Senate
2 May 1962

24th Parliament · 1st Session

  1. Senate
  2. 24th Parliament
  3. 1962

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

page 1033

QUESTION

CIVIL AVIATION

Senator ORMONDE:
NEW SOUTH WALES

– Can the Minister for Civil Aviation state why air services from the town of Corowa have- been cut from five to Melbourne and five to Sydney each week, to two services a week, one to each city? I have been requested by the Corowa Chamber of Commerce to seek that information.

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

– I knew of the interest of the Corowa Chamber of Commerce in this matter. I am not aware of the reason for the curtailment of the services conducted by Trans-Australia Airlines. I should imagine that it would be, as is usually the case - in part, if not in whole - lack of passenger support. However, I have had the matter brought to my attention and ] have requested that T.A.A. furnish me with information in connexion with the cutting down of those services. As soon as I have that information I shall be pleased to let the honorable senator have it.

page 1033

QUESTION

OVERSEAS INVESTMENTS IN AUSTRALIA

Senator WRIGHT:
TASMANIA

– I ask the Minister representing the Treasurer whether I am correct in recalling that a figure of £39,000,000 is stated in the quarterly Treasury Bulletin as representing private capital inflow into Australia during the quarter ended 3 1 st March. Will the Minister be good enough to comment upon the significance of any trend that that figure indicates?

Senator PALTRIDGE:
LP

– I think Senator Wright addressed this question to me on a previous occasion. I regret that I have not with me the information that I should like to give him. I did have a look at the matter at that time and I am able to say now that one of the factors which comes readily to mind - there are others - is that the very great imports of the previous period were paid for in the period under review against forward ordering and that, in itself, created something of a capital outflow, which was reflected in the figure cited. Also of course, credit sales of wheat to red China and other credit sales were factors which contributed towards net capital inflow being the comparatively small figure of £39,000,000. I regret that I cannot give offhand any further information. I shall have another look at the matter and see what information I can get for the honorable senator.

page 1033

QUESTION

NUCLEAR TESTS

Senator KENNELLY:
VICTORIA

– I preface a question, which I direct to the Minister for Civil Aviation, by referring to a statement made yesterday by the Minister that as a result of testing nuclear weapons over Johnston Island by the United States of America some delays in the schedules of Qantas Empire Airways Limited will occur. Can the Minister tell me how many flights will be affected and what will be the cost to Qantas of these delays? Will the Government make representations on behalf of Qantas to the United States Government so that the airline may be recouped for any losses that it might incur as a result of these nuclear tests?

Senator PALTRIDGE:
LP

– The question of the number of flights that will be affected is now the subject of inquiry, as a result of directions I have given. The length of time that may be lost also will be investigated. At the moment, I am unable even to estimate the cost of the delays, but I should think that it would not be great. Costs are incurred when flights are delayed, but the extent of the costs may not be as great as at first appears likely. However, as I obtain information on the matter I will let the honorable senator have it.

The Australian Government has not considered making a claim against the Government of the United States of America with a view to recompensing the Australian airline, Qantas, for any loss which it may sustain. In fact, I doubt whether any consideration by the Government of the matter would result in a claim being made on the United States Government, as the Australian Government recognizes that the testa being carried out in the Pacific will react to the ultimate benefit of the defence of the West in this troubled world.

page 1034

QUESTION

IMMIGRATION

Senator BUTTFIELD:
SOUTH AUSTRALIA

– Can the Minister representing the Minister for Immigration state whether the new immigration statistics issued by the department recently mean that previous statistics were wrong? To what extent have the results of the immigration programme been understated under the old statistical computation, compared with the new system?

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

– The revised system of compiling these statistics has been based on computations made by the Commonwealth Statistician since 1st July, 1958. The Bureau of Census and Statistics has been examining and collecting new details concerning people who have entered Australia between that date and the present time. Before steps were taken to change the method of compilation, a close examination of statistics for that period was made. It was found that, under the old system, the position regarding departures and arrivals was not shown to be as satisfactory as it is under the new system, which provides information regarding departures, arrivals and permanent settlers. I have in front of me figures which show that under the old system, the number of arrivals in 1961 was shown as 127,586, and departures as 59,147, or a net gain of 68,439. In fact, the permanent arrivals were 95,407 and the departures 8,240, or a net gain of 87,167. Whereas the figure was shown as 68,439 under the old system, under the new system, which gives the real figure, the net gain is shown to have been approximately 19,000 greater.

page 1034

QUESTION

TELEPHONE SERVICES

Senator SANDFORD:
VICTORIA

– My question is addressed to the Minister representing the Postmaster-General. Is it a fact that direct dialling facilities are now available on telephone services between Sydney and Canberra, but that such facilities are not yet provided for Melbourne telephone subscribers who wish to call numbers in Sydney? If the answer is in the affirmative, can the Minister say when it is expected that direct dialling will be possible between Melbourne and Sydney?

Senator WADE:
Minister for Health · VICTORIA · CP

– It is a fact that direct dialling is possible between Canberra and Sydney, but the facility has not yet been extended to the service between Melbourne and Sydney. I shall ask my’ colleague, the Postmaster-General, whether he can indi-, cate a specific date for the commencement of the service. I know that arrangements are well in hand to, have’ this facility made available between Melbourne and Sydney, but I am. not aware of the date oh which it is contemplated that the change-over will take place.

page 1034

QUESTION

TAXATION

Senator MARRIOTT:
TASMANIA

– Will the Minister representing the Treasurer say when the Government will implement its recently announced policy of not forcing travellers from Australia first to obtain a clearance from the Taxation Branch before leaving this country?

Senator PALTRIDGE:
LP

– There is a bill currently in another place dealing with this matter. When the bill has been passed by both Houses of the Parliament, and has received the Royal Assent, the new arrangement will be put into effect as soon as is practicable.

page 1034

QUESTION

TELEVISION

Senator McMANUS:
VICTORIA

– I ask a question of the Minister representing the PostmasterGeneral. What was the reason for allocating to the proposed additional television station in Melbourne channel 0, which does not appear on some sets, and which will involve many viewers in expense if alterations to existing sets are required? As the Postmaster-General has said that he will review the allocation of channel 0 in order to see whether it is unavoidable, has the Minister any idea when a decision will be announced, because such decision may affect in some instances sales of certain types of sets?

Senator WADE:
CP

– The reason for the establishment of an additional station in each of the metropolitan cities of Melbourne, Sydney and Brisbane is simple. The growth of television has been so rapid and so great that there is a demand for an additional station in those cities.

Senator McManus:

– I do not question that. I asked about the allocation of channel 0 in Melbourne. Why was channel 0 chosen?

Senator WADE:

– 1 cannot add anything to the comment made by the PostmasterGeneral yesterday that this is a most complex and technical problem. The PostmasterGeneral said that he was discussing this matter further with his departmental officers, and that on completion of those discussions he would make a statement about the problems involved in allocating channels and would give a final decision on the matter.

page 1035

QUESTION

TAXATION

Senator VINCENT:
WESTERN AUSTRALIA

– My question, which I direct to the Minister representing the Treasurer, relates to a question asked in another place yesterday by the honorable member for Scullin. The honorable member asked -

As it is reported that a member of one of the Government parties understated his income for taxation purposes and that his name was omitted by direction from the official list, recently published by the Commissioner of Taxation, of those who understated their income or evaded their legitimate taxation, I ask: Was any such name omitted from the list?

Has the Minister anything to add to the Treasurer’s reply to that question by the honorable member for Scullin, who, without being specific, has cast a very serious reflection on the integrity of the Commissioner of Taxation and his staff?

Senator PALTRIDGE:
LP

– Anybody who has seen the form of the question asked by the honorable member for Scullin could describe it as being unfortunate, to use the mildest of terms. The question not only casts a reflection on the integrity of the Commissioner of Taxation and his staff, but also implies improper conduct on the part of the Treasurer. What is equally important, the inference may be drawn that the question could reflect on the personal integrity of any member of the Liberal Party or the Australian Country Party in this Parliament. The honorable member for Scullin has made a most unfortunate choice of words. In saying that I let the matter down as lightly as I can at this stage. Perhaps at a later date more will be said about this type of tactic, which apparently is becoming part of a campaign by at least some members of the Labour Party. I thought that the Treasurer, in his answer to the question yesterday, put Mr. Peters well and truly in his place. This morning the Treasurer has addressed to that gentleman a letter, the concluding paragraph of which reads -

I shall appreciate it, therefore, if you will place in my hands - preferably before the meeting ot the House this afternoon - any information which supports or relates to the allegation you have brought before the Parliament.

It will be interesting to see just what sort of action we get from the honorable member for Seullin.

page 1035

QUESTION

APPLES

Senator O’BYRNE:
TASMANIA

– My question is directed to the Minister representing the Minister for Trade. Last February, I directed his attention to the prospect of a bumper pest-free crop of Tasmanian apples in 1962. In view of the fact that the crop has exceeded early estimates, can the Minister inform me whether adequate shipping arrangements have been made to lift all the fruit available for export this season?

Senator HENTY:
LP

– I remember quite well the honorable senator bringing this matter before the Senate. At that stage I undertook to make inquiries for him and ascertain from the Department of Trade what the position was. The assessment of the crop at that time was 4,400,000 cases, but the crop has proved to be in the region of 8,000,000 cases. I understand that it is the largest crop ever produced in Tasmania.

The shipping arrangements that have been made to transport the crop from Tasmania have been highly satisfactory. As I said to the honorable senator when he raised the matter earlier, organizations closely connected with the industry look after this business. Upon making investigations, I found that they already were alerted to the prospect of a much larger crop and had taken steps to ascertain what shipping arrangements could be made. I believe that all Tasmanians owe a debt to the shipping companies for completely re-organizing their services so that ships are available to move from Tasmania this crop which is almost double the estimate.

page 1035

QUESTION

CIVIL AVIATION

Senator LILLICO:
TASMANIA

– Has the Minister for Civil Aviation any further information on the proposed- air services to the west coast of Tasmania? Should they to inaugurated, would the aerodromes concerned need any further expenditure on them to bring them up to the’ required standard?

Senator PALTRIDGE:
LP

– I do not think there is anything I can add to’ what I ‘have already said on this matter, except that for these air services to the west coast of Tasmania there could be, in some circumstances, a need for rather larger aircraft than the types now used. That does not mean - I hasten to assure the honorable senator of this - a large aircraft but it may be preferable to use a twin-engined light aircraft instead of a single-engined light aircraft. In that circumstance it may be necessary to extend the runways at the three airports concerned. The question involves a good deal of technicality, and at this moment I am not able to say anything further about it.

page 1036

QUESTION

RADIO AUSTRALIA

Senator KENNELLY:

– My question is directed to the Minister representing the Minister for External Affairs. Does the Department of External Affairs have any say in the kind of programmes to be broadcast over Radio Australia? If it does, upon what statutory authority is such control based?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– I should like that question to be put on the notice-paper. My understanding at the moment is that for a long time the programmes broadcast over Radio Australia have been the subject of consultation and agreement between the Australian Broadcasting Commission and the Department of External Affairs, but that the department does not have any right of veto.

page 1036

QUESTION

PAPUA AND NEW GUINEA

Senator LAUGHT:
SOUTH AUSTRALIA

– I preface my question to the Minister representing the Minister for External Affairs by stating that I understand that a United Nations information centre has been opened in Port Moresby to provide services in the Trust Territory of New Guinea and to Papua. The centre has been established in response to resolutions of the General Assembly requesting the Secretary-General to take such action in consultation with the Australian Government. I understand also that a Mr. Abdel Salam Dajani, a national of Jordan, has ‘ been appointed . by the Secretary-General as .an interim director of the centre, and’ that at present lie’ is in Port Moresby. Whilst I appreciate that- this Jordanian national . provides a, service for the Trust Territory of. New Guinea, I ask < the Minister to state what special service this gentleman provides for the. people of Papua which the Australian Government, through the Department of Territories or some other department, could not provide.

Senator GORTON:
LP

– I do not believe that this gentleman in Papua can provide’ any service which could not be provided adequately by the Australian Government, but, since he is in that particular area and has been accredited by the chief of the United Nations to disseminate information relating to what the United Nations does, the way in which it works and things of that kind, there does not seem to be any reason why he could not disseminate that information through both the areas concerned.

page 1036

QUESTION

EMPLOYMENT OF PHYSICALLY HANDICAPPED PERSONS

Senator COOKE:
WESTERN AUSTRALIA

– I address my question to the Minister representing the Minister for Social Services. Is the Minister aware that the Australian Junior Chamber of Commerce is establishing rehabilitation centres with the object of helping severely handicapped people to become useful in public life and at the same time to have some form of remunerative occupation, the undertaking being known as the sheltered workshops project? Is the Minister aware that the Australian Junior Chamber of Commerce is having difficulty in obtaining contract work, particularly in rural areas? Is the Minister aware also that the Australian Junior Chamber of Commerce has stated that it intends to concentrate its efforts on making potential suppliers of work aware of the help that only they can give to these physically handicapped people? Will the Government assist and co-operate with the Australian Junior Chamber of Commerce in the rehabilitation of these! handicapped people, who at present are receiving insufficient assistance in various States under the social services legislation? Will the Minister ensure that if it is proposed to let a contract for any simple government work the contract will , be given to the sheltered workshops? Will .the Government adopt a sympathetic attitude to this matter?

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

– I have heard that the Australian Junior Chamber of Commerce is embarking on this project, and I congratulate it on doing so. I am sure that every Honorable senator joins with me in wishing it well. As yet I have not been informed of the degree of governmental activity, liaison or co-operation in this matter but, having been Minister for Social Services at one stage, I am certain that the Department of Social Services would wish the project well, and would express that wish in every possible practical way. I do not think I can do better than to say to Senator Cooke that I shall bring his question to the notice of Mr. Roberton in order to make certain that everything that can be done will be done.

page 1037

QUESTION

APPLES

Senator SCOTT:
WESTERN AUSTRALIA

– 1 wish to direct a question to the Minister representing the Minister for Trade. Is it a fact that an increasing proportion of the Australian apple crop is exported in a new type of container known as the paper board carton? Can the Minister say whether apples packed in these cartons are bringing a better price than are those packed in the ordinary wooden cases?

Senator SPOONER:
LP

– I have heard of the new container and, thanks to the efforts of Senator Henty, I have seen one. I do not know what result is being achieved from its use. I have not had any information about that matter. It may be as yet a little too early to judge the effect of the use of the new container, but if the question is put on the notice-paper I will obtain what information I can for the honorable senator.

page 1037

QUESTION

POSTAL SERVICES

Senator TANGNEY:
WESTERN AUSTRALIA

– I desire to address a question to the Minister for Civil Aviation about the provision of a much-needed service for the travelling public, as well as for airport employees. Will the Minister confer with his colleague the Postmaster-General with a view to providing at all major airport terminals, mail and late-fee posting boxes with regular clearances? Is it possible also to arrange for the sale of stamps and stamped envelopes at airport kiosks?

Senator PALTRIDGE:
LP

– The first part of the question dealing with the provision of facilities for the posting of both ordinary and late-fee letters is an interesting one. The matter was raised with me in this chamber by Senator Laught some time ago. In reply, I said that I would confer with the Postmaster-General on the matter, and I have directed his attention to it.

The second part of the question dealt with the sale of stamps and stamped envelopes at airports. I will ask the PostmasterGeneral to examine it.

page 1037

QUESTION

THE SENATE

Senator MARRIOTT:

– My question is addressed to the Leader of the Government in the Senate. Is it not a fact that when the Deputy Leader of the Opposition, Senator Kennelly, was speaking on the adjournment of the Senate last night, and criticized the naming of Senator Dittmer and his expulsion from the chamber, he said that while Senator O’Byrne was speaking there were more interjections and more banter than when Senator Scott was speaking? Will the Leader of the Government examine the “ Hansard “ record from which, in my belief, he will find that Senator O’Byrne addressed the Senate for 34 minutes, receiving eleven recorded interjections, and that Senator Scott addressed the Senate for 21 minutes and received thirteen recorded interjections, eight of which came from Senator Dittmer?

Senator SPOONER:
LP

– I have not carried out on the subject the research that Senator Marriott has apparently done. I believe it may be rather cheerfully said that last night a good time was had by all.

page 1037

QUESTION

QUESTIONS

Senator HENDRICKSON:
VICTORIA

– I preface a question to the Leader of the Government in the Senate by referring to a question asked on 11th April by my Deputy Leader, Senator Kennelly, who referred to the delay he had experience j in obtaining answers to several questions on the noticepaper. He claimed that it was not satisfactory to receive answers to questions by- letter. In reply, the Leader of the Government assured Senator Kennelly that the sending of a letter was done only as a courtesy, and that the question was answered in the ordinary way when Parliament reassembled. I have received three letters giving answers to questions I placed on the notice-paper. Two relate to superannuation payments to former senior public servants and the third relates to an expenditure of nearly £1,000,000 on motor cars used by Australian missions abroad. I ask: In the light of the undertaking given by the Leader of the Government, would it be possible for my questions and the answers I have received to be incorporated in “ Hansard “ as they are matters of great public interest?

Senator SPOONER:
LP

– After Senator Kennelly asked his question, I took steps to see whether the answering of questions could be expedited. I think that a good deal of progress has been made in the last couple of days. An appreciable number of answers was given yesterday, and the same will be true of to-day. I hope that there will be less delay in the answering of questions. After I had replied in the Senate to the question in relation to answers being sent by letter, the Prime Minister’s Department was good enough to send me a memorandum which, in substance, stated that the answer I gave in the Senate was correct. As Senator Kennelly had asked the question, I asked my secretary to let him see the answer from the Prime Minister’s Department.

I am wondering whether the explanation of the matter that Senator Hendrickson raises is that the questions were asked just before the Parliament was prorogued and the business paper was cleared. My recollection is that if a question is on the noticepaper when a session ends the answer is sent to the Minister who, if he so desires, writes a letter to the senator who asked the question, saying, “ Here is the answer to your question “. But the question still remains on the notice-paper, and the answer is given formally when the Parliament reassembles. This is subject to the qualification that when a session ends and the Parliament is prorogued, the business paper is cleared. If the honorable senator’s questions were asked at a stage prior to the business paper being cleared, I have no doubt that I can make arrangements to give the answers formally so that they will be in the record.

page 1038

QUESTION

TELEVISION

Senator KENNELLY:

– I ask the Minister representing the Postmaster-General: Has the Government imposed any conditions on the Australian Broadcasting Commission, in granting it permission to belong to Intertel? If so, what are these conditions? Will the commission now make the film which it intended to make originally for Intertel, and which was the cause of the difficulties that arose between the Government and the commission?

Senator WADE:
CP

– Yesterday, I assured Senator Kennelly that I would have an answer to his question on Intertel this week.

Senator Kennelly:

– I have read the answer already.

Senator WADE:

– The answer will be made available to-morrow. I am not sure whether I can secure the additional information by to-morrow, but if he puts his question on the notice-paper, the matter will be covered adequately when the question is answered.

page 1038

QUESTION

LUNG CANCER

Senator VINCENT:

– I ask the Minister for Health a question about the incidence of lung cancer and its connexion with the smoking of cigarettes. By way of preface, I mention that the Minister has made some reference to this matter, but only to certain aspects of it, on previous occasions. Will the Minister consider making a comprehensive statement covering all aspects of this very important matter, including not only the views of his departmental advisers but also, if possible, the considered views of leaders of the medical profession in Australia? Will he also consider including in the statement information on whether the medical profession has any reasonably efficient treatment for those who desire to give up the habit of smoking but find it difficult so to do?

Senator WADE:
CP

– I presume that Senator Vincent refers to considered opinions from such institutions as the Royal Australasian College of Physicians, and the Royal Australian College of Surgeons. There is a good deal of merit in the suggestion, but for the statement to be of any real value it would be necessarily long and involved. It would need to have the opinions backed by the statistical evidence that has been taken for some time, in order to give a comprehensive, and as nearly as possible correct, picture of the relation of smoking to lung cancer. 1 repeat my statement of a few days ago that the evidence indicates that those who smoke cigars and pipes are much freer of the danger of contracting lung cancer than those who smoke cigarettes heavily. Other factors must bc considered. One is the incidence of smog. Those who are prepared to make any sacrifice to refrain from smoking are, I am sure, considering their own interests well.

The point that I have tried to make throughout the whole of this controversy is that those persons who are tender in years should be advised, whilst young, that smoking does present some risk. When they reach maturity and are aware of the dangers, if they then choose to smoke, that is their business. 1 believe that the responsibility of the Health Department is to tell young people that if they smoke they run a greater risk than if they do not, and that when they are older it is up to them to decide for themselves. Finally, I shall consider the request made by Senator Vincent and, if it is practicable, I shall do as he suggests.

page 1039

QUESTION

SHIPPING

Senator MARRIOTT:

– I ask the Minister representing the Minister for Shipping and Transport: Is it a fact that the Bass Strait ferry “ Princess of Tasmania “ has already carried more than 200,000 passengers, with an average of more than 230 passengers a trip, and that it is already booked out for the trips shortly before and after Christmas this year? Does this not indicate that great benefit is accruing to trade and commerce on the Australian mainland and in Tasmania because of the Government’s action in providing this modern passenger-cargo ferry? When will building of the proposed vessel for the Sydney-Tasmania service commence? Will the Government give early consideration to the building of a third ship to augment the present Melbourne-Tasmania service and to provide a substitute service when the “ Princess of Tasmania “ or the SydneyTasmania vessel is laid up for maintenance, survey or refitting?

Senator PALTRIDGE:
LP

– No one could say that the honorable senator does not adopt a forward-looking attitude in matters such as this. He has invited me to gaze with him into the crystal ball, and I have to refuse the invitation. I do not know what the actual statistics are. I do know that “ Princess of Tasmania “ has had great success and has turned out to be a very popular ship. I know, from what I have been told by members of the Tasmanian Government, that the vessel has made a striking contribution to the commerce and the general economy of Tasmania. I do not know when the planned vessel for the Syd’ney-Hobart service, to which the honorable senator has referred, is to be built, but I shall find out. I repeat, I am not looking into the crystal ball.

page 1039

QUESTION

LUNG CANCER

Senator LILLICO:

– Relative to the question asked by Senator Vincent about lung cancer, I ask the Minister for Health whether his department has checked, by reference to the death statistics in the Commonwealth which, of course, indicate the various causes of death, to see whether the incidence of lung cancer has been increasing during the last decade, or during the last twenty years. Would not that be the best yardstick to use in assessing whether the contentions of the medical profession are correct or otherwise?

Senator WADE:
CP

– I believe it is true to say that the incidence of lung cancer has increased over the last decade. It is also true that the increase represents a very small percentage of the total number of deaths from all causes, but even an increase of a fraction of 1 per cent, is too great if it can be avoided. There is nothing more I can say, except to add that lung cancer, I am told, is a malady for which very little can be done.

Senator Hendrickson:

– What are the other causes of lung cancer?

Senator WADE:

– I emphasize that there are other causes of lung cancer. Statistics reveal that smoking and smog have a very close association with the disease. As a layman, Mr. President, I am not prepared to give a technical answer on the causes of lung cancer, but I shall ascertain the information and will let Senator Hendrickson have it if he is interested.

Senator DITTMER:
QUEENSLAND

– I also address a question to the Minister for Health on the subject of lung cancer. I am sure he knows that in New South Wales probably the world’s best mass radiographic investigation of chests has been undertaken. That investigation revealed the interesting fact that the incidence of lung cancer in rural communities - of course, we have to take into consideration the associated factor of whether people in rural communities smoke as many cigarettes as do people in metropolitan areas - was much less than in metropolitan areas. The investigation also revealed nhat the incidence of lung cancer in metropolitan areas was much less in outer suburban areas than in inner suburban areas. Would the Minister care to comment on the results of that investigation?

