Senate
24 November 1965

25th Parliament · 1st Session

  1. Senate
  2. 25th Parliament
  3. 1965

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

page 1751

QUESTION

CIVIL AVIATION

Senator CANT:
WESTERN AUSTRALIA

– I direct a question to the Minister for Civil Aviation. Has TransAustralia Airlines made an official application for the right to operate a service between Perth and Darwin? If so, was the official application made approximately nine months ago? If not, on what date was the application made? Has T.A.A. yet received an official answer to its application? If no answer has been given as yet, when is it likely that the application will be considered and an answer given?

Senator HENTY:
Minister for Civil Aviation · TASMANIA · LP

– Yes, an application was received approximately nine months ago. The matter is still under consideration. The Director-General of Civil Aviation has just been to the relevant area to examine the position in the north. I propose to go to Western Australia myself at the earliest opportunity after the Senate has gone into recess. By that time we should be ready to make a decision.

page 1751

QUESTION

EDUCATION

Senator DAVIDSON:
SOUTH AUSTRALIA

– I direct a question to the Minister in Charge of Commonwealth Activities in Education and Research. It relates to a news item broadcast a few mornings ago by the Australian Broadcasting Commission concerning proposals for the establishment of a faculty of agriculture at the Australian National University. Has the Minister any details of the reported proposals? Can he comment on the likelihood or possibility of the establishment of such a faculty?

Senator GORTON:
Minister for Works · VICTORIA · LP

– I think the honorable senator is referring to a report of a discussion between Dr. Burton, Principal of the School of General Studies, and somebody else whose name escapes me, as to the desirability of establishing a faculty of agriculture at the Australian National University. I understand a group of private people is working on a case to support establishment of such a faculty at the University but as yet no proposal has been put to the Council of the University so far as I am aware. If it were put to the Council, in the first instance the Council would have to study the matter. Then I should think that the Australian Universities Commission would consider it bearing in mind the other universities which have such faculties and the requirement for a balanced development of university education. After that, it would be for the Government to consider whether the finance required would be forthcoming. So far, to the best of my knowledge, the matter has not even reached the Council of the Australian National University.

page 1751

QUESTION

TEXTILES

Senator GAIR:
QUEENSLAND

– I direct a question to the Minister for Customs and Excise. Is the Minister aware that the rayon industry conducted by Courtaulds (Aust.) Ltd. at Tomago, New South Wales, recently dismissed 130 employees while a further large number had their earnings reduced, allegedly due to Japanese imports? Is it correct, as alleged by the majority of employees, that inefficient management is the greatest contributing factor to the present recession in the industry? As Courtaulds is in receipt of a bounty on acetate rayon yarn, would the Minister have an inquiry made of all interested persons into (he conduct of the industry to determine whether the company’s difficulties are of local origin or due to excessive competition from imports and whether continuance of the bounty is justified?

Senator ANDERSON:
Minister for Customs and Excise · NEW SOUTH WALES · LP

- Mr. President, I decline to give an answer to a question without notice which has so many implications, and which could reflect upon the efficiency and administration of an organisation. In all the circumstances, it would be appropriate for me to ask that the honorable senator place his question on notice.

page 1751

QUESTION

PARLIAMENTARY BROADCASTS

Senator BRANSON:
WESTERN AUSTRALIA

– My question is directed to you, Mr. President, and it concerns the broadcasting of parliamentary proceedings. I ask, Sir, whether you would give consideration to the suggestion that the Australian Broadcasting Commission’s announcer in charge of the broadcasting of parliamentary proceedings be asked to give some factual or historic comment during the lengthy period of background noise which occurs during divisions. This was most noticeable yesterday during the count of the 108 members in the House of Representatives when there were minutes of silence during which, I suggest, the announcer could have given some history of the result of past referendums.

The PRESIDENT:

– I will be very pleased to take this matter up with the broadcasting authorities. I think there is much merit in the honorable senator’s suggestion.

page 1752

QUESTION

CIVIL AVIATION

Senator BISHOP:
SOUTH AUSTRALIA

– My question is directed to the Minister for Civil Aviation and follows upon questions I have asked recently in connection with staggered air flights. Has the Minister’s attention been drawn to continuing support for staggered flight schedules and the most recent report that the Department of Civil Aviation would back a move by the Victorian Employers Federation to stagger airline services? Is this report correct? Is the Minister in a position to make any statement in connection with his previous promises to investigate this matter?

