24th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Alister McMuilin) took the chair at 3 p.m., and read prayers.
Assent to the following bills reported: -
– I ask the
Minister for Civil Aviation: Has an arbitrator been appointed under the Airlines Agreement Act to replace Sir John Latham, who retired in September of last year? If not, why not? When can such an appointment be expected?
– The procedure for the appointment of a chairman, as he is known under the new legislation, is as follows: When a matter is at issue between the two parties to the agreement, those parties confer on the appointment of an arbitrator. If they agree, their joint nominee -is appointed to the post. In the event of disagreement, the matter is referred to the Minister for Civil Aviation who appoints a judge from one of the various Commonwealth courts. At present there is no matter at issue between the parties. Therefore, there has been no need for them to confer on the appointment of a chairman. In the normal course of events, the appointment of a chairman would not occur until a need was created by an issue arising between the two parties to the agreement.
– Can the
Minister representing the Minister for Labour and National Service say whether his colleague is aware of the very low ratio of skilled workers to unskilled workers in the labour force in Australia? Has any survey of this problem been undertaken at the various unemployment centres in each State? If no such survey has been undertaken, will the Minister have one made with a view to improving the situation, first, by instituting training under an adult education training scheme for those wishing to im- prove their status; or secondly, by upgrading of semi-skilled workers by the same process; or thirdly, by an alteration of the present apprenticeship system, especially in regard to age, to allow greater expansion of training, as recommended by the Australian Apprenticeship Advisory Committee of 1954 in its report on this matter? Is the Minister able to say what action will be taken in regard to the very disquieting report tabled recently in another place on the position of the unskilled worker in Australia?
– I am not aware of the precise ratio between skilled and unskilled workers in Australia at the moment, but I think it is generally admitted that there is, if anything, a shortage of skilled workers in this country. I shall ask the Minister for Labour and National Service whether the survey suggested by the honorable senator has been undertaken or whether it should be undertaken. I do know that just recently, under the auspices of the Department of Labour and National Service, discussions were held with people, including trade unionists and those interested in this matter from various States - not as representatives of States but as persons aware of and interested in the problem - on the question of increasing by some means apprenticeship training over a wide field in Australia. A report on those discussions has been made available and I shall see that the honorable senator gets a copy of it.
– I wish to ask the Minister representing the Treasurer a question without notice. Will the Treasurer invite the Commissioner of Taxation to look at the boundary of zone B as prescribed in Queensland under the income tax legislation to see whether he might have it varied slightly so as to include the township of St. Lawrence, where living costs are as high as those in any place within zone B and where the educational facilities are much inferior to those provided in Mackay?
– I understand that the various zones for income tax purposes were fixed some years ago after a very exhaustive inquiry. I do not know whether the Treasurer has received any representations on the matter raised by Senator Benn, and I shall refer the question to him. However, I take this opportunity to inform the honorable senator that the subject of his question would normally be regarded as a budget matter and would be considered at the time of the preparation of a budget.
– I ask the Minister for Civil Aviation whether his attention has been drawn to a Labour Party advertisement that appeared on Sunday, 25th March, in the Western Australian “ Sunday Times “ newspaper. The advertisement reads as follows: -
The MacRobertson-Miller Airlines Company became a lifeline of our North-West as a result of subsidies paid by Western Australian Labour Governments.
Will the Minister comment on this statement, as it is generally understood that the Federal Government subsidizes MacRobertson Miller Airlines Limited? What Western Australian government was the first to pay a State subsidy in this matter?
– A Dorothy Dix-er!
– The question is not a Dorothy Dix-cr. I have not even seen the advertisement. I should be very interested and, I am sure, very amused to see it if the wording of it is precisely that quoted by Senator Branson, because the position is well-known. MacRobertson Miller Airlines Limited, which conducts services, in the main, to the northern and most isolated parts of the State, has been subsidized, not by the present State Government or any State government, but by successive Commonwealth governments since its foundation back in 1934.
– What about the subsidy on perishable goods?
– Wait a minute, please. What I have said is the only reason for the existence of the airline. It is true that on this subsidized service the State government some years ago decided that it would subsidize the carriage of certain perishables to some parts during the hottest months of the year, from November until about May. But the State government was subsidizing only that particular class of freight on a service that would not have existed but for the Commonwealth Government. I am further interested to hear, as I thought I heard, that this lifeline was provided by the initiative of the Labour Party when it was in office. The facts are, as I have good cause to remember, that the first arrangement was entered into by the Wise Government, which arranged for the Western Australian Transport Board to grant this concession. But the Transport Board quickly ran out of funds and it was the McLarty-Watts LiberalCountry Party Government that put this subsidization scheme on a sound footing. Since that time residents of the north-west have enjoyed a State subsidy applied to the narrow field of perishables. Senator O’Flaherty finds this matter amusing. I invite him to listen to the progress results of the election next Saturday. I warrant he will be extremely surprised. From the wording of the advertisement I can conclude only that the author either is incredibly ignorant of the facts or is wilfully endeavouring to mislead the public for political purposes.
– My question is directed to the Minister representing the Minister for Defence. Was the subject of the establishment of a naval base on the coast of Western Australia raised at the talks in which Mr. Townley participated in Singapore last week? In view of the recommendations of the United Kingdom Government that the Royal Australian Navy should have a submarine section, has consideration been given to providing a submarine base on Australia’s west coast, which is washed by the waters of the Indian Ocean?
– I congratulate Senator Tangney on her efforts to make an issue of the provision of a naval base in Western Australia. The facts are that at the conference in Singapore the United Kingdom Government re-affirmed its decision to continue to operate a naval base at Singapore. No question arises of the Royal Navy departing from the Singapore base. That, therefore, disposes of the proposal that a base should be established in Western Australia. The Royal Navy is based at Singapore for its own good defence purposes. As regards submarines, the Royal Australian Navy at present has a submarine section.
– All I can do is give the honorable senator some information in general terms. In Canada very great sums of money were spent and a very large number of holes were drilled before oil was found. There has been a substantial increase in the activity associated with the search for oil in Australia, more particularly since the strike of oil at Cabawin. I doubt very much whether that increase will be reflected in statistics that I may produce in answer to this question because, as with many things, a long time elapses before the results of exploration and seismic surveys are reflected in or lead to the drilling of a hole. On all occasions the drilling of a hole is the result of a major decision that is made after intensive study of the available information. Therefore, there is a time-lag between the increase in the tempo of the search and the actual drilling programme. If Senator Sir Walter Cooper will put his question on the notice-paper, I will get him an answer in more definite terms.
– My question is addressed to the Minister representing the Minister for External Affairs. What is the latest information that the Minister can make available on reported naval and air incidents and also reported landings of Indonesian forces in West New Guinea?
– There is no official confirmation of the reported landing on Waigeo Island or of the other reported incidents involving Dutch and Indonesian forces in the West New Guinea area. Assuming that the reports are based on fact - that is only an assumption - there is no reason to believe that the landings or incidents are on a scale that would make it difficult for the Dutch forces in the area to contain them.
– Has the Acting Minister for Trade anything to report to the Senate on the efforts of the Department of Trade to stimulate the export of Australian food and wines? In particular, is any precise information available on the results of the recent Australian food and wine festival staged in Singapore and Malaya?
– The festival held in Singapore and Malaya was accounted quite a success by the Department of Trade. A little more than 90 traders in that area attended the festival and the normal sales promotion work was carried out in retail establishments at the same time. Those establishments presented displays of Australian foodstuffs and wines. I understand that good orders were received, particularly for canned fruits and other foodstuffs. The orders for Australian wines were a little disappointing. That is a great pity because I believe that our Australian wines now compare with any other wine in the world and our prices are good. I hope that these festivals will help to increase sales of Australian wines. Canned butter, canned fruit, meat and honey were the best sellers at this festival. I am bringing this information to the notice of the Department of Trade and the wine industry in South Australia because I hope that together they can develop the very good market in the Singapore and Malaya area for our very good Australian wines.
– I preface my question, which is addressed to the Minister for Civil Aviation, by saying that several weeks ago I asked him a question about remarks critical of Government policy that are contained in the sixteenth annual report of the Australian National Airlines Commission, which operates Trans-Australia Airlines. In his reply to my question the Minister stated that he had written to T.A.A. in connexion with these remarks, but at that stage had not received a reply. I now ask him whether he has received a reply. If the answer is in the affirmative, will he table his letter to T.A.A. and the airline’s reply thereto?
– Yes, I have received a reply to the letter that I wrote early in December. I received it, I think, yesterday or this morning; I am not sure. 1 am now considering it before again writing to the Australian National Airlines Commission. I certainly will not table the correspondence. It is between a Minister and a statutory authority under his control. I would not mind the honorable senator, at any appropriate time, taking up the issues raised by T.A.A. , and I would discuss them with him in this place or any other place.
– Can the Minister representing the PostmasterGeneral say whether a decision has been made in regard to a site for a national television station in the Northam- York area of Western Australia? Is it a fact that Needling Hills has been selected as a proposed site? Can the Minister say whether other sites besides Needling Hills have been considered and investigated as possible sites for a television station, particularly sites east of Needling Hills? When a site for a national television station in the NorthamYork area has been selected, does it naturally follow that the commercial television station site will be in the same locality?
– Senator DrakeBrockman was good enough to tell me that he wanted information about the establishment of a television station in Western Australia, and I sought the information from my colleague, the Postmaster-General. He has informed me as follows: -
No determination has yet been made by the Australian Broadcasting Control Board of the site to be used by the national television station to serve the central agricultural area of Western Australia in which Northam and York are situated. Needling Hills has been tentatively selected as the site for the proposed national station, but investigations are still proceeding in the matter. A number of sites has been investigated, including possible sites further east than Needling Hills. The main difficulty with’ sites to the east of Needling Hills is in providing an adequate service to Northam.
There are advantages in siting commercial and national stations close together, but the views of possible applicants are not yet known and the board will consider any proposals submitted in that connexion.
– In directing a question to the Acting Minister for Trade, I refer to a statement made a few days ago by the Minister for Trade who foreshadowed a promising market in the Persian Gulf area for a range of Australian goods. Can the Minister furnish a statement showing Australian exports to the Persian Gulf area during the last two years? When the mission which recently visited the area was exploring this region, about which it is so enthusiastic, did it visit Basra and discuss the prospects with Sindbad the Sailor?
– I have not before me the statistics which the honorable senator requests. One could not be expected to provide them in an answer given off the cuff. I have read the statement to which he has referred and I have also read excerpts from the report which the mission has made since its return. The honorable senator appeared to be a little caustic about our prospects of doing business in that area. He is likely to be somewhat surprised. Australian manufacturers are developing an export trade throughout the world, the extent of which is not fully realized by honorable senators opposite- and by the people of Australia generally. If the members of the Opposition were to give a little more attention to the publications that are issued, showing the markets to which our exports are going and the way in which our export trade is developing, I do not think they would be quite so critical, or that they would ask questions such as that asked by Senator Hendrickson. As for consulting Sindbad the Sailor, I do not think there is any necessity to do that while the honorable senator is available.
– While I am not aware that Sabin oral vaccine is in actual use in
New Zealand, I am informed that it has been accepted for use in that country, in conjunction with Salk vaccine. The Australian Government has been vitally Interested in the development of Sabin vaccine and late last year it sent one of its chief medical officers, Dr. Duxbury, on a world mission to watch the trials and research being conducted in overseas Countries. Dr. Duxbury has returned and his report is almost complete. It will be placed before the Epidemiology Committee of the National Health and Medical Research Council when it meets in May, which will be the first opportunity the council will have to benefit from the services of Sir Macfarlane Burnet, who is returning from overseas. The Government will be guided by the advice of the council. As soon as it has completed its deliberations I shall endeavour to place its views before the Senate.
– Could the Minister representing the Minister for Labour and National Service tell the Senate the exact number of unemployed migrants at present living in hostels in Western Australia? How many of those migrants are skilled and how many are unskilled? What amount has been spent during the past twelve months on the payment of social service benefits to the inmates of those hostels? What amount is at present being spent weekly in paying unemployment benefit to them?
– I ask the honorable senator to put her question on the noticepaper. Obviously, I cannot carry in my mind the number of unemployed migrants living in hostels in Western Australia at any given time.