Senator WADE:

– The short answer is that the statistics prove that the honorable senator has stated the facts correctly. I repeat that, in industrial areas, where diesel fumes and smog are common, those things have a very significant effect on the people who live in the areas, particularly if they smoke heavily.

Senator WOOD:
QUEENSLAND

– I also address a question to the Minister for Health. In view of the seriousness with which the British Government is treating this question of the association between smoking and lung cancer, and the great publicity which that Government is giving to means of educating the people about the danger of contracting this dread disease through smoking, will the Minister state the positive steps that the Australian Government is taking in order to keep the people of this country fully informed of the risk they run of contracting the disease as a result of smoking?

Senator WADE:

– The Government, of course, has very limited power to take steps that might be termed as positive. The health of the people is the direct responsibility of State governments. That has never been challenged: In the federal sphere, we lend our resources to the States and we give them the benefit of our technical advice, should they care to avail themselves of it. My department has provided for me factual, considered statements on this matter. If there is anything else that we can do, I shall be very pleased to hear of it.

Senator DITTMER:

– Because of the importance of this question to the tobacco industry, one of our great primary industries, we need to be quite clear on the matter before we condemn the tobacco industry. I now ask the Minister for Health whether a research committee of the Royal College of Physicians in London announced’ recently that there was a menace, which appeared to be evident from statistics, in cigarette smoking and that the danger lay in the second half of the cigarette.

Senator WADE:

– The research people who were examining this problem did not confine their activities merely to Europe or the United Kingdom; they also went to the United States of America. Their investigations revealed the interesting fact that the incidence of lung cancer is lower in the United States than it is in some European countries. They concluded that that was because the American smokes only the first part of a cigarette and throws away a long butt. The research people say that that is a statistical fact which leads them to believe that the accrued danger in smoking a cigarette may well be in the latter part of the cigarette.

page 1040

QUESTION

SUPERANNUATION

Senator HENDRICKSON:

asked the* Minister representing the Treasurer, upon notice -

  1. Is it a fact that the superannuation benefits of nearly £50 per week payable to a former Chairman of the Public Service Board will not be reduced notwithstanding that he is now to receive £1,400 per annum plus expenses as the new Chairman of the British Phosphate Commission, an appointment sponsored by the Australian Government?
  2. If so, how is this situation reconciled with the position of those former contributors now engaged in private employment ‘whose cases are dealt with under section 65 of the Superannuation Act, namely, those employees who are not in any way associated with a government instrumentality, whether State, Commonwealth, New Zealand or United Kingdom?
Senator PALTRIDGE:
LP

– The Treasurer has supplied the following answers: -

  1. Sir William- Dunk is not Chairman of the British Phosphate Commission. As the honorable senator was advised on 1st March, 1962, in reply to his question without notice of 21st February last, Sir William receives £1,000 per annum, not £1,400 per annum, as the Australian commissioner. Sir William also receives £400 per annum as a commissioner of the Christmas Island Phosphate Commission. The pension for which Sir William Dunk was contributing upon his retirement is a matter of confidence between him and the Superannuation Board.
  2. The situation is not parallel to the cases dealt with under section 65 of the Superannuation Act 1922-1959, which refers to the restoration to health of pensioners to whom a pension is paid under section 45 of the act. Section 45 refers to the retirement of a contributor on the grounds of invalidity or physical or mental incapacity to perform his duties. There is no pension paid to Sir William Dunk under section 45 of the act.

page 1041

QUESTION

OIL

Senator KENNELLY:

asked the Minister for National Development, upon notice -

In view of the grave concern felt in many quarters that the ownership of Australian oil resources is falling into other than Australian hands, will the Minister prepare with the utmost speed a statement showing - (a) which companies hold oil prospecting leases in Australia; (b) which of those companies are Australian, overseas, and joint Australian-overseas companies, respectively, and who are the principal shareholders in each; (c) which of the Australian companies have arrangements with overseas companies for the exploitation of the leases, and what those arrangements are; (d) the extent to which the shares in the Australian companies are held by overseas investors; and (e) the basis of the joint ownership of jointly held leases?

Senator SPOONER:
LP

-I now supply the following answer: - (a), (b) and (e) The use of the term “ leases “ in the question needs to be classified. In petroleum legislation throughout the Commonwealth three types of tenements are generally recognized, two of which cover the exploration phase of operations, and the third, the lease, covers the exploitation or developmental phase. Nowhere in Australia has the search for oil reached the third or lease stage, and existing tenements only refer to the exploration phase. At the present time - 31st March, 1962 - 86 persons or companies hold petroleum tenements in the Commonwealth and in the Territory of Papua and New Guinea either separately or jointly. Of these, 45 are wholly owned by Australian concerns, six are joint Australian-foreign concerns and 35 are overseas owned. A list of these companies is contained in the appendix. From information available to my department, the following is a breakdown of the principal shareholders in those concerns which are an association of companies. I will refer in the first place to wholly owned Australian companies: -

  1. A.P.M. Development Proprietary Limited. A wholly owned subsidiary of Australian Paper Manufacturers Limited, Melbourne.
  2. Associated Australian Oilfields N.L., Associated Freney Oil Fields N.L., The Papuan Apinaipi Petroleum Co. Limited. These companies, all Australian owned, have formed themselves into a group in association with two other companies, viz.. Interstate Oil Limited, and Sleigh Exploration N.L. The latter company has recently merged with Bitumen and Oil Refineries (Australia) Limited, but details of the merger will not be made public until after 30th June, 1962.
  3. Beach Petroleum N.L. A wholly owned Australian company in which Geosurveys of Australia Limited is to receive 5 per cent, of the net profits made from sale of oil and gas obtained from its holdings.
  4. Haematite Exploration Proprietary Limited. A wholly owned subsidiary of The Broken Hill Proprietary Company Limited.
  5. Lakes Oil Limited. A wholly owned subsidiary of Woodside (Lakes Entrance) Oil Company N.L.
  6. Oilco N.L. A wholly owned subsidary of Woodside (Lakes Entrance) Oil Company N.L.
  7. Oil Development N.L.. A wholly owned Australian company which is developing its holdings by agreements and farm-outs with other Australian interests, as follows: -

Great Artesian Basin, Queensland - 9,474 square miles. 50 per cent. Oil Development N.L.., 50 per cent. Planet Oil Company N.L.

Bonaparte Basin, Northern Territory and Western Australia - 11,800 square miles. 50 per cent. Oil DevelopmentN.L.., 50 per cent. Westralian Oil Limited.

  1. Planet Exploration Company Proprietary Limited. An Australian company which in association with Planet Oil Company NX., is developing its areas with both Australian and overseas interests. The Australian interests are as follows: -

Bowen Basin, Queensland - 600 square miles. 90 per cent. Planet Exploration Company Proprietary Limited, 10 per cent. Oil and Gas Investments Proprietary Limited, which is a wholly owned subsidiary of Planet

Oil Company N.L.

Great Artesian Basin, New South Wales - 9,474 square miles. 50 pet cent. Planet Exploration Company Proprietary Limited, 50 per cent. Oil Development N.L.

Otway Basin, Victoria - 1,805 square miles. 50 per cent Planet Exploration Company Proprietary Limited, 50 per cent. Oil Development NX.

The following are joint Australian and foreign ventures: -

  1. Artesian Basin Oil Company Proprietary Limited. A joint American-Australian company in which all shares are held by Lucky Strike Drilling Company, Tulsa, Oklahoma, and Mr. Bjelke-Petersen of

Queensland. This company held A.T.P. No. 76p Queensland and has now disposed of this holding to the Australian company Exoil N.L. for cash and a share consideration in the latter company. Artesian Basin Oil Company Proprietary Limited retains a 5 per cent, overriding royalty on any production obtained from A.T.P. No. 76.

  1. Australasian Petroleum Company Proprietary Limited. The present financial structure of this company is: Oil Search Limited (Australian), 80 per cent.; B.P. (British), 10 per cent.; Vacuum Oil (American), 10 per cent
  2. Exoil NX. This company holds tenements in Papua. An Australian company, now public, which until recently was a wholly owned subsidiary of Oil Drilling and Exploration Limited, has now taken over interests in Artesian Basin Oil Company Proprietary Limited, which you ses above.
  3. Frome-Broken Hill Company Proprietary Limited. A joint Australian-foreign company, the financial structure of which is: Interstate Oil Limited (± 25 per cent. Australian ± 75 per cent. United Kingdom), 31 per cent.; Vacuum Oil Company Proprietary Limited (American), 31 per cent.; B.P. Exploration Limited (British), 31 per cent.; South West Potash Corporation (United States of America), 7 per cent.
  4. Island Exploration Company Proprietary Limited. This company is associated with Australasian Petroleum Company Proprietary Limited in exploration in Papua and has the same financial structure as that company, namely: Oil Search Limited (Australian), 80 per cent.; B.P. (British), 10 per cent.; Vacuum Oil (American), 10 per cent.

  5. West Australian Petroleum Proprietary Limited. The financial structure of this company is at present as follows: - Ampol Exploration Limited (Australian), oneseventh; California Asiatic Oil Company (a wholly owned subsidiary of Standard Oil Company of California), twosevenths; Shell Development (Australia) Proprietary Limited, two-sevenths; Texaco Overseas Petroleum Company, twosevenths.

    1. The following Australian companies have arrangements with overseas interests in the development of their holdings: -
  6. Associated Freney Oil Fields N.L., Associated Australian Oilfields NX., The Papuan Apinaipi Petroleum Company Limited. This group of Australianowned companies has entered into an agreement with Continental Oil Company of Australia Limited, and Ohio Oil International of Australia Limited, for the Exploration of Authority to Prospect No. 89p formed from parts of Authorities to Prospect Nos. 55p and 56p held by

Associated Australian Oilfields NX. and Associated Freney Oil Fields NX. respectively. The scheme calls for the expenditure, subject to normal pullout clauses, of over £1,000,000 by the end of 1964, after which Continental and Ohio will have earned 100 per cent, interest in the area, subject to substantial royalty to the Associated group on any oil or gas produced.

  1. Australian Oil and Gas Corporation Limited. A wholly owned Australian company which has an operating agreement with Union Oil Development Corporation, a wholly owned subsidiary of American companies, Union Oil Company of California and Kern County Land Company. The agreement is in respect of 59,376 square miles in the Surat Basin of Queensland. Under this agreement, Union-Kern will conduct and finance operations and carry A.O.G. with a reserved interest of 20 per cent, of profits. In the Hunter Valley, New South Wales, concessions totalling 12,300 square miles are held by A.O.G. and Union-Kern as regards pre-Permiaa rocks only. A.O.G. retains 100 per cent, interest in rocks of Permian age and younger. A.O.G. also holds, in its own right, 18,953 square miles in New South Wales, and 57,000 square miles in the Barrier Reef area of Queensland.
  2. Australian Pacific Oil Company Limited. An Australian company holding 7.5 per cent, interest in Permit to Explore No. 26, Papua, in association with: Union Oil Development Corporation, 40.5 per cent.; B.O.C. of Australia Limited (a wholly owned subsidiary of the Burmah Oil Company (Overseas) Limited, 26 per cent.; Murphy-Australia Oil Company (a wholly owned subsidiary of Murphy Corporation of Eldorado, Arkansas, United States of America), 26 per cent.
  3. Oil Development NX. South Australian portion of Otway Basin: The company has arranged a farm -out with General Exploration Company of Australia (a jointly-owned subsidiary of General Exploration Company of California and Santos Limited).
  4. Planet Exploration Company Proprietary Limited. An Australian company, which in association with Planet Oil Company NX. is developing its areas in association with both Australian and overseas interests. The overseas interests are as follows: -

Darling Basin, New South Wales, 13,220 square miles; 50 per cent. Planet Exploration Company Proprietary Limited, 50 per cent. W. J. Steeger, Houston, Texas.

Murray Basin, Victoria, 13,789 square miles; 50 per cent. Planet Exploration Company Proprietary Limited, 50 per cent. W. J. Steeger, Houston, Texas.

  1. Santos Limited. An Australian company which has entered into an agreement with Delhi Australian Petroleum Limited, whereby its holdings in South Australia and Queensland are checker-boarded on basis of minutes of latitude and longitude. This arrangement applies to areas totalling 244,250 square miles. An area of 137,000 square miles in Queensland is held jointly on a 50-50 basis.
  2. South East Oil Syndicate Limited and Beach Petroleum NX. These Australian companies are exploring areas held under “ farm-out “ arrangements with General Exploration Company of Australia Limited (see under Oil Development NX.) in South Australia. Details of the “ farm-out “ arrangements are not available.
  3. The Papuan Apinaipi Petroleum Company Limited. An Australian company which has entered into an arrangement with Phillips Petroleum Company and Sunray Mid-Continent Oil Company for the exploration of its A.T.P. 54P (43,000 square miles) in Queensland. PhillipsSunray have an option over 50 per cent, of A.T.P. 54P on a checker-board basis.

  4. Woodside (Lakes Entrance) Oil Company NX. This Australian company has entered into an agreement with Arco Limited (a wholly owned subsidiary of the Atlantic Refining Company, Philadelphia, United States of America) for the development of its Gippsland tenements only. Woodside will contribute one-third of drilling and exploration costs and Arco two-thirds. Woodside will receive 50 per cent, of benefits from developments, reimbursement for some past expenditure and a very substantial lump sum royalty if commercial production is established. If it wishes, Arco has the right to extend its interests, at a later date, to other areas held by Woodside.

    1. Details of this nature are not available to my department.

page 1043

APPENDIX

The following companies hold land under tene ment in Australia or Papua: -

Australian

  1. A. Adams, Esq.
  2. P.M. Development Proprietary Limited.

Associated Australian Oilfields N.L

Associated Freney Oil Fields N.L

Australian Oil and Gas Corporation Limited

Australian Pacific Oil Company Limited

Australian Oil Industries Proprietary Limited

Messrs. H. J. Blacker, P. L. Brady and T. Turner

The Broken Hill Proprietary Company Limited

Beach PetroleumN.L.

Central Queensland Oil Company Proprietary Limited

Clarence River Basin Oil Exploration Company N.L

Condamine Oil Limited

Consolidated Oil Proprietary Limited

Continental Oil and Gas Limited

Dome Oil and Minerals Syndicate N.L

Flamingo Petroleum Proprietary Limited

Geosurveys of Australia Limited

  1. Gulliver, Esq.

Haematite Explorations Proprietary Limited

Hawkstone Oil Company Limited

  1. H. Houben, Esq.

Jackson Explorations

  1. Kool, Esq.

Lakes Oil Limited

Longreach Oil Limited

  1. A. Morandini, Esq.

Oilco Limited

Oil Development NX.

The Papuan Apinaipi Petroleum Company Limited

Planet Exploration Company Proprietary Limited

Santos Limited

  1. H. Smart Oil Exploration Company Limited.

Standard Gas Proprietary Limited

Messrs. J. Strevens, R. Walton and M. Olarenshaw

  1. I. Vickers, Esq.

Victorian Oil NX.

Roland Walton, Esq

Westralian Oil Limited

Andrew J. Wood, Esq

Woodside (Lakes Entrance) Oil Company N.L

Woodside (Murray River) Oil Company Proprietary Limited

Woodside (Northern Rivers) Oil Company Proprietary Limited

Woodside (Darling River) Oil Company Proprietary Limited

  1. M. Westley, Esq.

Since most of these Australian companies are public companies, it is not possible to ascertain the percentage of their shares held by overseas interests, in most cases. In those instances, where the department has definite quantitative knowledge of overseas interests, the company has been listed as a mixed company.

Joint Australian and Foreign

Artesian Basin Oil Company Proprietary Limited

Australasian Petroleum Company Proprietary Limited

Exoil N.L

Frome-Broken Hill Company Proprietary Limited

Island Exploration Company Proprietary Limited

West Australian Petroleum Proprietary Limited

Overseas Companies

Amerada Petroleum Corporation of Australia Limited

Appaloosa Oil of Australia Limited

Australamerica Corporation

B.O.C. of Australia Limited

Conorada Petroleum Corporation

Continental Oil Company of Australia Limited

Delhi Australian Petroleum Limited

Lee Evans Australian Petroleum Limited

Exploration Drilling of Australia Limited

General Exploration Company of Australia Limited.

Gulf Interstate Overseas Limited.

Hackathorn Oils Limited.

Hunt Oil Company.

Kern County Land Company.

Magellan Petroleum Corporation.

Murphy-Australia Oil Company.

Nortex Australian Oils Limited.

North Australian Petroleum Company.

Ohio Oil International of Australia Limited.

Overland Australian Oils Limited.

Pacific American Oil Company.

Phillips Petroleum Company.

Placid Oil Company.

Plymouth Oil Company.

Queensland American Oil Company Limited.

Seismic Analysis, Inc.

Smith Australian Oil Company Proprietary Limited.

Stirling Australian Oil Corporation.

Sunray Mid-Continent Oil Company.

Titan Petroleum Corporation.

Triton Corporation.

Triton of Australia.

United Australian Oil Inc.

United Canso Oil and Gas Limited.

Union Oil Development Corporation.

page 1044

QUESTION

TELEVISION

Senator McMANUS:

asked the Minister representing the Postmaster-General, upon notice -

  1. Are videotape machines considered essential equipment for television stations?
  2. In what States are Australian Broadcasting Commission television stations equipped with videotape?
  3. What are the intentions of the Government in regard to Australian Broadcasting Commission stations not yet so equipped? Is it proposed to equip them with videotape machines so that they will not continue under severe disadvantages as compared with commercial stations?
Senator WADE:
CP

– The PostmasterGeneral has supplied the following answers: -

  1. Such equipment is essential for the preparation of high quality recordings of television programmes. 2 and 3. All Australian Broadcasting Commission television stations have videotape recording equipment and this equipment is in regular use.

page 1044

QUESTION

INVESTMENT ALLOWANCES

Senator LAUGHT:

asked the Minister representing the Treasurer, upon notice -

  1. Relative to the welcome announcement made by the Prime Minister on 7th February last, that investment allowances would be granted as a spur to reviving industrial activity, when is it proposed that the Government will bring in such legislation - before the winter recess or during the normal Budget session?
  2. Will consideration be given to allowing deductions in relation to all relevant plant delivered or acquired any time during the financial year 1961-62, rather than from 7th February last, as the adoption of a date during the progress of a year presents practical difficulties to industry and administration?
Senator PALTRIDGE:
LP

– The Treasurer has supplied the following answers: -

  1. The measure to authorize an investment allowance based upon expenditure on new manufacturing plant has now been introduced by the Commonwealth Treasurer in another place.
  2. The Government gave careful consideration to proposals that it received in relation to the commencing date of the legislation. The purpose of the investment allowance is to afford an incentive to manufacturers to invest in new plant delivered to the manufacturing premises on or after 7th February, 1962, and thereby to stimulate the level of demand in the economy. This purpose would not be assisted by general retrospective application of the legislation to July of last year.

page 1044

QUESTION

EUROPEAN COMMON MARKET

Senator HENDRICKSON:

asked the Minister representing the Minister for Trade, upon notice -

  1. Did the Prime Minister report to this Parliament a few years ago, after his talks with Dr. Adenauer, that the United Kingdom would not join the Common Market?
  2. If so, is this still the Government’s belief?
Senator SPOONER:
LP

– The Minister for Trade has supplied the following answers: -

  1. The right honorable the Prime Minister in his statement to the House of Representatives on foreign affairs on 13th August, 1959, referred to talks which he had had with Dr. Adenauer. The Prime Minister did not, however, report that the United Kingdom would not join the Common Market.
  2. The British Government has applied to join the Common Market. British Ministers and officials are at present engaged with The Six in negotiations for this purpose. Any view which the Australian Government might express at this stage on the likelihood of the United Kingdom finally joining the Common Market would amount to a pre-judgment of the outcome of the present negotiations.

page 1044

QUESTION

WHEAT

Senator HENDRICKSON:

asked the Minister representing the Minister for Trade, upon notice - 1 Has the revaluation of the German and Dutch currencies, which took place a year ago, facilitated the export of Australian primary produce or has it in fact made the position much more difficult for Australian wheat? 2 Is it a fact that the German Government will now lift the German price by at least 10 per cent. for (he coming season and that the German farmers will grow more grain and their nation import less?

  1. What is meant by the statement that under the Common Market’s agricultural policy the price of wheat by 1970 must be the same throughout Europe?
  2. Does it follow that British and French producers will grow far more wheat than they do now and that Australia’s exports to Britain worth £14,000,000, may be doomed?
Senator SPOONER:
LP

– The Minister for Trade has replied as follows: -

  1. It is not thought that the currency revaluation referred to would have directly affected the demand for Australian wheat in Germany and Holland.
  2. It is understood that the target prices for wheat in Germany for the grain year commencing 1st July, 1962, have been fixed at levels which are likely to result in an increase in the return to German farmers. Depending on seasonal and other factors, this may lead to increased German wheat production. It is not yet clear, however, what will be the position regarding German wheat imports after 1st July, because they will then be affected by the common grain policy of the European Economic Community. As far as 1 am aware not all the details of that policy have yet been announced.
  3. The common agricultural policy of the European Economic Community envisages that prices of wheat in the various countries of the community will be gradually harmonized so that by 1970 all wheat prices in Europe will be basically the same, the only variations being those dictated by quality, transport, &c. The rate at which harmonization will be carried out will be determined largely by the Council of the European Economic Community.
  4. Whilst it is not possible to be dogmatic, the prices which emerge under this harmonization process are likely to be higher than those now prevailing in France and the United Kingdom. If this happens wheat production in France (and in Britain if that country joins the Common Market) could be expected to increase, unless it is controlled in some way. The Minister for Trade, in a speech on 17th August, 1961, emphasized the seriousness of the position if the United Kingdom were inside the Common Market on current Treaty of Rome terms. However, the United Kingdom has given firm assurances that she will not join the Common Market unless satisfactory safeguards can be negotiated for Commonwealth trade.

page 1045

QUESTION

CIVIL AVIATION

Senator McKENNA:
TASMANIA

asked the Minister for Civil Aviation, upon notice -

  1. Was an application made to the Department of Civil. Aviation by East-West Airlines Limited to operate special flights into Coff’s Harbour airport so that the company might participate in the carriage of newspapers to Grafton, the airport at Grafton lacking night landing facilities?
  2. Was the application refused; if so, when and why?
Senator PALTRIDGE:
LP

– I now supply the following answer: -

No. Its representative did, however, seek by telephone an indication of the policy considerations which would be taken into account in deciding such an application. In addition, I understand that the company made an informal approach to the New South Wales Commissioner for Motor Transport who, as a result, asked what my department’s attitude would be if an application were made.

As a regular public transport service operates daily between Sydney and Coff’s Harbour, the Commissioner was told that Air Navigation Regulation 197 (2) would be applicable. By virtue of this regulation, charter flights to a frequency of more than once in 28 days can be made on a route served by a regular public transport service only with special authority of the Director-General of Civil Aviation. The long standing established policy is to refuse to grant such special authority unless there are serious requirements in the public interests which for some reason cannot be fulfilled satisfactorily by the regular operator.

page 1045

QUESTION

TRADE PROMOTION

Senator SANDFORD:

asked the Minister representing the Minister for Trade, upon notice -

In view of the impending joining by Great Britain of the European Common Market, and the consequent threat to portion of Australia’s export trade, what steps have been taken by the Commonwealth Government to establish new trade agencies in other parts of the world, particularly in the South-East Asian area, in order to boost our export trade?