Senator HENTY:
LP

– I have not seen the article to which the honorable senator refers but I can tell him that at the moment I have under consideration the setting up of a public inquiry into the synchronisation of schedules. As soon as I am in a position to do so I shall make a statement to the Senate.

page 1752

QUESTION

DROUGHT

Senator SIM:
WESTERN AUSTRALIA

– I preface a question to the Minister representing the Minister for Territories by saying that last year the Minister for Territories invited the New South Wales Soil Conservation Service to investigate the deterioration of soils and pastures in central Australia and to make recommendations on remedial action necessary to rehabilitate drought areas. The Minister also referred to the Soil Conservation Service a proposal by the Federal Rural Committee of the Liberal Party of Australia that national parks be established in arid regions of central Australia and the

Northern Territory. Can the Minister inform me what progress has been made with this investigation?

Senator GORTON:
LP

– The honorable senator informed me that he was going to ask this question and I have the following reply from the Minister for Territories: The New South Wales Soil Conservation Service accepted an invitation to carry out an investigation into the problems of pasture degeneration and soil erosion in central Australia and the controls that would be necessary under the provisions of a Northern Territory Soil Conservation Ordinance.

An interim report has just been received on a number of short term measures to alleviate the effects of the drought on soils and pastures. This report gives some interim advice on the stock number that could be carried in the area. The remainder of the investigation, which will include measures necessary to rehabilitate drought areas, is of a longer term nature and it may be some time before full reports and recommendations are available. The establishment of national parks iri the arid regions of the Northern Territory as proposed by the Federal Rural Committee of the Liberal Party of Australia and the requirements for a Soil Conservation Ordinance are among the measures to be reported upon in the full report.

page 1752

QUESTION

HOUSING

Senator CAVANAGH:
SOUTH AUSTRALIA

– I desire to ask a question of the Minister representing the Minister for Housing. Will the Government do anything to rectify the downward trend of home building as shown by figures released by the Commonwealth Statistician yesterday? As it was stated that the Homes Savings Grant Act and the Housing Loans Insurance Act and the establishment of a Commonwealth Department of Housing would increase home building, have these Acts and the Department failed to achieve what was expected of them?

Senator MCKELLAR:
Minister for Repatriation · NEW SOUTH WALES · CP

– I will direct the question to the Minister for Housing and obtain an answer for the honorable senator.

page 1752

QUESTION

ROAD SAFETY

Senator BREEN:
VICTORIA

– I preface my question, which is addressed to the Minister representing the Minister for

Shipping and Transport, by pointing out that a recent report stated thai six experts, namely, a doctor, a police officer, a research specialist, a statistician, a road engineer and a traffic engineer, had been added to the Australian Transport Advisory Council. In view of the coming holiday season and consequent heavy road traffic, I ask the Minister whether the Australian Transport Advisory Council will produce suggestions to further programmes that are being undertaken by the State Governments to combat the increasing road toll, which has reached the alarming proportions of one death every three hours and one person injured every seven minutes.

Senator ANDERSON:
LP

– It is my understanding that the Australian Transport Advisory Council finds expression in relation to road safety through the Australian Road Safety Council. Each State has its own Road Safety Council. The Australian Transport Advisory Council meets only from time to time. The Australian Road Safety Council is the body which directs the road safety campaign. Having been a member of a committee which inquired into the functions of the Australian Road Safety Council, I know, and doubtless other honorable senators know, that each year at about the festive season the Australian Road Safety Council and the State Road Safety Councils embark upon a campaign for road safety by means of the radio, television and the Press. The honorable senator’s question may have some other implications. Therefore, I shall refer it to the Minister for Shipping and Transport.

page 1753

QUESTION

PRIMARY PRODUCTION

Senator LAUGHT:
SOUTH AUSTRALIA

– Will the Minister representing the Minister for Primary Industry please ascertain for me the latest estimates for the 1965-66 harvest for each State in relation to wheat, oats and barley?

