the Government is infusing £5,000,000 into the capital of the bank but that it is not providing enough and is not enabling the bank to fulfil the function for which the Government claimed it was established. However, we support the measure. I hope that in the very near future we will see a development bank worthy of the name and that it will be able to assist primary producers and small business people in the crisis that will surely occur in the very near future when Britain joins the European Common Market.

Senator LILLICO:
Tasmania

– I rise to support the measure. I have taken note of the criticism that has been levelled against it. That criticism seems to fall into two main categories. One is that the proposed infusion of £5,000,000 into the funds of the Development Bank is not sufficient. The other criticism is that the bank is not allowed to open its doors, to trade as a trading bank, and to accept all manner of customers. As to the insufficiency of funds, we have all noted that when a party is in opposition it claims that the sum to be provided, no matter for what purpose, is insufficient. It claims that if it were to assume the reins of government and were handling the proposition currently before it, it would make of it a thing of beauty and a joy forever. But, of course, when an opposition becomes the government and is faced with realities, it comes down to earth and very often does just what the preceding government has done.

We already have one branch of the Commonwealth Bank which is functioning as a trading bank in opposition to the private1 trading banks. The Development Bank was established to fulfil a specific purpose. It was a good conception. It was set up to provide credit for primary producers and industrialists who were unable to obtain credit through the ordinary channels. In discharging that function it has done reasonably well. To me, as a primary producer, it seems good that the majority of the credits provided by the bank have been channelled into primary producing development.

I must agree with Senator Wright when he says that this bank, when making advances to primary producers and others, should take into consideration the human factor more than the guarantees that may be forthcoming from the people to whom it proposes to lend. In fact, the bank makes a feature of that in its report. I know of primary producers to whom money could be lent almost without security in the greatest confidence that, if conditions were at all favorable, they would make a go of the proposition in which the money was invested. This bank has been in operation for only two years. I have heard of propositions that were placed before it in relation to which it seemed to me that the amount of security demanded was excessive, being almost as much as an ordinary trading bank would demand. That security was demanded from people in whom I would have the greatest confidence and to whom one could lend money almost without security, resting content that they would do their utmost to make a go of the projects. I repeat that I agree with Senator Wright when he says that the human factor is the most important element in this bank’s business activities.

Let me say again that the establishment of this bank was a good conception. It seems to me that, if the activities of the bank could be increased - they are being greatly increased - that would be infinitely better for land development than some of the schemes which have been undertaken by the Commonwealth and State governments. When I say that, I think of the Montagu Swamp project. If we can advance money to primary producers who are willing and able to do their utmost to make a success of the project they undertake, it is far better to do that than for the Commonwealth and State governments to undertake any large-scale land development.

Senator Sheehan spoke of the necessity to expand the Development Bank because of the likely effect of the Common Market on our export trade. I do not believe that our exports to the United Kingdom will be cut off suddenly without some levelling out in order to give us time to adjust ourselves to new conditions. No matter what effect the Common Market may have, the position cannot be remedied by improving the banking system in this country. What we need are fresh markets to take the place of those that we will lose because of the existence of the Common Market. Senator O’Byrne referred to the invisible costs with which the primary producer is confronted. I do not know why those costs should be referred to as invisible costs. They are very visible to the ordinary primary producer. They are costs over which he has no control. They are costs that are threatening our export trade. Senator Toohey referred to the action taken by the Government in 1960. If something had not been done at that time to halt the inflationary spiral, confidence in the economy of this country would have been at a much lower level than it is to-day.

I wish to say something about the interest rate charged by the Development Bank. It has been claimed that the rate averages 6 per cent. Having regard to the cost of running a business and to the cost structure generally in Australia, 6 per cent, is probably a reasonable rate. But when we bear in mind that the primary producer receives 2 per cent, or 3 per cent, on his invested capital, a strong case exists for reviewing the interest rate charged by the bank and for reducing it. I know that the services of the bank have been drawn upon very largely by primary producers and other sections of the community. But surely it is a poor proposition to borrow money at 6 per cent, in order to increase wool production or fat lamb raising in the knowledge that the return from the land will be only 2 per cent, or 3 per cent. If the rate charged by the bank could be reduced, the bank would render an even better service than it is rendering now.