Senator SPOONER:
LP

– The Minister for Trade has supplied the following answer: -

Eight new trade commissioner posts have been established in overseas countries during the last three years. They are Chicago (1959); Ottawa, Nairobi, Accra and Cairo (1960); Lima and Beirut (1961); and Caracas (1962). A new post is also to be established in Athens this year.

Although no new trade commissioner posts have been established in South-East Asian countries during the period in question, there is already a heavy concentration of posts in the area as twelve of the 36 existing posts are located in the East. The position in the East is under constant review, however, and some posts have been strengthened recently by the appointment of assistant trade commissioners.

During the last two years the Government has concentrated on the establishment of new trade commissioner posts in South America and the eastern Mediterranean as these areas offer opportunities for the expansion and diversification of Australia’s export trade.

page 1046

QUESTION

AMMONIUM SULPHATE

Senator McMANUS:

asked the Minister representing the Minister for Supply, upon notice -

  1. Does the Commonwealth still own the factories at Albion and Mulwala, which were formerly engaged, under the auspices of Imperial Chemical Industries of Australia and New Zealand Limited, in the production of ammonium sulphate, but which have now been closed - the first in 1961 and the second more recently?
  2. Is there any intention of re-opening these factories in view of the export trade we were developing in ammonium sulphate to the extent of 21,000 tons in 1959 and a further 16,000 tons in 1960-61?
  3. Is it expected that there will be no exports of ammonium sulphate in 1961-62 due to depleted stocks and rising Australian demand?
  4. In view of the Government’s decision to assist ammonium sulphate production to the extent of £2 a ton, are there any figures which can be made available on the labour cost per man-hour per ton of ammonium sulphate?
Senator HENTY:
LP

– The Minister for Supply has furnished the following answers: -

  1. The ammonium sulphate plant at Albion was closed in May, 1959, and that at Mulwala in June, 1960. These plants are still owned by the Commonwealth.
  2. No. These plants were originally operated after the war to produce sulphate of ammonia to overcome a shortage of supplies in Australia. Eventually adequate supplies were available from other sources and continuance of production of sulphate of ammonia by the Government plants was no longer warranted or economic.
  3. This is a matter for the distributors.. I am advised there is no intention to export in 1961-62.
  4. Since the Government plants have not been in operation for some time, there are no up-to-date figures of labour costs available.

page 1046

QUESTION

GOLD

Senator PALTRIDGE:
LP

– On 5th April, Senator Cooke asked me a question without notice about the ineligibility of gold recovered by the treatment of sands and residues for payment of subsidy under the provisions of the Gold-Mining Industry Assistance Act 1954-1961. As promised, I have now obtained the advice of the Treasurer on the matter.

Under the provisions of the act, subsidy on any gold produced may be paid only to persons who have produced, from mines or alluvial deposits, the gold-bearing materials from which that gold has been extracted. Other persons who obtain gold, for example by extraction from tailing dumps left by the original producers of gold-bearing materials, are ineligible for subsidy. For practical purposes, this means that gold recovered from dumps within the normal operations and working life of a mine qualifies for subsidy, but not if it is recovered from old dumps on abandoned mining properties. These provisions are in accordance with the basic purpose of the gold subsidy scheme, which is to provide assistance to the gold-mining industry.

As the provisions of the Gold-Mining Industry Assistance Act 1954-1961 relate only to gold produced up to 30th June next, the Government has decided to introduce legislation during the current sittings of Parliament to extend without change the operation of the provisions of the act for a further period of three years. The decision to extend the operation of the present act without change in its provisions does not necessarily represent the Government’s final position in the matter of assistance to the industry. The Government has before it a number of proposals for amendment of the provisions of the act, but consideration of these proposals could not be completed in the limited time available prior to the close of the present sittings of Parliament. This consideration is still proceeding, and the Government hopes to be in a position to indicate its decisions by the time the Commonwealth Budget for 1962-63 is introduced.

page 1046

CIVIL AVIATION (CARRIERS’ LIABILITY) BILL 1962

Motion (by Senator Paltridge) agreed to-

That leave be given to introduce a bill for an act to amend the Civil Aviation (Carriers’ Liability) Act 1959.

Bill presented, and read a first time.

Standing Orders suspended.

Second Reading

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

–

I move -

That the bill be now read a second time.

The main object of this bill is to give the force of law within Australia to a convention, supplementary to the Warsaw Convention, for the unification of rules relating to international carriage by air. This convention was agreed to at a diplomatic conference held at Gaudalajara in Mexico in September, 1961.

To understand the effect of the present bill, it is desirable to refer to the provisions of the Warsaw Convention. This convention which was signed in 1929 unifies the rules relating to international carriage by air. It has been ratified by some 56 countries, including Australia and all other countries which operate major international air services. Australia gives effect to the Warsaw Convention by the Carriage by Air Act 1935. The principal effects of that convention were, broadly, to provide persons injured or whose luggage or cargo had been lost or damaged in the course of international air travel with the right to recover damages, up to fixed limits, without proof of fault or negligence on the part of the carrier. The limit on the amount of damages did not apply if the passenger established wilful misconduct on the part of the carrier or his servants. In addition, the convention facilitated the recovery of damages by provisions enlarging and defining the jurisdictions within which actions for damages could be brought.

In 1955, an international conference at The Hague agreed to a protocol to amend the Warsaw Convention in two main respects; firstly to double the limit of the amount of damages recoverable for death or personal injury from approximately £A.3,750 to £A.7,500, and secondly to extend the benefit of the limits under the Warsaw Convention to servants and agents of the carrier. The Hague Protocol was ratified by Australia pursuant to the authority to do so given by Parliament in the Civil Aviation (Carriers’ Liability) Act 1959. This protocol will not come into force until ratified by 30 States. To date 22 States have ratified the convention and it appears likely that the necessary number of ratifications to bring it into force will be received by the end of this year.

The Warsaw Convention in terms applies to “ successive carriers “, that is to say, where the carriage of the passengers is performed by a number of carriers in succession, if the carriage has been regarded as a single operation by the parties. In these circumstances, each carrier is liable for dam- age occurring during the carriage which he performs. However, the convention makes no provision for any other case where the contract for the carriage is made by the passenger or consignor with one carrier, but the whole or part of the carriage is’ performed in fact by another carrier. It has always been a matter of great uncertainty as to whether in such circumstances the references in the Warsaw Convention to “ the carrier “ were to the contracting carrier, the actual carrier, or both carriers. Such cases of charter and hire of aircraft were rare in 1929, when the Warsaw Convention was drafted, but have become increasingly common in recent years. One example is the recent operation by the Italian airline, Alitalia, of services between Italy and Australia with aircraft owned by the French airline T.A.I, and flown by T.A.I, crews.

The object of the diplomatic conference at Guadalajara was to arrive at a convention, to be supplementary to the Warsaw Convention, which would clarify this doubt as to the application of the Warsaw Convention to “ successive carriers “. The subject had been under consideration for some years by the legal committee of the International Civil Aviation Organization, which prepared a draft convention which was the basis for the discussions at the Guadalajara conference. Representatives of 40 countries, including Australia, were present at the conference as well as observers from the International Air Transport Association, the International Chamber of Commerce, the International Federation of Airline Pilots Associations and the International Law Association. The conference succeeded in drawing up a convention to carry out the objects for which it met. This convention will no doubt be known generally as the Guadalajara Convention and is referred to in those terms in this bill. The main object of the bill is to provide for the convention to have the force of law in Australia as soon as it comes into force.

The general scheme of the bill is to insert in the Civil Aviation (Carriers’ Liability) Act 1959 a new Part III.A. relating to the Guadalajara Convention, and to set out the terms of that convention in a schedule. In this respect the bill follows the same pattern as the act in relation to the. Warsaw Convention and the Hague Protocol. The formal provisions of the bill are to come into force upon the bill receiving the Royal Assent. The- provisions which give to the convention the force of law in Australia will come into operation on a date to be fixed by proclamation. This date will be subsequent to the convention coming into force after the deposit of five instruments of ratification as provided for by Article XIII. of the convention.

I turn now to the provisions of the convention as set out in the schedule to the bill. Broadly, the effect of these provisions is that, in the cases to which the convention applies, both the “ contracting carrier “ and the “ actual carrier “ are made subject to the rules of the Warsaw Convention - in the case of the contracting carrier, for the whole qf the carriage contracted for, and in the case of the actual carrier, only for the part of the carriage which he actually performs. The terms “ contracting carriers “ and “ actual carriers “ are used in the senses which I have already indicated, and are defined in precise terms in Article I. of the convention. “ Contracting carrier “ is defined as a person who as a principal makes an agreement for carriage governed by the Warsaw Convention, either in its original form or as amended by the Hague Protocol, with a passenger or consignor. “ Actual carrier “ is defined as a person, other than the contracting carrier, who by virtue of authority from the contracting carrier performs the whole or a part of the carriage contemplated by the contact made by the contracting carrier, but is not a successive carrier within the meaning of the Warsaw Convention.

The key provision of the convention is Article II. This article provides that where an actual carrier performs the whole or part of such carriage, both the contracting carrier and the actual carrier are subject to the rules of the Warsaw Convention, the former for the whole carriage contemplated in the agreement, the latter solely for the carriage which he performs.

The effect of Article II. may be illustrated by an example. A person in Sydney books with Qantas to travel or to ship cargo by that airline from Sydney to London via San Francisco. Qantas finds itself unable to continue the carriage past San Francisco in its own aircraft and arranges for the passenger or cargo to be carried from there to London by a Pan American aircraft. Iri these circumstances, if the passenger were injured or the cargo damaged or lost during the flights from San Francisco to London,the passenger or consignor would have a right of action under the Guadalajara Convention against both Qantas and Pan American. His rights would be governed by the terms of the Warsaw Convention at the present time, but if the Hague Protocol were in force his rights would be governed by the Warsaw Convention as amended by the Hague Protocol. This is made clear by the definition in Article I. of the Warsaw Convention.

Articles III. to X. of the convention con-; tain ancillary and consequential provisions arising from the key provisions in Article II. In relation to the carriage which the actual carrier performs, Article III. provides that the acts and omissions of the actual carrier and his servants and agents within the scope of their employment are deemed to be also those of the contracting carrier, and vice versa. Article IV. provides that complaints or orders required to be made or given under the Warsaw Convention may generally be given to either the contracting carrier or the actual carrier. Under Article V. a servant or agent of either carrier may avail himself of the limits of liability applicable to his employer, unless it is proved he acted in a manner which under the Warsaw Convention prevents the limits of liability from being invoked. This occurs if the passenger or consignor proves that the loss or damage was caused by the wilful misconduct of the servant or agent.

Articles VII. and VIII. of the convention contain provisions as to the bringing of actions where damage has occurred during the carriage performed by the actual carrier. An action for such damages may be brought against either the actual carrier or the contracting carrier or both together or both separately. The jurisdictions in which such actions may be brought are dealt with by Article VIII. This provides that the person suing has an option as to where he brings his action. He may do so at the place where the actual carrier is ordinarily resident or has his principal place of business. Alternatively, he may sue in a court in any of the places where an action could be brought against the contracting carrier in accordance with Article 28 of the Warsaw Convention. These places are the place where that carrier is ordinarily resident or has his principal place of business or has an establishment by which the contract has been made, or the place of destination of the carriage in question. Thus the convention gives the plaintiff a very wide choice of venue for his action, which should enable him to bring his case before a court in a country which is reasonably accessible and convenient in the circumstances. Any provision in the contract of carriage altering these rules as to jurisdiction is made null and void by Article IX. of the convention. That article also prohibits any contractual provision which would tend to infringe the rules of the convention as to the applicable law, to relieve either carrier from liability under the convention, or to fix a lower limit than those applicable under the convention. These limits are at present, in round figures, £A. 3,750 for death or injury to a passenger, £2 8s. per lb. weight for cargo or registered baggage and £150 for hand baggage. When the Hague Protocol comes into force, the limit of liability for personal injury or death will be increased to £7,500 approximately. The other limits are not altered by the Hague Protocol.

Article X. provides that the convention does not affect the rights and obligations of the carriers as between themselves except that if an action is brought against one only of the carriers, he has the right to have the other carrier joined in the proceedings in accordance with the law of the country hearing the case.

While the new convention covers a relatively limited set of circumstances, it is a useful and necessary supplement to the widely accepted rules of the Warsaw Convention. The United Kingdom Government has already introduced legislation to ratify the convention and to give it the force of law within Great Britain. It appears certain that the required number of ratifications will be lodged within the next few months, and that the convention will come into force in the remarkably short period of less than a year after its signature. Qantas Empire Airways Limited, as Australia’s designated overseas airline, has been consulted, both before and after the Guadalajara Conference, as to the desirability of an international convention of this nature. That company has expressed the view that removal of the doubt as to the meaning of “ carrier “ in the Warsaw Convention is a very definite advantage to the company, as well as to passengers and shippers. Its pooling arrangements with other carriers involve its entering into charter arrangements from time to time, and the new convention will clarify the rights of interested parties. The company’s considered view is that the convention should be ratified by Australia as soon as practicable.

Clauses 6 and 9 ot the bill amend the Civil Aviation (Carriers’ Liability) Act in some minor respects. Section 16 of the act deals with the situation where the carrier who is sued for damages under the Warsaw Convention as amended by the Hague Protocol proves that the damage was caused by or contributed to by the negligence of the passenger or consignor. The section also applies to actions for damages during carriage to which the Warsaw Convention, without the Hague Protocol, applies, by virtue of section 24 of the act. The effect of section 16 is that the court hearing the case first determines the damages recoverable as if there were no contributory negligence and no limit on the amount of those damages. The court is then required to reduce those damages to such extent as it thinks just and equitable having regard to the share of the passenger or consignor in the responsibility for the damage. If the damages as so reduced exceed the limit fixed by the Hague Protocol or the Warsaw Convention (whichever is applicable in the particular case), the damages must be further reduced to the amount of that limit.

The object of the amendment set out in clause 6 of the bill is to add a new subsection which makes it clear that where the trial of the action for damages takes place before a jury (as will generally be the case in State courts), it is the jury, and not the judge, which determines the damages in the first place and the amount by which those damages should be reduced by reason of the contributory negligence of the person suing.

Clause 9 of the bill provides for a similar amendment to section 39 of the act. This section is applicable to actions against a carrier under part IV. of the act. It will be recalled that part IV. of the act applies to certain types of carriage of passengers within Australia the general principles of the Warsaw Convention of liability of the carrier up to a specified maximum amount of damages without proof of fault or negligence on the part of the carrier. Section 39 provides for a reduction of damages in the event of contributory negligence on the part of the injured passenger, in terms similar to section 16. Clause 9 of the bill adds a new sub-section to provide that where the action is tried with a jury, the jury shall determine the damages and the amount of the reduction to be made because of the contributory negligence of the plaintiff, before the provisions of part IV. which limits the total damages recoverable to £7,500 are applied. I commend the bill.

Debate (on motion by Senator McKenna) adjourned.

page 1050

AUSTRALIAN UNIVERSITIES COMMISSION BILL 1962

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

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

– I move-

That the bill be now read a second time.

The purpose of this brief measure is to give power to increase the maximum parttime membership of the Australian Universities Commission from four in number to six in number. Section 6 of the Australian Universities Commission Act 1959 prescribes that “ the commission shall consist of a chairman and such other members, not being less than two in number nor more than four in number as are appointed from time to time”.

The position of chairman is, as the Senate will be aware, a full-time office occupied by the distinguished scientist Sir Leslie Martin. All four part-time membership positions available under the act are at present filled, and very satisfactorily filled, by Professor N. S. Bayliss of the University of Western Australia, Professor A. D. Trendall, Australian National University, Sir Kenneth Wills of Adelaide and Dr. J.

Vernon of Sydney. I take this opportunity of paying a tribute to the work of the present part-time members who, in the midst of their busy lives are serving the needs of the Commonwealth in an important field. I may say that the Government hopes to re-appoint the present members when their current three-year terms end on 30th June this year.

The problems facing the universities of Australia, and therefore the commission, are such that, acting on the advice of the commission, the Government has decided to expand the membership of the commission by two. Hence this bill. The work of the Universities Commission is becoming more complex with the pressure for the development of more facilities for tertiary education. Indeed, the whole question of the future pattern of tertiary education is at present under study by a committee which will report to the commission. Another matter giving Sir Leslie Martin and his colleagues great concern is the considerable expansion planned in various centres for medical education. For this reason, we have concluded that it is most desirable for the commission to have as one of its members someone eminent in the medical field. At the same time, we think it is desirable to add to the commission another member with a business background.

Plans for the appointment of these two additional members are already in hand and We would hope to be able to proceed with appointments in the near future. I commend the bill to the Senate.

Debate (on motion by Senator Tangney) adjourned.

page 1050

COMMONWEALTH ELECTORAL BILL 1962

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator WADE (Victoria - Minister for

Health) [4.29].- I move-

That the bill be now read a second’ time.

This is a short bill and a relatively simple one, but the implicationsin it are of the greatest significance. I would hope and expect that it will be received by the Senate with enthusiasm and passed without dissent. By so doing we would proclaim to the world that the representatives of all sections of the Australian community are determined to ensure that the aboriginal people of Australia enjoy complete political equality with the rest of the community. This has been a problem of which the Government has been conscious for some time. It recognized that from the national and international viewpoint it was important to give consideration to the rights and privileges of our native people. However, whilst the existing laws in New South Wales, Victoria, South Australia and Tasmania gave the full franchise to aboriginal natives by virtue of the fact that the respective State laws conferred full voting rights, in Queensland and Western Australia, where, together with the Northern Territory, most of the full-bloods lived, the Commonwealth and State Governments had not favoured extending the franchise when it was raised at the 1946 Premiers’ Conference.

When a general review of the Electoral Act was undertaken during the last Parliament, the Cabinet, while realizing the merits of the case for extending the franchise, appreciated also some of the difficulties and problems which exist. It therefore decided to set up a select committee, comprising members from both sides of the House of Representatives, to report to the Parliament on the matter.

The committee, which was under the chairmanship of Mr. George Pearce, the then member for Capricornia, visited every mainland State and the Northern Territory. It travelled over 22,000 miles, heard evidence and took statements from over 300 witnesses. The committee displayed magnificent enthusiasm and energy in completing its report within the time available. It deserves the gratitude and congratulations of the Senate, as also do the parliamentary staff and others assisting the committee. The report itself, both in text and presentation, was a very notable document, and had the additional merit of being completely unanimous.

In paragraph 77 the committee recommended -

  1. That the right to vote at Commonwealth elections be accorded to all aboriginal and Torres Strait islander subjects of the Queen, of voting age, permanently residing within the limits of the Commonwealth.
  2. That, for the time being, the enrolment of aborigines and Torres Strait islanders be voluntary, but when enrolled, compulsory voting be enforced.

The bill gives effect to those recommendations. In paragraph 84 the committee recommended -

It is recommended by your committee that a penal provision be inserted in the amending Act in respect of the use of duress or undue influence on aborigines in the exercise of their franchise.

Since the use of duress or undue influence are already included as offences in the act in respect of any person, aboriginal or otherwise, it was felt that the committee must have had in mind possible offences in relation to voluntary enrolment. The act is, therefore, widened by this bill to extend to enrolment those offences which relate to influencing a vote.

The Government wants to ensure that enrolment of the natives is entirely voluntary and that no undue influence or pressure is used by political parties or other interested bodies to induce the natives in respect of their enrolment or nonenrolment or in the exercise of their franchise. In paragraph 41 (3) the committee’s recommendation states -

That early action be taken by the Commonwealth Electoral Office to inform aboriginal and Torres Strait islander servicemen’ an exservicemen, and people entitled to the franchise under the terms of the Attorney-General’s memorandum to the Commonwealth Electoral Officer of 25th January, 1929, of their entitlement to be enrolled and to vote.

Action has already been taken in the terms of this recommendation. The Commonwealth Electoral Officer for Queensland visited the Torres Strait Islands prior to the last general elections for this purpose, and arrangements were made to bring to the notice of all aboriginal natives, including the Torres Strait Islanders, entitled to the franchise, their right to enroll and to vote. Action by the Electoral Office will be extended when the law is amended granting the franchise to all aboriginal natives.

Clause 2 of the bill removes the franchise prohibition against aboriginal natives of Australia, thus granting them the same rights and privileges of enrolment and voting as other Australian citizens have. At present these rights and privileges are withheld from most full-bloods in Queensland, Western Australia and the Northern

Territory. Clause 3 excludes the aboriginals from compulsory enrolment provisions of the law. The remaining clauses all deal with offences in relation to the enrolment or the refraining from enrolment of the natives.

The existing law already provides penal provisions in respect of duress and undue influence in the exercise of the franchise. The Government has decided not to adopt the recommendations embodied in paragraphs 41 (1) and 41 (2). The Government believes that if compulsory enrolment is not applicable to aboriginals generally, it would not be right to tighten up the compulsory provisions in New South Wales and Victoria. Further, it does not seem reasonable to administer the act differently in different States, or to attempt to provide different statutory obligations between the natives of the different States. Nor does it seem practicable to define an aboriginal native differently for the purposes of the electoral law from the general definition applied in other circumstances.

It is proposed that the electoral branch seek the assistance of the Department of Native Affairs and the various missions to acquaint the aboriginals of their entitlement under the new provisions. Electoral officers will, from time to time, visit aboriginal settlements and areas of substantial native congregation for the same purpose.

The co-operation of the State authorities and the Northern Territory Administration will be sought in educating the natives in the exercise of their franchise. There are, of course, a number of problems associated with the extension of the franchise to our native people. There is the name problem. Some bear a single name tag of local derivation and there is a tendency for others to change their names from time to time. Some have no idea whatever of their age.

In some isolated areas there is also the difficulty of providing adequate voting facilities. I might mention that at the recent general elections polling places were established on nine of the islands in the Torres Strait group. To provide facilities at these places, the Electoral Office hired a launch, and the total cost of the facilities for having the 387 votes recorded was just over £700. Again, . there are the islands inhabited by natives , only where. , there are no Europeans to act as polling officials. There is also the problem of providing facilities at the five mission stations on the western side of Cape York Peninsula. These problems could make further legislation necessary, but if so appropriate action will be taken in the light of Our experience. I commend the bill to the Senate.

Debate (on motion by Senator Tangney) adjourned.

page 1052

LOAN (INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT) BILL 1962

Second Reading

Debate resumed from 1st May (vide page . 1031), on motion by Senator Paltridge -

That the bill be now read, a second time.

Senator SCOTT:
Western Australia

– Prior to the adjournment of the Senate last night I had been speaking to this bill, the purpose of which is to authorize the borrowing of 100,000,000 dollars from ‘ the International Bank for Reconstruction and Development. This amount, in terms of Australian currency, is £44,700,000. [Quorum formed.]

Prior to being sat down because of lack of numbers in the chamber I had found, upon counting the Labour senators present that there were three or, at the most, four. I compliment the Australian Labour Party upon having that number in the chamber, because it is almost a record. No doubt it will be able to improve on that number.

It is the intention of the Government to borrow 100,000,000 dollars, or £A.44,700,000, from the International. Bank for Reconstruction and Development to finance additional projects associated with the Snowy Mountains scheme. The idea is that the money will be expended to finance the diversion of the Snowy River through the Great Dividing Range to the Murray River catchment area, and to use the diverted water to generate electricity. The project to which the money is to be applied is the Murray 1 power station which will generate some 760,000 kilowatts of electricity. It is the largest generating station for which the International Bank has been asked to provide finance. The production of power is expected to commence in 1966, and it is anticipated that full capacity will be reached in 1967.