Senator McKELLAR:
CP

– Yes.

page 1753

QUESTION

PRESIDENT KENNEDY

Senator TANGNEY:
WESTERN AUSTRALIA

– Is the Minister representing the Prime Minister aware that in this week the second anniversary of the death of President Kennedy of the United States of America is commemorated? At the time of his tragic death many sugges tions were put forward for the erection of an Australian memorial in honour of this humanitarian and statesman. Has anything been done in this matter? If not, is it not a fact that Canberra is one of the few major capital cities in the world where no memorial has been erected? Will the Minister give some attention to this matter so that a fitting tribute may be paid to this great leader of a friendly allied nation?

Senator HENTY:
LP

– I shall have great pleasure in bringing the matter to the attention of the Prime Minister.

page 1753

QUESTION

CIVIL AVIATION

Senator CANT:

– I address the following question to the Minister for Civil Aviation: Was the original appeal by Ipec-Air Pty. Ltd. to the Privy Council adjourned to a date in October of this year? Has the appeal yet been heard? If not, has a new date of hearing been set down? If so, what is the new date of hearing?

Senator HENTY:
LP

– I understand that the new date of hearing is January 1966.

page 1753

QUESTION

ARBITRATION

Senator MURPHY:
NEW SOUTH WALES

– I ask the Minister representing the Minister for Trade and Industry whether there is evidence of a downward trend in manufacturing. If so, will the Government intervene in the forthcoming wage hearing before the Commonwealth Conciliation and Arbitration Commission and make representations that when the Commission fails to keep up the real value of wages, as it did recently, this inevitably causes a reduction in demand?

Senator HENTY:
LP

– Alterations up and down in industrial conditions take place regularly. I think that as this matter is obviously worrying the honorable senator, he should place his question on the notice paper so that the Minister for Trade and Industry may provide him with up to date information and somewhat relieve his mind.

page 1753

QUESTION

LEGISLATIVE DRAFTSMEN

(Question No. 617.)

Senator MURPHY:

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

Is there a shortage of competent legislative draftsmen in Australia? If so, what is being done to remedy this situation?

Senator GORTON:
LP

– The AttorneyGeneral has provided the following answer -

There is a shortage of competent legislative draftsmen in Australia. In the Commonwealth Public Service, there are seven legal professional positions vacant in the Parliamentary Drafting Division of the Attorney-General’s Department. These have just been advertised. If they arc not filled, the matter will then be further considered.

page 1754

QUESTION

COTTON

(Question No. 687.)

Senator BRANSON:

asked the Minister representing the Minister for National Development, upon notice -

  1. What were the yields per acre of the present cotton harvest on the Ord River scheme?
  2. Do these yields indicate that the growing of cotton at the Ord River is a successful financial venture?
  3. How do these yields compare with other cotton growing areas in Australia and the United States of America?
Senator ANDERSON:
LP

– The Minister for National Development has supplied the following answers -

  1. Cotton yields obtained at the Ord during the 1964-65 season may be summarized as follows -

Individual farm yields in the 1964-65 season were as high as 2,844 lb. of seed cotton per acre compared with a maximum farm yield in the 1963-64 season of 1,558 lb. per acre.

  1. Net returns per farm averaged £7,624 for the 18 farms in production and were as high as £17,854, after meeting all costs including interest on capital at 6%, and making due allowance for replacement of structures, vehicles and plant. Individual farmers received a rate of return of up to 49% on their invested capital, with an average of 24% over all farms.
  2. Yield comparisons between cotton growing areas in Australia and in the United States of America in terms of seed cotton per acre -

page 1754

QUESTION

EMPLOYMENT

(Question No. 694.)

Senator WEDGWOOD:
VICTORIA

asked the Minis ter representing the Minister for Labour and National Service, upon notice -

  1. In view of recent statements by the Minister on the increasing importance of women in the work force, what are the functions of the Women’s Section of the Department of Labour and National Service, established in 1962?
  2. Has any further consideration been given to a suggestion, made by Senator Wedgwood in the Senate on 16th March 1960, that a women’s bureau, similar to the Bureaux of the United States of America or Canada, or a women’s consultative committee, similar to the United Kingdom Committee, might be established in Australia for the purpose of advising’ the Minister on questions of employment policy relating to women?
Senator GORTON:
LP

-The Minister for Labour and National Service has supplied the following answers -