– My question, which is addressed to the Minister for Health, relates to the procedure under the pharmaceutical benefits scheme for the supply of drugs prescribed by doctors for patients suffering from chronic complaints, when it is necessary for the patients to take tablets continuously. Can a doctor prescribe enough tablets to carry a patient over, say, a period of three months? If so, would such a prescription cost the patient the nominal fee of 5s., or would he have to pay at the rate of three or four prescriptions because of the number of tablets supplied by the chemist? Is it necessary for a patient to visit his doctor every time he needs a prescription renewed, thus adding to his expenses, when the doctor may consider a quarterly visit to be all that is required?
– Provision is made for an indigent person suffering from a chronic complaint to receive enough tablets for three months’ usage. A prescription may provide for a month’s supply, with two repeats, in respect of each of which a 5s. charge may be made, but the legislation makes provision also for a three months’ supply to be obtained in certain circumstances. The procedure is that the patient concerned makes application to the Department of Health. If approval is granted, one fee of 5s. is sufficient to cover the total prescription. It is not necessary for a patient to visit a doctor on every occasion when he wants a prescription to be repeated. I have said that two repeats are permissible. Generally speaking, however, the department is of the opinion - it is an opinion which I wholeheartedly support - that patients should keep in close contact with their doctors in cases such as these. So many drugs are toxic and have side effects that it is in the best interests of a patient to have a check-up periodically by his doctor.
– My question is directed to the Minister representing the Treasurer. Are the reports correct in today’s press that the Government has submitted to the private banks proposals for a revision of important aspects of banking policy? If so, what is the nature of the proposals?
– I noticed in this morning’s press a report of a change in the lending policy of the private banks. If and when it is appropriate for a statement to be made on this matter, it will be made under the authority of the Treasurer. It will not appear first in a newspaper report.
– My question refers to a report of the success achieved overseas by Mr. McEwen in obtaining for
Australia the right to be represented at talks affecting the European Economic Community. Is the Acting Minister for Trade able to amplify the report? Can he say whether the statement that Australia can be represented on one occasion only is true or false?
– I have read with great interest reports which have been published in the press from time to time about the sterling work the Minister for Trade is doing overseas on behalf of Australia. I am quite sure that at the appropriate time the Minister himself would be the best person to indicate to the Senate and to another place the results of his mission overseas. The whole of Australia is indebted to him for the work he is doing.
– I address to the Leader of the Government in the Senate a question relating to the European Common Market. This is a subject I have thrashed on many occasions in this place over the past five years. I refer to the disquieting news published in Australian newspapers relating to the fruitless and time-wasting visit of the Deputy Prime Minister to the United States of America, Canada, the United Kingdom, and Europe. I ask: Is it correct to say that the six members of the European Common Market have already indicated that they have no intention to grant Britain special terms of entry to the market? Has the Minister read one Australian newspaper report which stated that Mr. McEwen was characteristically blunt and did not pull punches when talking to the British Prime Minister? Is that statement related in any way to cow-punching, having in mind the fact that Great Britain has decided to restrict the importation of Australian butter, a step that will drastically and seriously imperil the Australian dairy industry, which has received further setbacks because of tardiness and lack of interest in the search for new markets for Australian butter and allied products? While we are on the subject of butter, I ask whether the Government will issue a new publication in lieu of the dismal drivel contained in the booklet “Eat Better for Less” which stated that margarine was as good as butter and cheaper. Will the new booklet be called “ Eat Butter or Else “?
– Senator Hendrickson has been more than usually inaccurate in his statements. We always expect inaccuracies from him, but on this occasion he has excelled himself. The first question, which relates to the allegation that Mr. McEwen’s trip is futile and timewasting, really does scant justice to the importance of that trip. I do not think it is an over-statement to say that Mr. McEwen, in the conversations which have been held in the United States of America, Canada, and Great Britain, and those which are now being held in France, is filling a new page in Australian trade history. The statement that the European Economic Community has decided not to grant special terms of entry to Great Britain is a complete figment of Senator Hendrickson^ imagination. I have never heard that stated previously. We have a great saying here in Canberra that when journalists are short of something to write about they write up a “ think piece “. I have never even heard of their writing up a “ think piece ‘* along these lines. We want to be quite fair. We cannot even suggest that Senator Hendrickson is capable of thinking, can we?
The other questions, which relate to butter and the butter market overseas, are exercising the mind of the Government quite seriously. Butter marketing has always been a problem to the Australian dairy farmer. I do not think any government has given the dairy industry greater support than has the Menzies Government. I do not remember the granting of a subsidy of £13,500,000 a year to the butter industry when the Labour Party was in power. Any dairy farmer who listens to a rebroadcast of this question will learn how superficial is the knowledge that Senator Hendrickson has of this great matter.
– I ask the Minister representing the Minister for the Interior: Is it not a fact that there is a shortage of hostel accommodation for single males and females transferred or appointed to Commonwealth Public Service positions in Canberra? Is any action being taken to provide more accommodation by the construction of additional hostels in Canberra?
Are transferees or applicants for appointments in Canberra informed of the lack of suitable accommodation in the National Capital? Is there any likelihood that the standard of hostel accommodation in Canberra for these employees will be improved in the near future?
– Senator Marriott has posed a series of important questions on a matter about which I am not sufficiently informed to give an intelligent answer. If he will be good enough to place the questions on the notice-paper, I shall pass them to my colleague, the Minister for the Interior, who will provide replies.
– My question is directed to the Acting Minister for Trade and relates to the announcement to-day that powdered butter has been developed by the Commonwealth Scientific and Industrial Research Organization. Can the Minister say how this development is likely to affect the butter industry? Have any arrangements been made for taking up with nations in the hotter areas, where powdered butter probably would be of much greater advantage than elsewhere, the question of buying this commodity from Australia?
– I noticed the announcement This is another example of the great work of the Commonwealth Scientific and Industrial Research Organization. Perhaps the question should be answered by my colleague, Senator Gorton, who is the Minister in charge of that organization. The honorable senator asked what would be the effect of this discovery from the point of view of trade. I do not think that anybody could say anything about that at this stage, except, of course, that the cost of transporting butter throughout the world would be largely reduced. As Senator Gorton reminds me, powdered butter will require no refrigeration. The discovery is important, but the development is in an early stage. The process has not yet even been patented or taken up commercially. The C.S.I.R.O. has done a great service to the Australian butter industry.
– I preface my question, which I direct to the Minister repre senting the Postmaster-General, by saying that last year, during the debate on the Estimates, I asked whether the PostmasterGeneral’s Department would put in an experimental translator television station in Western Australia in order to prove whether such stations are efficient. The Minister was good enough to obtain from the PostmasterGeneral a written reply, which stated, in paragraph 3 -
Translator stations are of low power and the area throughout which a useful service can be provided by them is not as great as that by high power stations. They are therefore relatively wasteful of valuable television frequencies.
I ask the Minister: Is it not a fact that television in Australia operates on very high frequency channels? Because the Adler translator works on ultra-high frequencies, how does the Minister justify the statement that it would take up valuable television frequencies, the two frequencies being of entirely different types? Has the Australian Broadcasting Commission called for quotes for this type of equipment? Can the Minister give me a reason why the department should not experiment in this field’ so the people of Kalgoorlie, Geraldton and other areas of Western Australia may look forward to having this avenue of entertainment in the near future?
– This is a technical question, about which Senator Branson was good enough to talk to me, and I went to my colleague, the Postmaster-General, for specific information. It is a fact that television in Australia operates on very high frequency channels. Translator stations may be used in either the very high frequency or ultra-high frequency band. The Australian television system is being developed in the very high frequency band and there is no intention at present of using ultra-high frequency stations, be they translator stations or stations of other types. Recently, the Australian Broadcasting Control Board invited quotations for very high frequency translator equipment. The question of providing service for areas such as those mentioned is receiving continuing attention. Some experiments are to be undertaken with translators, but it does not necessarily follow that such stations are the best means of providing a service for any particular area.
– Will the Minister for Civil Aviation, in fairness to both major airlines, relieve the DirectorGeneral of Civil Aviation of his appointment as co-ordinator under the Airlines Agreement Act, because of the actual conflict between his duties as director-general and the judicial impartiality required in the office of co-ordinator?
– No, I certainly will not. The honorable senator may recall that the co-ordinator holds his office by a statute of this Parliament. I am certain that not at any time has it been suggested that there is any man in Australia more suitable to occupy this office, which requires technical, operational and administrative knowledge of the airlines industry, than Mr. D. G.’ Anderson, the DirectorGeneral of Civil Aviation. I have never heard it said of him, even by those who from time to time think it necessary to criticize his decisions, that he is not a man adequately and eminently suited for the job.
– Is the Minister representing the Minister for Territories aware that grave concern is being expressed by teachers’ organizations and other education authorities over the fact that people are being sent as teachers to New Guinea and other Territories after as little as six months training? Has consideration been given to the effect of this upon educational standards in the Territories and also to the prospect of these teachers, after leaving the Territories, being able to find employment in the educational structure of Australia or any other similar country?
– I have read the press reports upon this matter but I am not otherwise aware of the position. I have read that teachers with intermediate standard certificates are being sent to New Guinea but I do not know the facts of the matter. Therefore, I think it would be better if Senator Cooke were to put the question on the notice-paper.
– Is the Minister for the Navy in a position to say whether RearAdmiral Mackenzie was correctly reported as having said that, as a result of pressure by the United Kingdom Government, Australia was considering establishing a submarine fleet costing some millions of pounds?
– I am not in a position to say whether Rear-Admiral Mackenzie was properly reported when that statement was attributed to him. If he was properly reported and the statement was made by him, the statement was, in fact, not accurate. No pressure has ever been brought to bear by the British Government or the Royal Navy upon the Australian Government to do anything. The British Government would not take such a step. Rear-Admiral Mackenzie is out here on a purely routine visit, at his own request, to inspect Royal Navy submarines and establishments here. He is not here specifically to discuss submarines, nor is he here at our invitation, although we are delighted to take all opportunities for contact with naval officers from other countries.
– I ask the Minister representing the Minister for External Affairs whether he saw the statement of the Minister for Customs and Excise recently that the selection of trade commissioners on the dual basis of experience and ability had been an unqualified success. I ask the Minister whether the Department of External Affairs has thought of using such criteria in selecting its officials to represent it overseas, instead of the rather narrow criterion of mere academic qualification. If the department has not done so, will the Minister see the Minister for External Affairs and ask him to make an examination of this matter, in view of Senator Henty’s definite remarks?
– The answer to the honorable senator’s question is that the Department of External Affairs selects its recruits and cadets on ability and immediately proceeds to give them experience by posting them to overseas positions, and that the criteria of ability and experience are then applied to their future advancement in the service.
asked the Minister for National Development, upon notice -
– The answers to the honorable senator’s questions are as follows: -
The Commonwealth Government has informed the State Government of Western Australia thai it will permit the export of the whole of the Tallering Peak deposit, which is about 100 miles north-east of Geraldton, Western Australia, and is estimated to contain just under two million tons of mineable iron ore. The Western Australian Government has granted the mining rights over this deposit to Western Mining Corporation. The Commonwealth Government has also indicated that it will allow the export of 15,000,000 tons at the rate of 1,000,000 tons per annum from the Mount Goldsworthy deposit which is situated about 60 miles east of Port Hedland, Western Australia, and which is estimated to contain 31,000,000 tons of iron ore. The Western Australian Government has recently signed an agreement with three companies, Consolidated Gold Fields (Australia) Proprietary Limited, of Sydney, Cyprus Mines Corporation of Los Angeles, and Utah Construction and Mining Company of San Francisco, for the mining of this deposit. If an eighteen-month preliminary investigation proves to be satisfactory, the three com panies expect to commence full-scale mining in about three and a half years’ time.
asked the Minister representing the Minister for Social Services, upon notice -
– The Minister for Social Services has supplied the following answers: -
asked the Minister representing the Prime Minister, upon notice -
When a Commonwealth public servant transfers to a State public service does he retain his entitlements to long service leave, &c?