When the water is diverted from the Snowy River to the Murray catchment area it will provide some 440,000 additional acre feet of water per annum for irrigation purposes. Under the present economic set-up that we have in Australia, we believe that this great scheme can be financed only with the assistance of loan moneys from outside Australia. I explained last night that because of the vastly increased call on loan moneys for developmental work in Australia - the Government has authorized the raising of more than £100,000,000 in the last twelve months - the only way in which this project can be financed is to obtain finance from overseas. It is in that respect that there is a difference of opinion between the Opposition and the Government. The Opposition says that it is in favour of the Snowy Mountains scheme. In fact, it says that it instigated the scheme, and I think that all sections of the Parliament readily agree that the Labour Party, prior to its defeat in 1949, initiated the Snowy Mountains scheme. As we know, the Labour Government held an opening ceremony at which, of course, the initial shot was fired some 2 miles away from any construction work. Because a general election was to take place in December of that year, the Labour Party thought that it would be of great advantage to have in actual operation some big scheme to which it could point for the benefit of electors. The Minister for Works in the Labour Government of that time circulated a letter to the people of his electorate advising them that he was Minister for Works in the Chifley Government which had initiated the Snowy Mountains scheme. That Minister, although he had received a majority of several thousand votes at the previous general election, was defeated by 4,000 or 5,000 votes at the 1949 election.

Senator Ormonde:

– What does that prove?

Senator SCOTT:

– It proves a lot to people who can think. It proves, for instance, that all the personal letters which that Minister wrote did not win him any votes.

Senator Cole:

– He should have stayed in Forrest.

Senator SCOTT:

– That is so. As a matter of fact, the letters were posted in Forrest. But we do not want to mention names.

The difference of opinion between the Opposition and the Government is not as to the way in which the work associated with the Snowy Mountains scheme should be carried out, but as to the way in which the scheme should be financed. This Government is keenly interested in development. In fact, it has been responsible for by far the greatest degree of developmental work that has been undertaken in Australia. We are eager to continue the development of Australia, and to do that we need finance from overseas. The two Opposition senators who spoke last night questioned the wisdom of obtaining money from overseas for developmental projects. Both stated that the Government was selling Australia and that it was taking advantage of the availability of money from the International Bank which could be diverted to other countries that are much less developed than Australia. When we consider the countries that are receiving finance from the International Bank, we find that they include countries with populations of 100,000,000, such as Japan, one of the wealthiest nations of the post-war period. Japan has borrowed millions of dollars from the International Bank for developmental purposes. I say to the members of the Opposition that, provided a scheme is sound, it pays a developing country such as Australia to borrow money from overseas to finance that scheme.

The Minister for National Development (Senator Spooner) has stated frequently in this chamber, in speeches and in answers to questions, that when the Snowy Mountains scheme is completed it will serve two main purposes, the first being the generation of electricity and the second the diversion to the Murray River, for irrigation purposes, of water that flows down the east coast. In all, approximately 440,000 acre feet of additional water will be available as a result of the diversion from the east coast to the Murray River catchment area. The whole of the cost of the scheme, including repayments, interest and sinking fund charges, is to be paid for by the sale of electricity to the States concerned. There is to be no charge for the water. The governments which receive the electricity for one penny a unit are receiving cheap electricity when we take into consideration that it is not base-load power; it is used for only about 25 per cent, of the time and is called upon only when it is needed at peak-load periods. The big coal-burning stations, either in Victoria or New South Wales, have to carry the base-load. The base-load is carried night and day, but there is always a peak during the eight hours of daylight when industry is using the maximum amount of power. At that time, the Snowy project can be brought into operation to provide the extra electricity needed.

Senator Mattner:

– It may be brought in at a moment’s notice.

Senator SCOTT:

– Yes. The cost of generating this power - something less than Id. a unit - is reasonable when we bear in mind that in New South Wales electricity cannot be generated by coal for less than .6d. a unit. In many cases the cost is higher than .6d. a unit. I would say that the average cost throughout New South Wales and Victoria of generating power from coal is close to Id. a unit.

Power from the Snowy scheme is being used at peak periods, and the cost compares favorably with the cost of power supplied by coal-burning stations in New South Wales and Victoria. I believe that if the Snowy scheme operated on base load it could supply electricity at id. a unit and still make a profit. It is recognized throughout the world that hydro-electric power is the cheapest type of power once the projects have been established. Certain industries, such as the aluminium industry, must obtain power for less than .4d. a unit. Those industries prefer to obtain their power at .3d. a unit, and in some parts of the world power is being generated at .2d. a unit. Comalco expects to be able to generate power in New Zealand for about .25d. a unit, taking into consideration the capital cost of the hydro-electric scheme there.

The Opposition has levelled a great deal of criticism at the Government for seeking loans from the International Bank for Reconstruction and Development.

Senator O’Byrne:

– It is dear money.

Senator SCOTT:

– It is not dear money because we can use the £44,700,000 obtained from the bank to finance work on the Snowy Mountains scheme. In his second-reading speech the Minister told us that the total cost of the work now being undertaken on the scheme will be about £92,000,000. It will be seen, therefore, that over the next five years about one-half of the expenditure involved on the scheme will be met out of the loan obtained from the International Bank. The remainder of the money , will be provided by the taxpayers. Up to 1st July, 1961, almost £7,000,000 had already been expended on the work that will be continued for the next five years. It must be remembered that the Commonwealth will be required to finance during this period other urgently needed projects throughout the length and breadth of the land. I remind the Opposition that in its policy speech at the last general election it undertook to spend hundreds of millions of pounds in developing the northern areas of Australia.

Senator O’Byrne and Senator Willesee said that because Australia was drawing money from the International Bank, other countries would not be able to obtain finance from the bank for urgently needed developmental projects. I answer that statement by pointing out that some countries that are better developed than Australia are at present obtaining loans from the bank. Two such countries are Italy and Japan. As long as we can meet interest and sinking fund charges on the loan, we shall be able to obtain additional funds from the bank, and thereby undertake further developmental work in this country. The more work of that nature that we undertake, the more employment we provide for Australians. I do not think that Senator Willesee and Senator O’Byrne paid much heed in their speeches to the unemployment problem.

It cannot be denied that the more work of a developmental nature that we undertake in this country, the more employment we shall provide. Somebody from this side of the chamber said that the work to be undertaken on the Snowy project, with the money provided under this loan would mean jobs for an extra 1,000 or 1,500. workers. That is wonderful. But the employment of those extra 1,000 or 1,500 workers on the Snowy project will in itself create work for several thousand more persons in other fields. This loan will not only create jobs for 1,000 or more workers on the Snowy project; it will create jobs for perhaps 10,000 or 12,000 people all told.

The Opposition claims that the work being undertaken on the Snowy project should be financed from our own resources. We are using all the money that we can get to carry out this great developmental project. In the next five years the Government will spend about £40,000,000 on the Kalgoorlie to Kwinana railway standardization scheme. The Commonwealth is spending £20,000,000 on the Mr Isa to Townsville railway. It is spending £5,000,000 on beef roads in Queensland and £1,000,000 in the Kimberleys. Large amounts of money are being spent in the Northern Territory. In addition, other large developmental projects must be financed. The Commonwealth must find £14,000,000 for the Chowilla dam in South Australia. If the Snowy project is financed by a loan from the International Bank, the South Australian Government will have a better chance of obtaining money from the Commonwealth for the Chowilla dam and other projects. AH of the projects to which I have referred will create employment. That is what we want. If all our developmental projects were to be financed with Australian money, our activities would be limited.

The Labour Party - thank goodness it is still the Opposition - has always opposed the borrowing of money from overseas. I can remember back to 1950 when Australia first obtained a loan from the International Bank. On that occasion, the Opposition voted against the legislation. The loan was sought in order to purchase machinery for developmental purposes in Australia. Most of the loans that we have obtained from the bank have been for developmental purposes. The annual report of the International Bank for Reconstruction and Development for the year 1960-61 shows that Australia has obtained six loans from it. Five of them have been for developmental purposes and the other one was for airlines equipment. I will not go through the loans one by one. The total amount that Australia has borrowed from the bank since 1950 is 317,000,000 dollars.

An interesting point is that when we borrow money from the bank it sells some of the loan to its customers. Of the 317,000,000 dollars that Australia has borrowed, the bank has been able to sell one-third - about 106,000,000 dollars. So the effective loans that we have obtained from the bank and that the bank has not sold amount to only about 212,000,000 dollars. The loans range over the period from 22nd August, 1950, to 3rd December, 1956, and this loan will be obtained in June or July, 1962. In one five-year period, we have repaid one-third of the amount that we have borrowed. If that rate of repayment continues, in fifteen years we will have repaid to the bank or the bank will have sold to other people the total amount of these loans, and that money will be available for lending to other countries, if they desire to borrow from the bank.

I believe, Mr. President, that the Labour Opposition, which is opposing this loan, should be congratulated because at the moment it has three senators in the chamber. [Quorum formed.] Another two Labour senators are now coming into the chamber. This is a great effort by the Labour Party! No doubt honorable senators opposite will be squealing in the very near future because they have not had an opportunity to talk. Now all of them are leaving the chamber again.

Senator Cooke:

– I rise to order, Mr. President. Will you give a ruling on whether, under the Standing Orders, the Government has to maintain a quorum in the chamber?

The PRESIDENT:

– Order! No. A quorum may be called at any time when the required number of senators is not present.

Senator SCOTT:

– The vital difference between the Australian Labour Party and this Government on development is that the Labour Party does not believe in borrowing money from overseas for developmental projects and the Government does. The Government believes that if we borrow money wisely for safe developmental projects we will develop the nation at a far greater rate than that at which it can be developed by any other type of government using only finance that can be obtained in Australia. A young, developing country such as Australia, if it wants to improve its standards and increase its population, must obtain finance and people from other parts of the world to carry out the development that is so necessary.

Mr. President, I am absolutely amazed by the attitude of the Labour Party on this measure. Here we have an opportunity to borrow £44,700,000 for the further development of Australia, and the only people who will vote against this measure are members of the Labour Party. I have very much pleasure in supporting the bill. I hope that further opportunities will come forward for the Australian Government, which is known and trusted, to obtain extra money for further developmental projects in Australia.

Senator DITTMER:
Queensland

.- This afternoon I rise to speak with a feeling of sadness because of last night’s happenings. I have no intention of reflecting on you, Mr. President, because at all times you have shown a sense of responsibility, real knowledge and impartiality. I know that at times my persistency can be irritating and even annoying. I am not ashamed of my persistency, but I am sorry that I can be irritating. I believe that at the hands of the Government I was the victim of a raw decision, to use an Australian colloquialism.

Senator Wright:

– Mr. President, I rise to order.

The PRESIDENT:

– Order! Senator Dittmer cannot pursue that course.

Senator DITTMER:

– All right, Sir, I bow to your ruling, as usual. The very title of the bill before the Senate should give us a clear indication of the nature ot the measure. Before proceeding to discuss the measure in detail, I should like to refer to the remarks of the previous speaker, Senator Scott, and the Leader of the Government in the Senate (Senator Spooner). Both of them suggested that we members of the Labour Opposition, in our attitude to the bill, were playing politics. If any one has played politics on this bill it has been the speakers from the Government side, particularly Senator Scott and Senator Spooner. I consider that the Minister for Civil Aviation (Senator Paltridge), whointroduced the bill, treated the matter in a most perfunctory and cursory manner. Despite the purpose of the bill, the mag nitude of the amount involved and the fact that the Snowy Mountains scheme is gigantic even by world standards, he cursorily dismissed the matter and did not even show the chamber the courtesy of dealing with the proposal in some detail.

I made some notes of what Senator Scott said. He said that while the proceedings were being broadcast he had to be - I would have used the word “ dirty “, but it is not an acceptable parliamentary expression - somewhat unfair. When a quorum was called, knowing that some people, although very few, would be listening to him, he said that he wished to direct attention to the number of Labour senators in the chamber. He said that three or four were present. Either he did not count or he cannot count. That is’ quite evident.

He also said that the Snowy Mountains scheme can be financed only by money obtained from overseas. Either he or the Minister assisting the Treasurer (Mr. Bury) is wrong because that Minister said that this money was not required for the development of the Snowy Mountains scheme, but would be thrown into the general overseas pool.

Senator Paltridge:

– No, he did not.

Senator DITTMER:

– If Senator Scott cares to make a check in order to see what the- Minister said, he will find that that is correct.

Senator Gorton:

– It is incorrect. Will you read what he said, in order to substantiate your statement?

Senator Hendrickson:

– Interjections are out of order.

Senator Gorton. - I am not interjecting. I am asking Senator Dittmer will he read what the Minister assisting the Treasurer said.

The PRESIDENT:

– Order!

Senator DITTMER:

– Are you interjecting or raising a point of order?

Senator Gorton:

– I am asking you to read what the Minister said.

Senator DITTMER:

– As you know, Senator Gorton, I do not have the “ Hansard “ number before me, but you know that I have a remarkably good and efficient memory, and that I am not likely to misquote the Minister, [f you care to take the opportunity during the suspension of the sitting for dinner, you can check what I said, and then it will be within your power to contradict me later to-night if 1 have been incorrect in my statements.

Last night, the Leader of the Government again charged the Labour Party with playing politics. When I first came to this place, I made a diagnosis of Senator Spooner’s condition as being one of euphoria, that is, having a sense of wellbeing. I must admit that I was mistaken in my diagnosis. I thought, judging by his. appearance, ability and success, that he would have a sense of well-being. I now believe that the correct diagnosis is political schizophrenia, because he has definitely a split personality. The latter part of his speech was thoroughly appreciated. He discussed the value of the scheme, and his remarks were intensely interesting. I pay a tribute to him. He has taken an interest in the scheme, and has attempted to further it to the best of his ability.

Senator Kendall:

– Further it? He built it!

Senator DITTMER:

– Am I to be permitted to make this speech? I thought that Senator Spooner went out of his way to be insulting to Senator Willesee who gave an extraordinarily interesting discourse on the purposes associated with the establishment of the International Bank for Reconstruction and Development. The Leader of the Government also went out of his way to imply that the Labour Government of New South Wales and a former Labour Government of Victoria had not accepted their responsibilities in regard to the constitutional requirements necessary to establish this authority in association with the Commonwealth.

He referred also, by way of implication, to the neglect of the New South Wales Government in relation to the Blowering dam. He stated that the New South Wales Government had not honoured the agreement. I heard Senator McKenna interject and ask whether the State Government was tied to a definite date, to which the Minister was fair enough to reply that he was not quite clear on that aspect. I understand that the New South Wales Government is not tied to a definite date by the agreement. In fact, it is eminently desirous of embarking on the scheme and of completing it but, due to the parsi monious approach of successive Menzies Governments to the financial problems of the States and the municipalities, the New South Wales Government, realizing that it had to have a system of priorities in relation to development, felt that it could not accept the financial responsibility of embarking on the construction of the dam.

Now let us deal with the Snowy Mountains scheme. When you think of this project you cannot but pay a tribute to the personnel engaged ranging from the commissioner, Sir William Hudson, who is a great man and who has done a magnificent job, to the assistant commissioners and down to every person who has been employed on the project. You must pay a tribute to the public relations officers, and to the contractors who accepted responsibility for major works. The men on the job set world records in tunnelling only to break those records themselves. All Australians should be proud of them.

Government supporters have had a lot to say about who should get the credit for this job. They have been neglectful in not paying a tribute to those who first visualized the possibilities and potentialities of the snow and water which appeared to them to be going to waste. This goes back to the eighties of last century. For many years, men thought only in terms of water that could be used in the growing of crops when the rainfall was low. After the First World War, they thought in terms of the added value of power produced by hydro-electric means. In the ‘thirties, serious consideration was given to the question of producing power as the main purpose of the scheme. It then became the responsibility of none other than the Labour government of the day, irrespective of the urgent demands of the war and post-war rehabilitation - incidentally, a magnificent job done by Labour - to embark upon a real investigation of the proposal which involved mapping, estimating the rainfall over the years, the possibilities of the maximum production of power, the utilization of the available water, the value of turning the Snowy River into the Murray or the Mumimbidgee Rivers, and so on. Irrespective of what this Government may do, however low it may sink in attempting to play politics - it never omits to play politics - the credit for initiating this undertaking will always rest. with that great

Labour Prime Minister, the late Ben Chifley. Credit for devising the scheme which we now see being brought into being must go to the committee which he set up consisting of representatives of the Commonwealth Government and the Governments of New South Wales and Victoria.

In passing, let me say that I take not one iota of credit from the Minister for National Development, but I think that he belittles himself, and lessens his stature, when he tries to take away from other men the credit to which they are entitled. As you traverse the Snowy Mountains scheme you will see brass plates bearing the Minister’s name - I would not take that from him - the Prime Minister’s name, contractors’ names and surveyors’ and engineers’ names, but nowhere do you see Ben Chifley’s name. I suggest that somewhere along the line before this scheme is completed consideration should be given to having Ben Chifley’s name in an honoured position. Sir Edward Hallstrom’s name is on an island near the Eucumbene dam so, out of a sense of fairness, the Government should name some section of the scheme in honour of this former great Labour Prime Minister.

When we consider this project we must think in terms of what it will do, what it has cost to date, and what it will cost to complete. I am not one of those who condemn it. In fact, I am not in a position to do so. Men with a profound knowledge of the subject have said that the scheme is economically worth while. All Australians are proud of it. However, in view of the magnitude of the sum involved in completing the scheme, and the period which must elapse before it is completed, I believe that there should be periodical assessments of the economic position in relation to it. I do not make that statement in a derogatory way, and I do not decry anyone, but I believe that there should be a national stocktaking of all major undertakings. The Snowy Mountains scheme is a major undertaking, and it should be reviewed periodically. I read recently that a Mr. Herbert, an economist, criticized the scheme. I do not agree with what he said, but when men of his standing see fit to criticize it I believe that the Government should consider making reassessments of the position, say, every five years. I commend that idea to the Government.

Now let me turn to the bill. Let us be clear that the Leader of the Government said - this has been repeated - that because we have offered a measure of opposition to the bill we are opposed to the scheme. I cannot follow this somewhat irrational line of reasoning. I heard one honorable senator say that Australia is entitled to borrow from this bank. What is the title of the bank? It is the International Bank for Reconstruction and Development. What was the purpose of the reconstruction? It is specifically set out in the charter associated with the establishment of the bank as post-war reconstruction for those countries that had suffered the hazards of war and had been devastated to a greater or lesser degree. It is specifically stated that the bank was established to assist the development of industrially backward countries.

For years Government supporters have been saying that Australia has been marching forward steadily compared with the time when Labour was in control of the treasury bench. But now, when it suits their purpose they say that we are justified in borrowing from this bank 100,000,000 dollars, or £44,700,000. By doing so we are increasing our deficits overseas. Successive Menzies Governments have, in effect, gone to the pawnshops of England, the United States, the Netherlands and Switzerland to put this country more and more into hock. Menzies Governments have brought into Australia as much capital as they can possibly extract with the result that the ownership of the real things of this country is in the hands of overseas interests.

It has been said that the Labour Party is opposed to borrowing overseas. With one breath Government supporters say so, and with the next breath they say that Labour has not hesitated to borrow overseas. I desire to state the exact position quite clearly. The Labour Party is not opposed to borrowing overseas, but it prefers to borrow money for a fixed term, thus knowing when the loan has to be1 repaid, and what the commitments are, rather than to import private capital provided by overseas corporations. The latter policy has the effect of handing over to those corporations the control, policy and form of Australian industry, as well as the! livelihood and standard of living in Australia. Those corporations have no real interest in the welfare of the people of

Australia or in the nation itself, but are interested only in the dividends they can extract from us. Australia does not want to be placed in a position similar to that in which Canada finds itself to-day. Nearly 70 per cent, of major industry in Canada is controlled by the United States. Labour’s policy is that we should borrow overseas only for specific purposes associated with development. We should import only those things that we cannot manufacture here at a reasonable cost. Labour is not opposed to borrowing for the purpose of buying and bringing into Australia things that are necessary, but it is opposed to handing this country over to moneylenders and other overseas interests for the purpose of importing luxuries that we can, and probably should, do without. Many of those things are imported simply to serve the interests of major importers and overseas manufacturers. Labour’s position in this regard is quite clear, and the party has never deviated from the stand it has taken.

Let us have a look at the bill to see what is involved. A commitment charge of three-quarters of 1 per cent, is payable in respect of the undrawn balance of the loan. Interest is at the rate of 5% per cent, on which no taxes, and no charges of any sort can be imposed. The schedule to the bill discloses that seven projects are involved, and that only one of the major undertakings could possibly incur major expenditure overseas. In view of that, how can the Government justify a loan of this magnitude It is, in effect, hoodwinking the Australian people. Electrical equipment . only is needed from overseas. What works are involved? There are tunnels, dams, pipe-lines and so on. Where does the material for that type of work come from? Where does the labour come from? The people of Australia provide the labour, and firms in Australia should be able to provide the materials. It may be necessary to replace some earthmoving equipment with machines from overseas. But the purpose of, say, the Utah construction company is to make profits which will be transferred overseas. Apart from funds for the purchase of electrical equipment necessary for only one of the seven major undertakings specified in the schedule, no money is required from overseas. Nevertheless, the Government says that this loan is necessary in order to carry on the Snowy Mountains scheme. It is because of this that Labour is opposed to the bill.

Let us be specific in our approach to this problem. Let us make clear to the nation the misrepresentation that the Labour Party has suffered at the hands of Government supporters. Labour is not opposed to the Snowy Mountains scheme. Labour may not have visualized the scheme, but it was a Labour government that inaugurated it. Mention has been made of Labour’s inauguration of the scheme just prior to an election. Would such a thing as that be unknown? It was coincidental that an election did follow the inaugural function, but it must be remembered that the function took place almost two months before the election. The ceremony was held on 17th October, 1949, and the election took place on 10th December. Had the function been left until after the election, it might have been inconvenient. With a change of government, probably the scheme would never have been gone on with.

Do not let Government supporters talk about taking advantage of major projects before an election to win votes. Let us cast our minds back to last year. What happened to the Mr IsaTownsvilleCollinsville railway line? The bill authorizing the money for that work went through this chamber on the last night of the Parliamentary session before the last election. I had to bring honorable senators back that night so that I could complete my speech. It was an important occasion because Queensland and one of the really great mineral deposits of the world were involved. When did the Government pass the legislation granting assistance for beef roads in Queensland? The bill went through this chamber on the day before Parliament rose prior to the last election. Yet honorable senators opposite are the people who make accusations against the Labour Party. I could say that they are political hypocrites, but such an expression would be unparliamentary. I would not mind Government supporters condemning the Labour Party if what they said was true.

What happened in Western Australia, which Senator Scott represents? Legislation giving assistance for beef roads in

Western Australia was passed at the end of the last session. For beef roads in the Northern Territory an amount of £350,000 was granted just prior to the election. The bill granting assistance for the construction of the Kwinana to Kalgoorlie railway was passed at the same time. A sum of £41,200,000 is involved in this project, and the Commonwealth is to make a direct grant of £14,400,000. A grant of special assistance to Western Australia was made. All these things happened just prior to the last election, yet honorable senators opposite talk about political window dressing because a simple function was held in 1949 in the Snowy Mountains where very few electors lived. It would not affect the election results at all. They make a great song and dance about it as though it was going to determine the election. I do not know whether it is true or not but it has been said that the function took place some two miles from where it should have been held. I do not know what importance that has, but I do know that the scheme was inaugurated by the man who was entitled to have the honour - the late Ben Chifley. Due to his drive, and his unwavering faith in the country and his certainty of success, this gigantic undertaking was begun.