  1. The . Women’s Section is the focal point of the Department’s activities with respect to female employment. It aims to promote a greater understanding of the important contribution that women may make in the work force and keeps abreast of the latest economic, industrial and social trends affecting the employment of women and girls.
  2. The Women’s Bureau of the United States of America has, among others, political and social functions which, in the Australian context, lie beyond the competence of a Labour Department; the Canadian Bureau is, in its composition and functions, very similar to our Women’s Section. I intend to keep under review the question of establishing a. women’s consultative committee.

page 1754

SULPHUR

Senator ANDERSON:
LP

– On 26th October, 1965, Senator Prowse asked the reasons for the recent steep increases in sulphur prices and whether these high prices are likely to be of long duration. I have made inquiries and desire to advise the honorable senator that I have now been informed by the British Phosphate Commissioners, who act as managing agents to the Australian Sulphur Purchasing Association, that sulphur has been purchased at low prices for the last five years due to a surplus in world supply. This position changed rapidly and unexpectedly during the last twelve months and to ensure adequate supplies to cover increasing demand in Australia it was necessary to re-negotiate supply contracts from the United States of America, Canada and Mexico at higher prices with effect from 1st July 1965. These prices are still well below the ruling market prices for new business. The British Phosphate Commissioners also advised that the future trend in sulphur prices is difficult to forecast but current demand and supply predictions indicate that elemental sulphur will be in short supply for some years and consequently, prices will be higher. .

The rates of bounty payable under the Pyrites Bounty Act 1960-1965, which is administered by my Department, vary according to the landed cost’ of brimstone into Australia. The basic bounty rate is £3 per. ton. This is decreased by the amount by which the landed cost of brimstone exceeds £16 per ton and is increased by the amount by which the landed cost is below £16 per ton. The applicable rate of bounty is promulgated quarterly. Although, as I mentioned, the increase in the sulphur price was effective from 1st July 1965, I am not able to give the honorable senator the bounty rate for pyrites for the September quarter of 1965 as the necessary information to calculate the landed cost per ton in respect of that quarter has not yet been received from the sulphur importers. However, to illustrate the possible effect of the latest increase, I point out that, if the f.o.b. price rise of sulphur of approximately nine dollars a ton were applied to the figures for the June quarter of 1965, the pyrites bounty rate of £5 6s. per ton applicable to that quarter would be decreased to £1 ls. 9d. per ton consequent upon the increased landed cost per ton of brimstone.

page 1755

QUESTION

NATIONAL SERVICE TRAINING

(Question No. 733.)

Senator CAVANAGH:

asked the Minister representing the Minister for Labour and National Service, upon notice -

Arc any medical examinations of persons for national service conducted by private medical practitioners; if so, is this general practice or does it happen only in particular areas?

Senator GORTON:
LP

– The Minister for Labour and National Service has supplied the following answer -

National service registrants are medically examined by medical boards ordinarily consisting of two’ registered medical practitioners. Depending on their availability at the times required, these practitioners may be drawn from those in private practice or from those otherwise employed.

page 1755

INTERNATIONAL AID FOR EDUCATION IN PAPUA AND NEW GUINEA

Ministerial Statement

Senator GORTON:
Minister for Works · Victoria · LP

– by leave - Some- time ago the Minister for Territories >(Mr. Barnes) announced that the Government was considering the possibility of international assistance for such’ educational, projects in Papua and New. Guinea as. the new . university, the technical education institute, the provision of -science laboratory equipment, teacher training and adult education. I now- inform the Senate that two missions from the United Nations will shortly visit Australia and Papua and New Guinea . to discuss four projects that might . possibly be appropriate for assistance. A joint mission from the United Nations Educational, Scientific and Cultural Organisation and the United Nations Special Fund led by Dr. William Lightfoot, a U.N.E.S.C.6. specialist in teacher training, will explore possibilities for the Special Fund to provide over a five year period staff and equipment for the Institute of Higher Technical Education in the Territory and assistance for the development of facilities for higher level teacher training and educational research. The mission will also consider the possibility of assistance over two years for consultant services for science teaching in Territory schools to be funded under the United Nations Expanded Programme of Technical Assistance and to be carried out with the assistance of U.N.E.S.C.O.