– The Prime Minister has supplied the following answer: -
There is no provision in Commonwealth legislation for a Commonwealth public servant to transfer to a State public service. When an officer resigns from the Commonwealth service to accept an appointment with a State public service he is normally paid in lieu of long service leave standing to his credit and bis superannuation contributions are refunded. The rights such an officer would have on appointment to a Slate public service would depend on the State legislation governing his appointment.
asked the Minister representing the Treasurer, upon notice -
Mr. W. A. McLaren, Secretary, Department of Interior;
Sir Kenneth Bailey, Secretary, AttorneyGeneral’s Department;
Mr. G. A. Rattigan, ComptrollerGeneral of Customs;
Dr. W. A. Westerman, Secretary, Department of Trade;
Mr. C. L. S. Hewitt, First Assistant Secretary, Department of the Treasury?
– The answers provided by the Treasurer are as follows: - 1 and 2. The maximum pensions to which contributors under the Superannuation Act 1922- 1959 may be entitled are set out in the First and Second Schedules to the act. There is no fixed amount of contributions. Thus the act provides for elections not to contribute for the full entitlement. Upon subsequent salary variations that confer an additional entitlement, however, provision is made for an election to take up previously neglected units of pension, subject to medical examination. The rates of contribution are set out in the Third, Fourth and Fifth Schedules to the act and vary according to age at entry to the scheme, age on each subsequent entitlement to a unit of pension that is taken up, whether the contributor has elected to contribute for a pension at age 60 or age 65, and whether he has elected to contribute to a pension for his widow equal to one-half or five-eighths of his own pension. The actual pension for which each of the public servants referred to by the honorable senator is contributing and the contributions they are paying for it are matters of confidence between them and the Superannuation Board.
asked the Minister representing the Attorney-General, upon notice -
– The AttorneyGeneral has supplied me with the following answers: -
Report of Special Advisory Authority
– For the information of honorable senators I lay on the table of the Senate a copy of the Special Advisory Authority’s report on Temporary Protection for Local Manufacture of Engine Bearings and Bushings for Motor Vehicles, and I ask for leave to make a short statement in connexion with it.
– Honorable senators will recall that in announcing new measures for giving temporary protection the Minister for Trade, Mr. McEwen, said also that, pending the necessary legislative changes, he would, if sufficient urgency existed, call on the Special Advisory Authority, Sir Frank Meere, to examine cases in which it appeared that urgent protection by means of import restriction might be appropriate. In keeping with that statement, Mr. McEwen subsequently referred to the authority the question of whether the local industry manufacturing engine bearings and bushings for use as original equipment and replacement equipment in motor vehicles is being so damaged by imports as to require urgent protection by means of import restrictions.
The Special Advisory Authority now has reported that he is of the opinion that urgent action is necessary to protect the manufacture of bearings and bushings used for original equipment but not those used for replacement equipment. He has indicated that the necessary protection could be given by import restriction, but at the same time has pointed out that in his opinion the circumstances are such that an equivalent result could be obtained more simply by an adjustment of the tariff which already lies within my power as Minister for Customs and Excise, that is to say the removal of these goods from concessional by-law.
After further examination of the matter, I have now decided to remove the goods from concessional by-law with effect as from to-morrow. I may add, however, that this action will not apply to any of those goods which are in direct transit to Australia on this date.
Motion (by Senator Spooner) - by leave -agreed to -
That leave of absence for one month be granted to Senator Reid on the ground of ill health.
Motion (by Senator Spooner) - by leave - agreed to -
That, in accordance with the provisions of the Parliamentary Proceedings Broadcasting Act 1946, the following senators be appointed members of the Joint Committee on the Broadcasting of Parliamentary Proceedings,. viz. - the President of the Senate, and Senators Arnold and Marriott.
Debate resumed from 14th March (vide page 479), on motion by Senator Paltridge -
That the bill be now read a second time.
Senator- Paltridge.- Before the debate is resumed may. I suggest that the convenience of the Senate may be suited if the two income taxation measures how before the Senate are debated concurrently?
– There being no objection, that course will be followed.
– The Opposition is not prepared to agree to the measure providing for a 5 per cent. rebate of income tax. On behalf of the Opposition, I move -
Leave out all words after “ That “, insert - “ the Senate notes with approval that, in response to public pressure, the Government has introduced the bill but the Senate condemns a proposal which although it provides for a 5 per cent. reduction of taxation, does so on an inequitable flat-rate basis which fails to extend an adequate share of the reduction to taxpayers with dependants and taxpayers with small incomes, and is of opinion that legislation to correct this injustice should be introduced immediately “.
– Is the amendment seconded?
– I second the amendment.
– The amendment that I have moved reflects the considered reasoning of the Opposition. The Opposition has carefully weighed the effect that its amendment will have on taxpayers. The amendment highlights our opposition to flat-rate income tax reductions. We are aware of the reasons behind the introduction of legislation of this kind, but we cannot believe that such legislation will have the effect contemplated by the Government. We do not agree that a flat-rate reduction will inject £30,000,000 into the economy of this country because a flat-rate reduction is inequitable and is superimposed upon the privilege that is in-built in a socalled graduated system of taxation. It cannot be denied that the Government has been forced to bring down this legislation because of the weight of public opinion.
This is one of the short-term measures used by the Government in an endeavour to cure a position that it created by mismanagement of the economy about twelve to fifteen months ago. The number of persons registered for employment decreased in February. One of the purposes of this legislation is the reduction of unemployment. We are aware that the school year started during February and that numbers of young people who were unable to obtain employment returned to school. The short-term measures being adopted by the Government will not have the effect that the Government desires.
This legislation proposes that the rebate of tax at the rate of 5 per cent, per annum will be spread over the final four months of the financial year 1961-62. For that period the rate will be 15 per cent. After 30th June the rate of rebate will revert to 5 per cent. That arrangement creates some uncertainty in the minds of people. Whereas certain categories of taxpayers under this system will receive a rebate of ls. a week, after 30th June the rebate will be reduced to 4d. a week. We are not satisfied that this type of legislation can cure the economic position that exists in Australia to-day. We are mindful of the fact that 112,000 people are unemployed at present, even after all the prospective schoolleavers who could not obtain work have returned to school. We demand from the Government something better than legislation of this type for our unemployed people. The Commonwealth Government, which controls the finances and economy of Australia, has a responsibility to do more than aggravate the inequity of a privilege system of income tax.
An examination of the schedules fo the income tax act show us that half of the total amount of this rebate will go to 90 per cent, of taxpayers and the other half of the rebate will go to 10 per cent, of taxpayers. It is unlikely that the amount received by the 10 per cent, of taxpayers in the higher income brackets will be put into circulation in the economy. The incomes of those taxpayers at present are high enough for a 5 per cent’, rebate of tax not to have any marked effect upon their standard of living. If they embark on additional expenditure it is more likely to be on luxury goods that are not manufactured in Australia and will not provide any additional employment, except for perhaps a few people in distribution centres.
We ask this question: Is the granting of a flat-rate rebate of tax a proper way to treat the family people in the community? We say that there should be more equity in Commonwealth legislation. Whilst the Government may claim that in legislation of this nature it is not attempting to make an equitable reduction in taxation and is not. attempting to cure injustices, and all that it is doing is trying to infuse extra money into the community, the overriding consideration in any community should be that justice will be given to those who need it most. If the greater proportion of the rebate were put into the hands of the people who have the least, that rebate would be more likely to go into circulation and have a tendency to create employment. When so much goes into the hands of a few people, we wonder whether the Government is really sincere in its attempts to use these methods to cure the position which, over the past twelve months, has got completely out of hand.
Another very interesting point that one must consider in this system of tax rebates is that at present the Commonwealth Government saves for the people about £90,000,000 a year and later refunds it to them. That happens in many ways, such as people having additional deductions for educational expenses, deductions for children born during the year, medical expenses and higher superannuation payments by those who can afford to pay them. Those people are not usually in the working class. Quite a large proportion of the amount that is refunded by the Taxation Branch is caused by people understating their deductions. For instance, a man with a wife and three children may ask his employer to make deductions which allow for his wife only, and then at the end of the year claim deductions for his wife and three children. In that way, the Taxation Branch becomes a saving authority for taxpayers.
The repressive measures taken by the Government have stabilized prices somewhat and already people have budgeted for the year, although they make payments from week to week as their salaries or wages come in. Any extra money that they are entitled to receive is quite likely to be left with the Taxation Branch and claimed at the end of the year in a lump sum. There is no way of forecasting how many taxpayers will ask their employers not to vary the deductions from their salaries or wages. If this practice applies to any great extent, quite a large amount of the £30,000,000 that it is said will be infused into the economy will not go into circulation at all. Phis is a position over which the Government has no control. Therefore, it is wrong for the Government to say that, by means of a 5 per cent, tax rebate, it intends to infuse £30,000,000 into the economy. The Government cannot be definite until it has calculated the number of people who will accept the 5 per cent, rebate.
The question one should ask again, of course, is whether there are not better ways to stimulate the economy than the particular method adopted by the Government. We say that while the method which the Government is using will cost the Treasury £30,000,000, half of that amount will go into the hands of people who are least likely to spend it. A big percentage of the other half, which will go into the hands of 90 per cent, of the people, will find its way to the single people and not to the families. lt is the families which are most likely to spend money. We say that a better way to enliven the economy would be to increase child endowment. The policy of the Australian Labour Party is to restore to child endowment the value that it had in 1949. If the Government could not see its way clear to infuse £62,000,000 into the economy by increasing child endowment payments to the value that they had in 1949, and I am not advocating this because it is not A.L.P. policy, the Government could have increased child endowment by a lesser amount and thereby put into the hands of the people most likely to spend it, a sum of money that would go into circulation and create employment. By that means the Government could do the best for those people who are in most need. If the Government had increased child endowment by a total of £30,000,000, that amount would have gone almost straight back into the economy, thus stimulating public investment. It is probable that our factories would have returned to normal production. At least, such a course would have stimulated the economy, in conjunction with the other short-term measures that the Government proposes, and would have led to a more equitable economic position.
If we consider whether the Government has a mandate to reduce taxation we are taken back to the general election campaign of December last. When we examine the position, we find that no political party was given a mandate to reduce direct taxation on a flat rate basis, but there was a very strong vote cast in favour of ‘increasing child endowment. ‘ Honorable senators opposite will no doubt be painfully aware that the Australian Labour Party- received 300,000 more votes than did the Government parties. The Australian Labour Party had, as a part of its policy, a proposal to increase child endowment. The Australian Democratic Labour Party also proposed to increase child endowment, and that party received approximately 500,000 votes from the electors of Australia. Overall, approximately 3,000,000 votes were cast in favour of an increase in child endowment, compared with 2,100,000 against such an increase.
The 2,100,000 votes cast in favour of Government candidates were not cast in support of a rebate of income tax. The Government would have been wiser to take note of the public conscience and to adopt measures approved by the public at the general election. I cannot understand why the increase of child endowment is taboo so far as the Government is concerned. It should be looking for measures to fulfil the promises that it has made to the people. The overriding one is the promise to restore full employment within a period of twelve months. I noticed in the press recently a statement to the effect that Mr. Brand, the Premier of Western Australia, intends to employ 9,000 people within two months. For the sake of the unemployed, I hope that is right. At the same time, I cannot help remembering that Mr. Brand has said that there is less unemployment in Western Australia at the present time than in the same period of 1959.
– The idea is to employ an extra 9,000 people after £150,000,000 has been spent in the next three years.
– We have yet to see that. Mr. Brand is speaking about employing 9,000 people in the next two months, not three years.
– The honorable senator should have a look at the headlines in the newpapers. We on this side of the chamber say that the Government should listen to the voice of the people and not continue the privileges that are inbuilt into the taxation system.
To instance just one aspect of that privilege, I refer to the tax rebates in respect of superannuation contributions. It is well known that the average working man is unable to contribute £400 a year to a superannuation fund. Therefore, the benefit of this tax provision is available only -to those members of the community who can afford to contribute on that scale. As a result, there is a further inbuilt privilege. While the Government can work out a graduated tax scheme such as we have now, it is unable to reduce taxation in a like manner. It adopts the flat-rate system. I do not want to dwell on the highlights of the scheme and to mention the people who pay 13s. 4d. in the £1 and those who pay ls; nevertheless, I propose to consider various aspects of the scheme without overstating the case and, I hope, without understating it, too. If the scheme is examined it will be found that it favours those who are least likely to spend money to give employment to the people, and employment of the people is the thing that we on this side of the chamber want to see. We are aware that even at this stage we are 112,000 tax-payers short. If the unemployed were put into employment they would pay a great deal of taxes and in that way help to improve the economy. The Government could stimulate the economy without any deficit budgeting.