I heard Senator Scott say something last night that precipitated the trouble that occurred then. I am one of those who cannot resist endeavouring to correct governmental inaccuracies. He said that the Government could have obtained from the International Bank the £20,000,000 required for the Collinsville-Townsville to Mount Isa railway. Let us traverse the history of the matter, because it is reasonable and fair for the people to know the truth. I am one who always lives in the world of facts and never wanders in the realm of fantasy. The Prime Minister (Mr. Menzies), on one of his many trips overseas, spent an hour with the chairman of the bank. It was an ineffectual hour, because it was spent in discussing the need to obtain £20,000,000 to assist the Queensland Government to rebuild the railway. The Prime Minister was unsuccessful. The bank refused to make the loan. Mr. Hiley, the Liberal Treasurer of Queensland, and Mr. George Fisher, chairman of directors of Mount Isa Mines Limited, subsequently went overseas. Then a senior official - I think the chairman of the bank - came out, but again the bank refused to provide the money. Yet Government supporters say that the money could have been obtained.

Senator Kendall:

– It could have been obtained, but Mount Isa Mines Limited would not accept the conditions.

The PRESIDENT:

– Order!

Senator DITTMER:

– I did not hear the interjection. I am certain that had I heard it I could have given the facts. It was said that Mount Isa Mines Limited would not enter into a guarantee. The company rather liberally accepted responsibility. Although it was only to use 48 per cent, of the freight facilities, it was prepared to accept 58 per cent, of the financial responsibility. It was even prepared to pay up to 70 per cent., and to establish a sinking fund to enable it to meet its commitments in case of any major catastrophe. None of these arrangements was acceptable to the Commonwealth Government, which was not particularly interested until just before the general election. The only expression of gratitude from the Queensland Government was in a letter from the Premier. I understand that he was castigated for sending it, because it was thought to be divorced from reality in that there was no need to be appreciative of assistance which the Commonwealth did not give. We should get the facts quite clear in relation to the matter.

The Government is now proposing to add £44,700,000 to our overseas indebtedness, although for the four years ended 30th June, 1961, our deficits amounted to £927,000,000. For the year 1960-61 we were £328,000,000 in the red. Yet this spendthrift, care-free Government, callously indifferent to the rights of the nation and the people, is prepared to put us in hock for all time through its incompetence and its desire to serve its overseas masters. It is prepared to add to the burden of the nation. It seems that this year the overseas deficit may not be so bad. The figure fluctuates. What will be the position if we cannot meet our overseas commitments? Are we to have a visit from a man of the calibre of Sir Otto Niemeyer? Are the Australian people to be held to ransom, as they were by Sir Robert Gibson, Chairman of the Commonwealth Bank Board, during the Scullin regime?

Senator Wright:

– Time!

Senator DITTMER:

– It is not quite time; I have two minutes to go.

Senator O’Byrne:

– One minute.

Senator DITTMER:

– That has- wasted nearly one minute of my time. If we cannot pay, such people might insist on the right to determine the standard of living of the Australian people and the future position of Australian industry. We may have a parallel to the position when Sir Otto Niemeyer said: “You are living too well. You are getting it too easy. You must cut social services and wages, but you will still have to meet your obligations in respect to your overseas debits, even though the servicing of those debits costs you twice as much as when you assumed the obligations.”

Senator LAUGHT:
South Australia

– I support the bill with great enthusiasm. Both this afternoon and yesterday 1 listened to Labour senators speaking. For the life of me I cannot understand why they oppose the bill. After all, it will infuse new money into the Australian economy at a time when the Government is deliberately setting out to do this. The bill provides for the borrowing by the Commonwealth Government of £47,700,000 from the International Bank for Reconstruction and Development. It provides for orderly repayment of that amount over a long period of years, according to the strict terms of lending of that institution.

The money will assist financially the conclusion of a certain section of the Snowy Mountains hydro-electric work. The section that it will particularly assist is that which diverts the waters of the Snowy River into the Murray River. Honorable senators will know that the whole project envisages that the fastflowing Snowy River, instead of tumbling willy-nilly down to the ocean on the eastern side of Victoria, doing no good and possibly doing great harm by cutting roads in that part of Victoria, will be diverted into the Murray River and thereby be of immense importance in irrigating vast areas of Victoria and South Australia. The scheme also envisages the generation of electricity by means of large power stations supplying electricity to Victoria and New South Wales.

Any scheme to conserve water anywhere in southern Australia is worthy of the Government’s fullest consideration. If it involves borrowing money from such a recognised lending authority as the Internatinoal Bank, the Government would be neglecting its duty if it did not borrow when money was available. There is nothing new or underhand in approaching a bank of the standing of the International Bank. After all, it is our bank; we are members of it. We have contributed to it approximately 30,000,000 dollars. As Senator Scott pointed out, we have already done considerable business with the bank. I understand that we have an excellent record with it. It is our bank, and therefore it is most logical that we should borrow from it on an occasion such as this. I am not in the least surprised, Sir, that the Labour Party has opposed this measure. It is merely being consistent. The Labour Party has opposed every measure that has come before this Parliament in relation to loans from the International Bank for Reconstruction and Development.

I recall a bill which came before the Senate in 1952 and in which I took a particular interest, because it had a direct bearing on South Australian affairs. Every Labour senator from South Australia opposed that bill, and every Labour senator from South Australia opposed all subsequent bills of a similar nature. As a matter of interest, I say in passing that the bill introduced in 1952, to which I have referred, provided for the borrowing of money for land development on Kangaroo Island, the provision of farms for fat lamb and wool production, land development and closer settlement in the south-east part of the State, in the Eyre Peninsula and in the Ninety-Mile Desert area. The supporters of the Labour Party must stand up and be counted for their attitude to that legislation.

Also in 1952, the Labour Party opposed a bill which provided for the borrowing of money for the development of the Leigh Creek open-cut coal-field, by the State Electricity Trust, to increase annual production of coal by 500,000 tons by 1956. The schedule to a bill passed by the Senate in 1954, which was opposed by the Labour Party, included provision for the financing of land settlement on Kangaroo Island and a vast programme of railway development.

An earlier bill had provided for the dieselization of the east-west railway, one of the most successful ventures in Australia and one which reflects great credit on this Government. The Labour Party, in its opposition to the borrowing of money for that project, showed where it stood. During the last few years, immensely important developmental works would have been starved of money had the Labour Party held sway in this Senate. Fortunately, that was not the case.

Let me turn to the record of the Government in its dealings with the International Bank. The Government has a splendid record in that respect. We have borrowed a total of 317,000,000 dollars from the bank. Of that amount, 29,000,000 dollars has been applied to the generation and distribution of electric power; 132,000,000 dollars has been used for transport, including, as I mentioned earlier, the dieselization programme for the east-west railway; 103,400,000 dollars has been used for agricultural and forestry purposes, and 52,700,000 dollars for industrial expansion. The borrowing of every one of those 317,000,000 dollars has been opposed by the Labour Party.

I ask honorable senators opposite: How could the Government provide the £92,000,000 needed to build the Murray 1 project if it did not borrow from overseas? I understand that £7,000,000 has already been provided from Consolidated Revenue. Of course, the easiest way would be to get the Government Printer to print the notes. That method, however, is completely unthinkable, and I do not believe that even the Labour Party would suggest its adoption. Another method would be to tax the people to provide the money. Individual income tax this year is expected to yield a total of £576,000,000. Last year it yielded £518,000,000. Would the Labour Party demand that, in order to obtain this additional -money, we should increase the yield from individual income tax from £576,000,000 to £620,000,000, or to some other figure? If that is Labour policy, let honorable senators opposite stand up and be counted on that, too.

Sitting suspended from 5.45 to 8 p.m.

Senator LAUGHT:

– The £44,700,000 that is to be obtained from the International Bank for Reconstruction and Development will finance a new stage of the Snowy Mountains scheme. That stage covers the diversion of water from the Snowy River into the Murray River. The Labour Party holds the view that such a project should not be financed with a loan from the International Bank. In its sixteenth annual report the bank refers to a project that it financed in Norway last year and states -

This loan will help to finance the second and third stages of the Tokke scheme, the country’s largest hydro-electric project.

That scheme is on all fours with our Snowy scheme. Not by any stretch of the imagination could Norway be referred to as a backward country or as a country that needs reconstruction. The Tokke project is a developmental project, and throughout the report numerous other developmental projects, associated with water conservation, generation of electricity or transport, are referred to.

We have heard a lot from the Labour Party about the heinous sin of borrowing money from overseas. But the Labour Party itself borrows money from overseas at times. A year or two before his government went out of office the late Mr. Chifley borrowed 20,000,000 dollars from the International Monetary Fund. Years ago, Labour Premiers were notorious for the way they borrowed money from all over the world. They paid high rates of interest on that money. The Labour governments of New South Wales and Queensland borrowed heavily from overseas. The present New South Wales Labour Government has an office in New York for the sole purpose of encouraging investment in New South Wales. I do not decry those efforts, but I merely point out that in the State sphere Labour governments are very keen about borrowing overseas.

This proposal to borrow from the International Bank has the approval of the Australian Loan Council. The senior member of the Loan Council is Mr. Heffron, the Labour Premier of New South Wales. Mr. Heffron and Mr. Reece, the Premier of Tasmania, both were present when the Loan Council approved the proposal to borrow this money from the International Bank. It is strange that Labour representatives in the Senate should oppose this proposal to borrow money from what is virtually our bank, because Australia is a prominent member of the bank. I think Australia has invested something like 32,000,000 dollars in the bank.

I turn now to the suggestion that we are borrowing too much from overseas. I am indebted to Mr. Bury, Minister assisting the Treasurer, for some very interesting figures. In 1949, when the Labour Party went out of office, interest paid by the Commonwealth on overseas borrowings amounted to .9 per cent, of the national income. To-day, interest on such borrowings amounts to .5 per cent, of the national income. So it will be seen that although the total of overseas borrowings has increased the national income has increased at an even greater rate. What a wonderful tribute that is to Australia’s economy under the guidance of this Government. We have an obligation to keep this great country growing. The money that we spend on the Snowy scheme will help to do that. In 1949, 26.2 per cent, of the national income represented capital borrowed by the Commonwealth and the States. To-day, only 12.1 per cent, of the national income represents capital that we have borrowed from overseas. Prior to the war, the overseas debt amounted to about £87 per head of population. To-day, the figure is about £67. Clearly, although our population has increased greatly since the war, our overseas debt has not increased in a similar ratio. I cannot understand why the Labour Party should be so fearful about the volume of overseas debt.

As our production increases so our capacity to repay this loan will increase. I have received from the Treasurer a copy of the Treasury “ Information Bulletin “, which contains figures that are up-to-date as at the end of April, 1962. The bulletin shows that between July, 1960, and February, 1961, the value of our exports of wool and sheepskins was £227,000,000. In the period July, 1961, to February, 1962, the value of those exports was £269,000,000. In the corresponding periods the value of wheat exports increased from £62,000,000 to £106,000,000. The total value of exports for the earlier period was £571,000,00, and for the later period it was £707,000,000. So the value of our exports has increased considerably in the last twelve months. I was very interested to read that there has been a reduction of imports. The value of imports in the periods that I have referred to has decreased from £756,000,000 to £562,000,000. Over the last few months there has been a marked increase in Australia’s capacity to service this loan. It is only right that the Senate should consider these matters. The information that I have placed before the Senate throws into bold relief the Labour Party’s doleful knocking of Australia’s progress.

I pose the question: When this matter was debated in the Loan Council, as it surely was, did any Labour Premier oppose it in the way that it has been opposed by honorable senators opposite? Can anybody imagine the Labour Premier of New South Wales opposing this proposal when it is remembered that all of the money obtained from the bank will be spent in New South Wales? Why, then, have the Labour senators from that State opposed this measure? Can one imagine the Labour Premier of Tasmania opposing it? Of course not. The Labour Premiers of those two States realize that if they were to oppose this proposal they would possibly, in the ordinary course, have to take less money in State grants. This £44,700,000 means about £18,000,000 less to New South Wales alone and that State is getting all the work done in its territory. Consequently, the Labour senators have to stand up and be counted on that score.

Now I take the Labour senators from South Australia. We in that State know the tremendous importance of the flow of the Murray River. Because of this project, the waters of the Snowy River, instead of flowing uselessly to the sea, will be diverted into the Murray River. It is very important for South Australia that this matter should” not be held up, that the money should be borrowed immediately and that the work should be proceeded with immediately. It is important to the taxpayers in that State because they will not be required to raise, by way of income tax payments, their portion of this £44,700,000. Therefore, I say that there is no logic in the attitude of the Australian Labour Party to this measure.

I say briefly that this loan is for the more rapid development of Australia. If the Opposition had its way, it would slow down the development of Australia.

Senator Anderson:

– This loan will provide employment.

Senator LAUGHT:

– As my friend1, Senator Anderson, rightly says, this money will provide immediate employment. We should recall that this is one of the matters that were envisaged by the Prime Minister (Mr. Menzies) on 7th February when he made his remarkable statement on the methods the Government had in mind for getting the wheels of industry to turn faster and to solve the unemployment problem that had arisen. Any hindrance presented by the Labour Party to the borrowing of this money for the Snowy Mountains scheme will go down to the very great discredit of that party.

I assure the Senate that the people of South Australia want this bill passed and passed quickly. The opportunities that have been offered to the Government by the borrowing of this money will mean that works such as the Chowilla dam, which is so important to South Australia, the broadening of the railway gauge between Port Pirie and Broken Hill and other important projects in that State, will be carried out more quickly, as people realize that the money for this project in New South Wales will be provided in the manner contemplated by the Government.

Some people say that it is a departure from previous practice for the Commonwealth to borrow money for part of the Snowy Mountains project. I admit that it is; but at present there are special circumstances. In order to bring back confidence in industry, we should relieve industry of some of the taxation that normally it would have paid as its share of the cost of this project. I believe that the Government has taken a very wise decision in approaching the International Bank, which, after all, is our own bank, for this money.

Before the suspension of the sitting, I showed how important the past loans from the bank have been to the dieselization of the east-west railway, the Leigh Creek coalwinning project, the development of the Coonalpyn Downs in South Australia, the rural development on Kangaroo Island and so on. Strange as it may seem, Labour senators opposed the borrowing of that money for each of those useful projects, and to-night they are opposing this measure. I cannot understand anything about their attitude to. this matter.

I ask honorable senators on both sides of the chamber to accept this bill. I believe that it will be of tremendous importance to the development of Australia. The interest rate is not high. It is 41 per cent, plus 1 per cent., and the 1 per cent, goes into the capital of our bank. The loan is for a long term.. I believe that by the Government borrowing this money taxation can be held within reasonable limits. I also believe that money that otherwise would have been used for this project could be used for other important developmental projects and that the unemployment figures, which are already falling, will fall further. The additional productivity . that will result from this project will make it much easier for Australia to repay this and other international debts than it would be if we stood still in our tracks and did nothing about development. Accordingly, I support the bill with much enthusiasm.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Mr. President, I always find these international agreements, particularly the international financial agreements, of fascinating interest; but I might not have entered this debate but for the speech made last evening by the Leader of the Government in the Senate (Senator Spooner). I believe that I should comment on three aspects of his speech. The first is that he accused the Australian Labour Party of attacking the Snowy Mountains scheme. He worked himself, with great ardour, into an attack upon the Labour Party accordingly. It was quite a fanciful idea on his part. Nothing that Senator Willesee, who led for the Opposition in this debate, said justified the attack that Senator Spooner made under that head. His idea is so obviously and completely wrong that it is necessary for me only to contradict emphatically the approach that he made.

It served him the good purpose, of course, of keeping him away from the purpose of the bill while he was discussing the virtues of the Snowy Mountains scheme and all that this Government has done, for which it is entitled to credit. It saved him the trouble of dealing with the bill which relates to the borrowing df money to finance a particular section of the Snowy Mountains project. I understand the tactics that directed the attack; but, of course, I entirely reject the fanciful conception that the Labour Party is opposed to the scheme. All Australia knows to the contrary.

I was amazed at Senator Spooner’s statement that there was no constitutional base for this project and the contracts until the Menzies Government, after a period of six and a half years in office, obtained the co-operation of two States - Victoria and New South Wales - and so gave the project a constitutional base. Senator Spooner is asking us to believe that he and the Government of which he is a member spent scores of millions of pounds in six and a half years, engaged contractors and entered into contracts for tens of millions of pounds, and they believed all of that to be invalid under the Constitution. Of course, that is not true. A government that proceeded on such a base would have been most irresponsible. Of course, there is no basis for his suggestion that the scheme was not well founded constitutionally.

In the first place, one can have recourse to the defence power. The building of power units underground is one of the main features of the project that contribute to defence. Power is a vital element in any war, or for defence. Our production and our safety depend upon it. Putting power units underground has a very strong defence aspect. Secondly, under its power over interstate trade the Commonwealth has - the High Court of Australia has so held - a perfect right to engage in interstate trade. What is the activity in which the Snowy Mountains Authority is engaged? It is the sale interstate of electricity and water, the very essence of interstate trade.

Senator Scott:

– We are not selling any water, are we?

Senator McKENNA:

– The water is being sold. We are engaged in passing it on.

Senator Gorton:

– It is passing on itself.

Senator McKENNA:

– Even the distribution aspect is a part of trade. Diverting it and distributing it for interstate purposes is for the purposes of trade. There is no doubt about that. Despite the limitation placed on the Commonwealth under the

Constitution in relation to the use of rivers, as recently as 1947 the High Court held that there is clear power to use the rivers of Australia for the purposes of interstate and overseas trade so long as there is no diversion of the waters from the reasonable use of residents. What does this scheme do? Not only does it not deprive residents of the reasonable use of the water, but it provides additional water as well.

Thirdly - and I can find additional grounds if necessary - I remind the Senate that, in 1909, when New South Wales ceded this Australian Capital Territory to the Commonwealth, paragraph 10 of the First Schedule of the Seat of Government Acceptance Act 1909 contained the clearest provision in these terms -

The State shall grant to the Commonwealth without payment therefor the right to use the waters of the Snowy River, and such other rivers as may be agreed upon or in default of agreement may be determined by arbitration, for the generation of electricity for the purposes of the Territory, and to construct the works necessary for that purpose, and to conduct the electricity so generated to the Territory.

Senator Wright:

– That is not attributable only to the Labour Party, is it?

Senator McKENNA:

– I am not suggesting that it is. I am laying it as part of the constitutional base for this job. That is the one point which concerns me. I am rebutting the suggestion of the Leader of the Government that this scheme lacked constitutional base from the beginning. Clearly it did not lack constitutional base.

Senator Spooner:

– The power was limited entirely to the Australian Capital Territory.

Senator McKENNA:

– That power was, but it related to the Snowy Mountains and the works. Apart from that, the other two grounds I put still stand. This Government plainly adverted to them at the time it launched the scheme. In any event, how irresponsible it would be for a government to go ahead with such a scheme, providing scores of millions of pounds a year and entering into contracts, unless it really believed that it had some constitutional authority. The other point is this: Who attacked the proposal? No one did! So again the honorable senator was chasing an illusion when he advanced that argument.

Senator Spooner:

– There would have been no scheme if we had not taken that view.

Senator McKENNA:

– And there would have been no scheme unless the Labour Party had originated the idea. At the base of everything that matters and everything that happens in the world there is an idea. To the great credit of the Labour Party, it was responsible for putting the idea into effect and launching the scheme. But that is not the argument. We are discussing a bill dealing with a proposal to finance the project, but as Senator Spooner raised three matters I want to deal with them briefly.

I come now to the third matter. He launched a fierce attack against the then Labour Government of Victoria and the present Labour Government of New South Wales for the delay in going ahead with the Blowering dam which the New South Wales Government had contracted to construct. I asked the honorable senator during the course of his remarks whether New South Wales was bound in time in relation to the construction of the dam, and he said that he did not think it was. The actual fact is that it never was. The agreement with New South Wales and Victoria states -

The State of New South Wales shall for the purpose of regulating waters of the Tumut River and the waters diverted thereto from the Eucumbene, Tooma or Murrumbidgee River catchments -

as soon as is practicable construct, or cause to be constructed, storage works on the Tumut River at Blowering or at such other site on that river, and of such capacity, as that State determines;

Senator Scott:

– What is the date of that agreement?

Senator McKENNA:

– 1958. Could anyone have expressed the proposal in looser terms? It was a case of do it when you like, on what site you select and with what capacity you prefer! If the Leader of the Government were driving a bargain on this occasion, and if the construction of the Blowering dam were so important that it should fit into the scheme of construction in progress, why was not that point particularized? Why was the State not bound? Frankly, it seems to me to be wrong for the Minister who negotiated that agreement and who failed to make the specific provisions, if they were needed, to be heard now blaming the State for not complying with a condition which leaves it the most complete freedom in that phase of the Blowering dam project.

Why did not the State go on with the job? Let me have a word to say about that. The first reason is, of course, that it has been short of funds for capital works purposes, a theme which I have developed in this place time and time again. Finally, in 1960, the State had trouble with the Wyangala dam, as no doubt the Minister for National Development knows. A crack developed in the concrete pipe that carried water to the powerhouse. The State had to call in experts from France. There was a programme of reconstruction and enlargement of the dam, and because the experts recommended urgent remedial action the State, with the approval of the conservation commission’s own experts, had to give approval for the expenditure of £14,000,000 to save the dam and the works on the Lachlan River. Electricity generation has stopped and the spillway has been lowered. That was the most urgent job of water conservation in New South Wales in 1960, but there was no reference to that by the Leader of the Government. The State had to attend to the project it had in hand. It was short of funds, and it did the right thing in concentrating on the Wyangala dam. It would have been at least fair for the Leader of the Government to have adverted to that fact when he was attacking New South Wales.

Let me mention another aspect of the matter. Two months ago, and before the New South Wales election, I understand that the Premier wrote to the Prime Minister (Mr. Menzies) pointing out that he was over-committed with his conservation works and inviting the Commonwealth to go ahead with the construction of the Blowering dam. The State undertook to repay the moneys expended over a period of years. To this day the Premier has not received an answer, yet the Leader of the Government stands in this place and accuses the New South Wales Government of being lethargic. The Premier has not even received a reply to his letter of some months ago putting a practical proposal for the work to proceed. I felt that I should deal with those three matters before coming directly to the bill.

As I see it, the bill has four main purposes which relate solely to one phase of the Snowy Mountains project. The first purpose is to approve the borrowing of 100,000,000 American dollars or its equivalent from the International Bank in terms of an agreement which is set out in an annexure to the bill. The second purpose is to authorize the payment of that amount of 100,000,000 dollars or its equivalent, in terms of the agreement, to the Snowy Mountains Hydro-electric Authority. The proceeds must go to that body. The third purpose is to appropriate from the Consolidated Revenue Fund the moneys required for the repayment of the principal loan, the interest and the other charges which arise under the agreement. The fourth purpose is to negative the application of the National Debt Sinking Fund Act to this particular loan. If that were not negatived the Commonwealth would be under an obligation to repay the loan within 50 years, whereas this loan must be repayed within 25 years.