A United Nations Children’s FundU.N.E.S.C.O. mission comprising Professor T. K. N. Menon, U.N.E.S.C.O. Education Adviser, Bangkok, and Mr. Y. C. Chen, Chief of the U.N.I.C.E.F. Office, Taipei, will discuss assistance from U.N.I.C.E.F. over five years in providing staff and equipment for the development of science teaching in primary and secondary schools in Papua and New Guinea. It is expected that the two missions will spend up to three weeks in the Territory. They will be fact finding and advisory and, of course, without commitment.

Any proposal which was the subject of a request would need to be consistent with the overall objective of the Territory’s balanced development and could not involve unbalancing or distorting policies applying in the particular field concerned, whether education, health, economic development, or some other field of activity. Whether the present missions result in formal requests for aid will be a matter for decision in the light of their visit. But as I have stated previously, the Government will not hesitate to take advantage of international assistance when such assistance can make a proper contribution in any field of progress.

I present the following paper -

International Aid for Education in Papua and New Guinea - Ministerial Statement, 24th November 1965.

Senator McKENNA:
Leader of the Opposition · Tasmania

– by leave - I move -

That the Senate take note of the paper.

I ask for leave to make my remarks at a later stage.

Leave granted; debate adjourned.

page 1756

SUPERANNUATION BILL 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– I move -

That the Bill be now read a second time.

In a statement on 25th March 1965 I advised the Senate of the Government’s decisions in relation to the surplus in the Superannuation Fund that was reported in the eighth quinquennial investigation of the Fund as at 30th June 1962. The main purpose of this Bill is to give legislative effect to those decisions, first, by reductions in the rates of contribution, which are to take effect from 1st July 1962. Secondly, the Bill authorises the cash distribution to eligible contributors and pensioners of shares of the re-assessed surplus which is to be calculated in the light of the revised assumptions about earning rates. As explained in the March statement, those revised earning assumptions and these reductions in the rates of contribution which are based upon them will be reviewed at the next actuarial investigation of the Fund at 30th June 1967, in the light of circumstances then existing. Contributors to the Provident Account will be credited with interest from 1st July 1957 at the average rate earned by the Fund in each financial year and these additional amounts will be paid in cash for those who have now ceased to contribute.

I know that the many contributors and former contributors, or their widows, who will benefit under this Bill are anxious to know when they will receive payment. Although the legislation will provide the authority for the payments, there is still a considerable volume of complex actuarial calculations and administrative arrangements to be completed before the surplus can be finally distributed to individual contributors and pensioners. The task of distributing a surplus of this magnitude in cash payments to so many contributors and pensioners, or their dependants, is quite unprecedented. Moreover, the difficulties have been accentuated by an extreme shortage of trained actuarial staff. As some indication of the administrative task, honorable senators may be interested to learn that some two million individual units must be re-priced by the Superannuation Board at the new lower rates of contribution before the revised statistical data can be supplied for the re-assessment of the surplus in the Fund as at 30th June 1962.

Every effort is being made to finalise these matters as quickly as possible but, because of the volume and complexity of the calculations which have yet to be completed, it will still take some time before all the payments can be made. For this reason, it is not proposed to defer all action until the re-assessment of the state of the Fund is complete but to introduce the many changes required by the Government’s decisions progressively and with the least possible delay. With this in view, the Treasurer has been examining the possibility of making interim payments of surplus to pensioners and of refunding excess contributions to contributors in advance of the complete distribution. This examination has shown that, in the vast majority of cases, some payments in advance of the final distribution are both actuarially feasible and administratively practicable.

The necessary preparations are already in hand for an interim payment to those now in receipt of pensions whose pensions commenced prior to 30th June 1962. The work is not yet sufficiently advanced to permit the announcement with certainty of a date of payment but the President of the Superannuation Board has advised the Treasurer that he hopes to commence these payments before Christmas.

Preliminary work towards reducing the fortnightly contributions of current contributors with effect from 1st July 1962 is also under way. The new, lower rates of contribution will be applied, by departments, to all units taken up since 1st July 1965, and to all future units immediately the Bill becomes law. Once the interim payments to pensioners have been made, the next step will be for the Superannuation Board to reduce contributions for units in force at 30th June 1965, and to refund to contributors, and former contributors now in receipt of pension, or their widows, the excess contributions paid since 1962, together with earnings thereon. It is, therefore, hoped that most persons who will be entitled to payments under the Bill will receive some payment within the next few months. Simultaneously with the work that is proceeding in respect of contributors and former contributors to the Superannuation Fund, Provident Account records are also being revised for the application of the new interest rates and the calculation of the amounts due to, or in respect of, former contributors.