– How many were put into employment last month? Do you remember the figures?
– I cannot say how many were put into employment last month. I can state approximately the reduction in registrations, but I do not accept that reduction as representing the number put into employment. I noticed a report in the “ Daily Telegraph “ this morning that last month manufacturing industries employed an extra 6,000. The number registered as unemployed fell by 19,000. We on this side of the chamber admit that some increase in employment has taken place, but we say that a large proportion of the 19,000 who went off the register were school-leavers who were unable to obtain employment and went back to school. No doubt Senator Scott saw a statement in the “ West Australian “ the other day to the effect that newsagents and sellers of text-books are complaining that they cannot supply all the text-books required for secondary education. One reason is that many children were unable to obtain employment and returned to school. Their text-books did not come on to the second-hand market. Over the years, suppliers of school books have budgeted for a certain quantity of secondhand books coming on to the market, but this year those books have not come on to the market. That indicates that many - I do not know the number, but the Government could carry out a survey - of the 19,000 who went off the register were school-leavers who did not obtain employment and returned to school.
As I stated, it was reported in the “ Daily Telegraph “ this morning that manufacturing industries have employed an extra 6,000 persons during the last month, but the position is not as good as the figures would indicate. I admit that on my argument I must agree that the number of unemployment registrations for January was boosted by school-leavers. I am loath to do that, because, although they were school-leavers, they were people who wanted employment and who did not want to return to school. In fairness to the Minister, I will admit that the unemployment figure must have been boosted by a number of school-leavers seeking employment. They have now gone back to school, and thus have reduced the number of registrations for employment.
– Do you think that any of those people were receiving the unemployment benefit?
– I would not think so - not in large numbers.
– I said “ any “.
– I will say that those under sixteen years of age were not receiving the unemployment benefit, because the legislation introduced by the Government does not provide for the payment of unemployment benefit to people under that age. The honorable senator will be aware, no doubt, that in the majority of States the school leaving age is fourteen years. That is one reason why these children would not be able to stay at home; they would have to go back to school.
There is no question that the Government could have introduced a sliding scale into its rebate scheme. Nothing is beyond the ingenuity of the Taxation Branch and the Department of the Treasury when it is a matter of taxing the people. They could have introduced a scheme on a sliding scale on this occasion.
– Do you remember a year when the Labour Party reduced income tax?
– The Labour Party does not claim to stand for low direct taxation. That is not one of its claims. Had a sliding scale been introduced, there is no doubt that public investment would have been encouraged, and greater public investment would have created the confidence that the Government requires the public to have in it. At the present time the community has very little confidence in the Government.
When the Menzies Government came to office in 1949 the average tax paid by Australians was £39 10s. 4d. In 1939-60 the average tax per head of population had risen to £73. 0s. 8d. At the present time the average would be approximately £80. During all this time child endowment - with the exception of the endowing of the first child - has remained stationary, as have so many other social service benefits.
– Do you remember how the basic wage in 1949 compared with the basic wage to-day?
– Yes, I can remember the basic wage in 1949, but I am prepared to admit an argument based on the basic wage only if the Government is prepared to admit that the amount it is spending on social services to-day is greatly inflated in comparison with the amount spent in 1949. When honorable senators opposite say that the Australian Labour Party spent £100,000,000 on social services in 1949 and that the Government is spending £300,000,000 to-day, they should take into account the decrease in the value of money. They are not prepared to do that, yet they ask speakers on this side of the chamber to compare the basic wage of 1949 with the basic wage of to-day. For the benefit of Senator Scott, in 1949 the basic wage was approximately £6, whereas to-day it is £14. 12s. I do not wish to hide that fact, but I do say that the basic wage to-day does not represent the same value as did the basic wage in 1949. We know that the basic wage was pegged from 1953 to 1956, and it has not yet caught up with the lag during that period.
Under the Chifley Government a married man with a wife and two children paid onethird of the tax paid by a single man. To-day, under the legislation as it stands, a married man with a wife and two children pays two-thirds the tax paid by a single man. There is no equity, and the Government has continued its system of privilege. Another way by which the Government could have infused this £30,000,000 into the economy of Australia, with more equity, would have been to fix the amount subject to rebate at a certain figure. The Government could have said that the first £750 of income earned was not taxable. That is approximately the annual total of the basic wage. If the first £750 of income or salary had not been taxable, the greater benefit would have gone to persons in the lower income bracket. For example, if the first £750 of an income of £1,500 was not taxable, the taxpayer would pay tax on an amount of between £400 and £500 and in the higher income bracket the rate of tax would be reduced by perhaps ls. in the £1. The federal basic wage is alleged to be a sum that will enable a man, his wife and three children to live in frugal comfort. I am aware, of course, that in 1934 the Commonwealth Conciliation and Arbitration Commission substituted for that a wage which industry could afford to pay. Nevertheless, the needs of the people are still the overriding factor. An annual basic wage income of £750 represents a weekly wage of £14 12s.
The proposal I have just put forward would have created some anomalies, but not half as many as are created by this legislation. Making a flat amount non-taxable would have benefited the single man more than the family man, but I do not know of any scheme that would not contain some anomalies. I have not yet seen one that did not have some anomalies. Whilst my proposal would have created an anomaly as between the single man and the married man, it would not have created the anomalies that are now being created by this legislation as between the man in receipt of a high income and the single man and the family man in the lower income bracket.
The reports of the Commissioner of Taxation are not up to date. The latest report covers the year 1959-60.
– I do not think it covers that year.
– It is the 1959-60 report, which covers the year 1957-58. In that year tax collections amounted to £360,000,000. It is estimated that this year collections of direct taxes will amount to £576,000,000. The Government is rather handy in throwing around millions of pounds. I point out that 5 per cent, of £576,000,000 is £28,800,000 and not £30,000,000, but for the sake of convenience we shall still deal with the £30,000,000. It is certain that that difference of £1,200,000 will not be infused into the economy, if the estimates of the Taxation Branch at the time the Budget was presented can be taken as a guide. The increase in tax collections is not the result of an increase in the rate of tax but is a reflection of the population growth. It is a reflection also of the inflationary spiral that we have witnessed over the past twelve years and of the general growth of the economy from year to year about which we have been trying to tell the Government for years but for which it does not budget. I well remember the year in which the Government budgeted for a deficit of £110,000,000. The Government finished the year with a deficit of £29,000,000. That was the result of growth within the economy - something which, as I said earlier, the Government does not take into consideration.
I have divided the taxpayers into three groups. I hope I have not been unfair in doing so. I have taken, first, those who are in what would be approximately the basic wage group. To obtain the figures from the report of the Commissioner of Taxation I have had to take the sum of £800. I find that taxpayers in receipt of less than £800 pay 11.19 per cent, of the tax collected, that they represent 44.74 per cent, of the total number of taxpayers, and that they represent 25.18 per cent, of the total taxable income. Working on those percentages, we find that the 5 per cent, rebate will give to taxpayers in receipt of less than £800 a year a sum of £3,357,000 out of the total of £30,000,000. That is the sum which persons who are in receipt of a little more’ than the basic wage, those on the basic wage, and those receiving less, will get as a result of this 5 per cent, rebate It must be remembered that the great bulk of family workers will be in that group. That shows just how inequitable will be this 5 per cent, flat rebate. It is interesting to note, too, that this group will receive 15.82 per cent, of the total deductions that are provided for in the act.
The next group I have taken is that of persons receiving between £800 and £2,000. I find that 47.37 per cent, of the total tax paid is paid by people in this group, that they represent 50.61 per cent, of the total number of taxpayers and 56.95 per cent, of the total taxable income. They will receive £14,211,000 of the proposed rebate. It is logical to assume that all these people will spend the rebate if they collect it. I say that large numbers of them will not collect it. The only direction in which persons in this group receive any great benefit is in relation to allowable deductions. They get 72.83 per cent, of the total deductions.
Then we come to a very small group, 4.65 per cent, of the total taxpayers, receiving over £2,000 a year in income. They pay 41.44 per cent, of total income tax and earn or receive 17.87 per cent, of the total taxable income. From the 5 per cent, rebate they will receive £12,432,000. So 4.65 per cent, of the taxpayers will get very nearly one-half of the total amount involved in the 5 per cent, rebate. At present they are allowed 11.35 per cent, of the total deductions. So we can see how the system of flat-rate deductions affects the field. Total deductions, of course, include subscriptions to medical and hospital benefit funds, life assurance and superannuation contributions, and gifts to public institutions. It is obvious that the people in the higher income bracket are allowed greater deductions as they are able to afford the things in respect of which these deductions are allowed.
A man on the basic wage, with a wife and two children, is taxed at the rate of ls. 8d. in the £1, or £63 5s. a year. The allowable deductions in respect of his wife and two children total £299, and his taxable income after those deductions is £461. The tax payable is £22 17s., and the 5 per cent, rebate will represent £1 3s. per annum, or ls. 6d. a week over four months. I do not know what impact that will have on the economy. This group includes less than half of the taxpayers.
– From an Australian point of view, it does not matter much who will spend the amount provided. There will still be £30,000,000 to spend.
– I am trying to direct attention to the fact that it will not be spent, because the bulk of it is not being put in the hands of people who are most likely to spend it.
– What will they do with it?
– They will tell thenemployers not to pay it over the next four months and if they are self-employed they will not spend it. The Government has no way of estimating what that amount will be.
A built-in privilege is included. A man on the basic wage has a wife who is valued at £11 19s. 4d., a first child valued at £7 lis. 8d., and a second child valued at £5 8s. 4d. The total deduction allowable in respect of these dependants is £24 19s. 4d. Let us compare the position of this family man with that of a single man in the same income group, whose tax on £760 would be £63 5s. His 5 per cent, rebate will be £3 3s., or 4s. a week over four months, as compared with the family man’s ls. 6d. a week. I find that the average income of the Australian working man is approximately £21 a week, or £1,092 a year. After allowance for a wife and two children, the taxable income of the average worker is £793, which attracts a tax of £68 9s. A rebate of 5 per cent, on this tax will amount to £3 8s. 6d. per annum, or 4s. a week over four months. Yet a single man with the same income, paying a tax of £126 4s., will receive a 5 per cent, rebate, amounting to £6 6s. 2d. per annum, or 7s. a week over four months, nearly twice as much as the amount received by the family man.
Then we come to the inbuilt privilege enjoyed by the higher tax group. The wife of a taxpayer receiving £21 a week is valued at £16 12s. 8d., his first child at £10 12s. 4d., and his second child at £7 lis. 8d. His total allowances for dependants are £34. 16s. 8d. So the family of the average wage earner is about £10 more valuable than the family of the basic wage earner.
The group of .taxpayers receiving £2,000 a year is, I believe, roughly the executive group in Australia at present. The tax payable on that income, without deductions, is £376 5s., or 3s. 9d. in the £1. After allowing deductions for a wife and two children, the taxable income is reduced to £1,701, which attracts a tax of £282 15s. Hd. The rebate will amount to £14 2s. 4d. per annum or 16s. 3d. a week for four months. So, from the basic wage earner who will receive ls. 6d. a week, we have come to the person who will receive 16s. 3d. a week in tax rebate. A single man in this category or a man without dependants, whose wife might even be working in business with him, pays £376 5s. in tax. A rebate of 5 per cent, will amount to £18 16s. 3d., or £1 2s. a week over four months. The value of a wife to a person in this income group is £26 16s. 3d., the value of a first child £17 ls. 3d. and the value of a second child £12 3s. 9d. The total value of deductions for these dependants is £56 ls. 3d. I do not think I have been unfair in taking the £2,000 income group. We can see that the value of a family increases from about £25 in the case of a basic wage earner, to £56 ls. 3d. in the case of a man receiving £2,000 a year. That system of privilege will be perpetuated by flat-rate deductions. It is a system of which the Australian Labour Party cannot approve. We approve of the rebate in tax but we cannot approve of the way in which it affects the family man.
– What would you suggest?