As is well known, we of the Opposition oppose the borrowing. It follows, therefore, that we oppose the machinery measures which flow from an acceptance of the loan proposal. I come now to the reasons for our opposition which Senator Laught found difficult to understand. I proceed to help him. Our first objection is that this money is not required for the Snowy Mountains Authority. As shown in the report of the commission, down the last twelve or thirteen years, £281,000,000 has been provided out of taxation to enable the project to go on. An accumulation of £31,000,000 was charged by the Government to the debit of the authority. I wish I had time to deal with that phase, but I am afraid that time will not permit me to do so. In this year of grace - 1961-62 - the Parliament has appropriated £16,500,000 out of revenue to enable the work to proceed. Has anybody on the Government side the hardihood to suggest that unless this loan is raised this work will stop?

Senator Gorton:

– Other work would not go on.

Senator McKENNA:

– Is it not quite certain that the project would go on at. the tempo that has been arranged, whether financed out of locally raised loan moneys or, as the Government has done without fail down a period of twelve years, out of the revenues of the country? Of course the work would go on; there is no question about it! There would have been another appropriation for next year of some £16,000,000 to £20,000,000 as there has been during the last twelve years. Any government that dared to halt the scheme would not live for a minute.

This money is not being raised for the continuance of the Snowy Mountains scheme. In fact the Government frankly admits that the only reason that this loan is related to the Snowy Mountains project is that it cannot get the money from the bank for general purposes; the loan must be related to a particular project. The Government frankly admits that. The Snowy Mountains Hydro-electric Authority is only an incident for the raising of money for purposes not connected with the Snowy Mountains scheme at all. The secondreading speech of the Minister for Civil Aviation was most inadequate. It left out vastly important features of the agreement. It was not a frank speech because we were not told one word - and the Government elsewhere has been pressed for information on the point - about how much of this loan was really required for expenditure overseas. The Government has not answered that question, and I ask it again now.

Senator Wright:

– Do you suggest that the money should be spent overseas?

Senator McKENNA:

– On matters connected with the work so that the project can proceed. The Government is borrowing £44,700,000 in Australian currency, the equivalent of 100,000,000 dollars. I ask how much of that is to be spent overseas? Why is this foreign currency required? Whilst I cannot get information from the Government, at least I have been able to find it for myself from a statement made by the International Bank itself back in January of this year. In the course of the statement the bank said -

The total cost of the project is estimated at 222,000,000 dollars. It is expected that the equivalent of 189,000,000 dollars will be needed for local expenditure-

That is expenditure in Australia - and the remaining 33,000,000 dollars will be required for imported equipment and services. Contracts for all major works and for the generating plant and equipment are being awarded after international competitive bidding.

We are told that 33,000,000 dollars out of the 222,000,000 dollars would be needed for overseas expenditure. We are not. in fact borrowing 222,000,000 dollars; we are borrowing less than half that amount. The 33,000,000 dollars can be reduced, to 16,000,000 dollars and that represents about £7,500,000 in our currency. So foreign currency is required for the project, according to what the Government has put before the International Bank, only to the extent of some £7,500,000 out of £44,500,000. That is the position if the bank can be believed, and I take it that the bank made its statement on information supplied by the Government. Therefore, I. repeat, foreign currency would be required for overseas expenditure to the extent of not more than £7,500,000 out of £44,500,000. That, again, makes it quite clear that this money is not required for the Snowy Mountains project.

It is rather interesting to note - putting the costs into Australian terms - that the total estimate of the cost of the project now under way, which is the special security of this loan, was £92,000,000. Of that amount £7,000,000 was spent in the last financial year, reducing the amount to £85,000,000. We are obtaining a loan against the whole of the national credit amounting to 50 per cent, of the value of the project. Is the Government proud that it is able to raise no more than 50 per cent, of the value of the project, if it must have a loan? Surely the credit of this project was good enough to raise 65 per cent, at the least and perhaps 70 per cent, or 75 per cent.l The Government talks about how high our credit is abroad. I would have expected that our high credit standing would have enabled the Government to raise more than 50 per cent, on the security of the project. On a project valued at £85,000,000 the Government is to get a loan of £44,500,000. Had I been the negotiator for the Government I would consider I had made an exceedingly bad deal if I could not sell our credit worthiness at a higher level than that. An advance of only 50 per cent, of the value of the project has been obtained, and the loan is backed by the nation!

What is the real purpose of this loan? I have shown and proved this money is not required as a loan for this particular project. What is the real purpose? The real purpose, of course, is to bolster our overseas funds - the weak position of our international balance of payments. I suggest that our economy is vulnerable. We are dependent so heavily on primary production and mineral production. We are sub-. ,ject to seasonal fluctuations and variations. . in our . markets and pur prices. On. the - other side, our secondary industries are . heavily dependent on our imports. We . are dependent upon imports for capital goods and above all for consumer goods that form the raw materials of many of our major industries. When we look down recent years we find an enormous gap on . current account in our balance of pay- ‘.’ ments. Because of this, we in Australia . have cause to be alarmed. The figures for the last three years are as follows: - In 1958-59 we were down £185,000,000 for the year. In the next year we were down £229,000,000. Last year- 1960-61- we were down £369,000,000 for the year.

How are we to get out of this trouble? Why were we not bankrupt, as we should have been on these figures? We were not bankrupt only because of borrowings by the Government. The Government has borrowed every penny it could borrow overseas. We also had an enormous inflow of private capital. It is in some respect like the curate’s egg, good in parts. That private capital inflow, upon which we have . been so heavily dependent, and which last year amounted to £326,000,000, could dry up overnight. It has almost dried up this year. The picture is completely different this year. Naturally, the Government is worried, and naturally it has scouted round to find what overseas currency it could obtain to bolster that weak international, position. . The purpose of this loan is not to finance the Snowy project at all, but to bolster a weak and dangerous position in our international reserves.

Incidentally, I heard the Minister for Trade (Mr. McEwen) speak in a television programme on Sunday night. He warned . against the dangers of allowing overseas capital to come into this country to the extent that it is controlling and largely taking over sections of Australian industry. Yet the Minister assisting the Treasurer (Mr. Bury) made a speech in the Parliament a few weeks ago to this effect, which horrified me -

If we want to develop quickly, we must have a large proportion of overseas capital and overseas people, controlling industry in some cases and snaring it in others.

That is another reason why the Labour Party opposes this eternal borrowing overseas and the inflow of private capital. We are not opposed to the inflow of capital as such, but we are opposed to the viewpoint that it should control Australian industries. We are not prepared to stand for that, but the Minister assisting the Treasurer, sponsoring this loan, advocated control by overseas interests of sectors of our economy and industry. That is a dangerous position, it is an un-Australian position and it is an additional reason why we oppose this legislation. We are more concerned with public borrowing, because that is the matter that is before us to-night. lt is very true that borrowing in foreign currencies does strengthen our overseas reserve position for the time being, but there is always a day of reckoning. Whilst it relieves for the moment, the amount obtained is very often dissipated in buying non-essential imports. We had an example of that in the last year or two. Then the time comes when we have to pay back. 1 now look at the schedule of repayments to be made over a period of 21 years commencing in 1966. We have to pay back 100,000,000 dollars. Although weshall start in the first year with only 1,200,000 dollars, the amount will be stepped up year by year. Every six months it will increase, until in 1976 we shall be paying 4,300,000 dollars a year. In the final year, 1986-87, we shall be paying 7,900,000 in two instalments. So there is a progressively increasing burden of capital repayments to be met. We are burdening the taxpayers of the next 25 years. That money must be provided in the foreign currency that we borrow. It has to be converted. It can be seen that there will bc a heavy burden upon the people. Here we are borrowing and expending money, making our balance of payments position worse down all the years that lie ahead. It would be bad enough if that were the only outgoing - the repayment of principal.

Senator Spooner:

– Income from the Snowy Mountains scheme will more than pay it.

Senator McKENNA:

– In twelve years, less than £500,000 has been received from the Snowy Mountains scheme on expen diture of nearly £200,000,000. Just how soon- will the scheme be revenue-earning to a degree where it will meet commitments of that kind?

Senator Spooner:

– It is now earning at the rate of £6,500,000 a year.

Senator McKENNA:

– And paying how much away in interest, charged by the Government? I repeat that the repayment of principal amounts is not the only burden. There is a commitment charge of threequarters of 1 per cent, for the money until it is drawn. The money will not be required in full during the next four years. On all the money that will be lying idle and undrawn, Australia will be compelled to pay three-quarters of 1 per cent. On 100,000,000 dollars, that will be 750,000 dollars in the first year. The amount will lessen as we draw further. So, immediately, millions of dollars are involved in outgoings.

There is one other aspect. If this Government were to drop out of office in the next two years, and a new government decided to pay back this onerous loan, what would it run into? This aspect was not mentioned by the Minister in his secondreading speech. Under the agreement, Australia would have to pay a premium of 5$ per cent, in order to pay back the amount borrowed 23 years before maturity. Australia would pay back 100,000,000 dollars, plus 5) per cent., for paying back ahead of time. That is recorded on page 8 of the bill. The premiums range from onehalf of 1 per cent, for prepayment not more than three years before maturity to Si per cent, for prepayment more than 23 years before maturity. I venture to say that if a Labour government were in power this would be one loan it would be happy to discharge at the earliest possible minute.

That is the burden of repayment. What sort of a deal is it for this country? Why did not the Treasurer, in the speech informing the Parliament about the matter, even mention that? I concede that borrowing gives temporary relief, but in the end it means long-term disaster. As Senator O’Byrne says, it is the rake’s progress. Ultimately, if persisted in, it must end in bankruptcy. When all is said and done, were we ever faced with a more disastrous position in our balance of payments than we face at the moment? We face the possible entry of the United Kingdom into the European Common Market, and loss of preference in a market to the extent of £200,000,000 worth of our primary production. That is a situation that can affect the living of everybody in this country, as the Minister for Trade so dramatically told the nation quite recently. Yet we are building up a burden, by this type of borrowing, upon the very balance of payments on which our standard of living and . the capacity of our big industries to provide employment depend. The whole matter of employment is wrapped up in these borrowings and in the balance-of-payments position.

We on the Labour side say that, having regard to that situation, borrowing ought to be the very last resort of the Government. From this side, we have told the Government what it ought to be doing to rectify the balance-of-payments position. We want the Government to go into overseas shipping in order to condition freight rates. We want the Government to let Australia into insurance of our overseas trade. We think that the Government should be taking steps to lower the cost level to give our exports a chance. I should like to devote half an hour to making suggestions in relation to that matter. The Government should be looking for new markets. It should press on with oil discovery at a greater tempo in order to relieve our outgoings for the importation of oil. The Government should reimpose restrictive controls on imports. It is coming to that in a weak way. The Government has adopted a section of Labour policy, coming back - humiliatingly for a government that set its face so strongly against it - to the need for quantitative restrictions on imports. This country’s economy will never be sound or safe until the Government takes a firm, immediate and progressive stand in the matter.

Now I come to what we have been criticized for saying. I think it was said from this side that it was bad business to pay back to the International Monetary Fund £78,000,000 on which we were paying interest at the rate of 2 per cent, and to take a new loan under the onerous conditions of 5i per cent, interest, with threequarters of 1 per cent, commitment charged, and all the other burdensome provisions. I join with those who make that complaint. Senator Willessee was told that borrowing from the International Monetary Fund was for short-term temporary purposes in relation to balance-of-payment difficulties. First, are we not in balance-of-payment difficulties to-day? Did not Mr. Holt, when the loan was obtained back in May, 1961, say, when speaking in the Parliament -

No charge other than the initial service charge is payable for the first three months. A charge of 2 per cent, per annum is payable for the next fifteen months, and from then on the charges rise by i per cent, per annum in each succeeding period of six months.

Listen to what he said as to the term of the loan -

If no repayments were made for three years the average effective rate of interest over that period, taking into account also the initial service charge of i of 1 per cent., would be 2i per cent, per annum.

In other words, he was clearly contemplating a loan that would run for at least three years. Let me drive that point home a little further. The Treasurer made a press statement on 22nd March last year when, after a year, the £78,000,000, which was costing this country only 2 per cent, interest, had been paid back. He said -

The drawing normally would have been due for repayment within three to five years.

Where was the urgency and the need to repay it? Have not we a balanceofpayments problem at the moment that is not only temporary but chronic? Do not we, along with other members of the Commonwealth of Nations, face the gravest dangers in the realm of trade? Yet, in the Treasurer’s own statement, made as recently as 22nd March last, there is an acknowledgment that we could have held that money for from three to five years. How , stupid it is to pay off on one day money that has been borrowed at 2 per cent., and on almost the next day, or at any rate at about the same time, to borrow 100,000,000 dollars at 5% per cent, interest.

Senator Armstrong:

– They say that is good business.

Senator McKENNA:

– I have never in my life heard of worse business.

We have been asked for reasons for our . opposition to this bill. I have given a number of reasons. I have said that the money is not required for the project at all, and I have stated the situation as I see it. The Government has paid off a 2 per cent, loan almost at the same time as it proposes to borrow 100,000,000 dollars at 5* per cent, interest. There is a difference in the terms, of course, but nevertheless the £78,000,000 could have been held.

Senator Scott:

– No.

Senator McKENNA:

– Unquestionably it could have been held. Your own Treasurer has said that it could, and I have quoted two passages from statements made by him.

Looking at the position, I find that overseas borrowing by this Government has gone on since 1950. According to the Treasurer, the Government has borrowed overseas some £530,000,000. To be added to that amount is the 100,000,000 dollars that we borrowed in 1950, so that we have, during this Government’s term, borrowed overseas to the tune of nearly £600,000,000. I am giving figures in Australian currency. Let us consider what that borrowing does. It involves us in repayment of principal year by year and in interest payments year by year. Interest payments alone probably amount to between £25,000,000 and £30,000,000 per annum. That is a most serious element in our balance-of-payments position. The Government is making the position worse by borrowing of this type.

Senator Gorton:

– Yet we owe less per head than before the war.

Senator McKENNA:

– That has nothing whatever to do with it. To answer that interjection, one would need to devote half an hour to discuss the Government’s own inflation and to allow for all the factors. The statement made by the honorable senator is a very bald one. It may or may not be correct; I have not checked it. But I am sure that if I had a little time to consider the argument addressed to the Senate by Senator Laught I would not leave very much of it.

Let me come to a point which, I notice, one or two honorable senators are waiting with glee to hear me mention. It is the fact that the Premiers, the members of the Australian Loan Council, Labour and Liberal alike, have applauded this loan. The one redeeming feature about it is the acceptance by the Government of another element of Labour Party policy and its avoidance of the completely mean and selfish policy, which has been adopted for twelve years, of paying for our public works out of revenue, with no repayments from the Commonwealth and no interest burden. Whatever moneys could be raised on the loan market were passed over to the poor States. Apart from some insignificant amounts for war service land settlement and a few minor matters such as that, the States have been handed the whole of the burden of the loan moneys that could be raised. Why would not they cheer when they saw that the Commonwealth at last, after twelve years, had decided to pick up a little of the burden? Of course the Premiers would cheer.

The one redeeming feature, I repeat, that I see in this legislation is that the Government at last has said: “Well, the Labour Party is right. We have been mean. We will now carry some of the dear money, the heavy-interest bearing money, that hitherto we have thrown at the States, whether it has been borrowed overseas or borrowed locally “. I congratulate the Government on the acceptance of a principle from the Labour Party platform.

Our statement of policy that we put to the electors during the recent general election campaign contained the following passage: -

The present practice of the Commonwealth’s raising money by taxes and lending it to the States at ever-increasing interest rates is unjust and will be altered to give the States a substantial relief from this unjust impost. Labour will re-allocate the pool of taxation components and public loan moneys between the Commonwealth, the States and local government.

I hope that the acceptance of this principle will be reflected in the loan raisings of this Government on the market in future. I shall watch that position with great interest.

What will this loan do for the Government? It will give it additional revenue. It will free the Government from the necessity to budget for the payment out of revenue of some £20,000,000 next year. It will enable the Government to cut down its deficit to that extent next year and the year after, as moneys come in under this loan. So, the Government is playing for its own electoral and political advantage. It is clear that that will happen, if the Government does hot have to allocate some £20,000,000 next year and £20,000,000 in the following year. Of course, it will do something to help build up overseas reserves, as I have indicated.

There are many other matters connected with this agreement which I should like to take up with the Minister at the committee stage. Time will not permit me to discuss tb/jm now. Before I conclude, I wish to read from the Budget speech of the Treasurer in 1950-51. At that time, the Treasurer said -

At 30th June this year-

That is, 1950 - the total international currency reserves of Australia stood at £650,000,000. A substantial part of this large total, however, has been accumulated through the temporary inflow of capital, and when allowance is made for this fact and for the greatly increased value of imports and exports as compared with earlier years, the total cannot be regarded as excessive for our requirements.

In 1950, when money was worth a great deal more than it is to-day - its value has been halved since then - £650,000,000 was not regarded as excessive. The Treasurer went on to say -

If we are to obtain the still greater quantity of imports we nee:l it is important that we should have adequate international reserves against the contingency of a fall in our export earnings or a reduction of the inflow of capital.

We are faced to-day with a similar position, although it is of a more serious nature, when our reserves are only £530,000,000 in the poor and depreciated currency of this Government.

I shall conclude my remarks on overseas borrowing with one comment. The policy speech that Mr. Calwell made to the people last year included this statement -

Overseas borrowing at interest to import nonessential goods-

And that is what can be done with the proceeds of this loan - merely increases Australia’s overseas indebtedness. We borrow money to import unemployment while our own workless walk the streets and our factories remain half idle. Only by overseas borrowing and overseas investment can the Menzies Government stave off an immediate economic collapse in Australia, even though what it does in that regard makes such a collapse more or less inevitable ultimately.

I hope that Senator Laught understands very much better now the reasons why we oppose this measure.

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

– I am certain that Senator Laught’s quandary, if he was in one, will not have been relieved by Senator McKenna’s remarks, because Senator McKenna has advanced altogether different reasons for the Labour opposition to this bill than those advanced by Senator Willesee, who led for the Opposition, and by the honorable senators who followed him in the debate. I must comment on some of Senator McKenna’s remarks. He smoothly twisted the facts, and his statements must be corrected immediately. He asked whether it was good business to repay £78,000,000 borrowed from the International Monetary Fund at 2 per cent, and to borrow about £44,000,000 the next day at 5J per cent. He knows, as well as every other honorable senator knows, that the short-term loan from the International Monetary Fund at 2 per cent, could not be used for the purpose for which the £44,000,000-odd is being borrowed.

Senator Armstrong:

– He never said that it could be so used.

Senator HENTY:

– No, but he said that we repaid £78,000,000 and borrowed £44,000,000 at a higher rate of interest; and he knows, just as Senator Armstrong and Senator Willesee know, that that £78,000,000 could not be used for the purpose for which the £44,000,000 is being borrowed.

I was very interested to hear Senator McKenna say that we have been financing the Snowy scheme from revenue instead of from loans. I have heard his doleful attacks on the budgets every year for the last ten years. Repeatedly, he has predicted the complete collapse of the economy, and” for the last ten years he has been wrong. He has castigated the Government for using revenue for the development of the Snowy scheme. Now, when we propose to raise a loan - something that he has been advocating for the last ten years - he opposes the idea. It is nice to have a couple of bob each way.

The Leader of the Opposition said that we had provided for the Snowy scheme £180,000,000 out of revenue, including £16,500,000 this year, and that the scheme did not pay interest on that money. Senator

Paltridge advises me that the Snowy Moun-tains Hydro-electric Authority has paid interest on the- money that it has receivedfrom the Commonwealth. The Leader of the Opposition said*-

Senator Hendrickson:

– He did not.

Senator HENTY:

– He did. I heard him. My ears are better than yours. You would not know what he said. He said that the States paid all the interest, and that the Commonwealth advanced the money to the authority interest free. That is not correct. 1 am informed that the authority has paid interest on the money that has been advanced to it.

During the debate yesterday, it was claimed by speakers from the other side of the chamber that representatives of the International Bank came to Australia to investigate our economy before recommending that the loan be approved. Nothing is further from the truth.

Senator Ormonde:

– Who said that?

Senator HENTY:

– You will find out if you read yesterday’s “ Hansard “. The bank’s representatives came to Australia to investigate the economics of the Murray 1 power station project. Having ascertained that the project was perfectly sound, they recommended that the loan be approved. That is why the bank’s technical officers came to Australia - not to investigate our economy, as Senator Dittmer suggested, with his reference to Sir Otto Niemeyer and all that nonsense. I am sorry that Senator Dittmer is not present to hear me say that his insinuations were far from the truth. In his speech Senator Dittmer said what Senator McKenna said a few minutes ago, although Senator Dittmer’s language was cruder than that employed by Senator McKenna. Senator Dittmer said that this Government had placed Australia more and more in hock. The facts are against Senator Dittmer. In fact, this Government has redeemed a great many of the pawn tickets left to it by the Labour Government. As Senator Laught pointed out, interest payments on overseas borrowing to-day represent .5 per cent, of the national income. In 1949, they represented .9 per cent. In 1949, 26.2 per cent, of the national income represented overseas borrowings. To-day, the figure is 12.1 per cent - less than half the 1949, figure. In 1949, the overseas debt amounted to. £87 lis. per head of population. To-day, the figure is £67 3s. 9d.. In 1949, interest payments on overseas borrowing amounted to £3 lis. 4d. per head of population. To-day, they amount to £2 16s. 9d. per head of population. In 1930, under the Scullin Labour Government, almost onethird of our export income went to pay interest on overseas borrowings. To-day, only 3.2 per cent, of export earnings is required to pay interest on overseas borrowings.

Over the years the Labour Party has exhibited a timorous, mouse-like fear of borrowing money overseas. It is pitiful to see its attitude to overseas borrowing. Its members are SO years behind the times. Their thinking has not kept pace with Australia’s development. There is no basis for their opposition to a loan made by the hard-headed businessmen of the International Bank. The loan was approved only after the economics of the Snowy scheme had been examined by the bank. But, because of its timorous approach to overseas borrowing, the Labour Party has said that it will oppose this legislation.

Senator Hendrickson:

– How much of the loan will be spent on the Snowy scheme?

Senator HENTY:

– If you had been listening you would have heard your leader give the figures. He told you how much of the money would be used in Australia. I have not had a chance to check his figures. Senator Hendrickson should save himself for the debate on the Common Market. He has been talking about the Common Market for the last five years, but still does not know anything about it.

The Labour Party has almost an obsession about borrowing money overseas. As reported at page 1014 of “ Hansard “, Senator Willesee said -

There is no need for this loan; the money could be obtained from within the country. The Labour Party thinks it is morally wrong for a wealthy country such as’ Australia to borrow money from the International Bank . . .

Two paragraphs later in his speech, as reported in “ Hansard “, he said -

The total cost of the Murray section of the scheme is £92,000,000. We are not borrowing, as it were, the full tool; we are borrowing only half of it. I wonder why we are not borrowing the whole £92,000,000. If we are deficient in part of this money, we ought to be deficient on the Whole of it.

Senator Willesee:

– Do not read all of it, will you?

Senator HENTY:

– Now I will read what Senator Willesee quoted from an address by Mr. Garner, the authority to whom he referred. This passage is interesting. It shows how the honorable senator mis-read and mis-interpreted what this authority, whom he quoted, said. Mr. Garner said -

However, to most of the recipient countries the amounts are never sufficient. In my opinion they never can be, because money alone accomplishes nothing. It is only a tool, and what it produces depends not on how much, but on how it is used. If it is applied to uneconomic purposes, or if good projects are poorly planned and executed, the results will be minus, not plus. The effective spending of large funds requires experience, competence, honesty and organization. Lacking any of these factors, large injections of capital into developing countries can cause more harm than good. The test of how much additional capital is required for development is how much a country effectively can apply within any given period, not how much others are willing to supply.