A good deal has been said about the insufficiency of funds provided for the bank. It has been claimed that the provision of £5,000,000 under this bill proves that the £5,000,000 provided nine months ago was insufficient. I cannot see the logic of that argument. The Government is to be commended for having increased the capital of the bank from time to time. It does not matter whether the duration between the increases be six months or nine months. When this bill was being debated in another place an honorable member said that, in terms of banking capital, the capital of this bank is comparable with that of the biggest of the private trading banks and is about double the capital of any of the other banks. I think that statement is sub stantially correct. Taking that fact into consideration, and remembering that during the two years it has been in operation the bank has increased its assets, surely it must be agreed that the bank is doing a worthwhile job. This bank is something that the primary producer has long needed.

Having been told by somebody that the Development Bank required the same security as any other trading bank, I made inquiries of several bank managers. They told me that the Development Bank accepted risks that the private banks would not dream of accepting. In view of that fact, I concede there is a case for charging a rate of interest commensurate with the rate charged by the trading banks. But when one bears in mind, as Senator Wright pointed out, that 80 per cent, of our exports are primary products, and that the primary producers do not share to any extent in the incentives that have been held out to other exporters, such as reductions in pay-roll tax and income tax, surely a case exists for a review of the interest rate charged. A lower rate of interest would provide an incentive for that class of people on whom our entire economy depends.

It must not be forgotten that if anything happens to close the gap between the price that the farmer receives for his produce and his costs, the consequences to the economy of Australia will be dire indeed. I believe there is danger of that happening. There is a definite case, while the exports of manufactured goods from this country are so small, for going ahead and developing more country and trying to augment our exports of primary products. I have heard people say, “What is the use of doing that? We cannot find sufficient markets for what we produce already.” That proposition has been put to me at meetings more than once. My answer to it has always been that if the people who pioneered this country had been imbued with that idea, scarcely any of it would have been developed for primary production. The problems that confronted the early settlers in Australia, particularly in Tasmania, in the obtaining of markets were greater than the problems that confront primary producers to-day. Therefore, if we contend that we must not go on developing because we might not be able to find markets, then truly we are throwing in the sponge. That is an attitude of mind which has never been prevalent in this country before. Had it been prevalent in the early days, when Australia was first settled, this country would not have been brought to its present state of productivity. I conclude with the plea that, if possible, something be done to bring about a review of interest rates charged by the Development Bank. I have very much pleasure in supporting the measure.

Senator O’FLAHERTY:
South Australia

– I have listened very carefully to the statements of Senator Wright and Senator Lillico who spoke on behalf of the Government. If Senator Wright did not show quite so much hatred of any representative of the working people, he would make a better job of advocating the Labour Party’s policy than he makes of it at the moment. He said that the Development Bank is not doing its job. I think he was quite right in saying that its ramifications are too narrow and that it is not doing the job that it was initially set up to do - development work in Australia. He related this particularly, of course, to the primary producer. He said that a tremendous calamity has occurred in Australia and because of this it is necessary to extend the capital of this bank; and he blamed it all on the Labour Party. He went further and said that the Labour Party raised the cost structure. He went on to point out that the interest rate is too high, and said he thought - there was nothing positive about it - that it would be possible to reduce the rate from 6 per cent, to 4 per cent.

I do not know whether Senator Wright knows it or not, but interest is the greatest factor in the cost structure in Australia. On his own showing, if interest payments to the extent of 60 per cent, over a ten-year period are increasing the costs of production in Australia, all he asks for is a reduction of 20 per cent., fetching it down to 40 per cent. I remind Senator Wright, and anybody else who has such a hatred of the working people, that the Labour Party has been advocating a low interest rate ever since this Government assumed office. It has always advocated a low interest rate. Might I ask, Sir, who Senator Wright thinks is responsible for the high interest rates that are now being charged? Who increased the interest rates? It was not the Labour Party; it was not the working man; it was the Menzies Government. I know that Government senators will say that the banking institutions, through our head bank, the Reserve Bank, raised the interest rate, but do not make any mistake about it; it was because of the actions of this Government and the O K given by this Government that the interest rate was increased. When the private banking institutions made representations to the Government for an increase in the interest rate, the Government did not want to move, so what did they do? They used a bit of a squeeze of their own, and forced the Government into the position where it had to acquiesce in the increase of the interest rate.