– I have made two suggestions which you would have heard had you been listening. I do not propose to repeat them. If you look at the report of my speech you will see that I have made two suggestions. Unlike Government supporters, I am not a taxation authority, but I think that my two suggestions, if adopted, would give more equity than the proposals in this measure. If the taxation authorities cannot implement either of the schemes that I have suggested, I say that they require some education. When I make that statement I am not attacking the taxation authorities; but I emphasize that the system of applying rebates of tax to groups - and I have instanced the first £750 a year as not being taxable - is followed in other parts of the world. There is no reason why the taxation authorities here could not have a look at such a system and work out a scheme that would give equity and justice to the Australian people.
– But you work on the assumption that all taxpayers are paying the same amount. That is the fallacy in your argument.
– I do not think that I have done so. I have taken three income groups - the basic wage group, the average wage group, and what I term the executive group. I have not said that every one earning below £750 a year will pay the same amount of tax. I have taken the exact group. We must insist on the immediate introduction of legislation to give justice to all people, and particularly those in the lower income group.
– I rise to support the bill and I recommend to the Senate that the amendment that has been moved by Senator Cant on behalf of the Opposition be rejected. I do not propose to follow Senator Cant through all the highways, by-ways and lanes into which he has led himself - indeed, I do not think he has found his way out of some of them. However, I think it desirable to restate the purposes of the two very simple bills that are now being discussed. In effect, the first measure seeks legislative sanction of the Government’s decision to provide a rebate of 5 per cent, of the personal income tax and social services contribution payable on income derived during the 1961-62 income year. The other bill relates to the way this rebate is to be applied on provisional tax.
The first point I want to make is that there appears to be two sorts of personal taxpayers in this country. The first type are those who pay their tax through the instalment deduction system, and on the latest figures available to me, £235,000,000 was collected in this way during the year 1958-59. The other type are those who make cash payments of their tax, and £153,000,000 was collected from this group in the year 1958-59. So it will be seen that the Government had to devise a way of rebating this 5 per cent, to two different types of taxpayers. The wage-earners, as I shall call them, contributed £235,000,000 in one year. I compliment the Government upon the speed with which it has dealt out justice to these people. It has provided that as from 1st March last their tax instalments shall be reduced by 15 per cent. The result is that in the last four months of this financial year the amounts deducted from the wages and salaries of those who pay income tax by instalments will be decreased by 3s. in the £1. That is a very marked decrease and the benefit will go to the people who a year or two back, on the figures available to me, contributed £235,000,000 in this way in a full year. I compliment the Government and the officers of the Taxation Branch upon the way they have dealt with this matter. I understand that it is working smoothly.
Senator Cant raised an interesting point when he said that possibly some taxpayers will not avail themselves of the opportunity to reduce their tax instalments. I understand that that is quite a feature of the system of taxation. I had occasion recently to talk to a leading Melbourne industrialist who said that inquiries he bad made in his business disclosed that this was actually happening - employees were not seeking the reduction of their instalments. That is a matter for themselves. What the Government has done is make these additional moneys available to taxpayers by introducing this measure and pre-supposing that it would be passed, because those reductions in instalments have been in operation since 1st March.
According to the statistics that I find in the thirty-ninth annual report of the Commissioner of Taxation, taxpayers in the group who make cash payments of their tax, in the main do so in the last four months of the financial year, so that comparatively few such people had met their tax obligations by cash payments as at the date of the Government’s announcement. I understand that the taxation branches throughout Australia have been most assiduous to ensure that immediately after 7th February the table of amended provisional tax was calculated and notified to the authorities responsible for deducting tax instalments from salary or wages. I understand, also, that any taxpayer who had already paid his tax before 7th February can get an immediate refund on application for it. Again I compliment the
Government on the way it has implemented this legislation in anticipation of its being passed.
I want to say now a word or two about the remarks passed by Senator Cant, because I think some of them have to be answered. He dealt with a wide range of subjects, from child endowment to secondhand school books of Western Australian students. He condemns, apparently, this flat-rate system of taxation as well as the flat-rate system of rebates, but I want to remind him that when Labour was in power that was the system of taxation that it used. I well recall that the taxation legislation that this Government inherited in 1949 laid down that tax would be paid by every person with an income of £104 a year. There was also the flat rate of tax. Therefore, it is rather interesting to compare the present legislation with what we inherited. Let me take, for example, the taxation of aged persons. Under this Government, a man and wife aged 65 and 60 respectively may enjoy an income of approximately £910 a year without being liable to pay any income tax. When Labour was in power it was most assiduous in taxing people with incomes as low as £104 a year. I submit that if there had been any substance in the proposition put this afternoon by Senator Cant, effect would have been given to it by the Labour Party when it was in government prior to 1949.
This legislation simply removes the extra 5 per cent, by which income tax was increased in November, 1960. As the increase was put on, so it has been taken off. I cannot see any objection to that course. Obviously the purpose behind any tax adjustment, including the adjustment of sales tax, is to stimulate industry and thereby stimulate employment. I think that employment is receiving a very great stimulus at present because of the Government’s overt act in stimulating business and industry generally. Recently the Senate debated the Government’s proposal to reduce the sales tax on motor vehicles. Some honorable senators who participated in that debate were able to show that registrations of new motor vehicles in February of this year were considerably in excess of those in January. The increase in the number of new motor vehicles registered means that all industries connected with the motor trade will increase their activities. That is an illustration of the stimulus created by the reduction of sales tax on motor vehicles. But how much greater will be the stimulus to industry brought about by the reduction of income tax! I was interested to read in yesterday’s “ Financial Times “ a statement about the upturn in the economy. That statement shows clearly that when we consider this matter we should examine not only the increase in expediture on consumer goods, but also, as was mentioned by Senator Wright by way of interjection, the increased investment that will flow because of the reduction of tax. Already increased investment has stimulated production of a good many basic materials. The statement in the “ Financial Times “ reads -
Australian industrial activity turned on a burst of speed during February in response to the Federal Government’s economy concessions.
The boost to business confidence brought a wave of re-employment and increased production.
Output of some basic materials increased by 30 to 40 per cent, over the January level.
Building materials such as hardboard, clay bricks and Portland cement all re-acted strongly to the Government stimulus.
Activity in the building industry itself sharpened during February.
We must not measure this increased activity solely by the spending power of wage-earners and others, good as it may be. The important thing is that production of basic materials will be stimulated. Industry will gain stimulus from the knowledge that money will be available for investment at reasonable rates. The £8,000,000 or £10,000,000 that will be diverted from Consolidated Revenue into the pockets of the taxpayers will lead to industrial expansion and increased employment opportunities. Already the employment statistics are encouraging. About 20,000 more people are employed now than were employed one month ago. As the months roll by this legislation will lead to more benefits of the kind to which I have already referred.
Little remains to be said about these two very small bills. I urge Senator Paltridge, who is in the chamber, to encourage his colleague, the Treasurer, to say as soon as possible whether the 5 per cent, rebate will continue after 30th June’ next. It is most desirable that industry, in particular, should know whether the present stimulus is to be maintained, because industry has a good deal of planning to do. I remind the Minister that the Government proposes to introduce a scheme providing for investment allowances for industry. Already the Government has indicated to the rural industries that the 20 per cent, depreciation allowance will be continued for a number of years. That was a wise move on the part of the Government. At the same time, it should let industry know as soon as possible whether the 5 per cent, income tax rebate, imaginative as it has proved to be, will be continued. If the Government were to make a statement on this matter I do not think it would break any of the traditional secrecy that it has observed over budgetary matters in the past. The Government has made a statement about depreciation allowances for primary producers. It has made a statement about investment allowances. I think that industry and the people generally are entitled to know whether they will enjoy this 5 per cent, tax rebate in the coming year. The 5 per cent, rebate, in addition to the depreciation allowance and investment allowance, will, if continued, lead to increased stimulation of industrial activity. I support the bill. The amendment should be rejected because, having no legs, it cannot run.
– I support the amendment moved on behalf of the Opposition by Senator Cant. When this legislation first was mooted I wondered at its purpose. After some weeks we ascertained that the legislation was designed to put nearly £30,000,000 back into circulation. By that means it was hoped to get the wheels of industry turning much faster than they had been turning since the Government’s stopandgo fiscal policy was first announced. The Commonwealth Statistician has told us that the number of persons registered for employment has fallen from about 130,000 to about 112,000. I, like everybody else, am pleased to see that fall in the number of persons registered for employment. I hope that the number continues to fall. However, I am a little apprehensive about the employment position in the coming winter months. At least I am hopeful.
asked a very pertinent question; namely, will the Government tell the people whether or not this rebate will continue after -30th June? “ It is true, as he said, that the Government has already told the primary producers that they will continue to receive their depreciation allowances for some years. What about telling the people whether or not they will continue to receive the 5 per cent, rebate? I do not agree with the reason the Government has given for granting this rebate. I believe that the most money that we can expect to be circulated in the community forthwith is about half the amount suggested by the Government. We will be lucky to get that much.
The man with a taxable income of £2,000 a year already has sufficient money to buy all that he needs. He is not short of anything. I do not think any member of this Senate is short of anything. If he is, he must be a better saver than the average person is. If he is short of anything, I think he is foolish because he has the money with which to buy anything he needs. I believe that that applies to an ordinary person with a taxable income of £2,000 a year. Therefore, I suggest that such a person would bank the amount represented by the reduction of the tax instalment or invest it.
– Many of them who are putting their children through school would want another £100 and could spend it usefully.
– There may be some people in that position; but I still believe that a man with a taxable income of £2,000 a year could do that without receiving this rebate.
– It all depends on the expenditure to which he is committed already.
– Yes; I know that that is true. No one knows what another person needs. One is pretty good if he knows what he can do with his own money. We cannot judge what other people do. I am just talking about the ordinary run of people.
If the main purpose of this measure is to throw £30,000,000 into the economy so that every one will start buying, the wheels of industry will turn immediately and hirepurchase payments will increase, the Government’s measures have had those effects up to date. The money owed to hire-purchase companies is falling each month. The only thing that is really increasing to-day is the amount of savings bank deposits. I do not think that the Government is pleased about that. I would not be pleased ‘ about it if I were in the Government’s position because I believe that this increase denotes that people are a little apprehensive of the future. If they were not, I think they would be spending more money.
– They are too near to a Labour’ government.
– That is just one of those ratty interjections we hear too frequently. One marvels at the mentality - such a small mentality for the National Parliament - of a person who would make an interjection like that. Members of the Government must remember - I am not one who will allow them to forget it - that their economic policies have stopped and started many times. They have told us two or three times since 1960 what was to be done for the economy and one is a little apprehensive about taking notice of what they say. Up to date the Government’s measures have not worked. The Government has had two or three bites at the cherry and most of the cherry is still left. One does not like to agree completely with a Government measure without giving it very careful consideration.
If the Government wanted to put £30,000,000 into the economy, we say that it could have found means other than this of doing so. Those means would have benefited a greater number of people. Then the Government would not be worried, as it is and must be at present, because about half of this money will be used, not by individuals, but by savings banks. The savings banks’ deposits will increase and those institutions will lend money for government or semi-government works or housing.
– Does not that create employment?
– Yes, but that is not what was expected. Your look of apprehension nearly frightens me.
– I am expressing amaze1ment.
– Wait a minute! Your look nearly frightens me and I do not want to be frightened at this time on a Tuesday. The Government was obliged to help the people. It had an obligation to right the wrongs it caused. The Government caused a lot of suffering with its stopandgo economic policy. It increased the number of unemployed from 60,000 to 130,000 people. Then it brought the State Premiers to Canberra and handed them a large amount of money. It is common sense to say that the Commonwealth Government cannot put money into local government and State government instrumentalities and not reduce that figure. Honestly, I was amazed that the figure was not reduced more than it was.
– To what figure are you referring?
– The unemployment figure. I honestly thought that in a month the figure would be reduced more than it was, taking into consideration the time of the year. As a rule, there is an uplift in industry in the second month of each year. Nothing much is done in the first month. People do not go back to work until about 12th January, as a rule, and industry does not run normally until about the beginning of the second month. So one has cause to be a little apprehensive.
We have said that if the Government wanted this money to be spent it could have found better methods than this. I do not know why the Government granted this rebate. Was there any clamour to give a 5 per cent, rebate of tax? Was it given because a certain section-
– I did not hear any outside interest suggest it. Did you?
– No, only the press to which the Government listens. That means all the newspapers except one; but do not be too critical of it.
– Of what?
– Of a certain section of the press, because you never know the day or the hour when it will find its rightful place or the place that it has always occupied.