The Bill also increases children’s pensions, from 24th September last, from £1 per week to £2 per week for a child whose mother is still alive, and from £3 per week to £5 per week for a child who has lost both parents. These pensions will be paid until 21 years of age for children undergoing full-time education instead of terminating at age 16. The adjustments in existing pensions for children will be made shortly after the Bill receives the royal assent. However, the extension of the age limit for student children means that pensions will now be payable for some children who have either ceased to receive pension on attaining 16 years of age or who have not previously been entitled to pension under the Act. It will not be possible to make these payments until applications are obtained from the mothers or guardians and it is established that the children are, in fact, undergoing full-time education.

The Bill makes two other changes of importance to pensioners and contributors. The first will remove the existing reduction of pension upon re-employment by the Commonwealth after retirement. Subject to a minimum pension, the Act now provides for a reduction in pension to one-half of the full rate during a period of re-employment by the Commonwealth. The Government has now decided to remove this limitation. The second change affects those contributors who elected under the 1959 Act not to pay additional contributions for a five-eighths pension for a widow but to continue their existing contributions for a onehalf pension for a widow. The Government intended that the 1959 option should be a single option and this was given wide publicity; the 1959 Act required the payment of additional contributions for the higher pension unless the contributor elected in writing to continue to pay only for the lower entitlement. Contributors therefore could not fail to contribute on a five-eighths basis through ignorance of the opportunity. Despite these precautions, some contributors are said to have acted under a misapprehension. The Government has therefore decided to provide a further opportunity for those contributors to elect to change to the higher basis, subject to their passing a medical examination and paying additional contributions at rates which will be specially determined.

A number of other structural and machinery changes has been incorporated in the Bill, and these changes will be explained during the Committee stage. They are mainly for the purpose of facilitating administration or correcting minor defects in the legislation which have been detected in recent years. I commend the Bill to the Senate.

Debate (on motion by Senator Willesee) adjourned.

page 1757

DEFENCE FORCES RETIREMENT BENEFITS BILL (No. 2) 1965

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– I move - That the Bill be now read a second time.

The purpose of this Bill is to extend to members of the forces a number of the changes in retirement benefit provisions just introduced in the Superannuation Bill with the exception, of course, of those provisions relating to the surplus in the Superannuation Fund. It will not be known whether the Defence Forces Retirement Benefits Fund is in surplus until the actuarial investigation into the state of the Fund is complete. The- Bill increases children’s pensions, as announced in the Budget Speech, from £1 a week to £2 a week, for a child whose mother is still alive, and from £3 a week to £5 a week, for a child who has lost both parents, and extends those pensions .from the present age limit of 16 years to the age of 21 years for children undergoing fulltime education.

The present limitation on the pension of a Defence Forces Retirement Benefits Fund pensioner who is re-employed by the Commonwealth in a civilian capacity after his retirement from the forces is removed, but the existing restriction is maintained if a pensioner under the Act engages in fulltime continuous service in the armed forces. This amendment will be of great significance to retired servicemen because of their earlier retiring ages and should materially assist their rehabilitation into civilian employment.

The third major change is the extension to contributors of a further opportunity to elect for a five-eighths pension for a widow, subject to their passing a medical examination and paying additional contributions at rates which will be specially determined. Despite precautions in 1959 to ensure that contributors could not fail to contribute on a five-eighths basis through ignorance of the opportunity, some are said to have acted under a misapprehension.

In addition to these more important changes, the Bill includes some machinery and administrative amendments which can be explained in detail in the Committee stages, I commend the Bill to the Senate;

Debate (on motion by Senator Willesee) adjourned.

page 1758

CURRENCY BILL 1965

Second Reading

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– I move - That the Bill be now read a second time.

The Currency Bill 1963 was introduced into the Senate in October 1963. Since then the authorities concerned appear to have made excellent progress in their preparations for a smooth changeover to a decimal currency system in Australia on 14th February next. The two principal co-ordinating bodies - the Decimal Currency Board and the Commonwealth Treasury - have had long and detailed discussions with the large numbers of interested Commonwealth and State Government departments and. instrumentalities, with the Australian banks,, with the principal distributors and users of monetary machines and, in fact, with each of the major organizations and institutional groups which are concerned with the paying, receiving and recording’ of amounts of money.