The high interest rates to-day have resulted from the actions of this Government. Senator Wright cannot shed his hatred of the working man; and he blames the representatives of the working man for the high cost structure in Australia. At the same time as he blames the working man, he tells us what a calamitous position Australia is in. It is people such as Senator Wright who tell us that we are calamity howlers. Who does Senator Wright think is responsible for the bank not carrying out its functions. It is not the Labour Party. Our party has been in opposition, and has had no power at all. As a matter of fact, until the last two or three weeks we were treated as if we did not exist. Previously, the Government would have nothing to do with any suggestion we made; it just wiped us off. The Government would not take notice of our suggestion that there should be a reduction of interest rates. When the Development Bank was established, Opposition senators told the Government that the bank would not function as it should because private banking institutions were to be its agents. We said that if the private banks did not want some business - and they do not want anything that does not pay - they would pass it on to the Development Bank. That is what is happening now.

Any business that attracts a high interest rate will be accepted readily by a private bank, but we know what happens to any person who tries to obtain an advance on a venture that will not bring a profit. The bank advises the client to go to the Development Bank. Even then, the client is not out of the wood. Do not make any mistake about that. When he goes to the Development Bank, after having been recommended to do so by his private bank - which is the agent of the Development Bank under the act - the Development Bank asks him whether he has tried to obtain the finance elsewhere. He is asked what bank he approached and why that bank would not give him the accommodation. Not satisfied with that, the Development Bank will ring up the trading bank to find out why it would not provide the accommodation. It is not the fault of the Labour Party or of the working people of Australia that these things are happening; it is because the Government wrote the provision I have mentioned into the charter of the Development Bank. The Opposition suggested at the time that the ramifications of the Development Bank were not wide enough. If honorable senators opposite refer to “ Hansard “, they will find that time and time again Labour senators suggested that the functions of the Development Bank ought to be widened and that the capital of the bank was not sufficient. The Government took no notice of them.

To-night Senator Wright and Senator Lillico told the Senate that the bank was not carrying out its proper functions. They made excuses for it and went on to tell us of the awful position of the primary producers. Senator Wright went out of his way to tell us about that. He went so far as to tell us that the primary industries are producing more than they produced twelve years ago. I think everybody knows that the volume of our primary production is greater than it was twelve years ago. Senator Wright told us also that the return to the primary producers to-day, in respect of that greater production, is only equal to the return on the smaller production twelve years ago. He has only just discovered that. He said that the solution of the problem was to reduce costs. He went out of his way to direct the attention of the Senate to the cost structure and said that it was necessary to reduce interest rates.

Senator Lillico went a little further than Senator Wright. He said that it would be probably better if we did not have to rely upon the Development Bank. He suggested that some other government instrumentality should make advances to primary pro* ducers, not necessarily on the security ot assets, but because of ability to produce. He said emphasis should be placed on the human factor. Senator Wright mentioned that, too. It was said that if the Government did that, we would probably get greater production than we get now, and in addition, because of lower costs, we would probably be able to find better markets. Senator Lillico suggested a rate of interest of 2 per cent, on such advances, instead of the 6 per cent, which is the average to-day.

It is extraordinary that this suggestion should come from men who, time and time again, slate the Labour Party and the representatives of the working people for advocating socialistic methods of overcoming our problems. They blame the Opposition for creating the trouble that the Government has, in fact, brought about itself. The Government is responsible for the calamitous position that primary producers are in at the present time. I remind Senator Wright that some members of the Labour Party who represent primary producers were engaged in primary production before he was born. Those men know what they are talking about. Some of the things that Senator Wright has advocated are a part of the rural policy of the great Australian Labour Party. I was a member of the first rural committee of the Australian Labour Party, long before Senator Wright came into the picture at all. He attacks the members of this party because they represent the people who produce and work for their livings, instead of those who exploit the working people.

Senator Lillico stressed the relationship between interest rates and the prices of primary products. Both Senator Lillico and Senator Wright spoke more specifically about primary production than about industrial production, and they both stressed the relationship between prices and interest rates. I said a little while ago that interest is the major factor in the cost structure of Australia to-day. Figures I have obtained indicate that interest charges account for nearly 60 per cent, of the cost of production of goods produced in Australia. It is no use talking about government instrumentalities providing something or other.

Debate interrupted.

page 524

ADJOURNMENT

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

That the Senate do now adjourn.

Question resolved in the affirmative.

Senate adjourned at 11 p.m.

Cite as: Australia, Senate, Debates, 14 March 1962, viewed 22 October 2017, <http://historichansard.net/senate/1962/19620314_senate_24_s21/>.

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