– Are you talking about the Melbourne “Herald”?
– I read an article by Mr. Eddy in the financial pages of the “ Herald “. 1 asked: “ Why does he want this rebate? What will it achieve? “ Senator Laught read an interesting article - or portion of it. I have read that article and I think it said, after the portion Senator Laught read, that there was some apprehension in certain industries. Senator Laught should read the complete article. When I say that, I am not accusing him of wilfully suppressing part of the article. He picked out a certain passage in the article that supported his argument. It would not have been a bad idea for him to read the complete article. If he had read it right through, it would have been seen not to support the honorable senator’s contention entirely.
– Pretty well.
– I do not know the definition of that phrase. We say that the Government could have gone about stimulating the economy in a better way. It could have given the benefit in such a way as to ensure that the money would be spent. If that had been done industry would have been given the impetus which, unfortunately, we have not yet seen.
The position is indeed a worrying one. I suggest that the supporters of the Government should speak to the people in the big cities. If they talk to manufacturers they will find that they are by no means happy. That thing called confidence has not been restored by any means. I am not saying that to gain political kudos for the Australian Labour Party or any other party. Recently I was speaking to a person who is in a pretty big way in industry in my own State. We were speaking candidly and he said that he was worried about the position. I think that that is true of all of us. We want to know when the kick is coming that will put the economy back to somewhere near its previous position.
If the Government thinks that by reducing income tax by 5 per cent., and by more or less bowing to the dictates of certain sections of the press, it can restore economic stability, it will not get very far. Senator Laught said that he had been informed by the majority of the people to whom he had spoken that their employees had asked them to continue to deduct from their pay the same amount of tax as previously.
– Do you think that the interests you support have jacked up costs too high?
– I should like the honorable senator to explain the words “ the interests that I support”, without that peculiar look he gets in his eye. If he did so, I might understand what he meant, and I would answer his question with the greatest of pleasure and, I hope, with courtesy. How many honorable senators have decided to allow tax deductions to be made from their pay at the old rate until the end of June, or until August, when they receive their income tax assessments? I do not know what other honorable senators did, but I know what I did, and I think the majority of people are saying, “ We will leave it there until we get our income tax assessments.”
– Does that not give you a little less anxiety than you would otherwise expect to have in June?
– No. Why should it?
– If I have a few pounds in the bank, I certainly have less anxiety.
– I do not want to go into the figures. Senator Cant went to a great deal of trouble in that respect. It will be remembered ‘hat the honorable senator stated that a man with a wife and two children, on a taxable income of £800 a year, or on the average gross wage of about £21 a week, would receive a tax reduction of about 6d. a week under the Government’s proposal. His wife will not be buying a new washing machine or a new refrigerator on that amount.
– The figures quoted by Senator Laught showed that there was a pretty good increase in washing machines.
– I am not doubting what the honorable senator said, burl wish he had read the article right through. If very few goods were bought in November, December and January, it stands to reason that there would be more bought in some other month of the year. Surely it is not contended for one moment that because a man with a wife and two children receives a tax reduction of 6d. a week from 1st March to 30th June - and with no certainty that the reduction will continue - his wife will be induced to rush to Myer’s Emporium, in my very lovely city, and buy a new washing machine.
– Do you not think the weakness might be with the increase in washing machines?
– That statement, coming from my friend more than from any one else, is beautiful. He is more or less implying that there should be control of prices.
– Well, what are you doing?
– I repudiate that suggestion.
– Then what did you say? Did you not say that people were not buying washing machines because of their price?
– No. I said that maybe the weakness is with the increase in washing machines and not in bricks, timber and other hard materials.
– I do not think that Australian women have any more than they are entitled to have. I understood from the honorable senator’s interjection that he was referring to prices.
– No, nothing of the sort.
– You would have no controls at all. That is why the rural industries of this country are in their present position. You were one who helped to put them in that position, because you would not have control of land prices. You know of the difficulty that that lack of control has landed the country in.
If I may refer briefly to the legislation before the Senate, Sir, I say that we would have preferred to see the economy stimulated by other means. We want the wheels of industry to keep turning. We want the factories to keep working, because in those factories we can provide employment for our people and the migrants that we bring here. We are of the opinion that the Government will not receive from the £30,000,000 that it proposes to inject into the economy the value that it expects to receive.
– I rise to support the bill. I was amazed that Senator Kennelly, the Deputy
Leader of the Opposition in the Senate, should have said so little about the amendment moved by Senator Cant. In fact, he mentioned it only to say that he was supporting it. We have to look at the overall picture of the measures that are coming before the Parliament during this sessional period. The Government believes, and I do too, that those measures will have the right effect on the economy and will correct the employment position. The bill before the Senate at the moment proposes to allow a tax deduction of 5 per cent., and it is expected that during the four months between the beginning of March and the end of the financial year, approximately £30,000,000 will be injected into the economy as a result of it. This measure, in conjunction with the reduction of sales tax and grants to the States and local government authorities, will, we believe, have the desired effect. If we compare the unemployment figures for to-day and for a month ago, we find that 19,000 fewer people are registered as unemployed now than were registered a month ago. There are now 112,000 people registered as unemployed, as against 131,000 a month ago. I believe that most honorable senators will agree that if the number falls to 60,000, that will, to all intents and purposes - taking into consideration the people who change from job to job because they are seasonal workers and register as unemployed in the meantime - represent a position of almost full employment.
– With 60,000 unemployed!
– The honorable senator can criticize me if he likes. That is fair enough. That position is a little different from the position of 5 per cent, of unemployment that was mentioned in another chamber.
– Who mentioned that?
– Mr. Haylen, in 1946, when he was speaking on a bill in the other place. It was during a period when a government of a different political colour was in power.
– Why don’t you burn the “ Hansard “ ?
– I know the honorable senator would like to burn that copy of “ Hansard “, but we will keep it because the statement 1 have quoted was made by a responsible member of the Labour Party. He said that if any government in the free world, I think, had no more than 5 per cent, of its work force unemployed, that, to all intents and purposes, would represent full employment. This Government has never yet allowed the position to deteriorate to the stage where we have had 5 per cent, of our work force registered as unemployed. The maximum number registered as unemployed has represented only about 3 per cent, of the work force, and that has occurred only on very rare occasions. At the moment the percentage is roughly 2.5. and it is rapidly declining.
– There are still more than 100,000 people registered as unemployed.
– The number now is 112,000. Nobody wants to see it as high as that. We on this side of the chamber do not wish to see it as high as that, any more than do honorable senators on the other side. Honorable senators opposite speak about lack of confidence, so soon after the opening of the new Parliament. I agree wilh Senator Kennelly that the reason why a certain number of people are unemployed at any particular time is lack of confidence. I think the words Senator Kennelly used were to the effect that the little bit of confidence that is so necessary in the minds of the Australian employers is not there.
– That is true.
– Why is the confidence not there? It is because, from the month of September right through until the election, many members of the Labour Party endeavoured to create a feeling of insecurity in the minds of the employers of this country. They did that in order to cause a state of affairs in Australia in which large numbers of people would be unemployed. They believed that if they could bring about that position, the electors would return their party as the government. I venture to say that, as a result of its propaganda, the Labour Party came very close to becoming the government. No honorable senator opposite can deny that that propaganda was used. It can bc read in “ Hansard “. I will obtain a list of speakers, and present the list to honorable senators opposite if they like.
– Read out what they said.
– I do not think that is necessary, but I believe that what I have said is factual. That is why I have said it.
I wish now to refer to some statements made by my colleague from Western Australia. He said that Western Australia at the moment has less unemployment than other States.
– Who is this?
– My colleague, Senator Cant, a member of the Opposition. He stated this afternoon that the number registered for employment in Western Australia at the present time is 6,000, and that in 1959, under a government of a different colour, some 800 or 900 more than that were unemployed. Senator Cant then said that Mr. Brand was reputed to have stated that if his party were returned to office it would employ another 9,000 people within two months. I want to correct that statement, which will appear in “ Hansard “, because the Premier of Western Australia, Mr. Brand, never said that. What he said was that the Liberal-Country Party Government, during the last three years, had got promises that during the next three years £150,000,000 will be invested in the State, and the spending of that money will create jobs for another 9,000 people. In fact, the State Government, during the last three years, because of its active policies - it has not been hampered by the dead hand of socialism - has created 6,000 extra jobs.
– Do you not think the look on Senator Kennedy’s face indicates that socialism makes him sick?
– I think the mention of it makes him go a little pale. It cannot make him too sick, because that is the policy of his party. However, he likes to soft pedal it a little.
The records for Western Australia show that when a socialist government is in power, the greatest unemployment occurs, and when a socialist government is not in power the position is reversed.
– You would say anything at all.
– I shall quote the figures, and the honorable senator can contradict me if he likes. He can tell me whether I am right or wrong. In 1953, a Liberal Party government was in office in Western Australia. When that government went out of office, the number of unemployed was the lowest in any State in the Commonwealth. Then we had the socialistic Hawke Government in office for three years. When that Government went out of office, Western Australia had the greatest number of unemployed of any State of the Commonwealth.
– You can say “Oh”, if you like. All I am doing is giving you the statistics.
– How many people are there in Western Australia?
– I am referring to unemployment on a percentage basis. You must be reasonable. I never thought for a moment that the honorable senator would . have any other basis in mind. I am talking on a percentage basis, and the figures I have quoted are correct.
Sitting suspended from 5.45 to 8 p.m.
– I was about to refer to Senator Cant’s statement that in 1949 the amount of income tax paid per capita was £39 10s. 4d. and that in 1959 it was £73 0s. 8d. The honorable senator did not have any figures at his command for 1961 but he estimated that the per capita payment was almost £80 or double the amount paid in 1949. Although the amount of tax paid by each individual has doubled, the income tax rate in 1961 was almost two and a half times as great as that of 1949. That would lead one to believe that in 1961, a person would have more money left to spend and therefore would be able to buy far more goods than his counterpart of 1949.
To prove what I have said, I should like to offer a comparison between the increase in disposable incomes and that of the consumer price index. The weighted average consumer price index for the six capital cities for the quarter ended 31st December, 1961, shows an increase of 97.6 per cent, over the figure for the quarter ended 30th June, 1949. Now I shall give the increase in the disposable or after-tax income of basic wage earners. In 1949-50 a man without dependants and in receipt of a basic wage of £330 paid tax amounting to £16, leaving a disposable income of £314. The basic wage for the same person in 1961-62 would be £749. His tax would be £58 9s. and his disposable income would be £690 lis., an increase of 119.9 per cent, since 1949. When we compare that increase of 119.9 per cent, with the increase of 97.6 per cent, in the consumer price index, those of us who are able to add will realize how much better off is a basic wage earner to-day than was his counterpart in 1949. For a man with a dependent wife the increase would be 120.5 per cent, and for a man with a dependent wife and one child it would be 120.6 per cent. In 1949-50 a basic wage earner with a dependent wife and two children received £330. He paid tax amounting to only 16s., and was left with a disposable income of £329 4s. In 1961-62 the same person would receive a wage of £749, would pay income tax amounting to £20 lis. and would be left with £728 9s., an increase of 121.2 per cent.
– What about a man with an independent wife?
– -I have not the relevant figure here, but I am quite satisfied that he would be better off than he was formerly. I cite those figures to refute the statement that the people of to-day are being hampered by taxation.
Let us examine the position in 1949-50, when a socialist government was in office. We find that then, taking the social service contribution into account, the maximum rate of tax was 16s. in the £1. The social service contribution which, as I said, was included in the 16s., was a flat rate of ls. 6d., in the £1. Do all honorable senators agree with that statement? I do not hear any one contradicting it. The maximum rate levied by this Government is 13s. 4d. in the £1, and I understand that following the introduction of this 5 per cent, rebate it will be 12s. 8d. in the £1. That rate includes the social service contribution. In 1949 the Labour Government had the National Welfare Fund, and the Budget speech that year revealed that the flat-rate social service contribution of ls. 6d. in the £1 was expected to yield approximately £79,000,000.