Then the honorable senator transposed that statement and said, in effect, “ Do we lack experience, competence, honesty and organization?” The only thing we are talking about now is money, but money, as Mr. Garner says, is not the all-important thing. Mr. Garner says that as well as money we need the very things that the Snowy Mountains Authority has, that is, experience, competence and know-how. Those things together make the Snowy Mountains project an ideal project for a loan such as that proposed under this bill.

I would not like to let this opportunity pass without referring to the excuses that Senator McKenna made for New South Wales’s failure to honour the spirit of this project by not building the Blowering dam. Last night the Leader of the Government in the Senate (Senator Spooner) gave figures to show what that meant, particularly in this drought year, to people on irrigated farms who would have received this additional water had the dam been built by the New South Wales Government. Those people know what they have lost through that failure to honour the spirit of the whole Snowy Mountains project.

It is not good enough for Senator McKenna to say that the New South Wales

Government wrote two months ago to see whether it could pass the buck to the Federal Government. I give great credit to the Australian Labour Party, which started this Snowy Mountains project. In the spirit of the whole undertaking, as envisaged by the Labour Party in its early days, the New South Wales Government should have built the Blowering dam. It is not good enough to say that it has not had sufficient money. It has had the money and spent it on other things.

Senator Ormonde:

– Such as?

Senator HENTY:

– One only needs to consider the amount of money that has been provided to New South Wales over the last few years and the things on which the New South Wales Government has spent that money. That Government has chosen the things on which it should spend the money, but it has not honoured the spirit of the Snowy Mountains undertaking by building the Blowering dam and so providing additional irrigation water for farmers who, in this drought year, needed it and could have used it. It is not good enough to try to pass the buck to the Federal Government and say that the New South Wales Government wrote two months ago. The Snowy Mountains project has been going on for some years, but only two months ago the New South Wales Government wrote in an effort to pass the buck to the Federal Government. That will not wash with the farmers who wanted this water in this drought year. A poor and pitiful excuse has been advanced for the failure of the New South Wales Government to keep to the spirit of this project.

I also noted the complete failure of Senator McKenna to advance any alternative proposal. It is easy to stand up and criticize actions that have been taken. What alternative does the Labour Party propose if this £44,700,000 is not to be raised in the way provided under this bill? That money would be raised out of revenue or the loan funds of Australia. Senator McKenna asked, “ Does anybody say that this project would stop? “ I agree with him that this project would not stop; but the Australian States and other Australian projects would be £44,700,000 short. That is the position.

Senator Hendrickson:

– Why?

Senator HENTY:

– Because if we do not borrow money overseas-, the money must be found from Australian loan funds or revenue. I do not believe that the work would stop, but other projects would have to suffer. I am sure that the Premier of New South Wales and the Premier of Tasmania - I do not know which Premier has the greater measure of the allegiance of the Leader of the Opposition at the moment; perhaps it is shared equally - who agreed with this proposal at the Australian Loan Council meeting, would not be prepared to forgo some of the money that they are entitled to receive from loan funds and revenue under the formula. They would not postpone some of the developmental projects in their States so that the money could be used for the Murray 1 section of the Snowy Mountains- project merely because we had not borrowed this money from the International Bank when it was offered to us for a sound project after proper examination. The alternative, of course, would be that the money would be provided out of Australian funds and the States would receive their full entitlements. Then where would the revenue come from - increased taxation?

Senator Hendrickson:

– Certainly not.

Senator HENTY:

– I am sorry, but I could not accept you as an authority on this matter because you would not know. The money would have to come from increased taxation or from treasury bonds. The Leader of the Opposition does not say that this proposal is wrong in principle. He says, in effect: “ We should not borrow this money from the International Bank. We would finance this work out of Australian resources. We would do that by increasing taxation or by issuing treasury bonds.”. That would revive the great inflationary spiral that we fought for years and at last have stopped after a very long fight. There are the two propositions which the honorable senator failed to face. You cannot pull the legs of the people of Australia, you know. They know these facts. They know that it is easy enough to criticize and to say this and that, but you have to put before them some really concrete proposal. If the Opposition would finance the project by increasing taxation or by the issue, of treasury-bonds which would bring about the return of inflation, then the people of Australia should be told so that they could judge the soundness of the Government’s proposal to borrow from the International Bank for the project under discussion which, as the Leader of the Government has said, will be producing revenue by the time repayment of the loan is due.

The Leader of the Opposition mentioned that repayments were stepped up as the loan period progressed. That is normal commercial practice.

Senator Wright:

– Repayment is stepped up as productive capacity increases.

Senator HENTY:

– That is right. As the project grows and begins to earn income we shall be in a much better position to repay the loan. What we have done in this instance is the sort of thing that every commercial house does. If you set out to build a warehouse and borrow money for the purpose, you are in a much better position to increase the repayments when the warehouse earns income. The honorable senator’s arguments will not bear examination. They sounded very smooth when he advanced them. No one is better able than he to prepare smooth-sounding arguments, but they will not stand up to investigation.

It is almost pitiable to see the hide-bound opposition of honorable senators opposite to borrowing money overseas. They still do not understand the position. The honorable senator who led the attack on this bill on behalf of the Opposition - I have not yet learned to pronounce his name correctly - referred to the late Mr. Chifley and the terms upon which the Labour Government of the day became a member of the bank. He is still living in those days. The bank has lent money to such highly developed countries as Norway to enable it to carry out a project similar to this. Australia’s development in the past twelve years under this Government has been so great that honorable senators opposite just do not understand the tremendous demands that are being made upon capital at the present time, and the even greater demands that will be made in the time that lies ahead. When you look at the projects which have been planned, and when you consider the enormous capital which must be available for those projects, then indeed it becomes apparent that the proposal now before us is a sound one. It will enable the people farming along the rivers to obtain additional water. The loan will pay for itself when the power station begins to earn revenue. I have great pleasure in supporting the bill.

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

– I thought that this bill would pass through the Senate very quickly. I thought that the only comments which would be made would be in praise of the tremendous’ achievements in the Snowy Mountains scheme. But it appears that the debate has developed into a political squabble between two parties about who was responsible for implementing the scheme, who fired the first shot, and so on. The issue before us is the proposal to borrow 100,000,000 dollars from the International Bank for Reconstruction and Development. I thought that honorable senators from certain States - at least those from Tasmania - held the view that the Snowy Mountains scheme should be financed from loan moneys and not from revenue.

Senator Wright:

– That is what Senator McKenna has advocated hitherto.

Senator COLE:

– And that is what we have been advocating for the past twelve years. This scheme should not be financed from revenue. Let us consider Tasmania, for example. In that State, we have a very good hydro-electric scheme, and experts have told us that for the amount of money which will be spent on the Snowy Mountains projects Tasmania could produce the electricity to be used all over Australia except, of course, for its reticulation. Tasmania has been producing hydro-electric power for twenty or 30 years and, except for the tunnelling, its works are comparable to those in the Snowy Mountains. Tasmania has been borrowing £8,000,000 or £9,000,000 a year and expending the money on producing hydro-electric power. We in that State are building up quite a debt, but posterity will benefit. At the same time we have been helping to pay for the production of electricity by the Snowy Mountains authority. Now the Government is heeding what we have been advocating for the past twelve years. I should have thought that all honorable senators would have agreed that the Snowy Mountains scheme should be financed from loan moneys.

I have heard no reasons advanced by the Opposition why the loan should not be made available to the authority. Several arguments have been put forward that in borrowing this money from the International Bank Australia has not been fair to the under-developed countries. I have no doubt that all the money required for underdeveloped countries will be found by the International Bank. I cannot understand why honorable senators from States such as Tasmania should be arguing against the loan.

We know that the Snowy Mountains project is a tremendous one. I would like to pay tribute to the people who conceived the idea, and to the Minister and the present Government for carrying it out during the last ten to twelve years. There is no doubt that the Government has done a great deal towards furthering the scheme.

Senator Sheehan:

– Who started it?

Senator COLE:

– I am not talking about who started it. I am giving credit to those who conceived the scheme and to those who have carried it out. I give credit to the Minister for his interest in it and for the effort he has made in the Cabinet, I suppose, to get the moneys required for such a large scheme. Most of all I should like to give credit to the Snowy Mountains Hydro-electric Authority that has worked so tirelessly and well.

The authority needs this £44,700,000. Whether the actual loan is to be used for the Snowy Mountains scheme or somewhere else does not worry me in the least. We want all the money we can get, whether it comes from overseas, from our own revenue or from, our internal loan market. We want the money, and we want it now. Because of the world situation to-day we cannot afford not to have development in Australia; Although the Government has this scheme and other schemes I still believe that it is not looking far enough ahead. I do not mind whether the loan comes from overseas or is raised internally. The more money we can spend in Australia the more people we can have to populate it and the safer the country will be. This matter has to be looked at from the Australian point of view, and that is why, Mr. President, we of the Australian Democratic Labour Party support the bill, lt is going to do something. Somebody has said that the money will not be used for the Snowy Mountains scheme. It will not worry me in the least if the money is allocated to other schemes. What I want to see most is the development of Australia.

Senator WRIGHT:
Tasmania

.- I rise with an enhanced feeling of appreciation. 1 wish to express my great gratitude to’ my fellow Tasmanian, the Leader of the Australian Democratic Labour Party (Senator Cole) for the forthright speech that he has made. He intervened in this debate to point to the very kernel of this proposal. He pointed out that Australia is a developing country. If employees who are building developmental works in this country are to be paid, the money must be forthcoming. The Labour Party has chosen the most vulnerable stage of the Snowy Mountains undertaking to attack and undermine it and it has done so for reasons of political expediency of the most superficial character, indeed of a hypocritical and despicable character. It has chosen to launch its attack at the most vulnerable stage of the development of this magnificent conception. It is attempting to deprive the scheme of financial resources which every man on the Labour side knows must be found to pay the wages of the men who are working to build this scheme.

Let us consider the real position. As Senator Cole has pointed out, we in Tasmania live by hydro-electricity, and we have borrowed every penny to finance that unique undertaking which has the great privilege of being guided by an engineer who is fit to be mentioned in the same terms as Sir William Hudson. I speak of Allan Knight. He has purposefully guided the Tasmanian project having regard not only to national interest but also economic efficiency. . Tasmania has borrowed every penny that has been used to pay the men who have worked to build the scheme. I am reminded of the words of Byron -

Tis something in the dearth of fame,

Tho’ linked among a fettered race

To free at least a patriot’s shame,

Tho’ shame, e’en while I sing, suffuse my face.

In the National Parliament to-night we can either retard or assist the development of a £400,000,000 project that will ‘ distribute electricity at peak periods to South Australia, Victoria and New South Wales. This is an illustration of national co-operation that should be the spirit of Canberra but which all too infrequently helps to create undertakings that supply the power, the light and the essentials of these great States.

We have the opportunity to say whether or not we will commit the credit of the Commonwealth to the extent of £44,700,000 for the purposes of the Snowy Mountains scheme. It is a purpose for which the Labour Party can take ‘ some credit, although it was not altogether unrelated to the circumstances of 1949. At that time a Communist conspiracy threatened to immobilize the coalfields of New South Wales. Seeking to assure their political survival Labour Ministers had the instinct of statesmanship which caused them to consider this great national idea. The timid-? the reverse of the intrepid - for 50 years had failed to capture the idea that engineers had put forward away back in 1880. The Labour Party did accept the idea in 1949. Pressure and reasons of political expediency created the national opportunity,, and an act was passed which enabled the purposeful people to go ahead. It was then that the present Government came into office.

As the report of the Snowy Mountains Hydro-electric Authority indicates the present Government has spent £190,000,000 on the project. Of that amount £13,000,000 was spent to bring about the Guthega stage, £16,000,000 to reach the Tumut No. 1 stage and £150,000,000 is being spent on works that have not yet come into production.

Let me say again, in case any have missed its significance, that on this stage, which is not yet in production, we are spending £150,000,000. The Australian taxpayer has provided the whole of that amount to finance this Commonwealth capital work. Why? So that the commitments of the States for their developmental construction programmes could be met by their being allocated all the loan money that could be raised in this country. The Commonwealth, in addition to underwriting the State capital requirements, took on the burden, in its current budget, of the amount necessary to finance this and all other capital work. I speak again with appreciation of the sound common-sense of a fellow Tasmanian who had the courage of his political convictions - Senator Cole, the Leader of the Australian Democratic Labour Party, who, after 30th June, will carry alone the banner of the party that he represents, but the fewer the men, the greater the share of honour! He had the sense to-night to say that this was a national work. If, at this particular time, it would be imprudent, impolitic and unjust to increase taxes on the Australian community for the purpose of raising money for capital works, surely one would expect the sense of responsibility and the national sentiment of the Labour Party to be at least sufficiently strong for it to applaud the Government on being able to maintain credit with the World Bank such as to induce it, after the careful inquiries that it makes, to provide a loan of £44,000,000 to finance a vital stage of this national project.

Having said that, let me speak in a more personal sense. I have stood in my place in this Parliament for the last six years to say that I believe it is a contributory factor to inflation for national capital works to be financed out of revenue, at any rate to a significant extent. After directing attention from year to year persistently to that aspect, and not having yet - I say in the presence of the representative of the Treasurer - received the consideration - I shall not say courtesy - of a thoughtful and considered statement as to the arguments pro and con this policy vis-a-vis inflation, and recognizing the difficulties under which I speak without such a statement, I still affirm the soundness of the proposition which I put, and which this bill confirms.

Senator Spooner told us last night that after the Tumut 2 station comes into operation on Saturday, the undertaking will be producing revenue at the rate of £6,000,000 a year. The annual report on the undertaking tells us that it is producing peak load electricity at a cost of .9291d. per kilowatt, and it assures us that that cost is less than the cost at which New South Wales, Victoria and South Australia are producing their base load power in thermal undertakings. We have in development a national asset that is capable, in the forthcoming years, of yielding a revenue that will grow. At present, we expect to be in receipt of more than £6,000,000 a year. Surely our faith in the value of money committed to investment is such that if we appeal to the people of Australia to invest and they do not lend more than sufficient for the States’ capital works requirements, we may go to our friends abroad and borrow from them money on terms at which an energetic government believes it can be borrowed with advantage.

I suffered the ignominy of listening to Senator McKenna, who knows not so much of the role of the borrower as of the role and strategy of the lender, deprecating, in the national interest, Commonwealth borrowing from abroad of money at Si per cent., and pretending to express fear and trepidation as to whether we in this country could use to advantage money at that cost. Any man in Australia that cannot borrow money at that cost to-day and, by his management of it, turn it to employment and profit - in this instance national profit and State profit - either does not know the advantages of borrowing money or is dissimulating. It is not unfair to suggest that in the Labour attitude to-day there has been rank dissimulation, because honorable senators opposite know that this undertaking must be financed if the men employed in it are to be paid. They know that we must raise money to an amount that is not limited to what can be raised by taxation, but limited only by what can be raised by borrowing where we can find lenders with the confidence in us to lend on economic terms. But, Mr. President, it does not rest there. We are borrowing from an institution which was formed in the great days of world reconstruction. One must not sneer at the ideas of the 1943-49 period, when the United States of America realized its international responsibility, not merely in regard to winning a victory against Nazi-ism, but also in regard to preserving the world against authoritarian challenge. One of the first things that the private enterprise system of America suggested to the world was the creation of a world bank, into which all contributors who would were to put their money as shareholders to create a co-operative for lending.

We have heard to-night a sneering speech from the Leader of the Opposition. He suggested that we are going to financiers in foreign fields and implied that they, like Shylock, will fleece us. We are borrowing from the World Bank. This country has made national contributions to the shareholding of that bank. Because Australia and other nations have done that, the credit accounts have been made respectable and such a degree of confidence has been injected into the bank that the money lenders in the financial markets of the world will lend to the bank additional resources that are now available for construction projects throughout the world. In this year, 700,000,000 dollars has been committed for national projects such as the Snowy Mountains scheme, projects concerned with the reticulation of power to provide light and warmth for the homes of respectable communities such as we have in Australia.

I speak as I do, Mr. Acting Deputy President, only because I deplore the fact that we have in opposition in this Parliament a party which is not prepared to assist in the development of this great scheme at a vulnerable stage. We have already committed £150,000,000 of the Australian taxpayers’ money to works in connexion with the Snowy Mountains scheme, works which are not yet reproductive. We have the opportunity to obtain finance for the Murray 1 project, which is to cost about £90,000,000. If the scheme were sabotaged at this time it would be nothing less than a national disaster for Australia. If we were not to obtain this money from the World Bank we would have to obtain it from our own citizenry by voluntary loans, unless the Opposition suggests that we should venture on a policy of compulsory loans.

Senator Courtice:

– You had such a policy a little while ago and you abandoned it.

Senator WRIGHT:

– I had no such policy. The money would have to be raised by voluntary loans unless it were proposed to increase taxation savagely.

I have never spoken in this place with more spirit than I do to-night. Senator Cole, who had the courage six years ago to stand up for his own beliefs regarding the proper direction of the Australian Labour Party, has expressed a forthright and sensible attitude to this proposition. The Liberal PartyCountry Party Government has chosen this year as the first occasion on which to inject into the Snowy Mountains scheme £44,700,000 of borrowed money, having financed the scheme so far from revenue to the extent of £190,000,000. My belief is that, in the main, capital works, of which this is a significant example, must be financed otherwise than by taxation. After five or six years’ advocacy of that viewpoint, here we have an instance of it being given effect. I do not claim, of course, that that is due to any merit in the viewpoint I have expressed; nevertheless, the Government has adopted this course and is proposing to borrow from the World Bank. Australia is a contributor to the resources of the bank, and we are to be loaned £44,700,000 from that cooperative.

It is deplorable that the Labour Party is prepared to risk the success of the Snowy Mountains scheme for political expediency. After all, the Labour Party claims that it allowed the scheme to grow in 1949. Now, by seeking to deprive that scheme of financial assistance from the World Bank, it is prepared to take the risk, for superficial, politically expedient purposes, of sabotaging this national undertaking at its must vulnerable stage. In this significant year, when Sir William Hudson is approaching the termination of his public career, because of the wonderful work that he has inspired throughout the whole of the operations, whether in the constructional, social or financial fields, I support with even greater enthusiasm this proposed raising of finance for the undertaking. I conclude by paying a tribute to an outstanding public man. The Australian nation owes a great debt to his personal contribution to the Snowy Mountains scheme.

Senator VINCENT:
Western Australia

– In the absence of an Opposition speaker, the supporters of the Australian Labour Party apparently either having become a little tired of the debate or not being anxious to pursue it, I rise to support the bill. I am not surprised, of course, that the Labour Party is opposing this measure. Its opposition, regrettably enough, is consistent with the somewhat peculiar and narrow outlook of our Australian socialists, as distinct from that of Russian and other socialists in the world.

Senator Willesee opened the debate for the Opposition, and I must take it that he expressed the sentiments of the Opposition in this matter. The honorable senator is not very good at weeping crocodile tears.

Nevertheless, in his contribution to the debate he. shed a very large crocodile tear for the less fortunate or less developed countries of the world which, he said, should be receiving the benefits of this loan rather than Australia. According to him, Australia should not have interfered with the processes of international finance by asking for a loan, to the detriment of less fortunate nations. He even said that it was morally wrong for Australia to obtain this loan from the International Bank for Reconstruction and Development when more worthy cases for such loans existed. He developed that proposition still further in a manner to which I shall refer in a moment.

I wish to make some reference to the basis of Senator Willesee’s objection to the bill which, 1 assume, was the substantial objection of the Labour Party until, of course, Senator McKenna threw a different light on the matter. Senator Willesee claimed that it was morally wrong for Australia to borrow money from the bank because of the claims of less developed countries. If Senator . Willesee were to peruse the voluminous literature that exists about loans by the bank he would not have argued such a foolish proposition. I refer Senator Willesee to the fundamental policy of the bank relating to the making of loans, which reads -

In making or guaranteeing a loan the Bank is obliged under its Articles of Agreement to pay “ due regard to the’ prospects that the borrower, and, if the borrower is not a member, that the guarantor, will be in a position to meet its obligations under the loans “; the Articles further enjoin the Bank to act “ prudently “ in the interests both of the borrowing country and of the members as a whole. Even apart from this provision of the Charter, it would be implicit in the concept of the Bank as a continuing institution, designed to operate on a sound business basis and with funds borrowed in the private market, that it should make loans only where there are reasonable prospects of repayment.

That is where we start this discussion. There must be reasonable prospects of repayment. It does not matter how many crocodile tears the Opposition sheds about under-developed countries; if your prospects of repayment are not reasonable you cannot get a loan from the bank. You could get assistance from other quarters, but not from the bank. I cannot agree with Senator Willesee that Australia did wrong in approaching the bank because it is obvious that the loan would not have been granted unless it was proper to grant it and unless Australia had a good chance of repaying it. It is for the bank to decide whether it will grant a loan to a particular country.

We must remember that the bank is administered not by one particular country, but by representatives of all the 59 member nations of the fund. It is futile to suggest that any nation has less right to seek a loan from the bank than another nation. The bank lends money as a business proposition. If Senator Willesee had had time to peruse the details of loans that have been made by the bank to various countries he would not have argued that Australia did wrong in seeking a loan. The bank’s report from which I quoted earlier shows that many highly developed countries have had loans from the bank. For instance, the well-developed and comparatively prosperous country of Austria has had a number of loans totalling 101,000,000 dollars. Belgium has borrowed 161,000,000 dollars, Denmark has borrowed 60,000,000 dollars and France has borrowed 350,000,000 dollars from the bank. Does Senator Willesee suggest that Australia stands in a worse position than those countries in relation to the right to borrow money from the bank? Italy has borrowed 299,000,000 dollars from the bank. The Netherlands - a pretty prosperous country - has borrowed 244,000,000 dollars from the bank. South Africa - not a very impoverished country - has borrowed 196,000,000 dollars from the bank. Norway - a pretty prosperous country - has borrowed 95,000,000 dollars from the bank. Norway’s last loan was in 1959. Even the United Kingdom has borrowed money from the bank. Her last loan was in May, 1958, and she at present owes to the bank 193,000,000 dollars. Surely, bearing those facts in mind, the Opposition’s argument that it is morally wrong for Australia to approach the bank appears rather foolish.

Let us assume for the moment that Senator Willesee is right in suggesting that the bank exists to assist the really impoverished nations. It is on record that the bank has never yet refused a loan for lack of liquidity. That is to say, the bank has always had funds available to lend money in accordance with the conditions laid down in its charter. In fact, the bank’s liquidity during the last twelve months has been very high. Figures supplied by the Treasury show that the liquid reserves of the bank in 1959 amounted to 890,000,000 dollars. Those reserves in 1961 had increased to 1,350,000,000 dollars. Surely in those circumstances it cannot be argued that the bank is short of funds or that Australia does not have the right to borrow from the bank.

Australia has as much right to borrow from the bank as has the United Kingdom, the Netherlands or Norway. I suggest that the Opposition’s argument is pretty thin. But I do not think that its claim that we have no right to borrow from the bank is the real reason for its opposition to this measure. The Labour Party has a rooted objection to anything foreign entering Australia, and it hopes to gain a little popularity from the cry that we should not borrow money overseas and thereby make some rich overseas capitalist the more wealthy. The Labour Party seeks to play on the simple sentiments of many people who do not understand the problems confronting a country in need of investment in public works. If it is right for the undeveloped countries - the real underdogs - to borrow from the bank, then, provided the bank has sufficient funds, would it not be right for Australia also to borrow from the bank? I invite Senator Willesee to deal with that matter when he replies.

Senator Willesee:

– I do not have the right of reply.