We heard Senator Cant say earlier to-day that the Austalian Labour Party believed in progressive rates of taxation. What was the view of the Labour Party on this social service contribution of ls. 6d. in the £1? Did the Labour Government believe in a flat rate of tax, which meant that a person in receipt of £200 a year should pay the same rate £.s a person in receipt of £15,000? It did. Yet we get all this kafoofle from members of the Labour Party to the effect that they believe that taxation should be imposed on a sliding scale. They say that by this 5 per cent, reduction we are helping people who pay high income tax more than we are helping people who pay low income tax. That, of course, is perfectly true, but when income tax is increased we hurt the person paying high income tax more than we hurt the person paying low income tax. I think honorable senators opposite would agree with that.
The Government has altered the legislation relating to income tax and social service contributions and has done away with the practice of requiring a person to pay a social service contribution of ls. 6d. in the £1 whether he earns £200 or £16,000 a year. A person earning £200 a year to-day pays far less, in proportion, for social services than does a person with an income of £16,000 a year. I do not wish to delay the passage of this important piece of legislation. The amendment is completely ridiculous. I cannot support it, and I have much pleasure in supporting the bill.
– I rise to speak quite briefly in closing this second-reading debate. I want to state formally, of course, that the Government does not accept the amendment submitted on behalf of the Opposition by Senator Cant, and referred to in such acid terms by my colleague, Senator Scott, a moment or two ago. I want to take this opportunity to thank Senator Laught and Senator Scott for most effectively demolishing the attempted criticism which has come from the Opposition in respect of these measures. Indeed, looking at the debate in retrospect, it appears to me that the Opposition has failed completely to understand the purpose and the intention of this piece of legislation.
This legislation takes its place with the range of economic measures which the Government announced some time ago and which we are now in the process of considering in both Houses of this Parliament. It takes its place beside the measures which provide for increased spending by State governments, for accelerated spending by Federal Government departments, for increased loan allocations for immediate spending by local authorities, for sales tax reductions to stimulate the sales of motor cars, for increased money for housing, and for greater initial advances for war service homes. This is a measure designed to increase the spending capacity of the taxpayers of the country.
The Opposition, not with any great validity, has based its argument against the legislation on the ground that the distribution of the benefits which will flow from this tax concession will not result in immediate spending. Senator Cant produced a mass of statistics. I do not speak in any way offensively when I say that I was not sure what he was trying to prove. He said that because this concession of £30,000,000 would be distributed in such a way that some of it - the smaller proportion of it - went to the higher income earners, it would not result in expenditure. I had it in my mind right through Senator Cant’s speech that his idea of expenditure was restricted purely and solely to the act of a man or a woman receiving money from some source, putting it into his pocket or her purse and going down the street to spend it. That is spending, I suppose, in a very real sense, but spending is not restricted to that sort of activity, Mr. President!
Spending extends over all forms of activity and all forms of investment. For the purpose of this argument, what would it matter if a taxpayer received - I quote these figures merely by way of example - a £30 a week concession in respect of this legislation, and that £30 a week was not spent in the way that Senator Cant envisages but was spent by way of investment in a manufacturing enterprise or by way of stimulating some other form of economic activity? No one will deny that this legislation, through a number of channels, will pump into the economy an amount of not less than £30,000,000. For the purposes of the legislation, it matters not whether that £30,000,000 is spent on consumer goods to be consumed immediately, on consumer durables or on capital investment. The purpose of the legislation is to get £30,000,000 back into the economy and moving. That is precisely what the legislation will do, particularly when taken in collaboration with all the other measures that the Government has introduced.
If one establishes that point - and I submit, with great respect, that it is not a difficult point to establish - the only other point of any substance in the Opposition’s case is, in effect, an attack on the principle of progressive taxation. I want any member of the Labour Party, the alternative government, at some time or other to stand up in this place and say that he is opposed to the principle of progressive taxation. If honorable senators opposite, in opposing this legislation, are prepared to attack the principle of progressive taxation, they must be prepared to state - and I should like them on any appropriate occasion to state - that they oppose progressive taxation, and to go on record with reasons why.
I do not want to dwell at any length on the distribution of these concessions. It is sufficient to say that if one looks at those income-earners whose incomes lie between £105 and £2,000 - I do not waste the time of the Senate by breaking them into sub-categories - one finds that there are in this category no fewer than 4,012,000 taxpayers, out of a total of 4,315,000. The proportion of the £30,000,000 that will go to that category is 54.3 per cent. I mention those figures merely to indicate that the greater proportion of refund is going back to 4,000,000 people in a category that extends from the lowest income-earners to those with an income of £2,000 a year.
But the point was taken - and it was stressed - that the reduction in tax authorized for persons in the low income group will be less than that provided for persons receiving a greater income. Of course it will. That is the very principle of progressive taxation. Let me take an example. The tax reduction for a taxpayer witha dependent wife and two children earning £1,000 a year will be £2 14s. The reduc tion for a taxpayer with similar domestic responsibility - a wife and two kiddies - but earning £5,000 a year will be £77. Taking this case, the argument of the Labour Party is that here is a fellow getting only £2 14s. rebate on £1,000 while the man on £5,000 is getting £77 tax reduction. But let us look at it a little closely, because the situation cannot fairly be considered in isolation of two facts. First, one taxpayer will pay only £51 4s. tax while the taxpayer with the income of £5,000 will pay - and listen to this - twenty-nine times as much in tax, that is, £1,469 8s., and, secondly, the reduction is made on a progressive scale. Then it becomes completely obvious that the taxpayer on £5,000 a year should receive this greater amount of benefit than the taxpayer on £1,000 a year.
The existing principle of progression in tax rates is widely accepted - I repeat, it is accepted by the Labour Party - and it will not be disturbed by the proposed 5 per cent. rebate. The person who now pays a tax equal to, say, one-tenth of his neighbour’s tax will continue to pay one-tenth of his neighbour’s tax under this legislation. Clearly, a 5 per cent. reduction in personal taxation will not destroy or alter the effectiveness of the present progressive rate.
I return to the point from which I started: Having regard to the purpose of this legislation - to get £30,000,000 into spenders’ hands - there can be no valid criticism of the legislation. The amendment is rejected.
Question put -
That the words proposed to be left out (Senator Cant’s amendment) be left out.
The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)
Majority . . . . 7
Question so resolved in the negative.
Original question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Consideration resumed from 14th March (vide page 500), on motion by Senator Paltridge -
That the bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from 14th March (vide page 506), on motion by Senator Paltridge - That the bill be now read a second time.
– This is a machinery bill and the Opposition will not hinder its passage. The measure arises out of a mistake made in computing the amounts payable under the income tax reimbursement system to the States of Victoria, Tasmania and Western Australia. After the original calculations had been made it was discovered that those three States were entitled to more money. This bill puts the matter in order.
– I am pleased to know that the Opposition supports this measure. As
Senator Benn has said, this a machinery measure but it has created a great deal of interest. At the Premiers’ Conference in 1959, from which the Prime Minister and the Premier of New South Wales were absent, a formula was agreed upon under which the States would receive from the Commonwealth £244,500,000 by way of tax reimbursements. The agreement was to run for six years. The Commonwealth, being eager to enter into an agreement with the States, agreed to increase the amount from £205,000,000, which had been the amount of the reimbursements in 1958-59, to £244,500,000. That agreement was reached after a good deal of haggling between the States and the Commonwealth. Mr. Bolte of Victoria stood out for and received an extra £1,000,000. At the Premiers’ Conference in the following year certain Premiers claimed that the Commonwealth, in arriving at its formula, had neglected to take into account the increase in the basic wage granted by the court. Their claim, however, was rejected and the existing formula was continued. I have no doubt that the formula will prove satisfactory to all concerned during the entire six years of its operation.
This bill is designed to correct an anomaly that exists because of the movement of population. Certain States will receive increases. I understand that Victoria will receive more than £1,000,000 extra because of the increase in that State’s population.
Financial agreements between the States and the Commonwealth are a step in the right direction. In the past there has been too much haggling between the States and the Commonwealth. Now the States know where they stand for six years. The current agreement has been in operation for almost two years. Under the formula a State automatically receives an increased amount from the Commonwealth if its population increases or if there is an increase in the average wage throughout Australia. Under this arrangement the Commonwealth and the States know exactly where they stand. I believe that at the end of the current six-year period the States will seek a renewal of the agreement for a further six years.
.- This matter has been explained very fully in the second-reading speech of the Minister for Civil Aviation (Senator Paltridge) and the speeches made by Senator Benn and Senator Scott. The only thing that remains to be said is that it is a pity that the error has occurred because of inaccurate estimates. The Commonwealth has proposed a plan by which a more accurate estimate can be made during intercesal periods. Of course, at the time of a census the figures are . accurate. That plan has not been adopted fully. I hope that it will be adopted with the full agreement of all the States and that in future it will be unnecessary for us to occupy our time on a bill designed merely to correct an error.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Paltridge) read a first time.
– 1 move -
That the bill be now read a second time.
The purpose of this bill is to give the Treasurer authority to raise loan moneys totalling £7,500,000 for financial assistance to the States for housing. This amount will be additional to the £42,900,000 already authorized to be raised under the Loan (Housing) Act 1961, thus making a total authorization this financial year of £50,400,000.
In accordance with the requests of the States, and the approval of the Australian Loan Council, the total amount of £50,400,000 will be distributed as follows: -
The provision of this amount in 1961-62 represents an increase of £13,200,000 over the amount advanced to the States in 1960- 61. The decision by the Commonwealth to increase the level of advances under the Commonwealth and State Housing Agreement by £7,500,000 was one of the measures it has taken to stimulate activity and employment in the building industry.
Advances to the States of the moneys referred to in this bill will be made under the authority of the Housing Agreement Act 1961, which provides that the Treasurer shall advance moneys in accordance with the scheduled Housing Agreement with each of the six States. This agreement came into operation during the present year. The new agreement embodied in the Housing Agreement Act 1961 extends the 1956 Housing Agreement, which expired on 30th June, 1961, for a further term of five years subject to certain minor amendments which were discussed in the second-reading speech on the Housing Agreement Bill.
The provision of finance by the Commonwealth under the 1956 Housing Agreement has been most beneficial to State housing schemes and to the development of building societies. The passage of the bill now before the Senate will provide additional funds for the same purpose. The execution of the new agreement required special legislation to be passed in all States. That legislation is now completed and the new agreement has been duly signed and is in formal operation in all States.
It is expected that, of the total Commonwealth advances of £50,400,000, £33,305,000 will be allotted to the State housing authorities, compared with £26,030,000 during 1960-61. From the funds provided in 1960-61 and from additional advances made by the Commonwealth to finance the construction of dwellings for members of the defence forces, the housing authorities commenced 9,583 homes and completed 8,859 homes. The funds available for 1961-62 will allow a 28 per cent, increase in construction expenditure by the authorities. The total allocation to building societies and other institutions for home ownership during 1961- 62 is estimated at £17,115,000 compared with £11,170,000 last year. I commend the bill to honorable senators.
Debate (on motion by Senator Kennelly) adjourned.
Debate resumed from 15th March (vide page 535), on motion by Senator Henty -
That the bill be now read a second time.
.- I may desire to make a few comments on this bill, and I ask for leave to do so at a later stage.
Leave granted; debate adjourned.
Debate resumed from 8th March (vide page 434), on the following paper presented by Senator Spooner -
River Murray Waters Act - Annual Report of the River Murray Commission, together with statements of gaugings and diversions, for year 1960-61.
And on the motion by Senator Buttfield -
That the paper be printed.
– I am very pleased to have this opportunity to speak on the annual report of the River Murray Commission. There is no document that is of more importance for Australia than this report. After all, a nation’s wealth is measured by its production, and the prosperity of its people depends on the development of its natural resources. What is more important in Australia than the development of our water resources? Water is vital to any country, but in Australia it is of greater significance than in any other country because Australia is the driest continent in the world. The Australian continent has an average annual rainfall of only 16 inches, whereas in Europe the average is 24 inches, in Asia, 25 inches, and in the United Stats of America, 29 inches.
It is well to consider the rainfall distribution in our continent. It is seldom appreciated that about one-third of the total area of 3,000,000 square miles is desert, where the average rainfall is only about 5 inches a year. A third of the continent is suitable only for pastoral development on a vast scale. Only about one quarter is suitable for intensive development, and a great deal of this part of Australia consists of rugged mountain country an i areas subject to floods and droughts. These facts should be made known to people ou:side Australia, particu larly in South-East Asia, because it is not generally realized that the difficulties that are experienced with development in this country are due to geographical factors.