Senator Branson:

– You could do it in the committee stage.

Senator VINCENT:

- Senator Willesee is well aware of his rights under the Standing Orders.

Senator Willesee:

– I do not have a right of reply.

Senator VINCENT:

– If you dealt with this matter in the committee stage it would be in the nature of a reply - assuming you had the courage to deal with the matter.

Senator McKenna, on behalf of the Opposition, argued that it was unnecessary to borrow this money. He submitted that we should have kept the £78,000,000 obtained from the International Monetary Fund at 2 per cent, instead of borrowing this £44,000,000 from the bank at 51 per cent. That argument sounds pretty good when it is broadcast to unsuspecting people, but what Senator McKenna neglected to say - he is well aware of this fact - is that the International Monetary Fund advance is to be used only to maintain overseas reserves, and for no other purpose. Australia has some regard for international reputation. It would be unworthy of this or any other respectable country to use funds from the International Monetary Fund, which are obtained only for the purpose of maintaining overseas balances, for any other purpose. That would be highly immoral, to use Senator Willesee’s term. I suggest that Senator McKenna knows that perfectly well.

If one wants to argue the merits of Senator McKenna’s argument, it can be put in this light: The International Monetary Fund advance is for a maximum of five years. This loan will not all be drawn until four years hence and will not be repayable for a further period of 25 years. So, there is a great deal of difference between the two advances. One is for a maximum of five years and for the express purpose of maintaining overseas reserves. The other is for a maximum of 25 years, is to be drawn over a period of four years, and is for the purposes of development. There is a big distinction. If anybody wishes to argue that point further, he will have to produce something pretty good out of the box.

It is palpably clear that if any nation misused an International Monetary Fund advance for the purpose for which Senator McKenna proposes we should use it, when the time came for an application for a further advance that nation would get very short shrift from the International Monetary Fund. That is the sort of conduct that one would expect from a Colonel Nasser. I say that with great respect to him and with apologies to him. If Senator McKenna wants a further reference to the matters that I am discussing, he will find it at page three of the International Financial Statistics of March, 1962. Time prevents my quoting that reference, but it sets out quite clearly that the resources of the fund are available only on a short-term basis and for the express purpose of contributing to the solution of overseas balances problems.

Senator McKenna also argued that the loan was not necessary because we should not borrow so much money overseas. I do not want to quote him out of context, but I gathered that his argument was that we were borrowing too much money overseas or, in other words, that our level of overseas borrowings was too high. I join issue with him on that. 1 believe this is an important point. I consider that the overseas borrowings of a country can be too high. Many figures have been cited in this matter, but I want to cite some more to show why I am quite satisfied that the present level of our overseas borrowings, expressed as a percentage of the national income and a percentage of export income, is the lowest it has been for many years. Our overseas borrowings are also low in comparison with the total national debt. So, whichever way one looks at our overseas borrowings, one finds that at the moment they are extremely low in relation to these other aspects of our economy.

For example, expressed as a percentage of the national income, our overseas borrowings were running as high as 71 per cent, in 1929; in 1949, under the Chifley Administration, they were running as high as 26 per cent.; but at the moment they are down as low as 12 per cent, of the national income. When we turn to a comparison on a per capita basis, we find that in 1929 our overseas borrowings were running at £89 per head; under Mr. Chifley’s regime they were as high as £65 per head; now they are at about the same figure, namely, £67. Of course, there is a difference between the value of the currency under the Chifley regime and that under the present Government.

A comparison of interest payments is still more unfavorable to the argument that at present our overseas borrowings are too high. In 1929 interest payments represented 3.4 per cent, of the national income; under the Chifley regime they represented 9 per cent.; now they represent .5 per cent. Interest payments expressed as a percentage of export income is a most favorable comparison. In 1929 our overseas interest liability represented 20 per cent, of our export income; in 1949 it represented 3.3 per cent.; now it represents only 3.2 per cent.

I have other statistics that I have not time to cite; but one sees in them a distinct tendency for the overseas borrowings, expressed as percentages of national income and export income to be very low at present. I suggest that that is the kernel of the answer to Senator McKenna’s objection that our overseas borrowings are too high. With the concurrence of honorable senators, I incorporate in “ Hansard “ the following statistics: -

I turn now to another aspect of the Opposition’s attack on this legislation. Both Senator Willesee and Senator O’Byrne, whom I could describe as the angry young men of the Labour Party, attacked this legislation rather enthusiastically. I point out to them, whom one might call young Australian socialists, that their ideas about the importation of capital differ very markedly from those of socialist countries. Mr. Chifley, their hero, very enthusiastically and very gratefully borrowed about £20,000,000 from the International Monetary Fund to maintain Australia’s overseas balances in 1949. Socialist countries, such as Yugoslavia, India and Ceylon, have borrowed very heavily from the International Bank. The Indian socialists have not the objection that Senator Willesee has to borrowing money from overseas. Among the really heavily involved socialist countries, Russia encourages the export of roubles to other socialist countries. At present mainland China is heavily indebted to Russia. In fact, that country could not be developed without Russian capital.

I suggest for the consideration of my friends in Opposition that this objection to capital is rather confused as far as they are concerned. They seem to think that there is something sinister about capital. They overlook the very important fact that even in a socialist state there has to be capital. Although, if Australia became a socialist country, ownership might move from private individuals to the nameless state, there still must be capital. Every good socialist realizes that. In fact, in a socialist State you would require far more capital than you would require if you were running your economy basically on private enterprise lines. But that is by the way. I cannot understand the confusion in the minds of Australian socialists in their opposition to this notion of capital, because you cannot dispense with capital even if you become a socialist. I do not know what members of the New South Wales Government would think to-night if they heard Senator McKenna’s speech, because New South Wales at present is striving desperately to import capital. In fact, it has an organization in New York for the express purpose of raising overseas loans. So the Labour Premier of New South Wales probably would not be at all pleased with Senator McKenna’s rooted objection to this legislation.

Finally, we must not forget that the decision to borrow this money was made by the Australian Loan Council, on which every State is represented and has a vote. Whatever the merits of the legislation, we must accept the proposal as a federal project of a typically federal nature because not only the Commonwealth, but all States as well are responsible for it. All honorable senators know that all the State components of the Australian Loan Council support very strongly the idea of using loan funds instead of revenue to finance certain Commonwealth works.

The question has been posed why we should borrow this money overseas instead of endeavouring to raise it internally. That is a fair question, and I want to devote a few minutes of my time to replying to it. In normal circumstances, the normal capital works of a normal country can be financed from local Joans. But we are not living normally. We are developing at a rather abnormal rate. I invite the attention of my friends of the Opposition to the history of various countries which have been developing abnormally during the last 200 years. The classical case is the United States of America, which developed in the nineteenth century at an abnormally fast rate. It is history now - no one will deny it - that the only reason why the United States developed in the nineteenth century at such an abnormally fast rate was because of the remarkable inflow of capital investment from Europe, particularly from Great Britain. For example, most of the railways in the United States were built with British capital and with British know-how. There is nothing unusual about that, because in the nineteenth century Britain was a great creditor nation. The United States is a classical illustration of how a nation can be developed by importing capital. My friends of the Opposition seem to see something sinister in importing capital but nothing sinister in importing a migrant. The principle is exactly the same. Whether you import capital or a migrant, the economics of the situation are identical.

Let me return to the question why we could not have raised this loan and other loans locally. I shall indicate briefly the increase which has taken place in our expenditure on public works. This is only one aspect of development, but a good illustration. In 1957-58, Commonwealth expenditure on public works was £123,000,000. Last year it was £160,000,000, so there was an increase of almost £40,000,000 in that one element of our economy. The position in relation to Loan Council expenditure is exactly the same. In 1957-58 the total loan programme for works amounted to £200,000,000. Last year it was £247,000,000, an increase of £47,000,000. That was the additional amount which we were obliged to find for public investment. But in addition to that there were certain contingent liabilities which the Government accepted during the last twelve months. All honorable senators will recall them readily. There was the standardization of the railway gauge in Western Australia, the South Australian railway project, the beef roads in Queensland, the facilities for handling coal in New South Wales ports, the Mount Isa railway, the provision of harbour facilities at Gladstone in Queensland, and now the construction of a dam at Blowering.

I have mentioned those projects because they are contingent liabilities which did not exist twelve months ago, and which must be added to our current loan expenditure to obtain a reasonable picture of how difficult it will be for us to finance- our development in the next few years. That is why the Government seeks to borrow money. It could not have borrowed on’ the Snowy Mountains project prior to this year because the project was not financially able to repay the loan, but as soon as it was in a position to do so an approach was made to the bank. There will be a very considerable injection of additional money into the economy to correspond with the necessary contingent, obligations which the Government has accepted.

When Senator Willesee returns to Western Australia let him tell the people there that he objected to this bill. His opposition, if effective, would mean that less money would be available for development. Consequently, he would have to assume responsibility for a reduction in the funds which Western Australia would receive in the next year or .two. If there were a reduction in the allocation to that State perhaps serious unemployment would result. 1 invite Senator Willesee to explain his attitude to the people of Western Australia. In effect, he is prepared to retard our development to the extent of £40,000,000, with the consequential effect on employment.

I am happy to support the bill, but I am extremely sorry that the Opposition has not given it proper consideration.

Senator SHEEHAN:
Victoria

.- 1 intervene in this debate because of the nature of the language that has been used by the Minister for Customs and Excise (Senator Henty) and Senator Vincent. 1 feel that something must be said to rebut the extravagant statements and allegations that have been made against the Labour Party. I was very surprised last evening to hear the speech made by the Minister for National Development (Senator Spooner), who is in charge of the Snowy Mountains undertaking. Since he became associated with the scheme he has wholeheartedly supported the project, in marked contrast to his colleagues who were in control of it earlier and in marked contrast also to those who could have filled that office. It is well known that when the scheme was launched - I emphasize this although it has been said by previous speakers - not one member of the then Opposition parties in this Parliament saw fit to go to the opening ceremony. The only member of the Government parties who did attend was the then Minister for Electrical Undertakings in Victoria, the Honorable W. S. Kent Hughes.

Reasons have been given why the members of the Opposition at that time boycotted the opening of the scheme. I could not believe my ears when I heard Senator Spooner refer to the conditions which he said existed at that time. One would think that the scheme had been conjured up by the Labour Party as a stunt a few months before an election. It was suggested that the date of the opening was brought forward because an election was in the offing. Do Senator Spooner and Government supporters believe that the Labour Government of that time made all the preparations for the scheme in a few months? Do they not realize that a great deal of work was performed by the Labour Government prior to the official launching of the scheme? Negotiations had been in progress for months and months and the Government decided finally that the scheme should be commenced. It was not afraid that some representatives of State governments might not come to the party. The Labour Govern ment of. that day visualized the growth of this great nation and knew that the Snowy Mountains scheme would bring prosperity to Australia. The Government realized that following the cessation of hostilities development had to take place. It had the constitutional power to go ahead with the scheme and, under the guidance of Mr. Nelson Lemmon, the then Minister for Works, and the prime ministership and treasurership of Mr. Chifley, it went on with the business. Notwithstanding this, honorable senators on the other side are struggling to belittle the part that the Labour Government of the day played in the establishment of this great scheme.

I give to Senator Spooner all the credit and honour that are his due. He -inherited a scheme which members of his party had previously boycotted. I congratulate him upon the manner in which he has proceeded to carry out that scheme, and I feel that every member of my party will do the same.

What is our quarrel to-night with the Government’s action? We do not wish to sabotage the scheme, as was mentioned by Senator Wright. We do not wish to do the things that were suggested by Senator Henty and Senator Vincent. The present Opposition, when it was in office, after fighting a great war and rehabilitating those who fought in that war, gathered from the people of Australia sufficient money to commence this great national undertaking. I feel, as certain as I am standing here tonight, that if the present Government had attempted to do the same thing it would have succeeded.

Was the Government afraid to go on to the local loan market and ask the investing public of this country to support this venture? Was it afraid to do that because its policy in recent years has brought this populous and prosperous country almost to the brink of destruction? Did the Government feel that the investing public would not be prepared to lend it this money? Did the Government not see great public institutions of this country borrowing on the local market? The Broken Hill Proprietary Company Limited, the State Electricity Commission of Victoria, the Melbourne and Metropolitan Board of Works and other great undertakings have asked the Australian public to support them in their developmental work, and they have received the funds they have needed. Apparently this Government was afraid to go to the people of Australia. Did it fear that it would be turned down and humiliated by the people? They humiliated it, and went within an ace of destroying it, at the last election! 1 remember the talks which took place, not only in the Parliament but also in the Labour caucus, on whether Australia should become a member of the International Monetary Fund and a party to the International Bank for Reconstruction and Development. It was not all plain sailing. A lot of people in Australia were opposed to Australia joining those organizations. lt was felt that possibly we would become tied to the heels of foreign financial institutions. However, the Labour Government took its courage in its hands and, despite opposition, decided to take the steps required to enable Australia to join the organizations. The Labour Government thought that, as a result of its growth, Australia would never need to borrow from the bank, and that because of our prosperity we would be able to assist the nations for whose benefit it was being founded. The Labour Party thought we would be able to help undeveloped countries to rehabilitate themselves. We knew the condition of Europe after the war and we had seen the emergence of Afro and Asian people, who were struggling to find sufficient capital to develop their economies. We felt that Australia, by becoming a party to these organizations, could play a part in assisting undeveloped countries. We never felt that it would be necessary for us to borrow from the fund. What has happened is that this Government, following the old liberal and conservative idea of selling the nation into bondage to the overseas money lenders, has decided to borrow from the bank.

How has the Government been financing works in recent years? It has been taking money from taxpayers by direct taxation, and lending it back at interest to the people from whom it was taken. It has been taking money from the people using the Post Office and charging them interest on their own money. At meetings of the Loan Council, it has allocated to the States money from the pockets of the taxpayers in the

States, to be used for public works, and it has charged the people interest on their own money. That is the Government’s system of finance. At this time above all, when for months and months we have been afraid of the position in relation to our overseas balances and have .been looking almost everywhere for increased export opportunities, when joy is expressed at every increase in our overseas balances, the Government is going onto the overseas market for money.

Surely the Government should appreciate that our overseas indebtedness ought not to be increased by borrowing when we are facing the European Common Market issue. If this Government were prudent, knowing that we must repay overseas borrowing with exports, it would be contriving in every possible manner to obviate the necessity for borrowing money abroad, whether it be from the United Kingdom, the United States of America, Switzerland or anywhere else. The Government should be looking to the Australian people for the funds necessary to carry on great public works. If it possessed the confidence of the people, it could go onto the market to-morrow and successfully ask for sum.cient money to carry on this great scheme.

Because Opposition senators have told the Government these things, we have received from the Government benches nothing but suggestions that we want to sabotage, as it were, the growth of our own child. We have simply endeavoured to point out the manner in which the Government should have financed this scheme; that is, the manner in which the scheme would have been financed had the Australian people sent two more Labour members to the House of Representatives last December. If that had happened, this bill would not have been debated to-night, but the Snowy Mountains scheme would not have ceased. It would have had the whole* hearted support of the new government, which would have finished the work that was started by a former Labour Prime Minister. It is beyond my comprehension that honorable members opposite could say the things that they have been saying for the last hour or two. This is the only way in which the Government can finance the scheme, so the bill will go through, but the external debt of Australia, at a most critical period of its history, will- be increased and we shall have the job of making repayments at a later stage.

That is all that I have to say. I rose to refute the things that have been said by some honorable senators opposite. I hope that in the near future a Labour government will go on and finish the great work that was started by Labour.

Senator GORTON:
Minister for the Navy · Victoria · LP

– We have heard yet another attempt by a member of the Opposition to explain why the Labour Party objects to borrowing £44,000,000 to enable the Murray section of the Snowy Mountains scheme to be pushed forward. We have heard from Senator Sheehan perhaps the most succinct speech on this matter that has come from the Opposition. He said: We in the Labour Party would not borrow this money from the International Bank. We would see that the Snowy Mountains scheme went on, but we would finance it either from internal borrowing or from revenue.

Senator Sheehan:

– We would borrow internally.

Senator GORTON:

– The honorable senator confirms that they would finance it from internal borrowing or from revenue. It must be plain to the merest child that the amount of money that can be provided for development by means of taxation and internal borrowing has an upper limit. It must be perfectly clear that no unlimited amount can be borrowed internally and supplemented by internal taxation. If what Opposition senators tell us they would do is what they would do, they would refuse to add to what can be borrowed and raised in taxation a sum of £44,000,000 to enable more developmental works to take place. If they did what they have told us they would do, this would have the effect of reducing by £44,000,000 the value of developmental works that could be carried on. Sure, they would keep the Snowy Mountains scheme going, but this subtraction of developmental money would show up in every State, mainly in State works, but partly in Commonwealth works.

Let us look at the development in various States at present - beef roads and coal ports in Queensland, coal ports in New South

Wales, the Chowilla dam in South Australia, and the standard-gauge railway work in Western Australia. There is a long list of Commonwealth works that are being pushed to completion, and I have not touched upon the State works which are carried out from internal borrowing and revenue raising, which are providing an ever-growing number of schools, hospitals and other facilities for the expanding population, and which must continue to supply those things in greater quantities if the Australian population is to continue to increase by way of immigration as it is increasing at present. Therefore, what the Opposition is saying is this: In spite of the requirements for dams, railways, new airports, coal development, and a myriad of other things, it would limit the amount of development to go on because it would refuse to add to development funds money which can be provided by borrowing overseas. What is the Opposition’s policy? Only a certain amount of money can be raised” by internal borrowing and taxation. By refusing to augment that amount by borrowing abroad, the Opposition would diminish the amount of developmental work that could be done, and the result would be felt in every State.

What are the reasons advanced by the Opposition for this refusal to allow Australia to develop in the way in which it should develop? What are the reasons for this timorous approach to Australia’s future development, for this hesitant fear of pushing development ahead as fast as it can be1 pushed ahead? It is not argued that this money would not be spent to proper purpose on the Snowy Mountains scheme. There was a half-hearted attempt by the Leader of the Opposition to show that repayment would be a burden, but when he had pointed out to him the nature of the earnings that would result from this investment that line was not proceeded with.

It is not argued that the money will not be spent with the greatest efficiency by the authority to which it is to be provided. Indeed, it is agreed that the authority is highly efficient and is getting value for every £1 that is provided. The sole argument put forward, as far as I can see and as far as I have been able to hear, is that we should not borrow from the International Bank because other countries might want to borrow from it; that we might prevent them from doing so, and’ that would be an immoral thing to do. The International Bank, Sir, is not an overseas private financier which is enriched by this means. The bank’s capital was provided by various countries, and it has augmented that capital by its own borrowings. Its capital from both those sources is 4,288,000,000 dollars. Loans which could be drawn amount to less than 4,000,000,000 dollars, and an amount of approximately 390,000,000 dollars remains undrawn.

The profits which the bank will make as a result of this transaction, and which it makes from its other transactions, go to strengthen the bank and to enable it to augment its capital to carry out to better effect the purposes for which it was designed. Yet, there is some vague idea that it is wrong to borrow, to develop Australia, from a bank which is designed to allow countries to develop. I do not think I have ever heard a weaker argument against the borrowing of money than that. I have not heard developed, nor could there be developed, the argument that the asset which we will get as a result of the expenditure of this money will not produce an income sufficient to amortize and meet interest on the debt, an asset which, after amortization and the payment of interest, will continue to be one of the great assets of Australia. The Snowy Mountains scheme means that, for hundreds of years, water which otherwise would not reach the inland will be carried to inland areas. Without such water the inland could not be developed. It is an asset which will provide power to industries which depend on power for proper expansion. I have never heard a weaker argument against the necessity for such developmental works or, if we take it a step further, a weaker argument against doing those things at the expense of other vital developmental work, than the only argument advanced by the Opposition.

The only other thing I wish to say is that it is significant and important, in view of some of the statements which have come from the other side of the chamber, that in this year we owe less per head in overseas debt than we owed in 1949. We now owe less than we owed before the war, in pounds which are less valuable than they were before the war. The benefits that we will derive from this’ legislation will flow from the fact that this Government was re-elected at the last general election^ In the words of the Opposition, those benefits wOuld not be available if Labour’ had been elected. I hope that people in Australia who are undertaking specific developmental projects which will help their State or their district will bear in mind that, as to this £44,700,000 worth of finance for development, it has been made possible only because this Government has remained in office.

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

– in reply - My first duty - it is a very pleasant one - is to thank those of my colleagues who have participated in the debate. I think it is fair to say that never has a Minister sponsoring a bill had less to reply to than I have on this occasion. The opposition of the Labour Party to the measure has been dismantled and destroyed as each Government supporter has replied to the criticism advanced from the other side of the chamber.

To-night, the Leader of the Opposition (Senator McKenna), appeared in the role of the Duke of Plaza Toro. He had not led his party in the debate and intervened, in despair, only when those who sit behind him were not prepared to fight it out. Having spoken, he was followed by no fewer than four speakers from this side of the chamber. Senator Sheehan was the only Opposition supporter who was prepared to give it a go. For his display of courage I commend him. We have seen a deplorable effort on the part of the Opposition.

I wish to refer to the comments of Senator Willesee, who opened the debate for the Opposition, but before doing so I want to discuss briefly, in the few minutes remaining for the debate to-night, one of the remarks made by the Leader of the Opposition. I have been a member of this Senate for eleven years and I have heard Senator McKenna consistently and persistently advance the theory that public works should be financed, not from taxation revenue, but from loan raisings. To-night, he had the opportunity to discuss a bill under which it is proposed to raise by

I ask the Leader of the Opposition: If he wants to have works financed by loan moneys but will not have overseas loans because the rate of interest makes them catastrophic, what rate of interest would he propose to pay on local loans? When he answers that question we shall see completely exposed the fallacy of the socialist approach to loan moneys and their application to works. The honorable senator will not have an overseas loan because the rate of interest, although it is a fair rate, will create, he says, a catastrophe. He will have a local loan, but he will not tell us the rate of interest that would be paid. Of course, it would be a forced loan. It would be the capital appropriation that we heard suggested by the Opposition for so many years. By his silence to-night Senator McKenna has indicated that the socialist theory that he has espoused for so long would be put into practice to-morrow if perchance his party were to govern tomorrow.

Debate interrupted.

page 1089

ADJOURNMENT

Tariff Board: Reports

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

That the Senate do now adjourn.

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

– 1 lay on the table of the Senate a report by the Tariff Board on the following subject: -

General textile reference- -Interim report on continuous man-made fibre yarns.

Senator Kennelly:

– I rise to order! Sir, you put the question -

That the Senate do now adjourn, and immediately called Senator Henty.

Senator Henty:

– I rose.

The PRESIDENT:

– Order! lt is obvious that if 1 were to put’ the question, the

Adjournment. 1089

The PRESIDENT:

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

Senator HENTY:
LP

– I also lay on the table of the Senate reports by the Special Advisory Authority on the following subjects: -

Polyvinyl chloride resins and moulding compounds.

Slide viewers and slide projectors.

Senator WRIGHT:
Tasmania

– Speaking to the motion for the adjournment of the Senate, I make the point that any thoughtful Opposition would have welcomed the information contained in the Tariff Board reports. The point of order raised by Senator Kennelly and referred to by Senator Willesee seems to have emanated from a sense of vacuity on the part of the Opposition.

Question resolved in the affirmative.

Senate adjourned at 11.5 p.m.

Cite as: Australia, Senate, Debates, 2 May 1962, viewed 22 October 2017, <http://historichansard.net/senate/1962/19620502_senate_24_s21/>.

View PDF View XML View in Voyant