When I was in India I was asked quite frequently whether Australia’s prosperity was due to the fact that it was a vast continent with a small population. I do not think that that is the reason why Australia is prosperous. We are prosperous because everybody knows how to work. Nevertheless, it is important to get the facts of the matter over to the people of South-East Asia. They should be made aware that there is only a very small part of our continent which is suitable for closer settlement and for the kind of development which they seem to think is possible right throughout Australia. It is also important to tell the story to our own people so that they will understand the reasons for our developmental troubles and appreciate our difficulties with water supplies.
I spent some time this afternoon, Mr. Acting Deputy President, in ascertaining the distribution of rivers in the various States of the Commonwealth. Unfortunately, I am not able to put my hand on the document that I prepared, so that the figures I am about to give will be approximate. South Australia has perhaps the greatest difficulties of all the States so far as water supplies are concerned. We have one main river, one river from which we can draw a regular supply of water. According to the Commonwealth “Year Book “, there are in that State 22 creeks, which is the only way to describe them as most of them flow only after heavy rain. They constitute the only other source of water available to us. On the other hand, every other State has many big rivers. Western Australia has 55 listed water courses. In Victoria there are approximately 124, and there is a slightly smaller number in New South Wales. Tasmania has 84, while Queensland has 940. By comparison with the other States, South Australia is in a very difficult position, being almost completely dependent for its water supplies on the river Murray.
I wish to enlarge on some of the matters mentioned in the report of the River
Murray Commission. If we are to continue to increase our population and also to develop our economic resources, we have to think big and to think nationally, lt is of no use each State saying, “ This river runs mainly through our territory and therefore we should get the water as it flows through “. The people of States such as Victoria and New South Wales should realize that they have a tremendous number of rivers, whereas South Australia does not have a great volume of water available. The people of other States must try to alter their thinking on this subject and endeavour to appreciate that South Australia should be able to continue its development in consonance with that of the other States. I am not suggesting that South Australia should be given more water than the other States have overall. What I am saying is that the people of Australia generally should come round to thinking that South Australia must not be hampered in its development because it has not sufficient water.
It is interesting to realize just how much water is necessary when development is commenced. In the field of agriculture, I find that the production of one ton of grain wheat requires 1,100 tons of water. The production of one ton of wheaten hay requires 325 tons of water, and a ton of subterranean clover, 525 tons of water. In manufacturing industry, the production of a ton of steel needs 65,000 gallons of water, and a ton of paper, 15,000 gallons. It will be seen, therefore, that water is essential in and around the cities if we are to increase our manufacturing industries. In this respect, South Australia has a very difficult task. We have dammed in the hills around Adelaide practically all the possible sites for the storage of water. Yet, with all that water stored, we can draw only a little less than one half of our needs from those dams. We are dependent on the river Murray for more than half of our requirements for domestic use, for farm development, for commercial use and for manufacturing purposes.
This leads me to speak in more detail of the river Murray itself. The Murray is the greatest river in Australia. In fact, it is the fourth largest river in the world, lt is surpassed in length only by the Nile, the Mississippi and the Amazon. It is a mighty river. We have to depend on it a great deal, and for that reason we must conserve the water of the Murray to ensure that we get the most benefit from it. Its basin covers about 400,000 square miles, or oneseventh of the area of the whole of Australia. The length of the Murray itself, not taking into account the length of the Darling or the Murrumbidgee, is 1,600 miles, 1,300 miles of which is below Albury. That is the part with which we are most concerned and on which the River Murray Commission reports. It is important to note that the fall of the river below Albury is 9 inches a mile until it reaches South Australia, and then the fall is only 1 inch a mile. This is very important to South Australians. When we experience floods such as we experienced two or three years ago, it is almost impossible for the water to get away. South Australia suffers under the very great disadvantage of having the waters of the Murray converge upon the State in times of flood. Great devastation is caused and the flood waters cover the countryside for a long time.
Back in 1863, people in Australia began to realize that something would have to be done to harness the waters of the Murray. The three States concerned - New South Wales, Victoria and South Australia - got together and tried to formulate plans to carry out this purpose. By 1880 it was realized that irrigation would be much more important than navigation, which in 1863 people had thought would be the main problem on the Murray. It was not until 1902 that a royal commission was formed to consider the best way to find a working arrangement to which the three States could agree, so that they could get on with development. It was in 1914 that full agreement was finally reached and the River Murray Commission was set up.
I dare say that most honorable senators know exactly how the River Murray Commission works, but it will not take me long to cover the ground. The commission is constituted of four members - one representative of the Commonwealth Government and one representative of each of the three States that I mentioned - New South Wales, Victoria and South Australia. The representative of the Commonwealth is the president of the commission. The commission is charged with responsibility for the construction, maintenance, operation and control of struct ires on the river, and for the distribution of water in accordance with the River Murray Agreement Act. The act sets out the many things that are to be done by the River Murray Commission. Perhaps tie most important of these is distribution of the waters of the river.
In a normal year, South Australia, according to the agreement, is to have 1,254,000 acre feet of water. The agreement specifies the quantities for the various months. The States of New South Wales and Victoria are to share what water is then left after it flows over the Hume dam at Albury. Those States, of course, have complete control of the tributaries of the Murray in their areas and of the distribution of the water in those tributaries. A little over one-half of the one and a quarter million acre feet of water that goes to South Australia is virtually wasted, in the sense that it has to be used for purposes other than irrigation or development. Practically one-half of the water is used for flushing out the river, because of the grave problem of salinity. The river bed in the upper areas of South Australia, around Renmark, Berri and Waikerie, is an old sea bed. If the height of the water in the river falls below a certain level, salt flows into the river and the water becomes unusable below Waikerie. A certain amount of water has to be kept flowing through the river all the time to keep the stream flushed out, and to ensure that the salt does not flow in and make the water unusable. Only 600,000 acre feet of water is usable.
In a drought year, the amount of water made available to South Australia varies. It is sometimes less than the one and a quarter million acre feet stipulated for times of normal flow. As the water flows over the Hume dam at Albury, it is divided between the States in the proportion of five-thirteenths each to Victoria and New South Wales and three-thirteenths to South Australia. In a drought year, South Australia receives only 40 per cent, of its normal supply, or about 700,000 acre feet. When we remember that over 600,000 acre feet has to be usee for flushing the river out, it will be see i that not very much water is then available for normal uses, and certainly not very much for further development of the State.
It is important to realize just how much South Australia depends upon the waters of the Murray. Naturally, in the northern part of the State irrigation is the main use to which the water is put, but 97 per cent, of the population of South Australia uses water that is taken from the Murray below Waikerie. Honorable senators will realize the importance of what I mentioned a while ago. If we did not keep the river flushed out, 97 per cent, of the population of South Australia would be in danger of having to use salty water. In 1961, 40,000,000,000 gallons of water were supplied to South Australians from the river below Waikerie. It is estimated that by 1970 65,000,000,000 gallons will have to be taken from the river to provide for normal development, as planned at present.
Perhaps it is important, too, to realize how the State is being developed by water taken from the Murray. Before I speak of the main Morgan-Whyalla pipeline, let me say that there are over 9,500 miles of pipeline in South Australia, carrying water to 95 per cent, of the population of the State. All this water is taken from the river below Morgan. The main pipeline in South Australia is the Morgan-Whyalla pipeline, which takes water more than 223 miles to Whyalla. Just prior to the last war, Whyalla had a population of 800. Its only industry was the shipment of iron ore from the Middlebank ranges. It was only the project to pipe water from the Murray to Whyalla that led to the development of the shipbuilding and iron smelting industries there. In 1943, the first pipeline was completed and 3,000,000,000 gallons of water flowed into Whyalla in that year. In a very few years, the population of the town increased, and to-day there are 14,500 people there. The population has grown in that short span of time from 800 to over 14,000. Work was started on a second pipeline last month. This line will cost £18,000,000 to build and, when completed, it will carry more than four times the amount of water which is flowing through the present pipeline. The water from the new pipeline will allow for development of the steel industry and of ore processing at
Iron Knob. Naturally, with the development of these major industries, many satellite industries will come into being, and it is impossible to estimate how large the population of Whyalla will be in twenty years’ time. What I have said indicates how the development of South Australia is completely dependent on the river Murray. If we could not visualize the supply of enough water in the future, it would be impossible to proceed with development. Other towns in the north are being fed by this pipeline. Very important industries are being developed in the industrial triangle consisting of Port Pirie, Port Augusta and Whyalla. At Port Pirie lead is smelted, and at Port Augusta power is generated and there is the railway centre for the north. The . pipeline continues for another 108 miles beyond Port Augusta to Woomera where there is a project that is of vital importance to the whole of Australia. Perhaps the security of the whole Western world is tied up with the rocket range and the work that is being carried on there.
When we realize that in time of drought, as things are placed at the moment, South’ Australia can expect to get only about 40 per cent, of its normal supplies of water, the necessity for going ahead with the construction of the Chowilla dam becomes quite obvious. That dam would hold back approximately 4,500,000 acre feet of water and would be of importance not only to South Australia but also to Victoria and New South Wales. I strongly advocate the construction of this dam as soon as possible. It is estimated that in the next 50 years there will be some twelve drought or restricted years. South Australia would be at a very grave disadvantage in those years if she could not get more water than she is getting at present. We believe that the construction of this dam would solve our problem for the near future. Perhaps it would be only for the near future. Obviously it would be of the greatest advantage to South Australia if the project could be worked by South Australia in conjunction with the Commonwealth, because naturally South Australia would get a larger share of the water. But New South Wales and Victoria would still gain advantages from the dam even if it were worked entirely by South Australia and the Commonwealth. Of course, it would be of greater advantage to those other two States if it were worked by the River Murray Commission on the lines I outlined earlier.
The River Murray Commission has worked out many ways of dealing with the matter, but in its report it has advanced at least two suggestions. One is that the water should be allocated in drought years in the normal ratio of 5-5-3, South Australia to get three-thirteenths of the water. Alternatively, the allocation should be altered so that all three States share alike. As South Australia is so gravely disadvantaged because of the lack of rivers suitable for damming or for the supply of water, it should not be difficult for the other two States to say, “Let us agree to alter the allocation so that we all can draw equally in time of drought”. As the other two States have so many more rivers, they would not be gravely disadvantaged. If South Australia is to develop and we are to have decentralization, in what other way can we expect to get the water that will be needed?
The suggestion for damming the river in South Australia is one which we as South Australians advocate. We hope the other two States will think big, will think nationally, and will say, “All right, it may be vitally important to South Australia to have a slightly larger share in time of drought “. It is important to realize that we have not yet had a year which has been declared a restricted year, even though we have been very close to it. We hope such a situation will never arise. With the development of the Snowy Mountains area, if we are able to go ahead with the construction of the Chowilla dam it may be possible to avoid restricted years.
– What is the estimated cost of the dam?
– It is approximately £14,000,000. Just recently in this chamber I asked whether that cost could be reduced by the use of nuclear explosions similar to those that are being experimented with in America. It seems that that would be a practicable proposition. Professor Higgins said he thought a dam could be built in South Australia for approximately £1,000,000 or perhaps less. I hope the possibility of using this means will be examined. If it were possible, it would certainly be a nuch better proposition. Probably more water could be dammed, because it would t e possible to deepen the channel of the ri/er to hold more water without flooding any more country.
Let us get ahead with the building of this dam. Let us acknowledge that South Australia is gravely disadvantaged because of the lack of suitable rivers. Let us as a nation say, “ South Australia is to have a bigger allocation”. South Australia quite gladly joined the other States in paying for the Snowy Mountains scheme, which will benefit mainly New South Wales and Victoria in the allocation of water and in the production of power. I do not think anybody has any regrets about that scheme on the score of cost. Certainly South Australia is getting some advantage from it. But each State in the Commonwealth in its turn is getting some advantage from the taxpayers of Australia. It is time that South Australia was given extra consideration by the other States. Let us build this dam quickly and ensure the development of that State and the future prosperity of all Australia.
– Mr. President, I ask for leave to make my remarks at a later stage.
Leave granted; debate adjourned. t^. Senate adjourned at 9.17 p.m.
Cite as: Australia, Senate, Debates, 27 March 1962, viewed 22 October 2017, <http://historichansard.net/senate/1962/19620327_senate_24_s21/>.