The new Currency Bill which I am now presenting results to a large degree from these discussions. It will establish a set of guiding rules which should reduce to a minimum any inconvenience which the community in general might suffer as a result of the changeover. The new Bill, together with the Decimal Currency Board Bill, which I shall be introducing shortly, will incorporate most of the provisions of the Currency Act 1963. It will settle the changeover date as 14th February 1966. It will provide for the period of up to two years after that date during which it will be permissible to conduct transactions in either the new or the old currencies. This period of flexibility will be necessary until all £ s. d. monetary machines are either converted to decimal operation or replaced by new decimal machines.

I may add that the substance of the Bill and much of its detail have been discussed with such bodies as the Australian InterBank Decimal Currency Committee, the Associated Chambers of Commerce and Manufactures, the Australian Council of Retailers, the Australian Council of Trade Unions, the National Employers Policy

Committee, the Life Offices Association of Australia, the Australian Associated Stock Exchanges, the National Council of Wool Selling Brokers, the Australian Society of Accountants, the Institutes of Chartered Accountants and of Cost Accountants, and the Chartered Institute of Secretaries. All are now in general agreement that the. approach proposed is satisfactory from their points of view. .

There have also been conferences with the State Parliamentary Draftsmen, who will be concerned with the complementary task of preparing legislation to cover matters which are the concern of State Governments - for example, references to £ s. d. amounts in State legislation including stamp duties, rates and taxes, and so on.

The. Currency Act. 1963 provided for the introduction of a decimal currency system into Australia on a- date to be. proclaimed. It established the dollar as the name of the new monetary unit. It settled the .denominations and composition of the new decimal coins. Finally, it gave statutory effect to the appointment of the Decimal Currency Board, which is charged with supervising the main aspects of the changeover arrangements.

Part V of the Currency Act, which was mainly concerned with the responsibilities of the Decimal Currency Board, came into effect as soon as the Act received royal assent in October 1963. This was to enable the Board to proceed with the complex arrangements leading up to the changeover date, including negotiations with the com-, panics which will be converting some hundreds of thousands of £ s. d. machines to decimal operation during a period of up to two years following C Day. Parts II-IV and VI of the Act were to come into effect on the proclaimed date, since agreed as 14th February 1966. These parts would repeal the Coinage Act 1909-1947 and would make, decimal coins legal tender on and after that date. It was realized at the time that further legislation would be needed later to cover the two-year “ transition “ period after C Day.

Some thought was given at the time to the possibility of including the “ transitional “ provisions in the original Currency Act, but it was considered safer to defer this exercise until more was known about the problems likely to be encountered. This has proved to have been the .wisest course, and discussions which the Treasury, the Decimal Currency Board and tha Parliamentary Draftsman have had with numbers of interested parties over the past two years have not only indicated the best form which the transitional provisions should take, but have also shown that several new provisions are desirable additional to those already in the Currency Act itself.

While experience has shown that a few of the original provisions of the Currency Act could with advantage be further clarified, there would be no need in normal circumstances to have more than an amending’ Act in order to provide clarification where desirable, to introduce new provisions the need for which was not realized in 1963, and to provide for the transitional period. However, so many parties are closely affected, and there is therefore such a wide and active interest in ‘ the ‘precise ‘ terms of the decimal’ currency legislation, that the public could be decidedly inconvenienced if it were necessary to refer to two separate, pieces of legislation- the original Currency Act and an amending Act.

It is therefore proposed that the Currency Act 1963 be repealed except for those sections dealing with the functions of the. Decimal Currency Board , which must obviously have continuing effect from 1963. The Act should then be renamed the Decimal Currency Board Act. I shall shortly be introducing a Decimal Currency Board Bill to give effect to this. No changes are proposed from the original provisions relating to the Board, and the Bill therefore does not call for any special comment.

The other provisions of the Currency Act 1963, which were not due to come into force until C Day, will be incorporated in the new Currency Bill, which will then cover currency, coinage, and associated matters only, first during the transition period and later on a permanent basis after the transition period is completed. There will indeed be an advantage in excluding Decimal Currency Board matters from an Act which will have continuing effect long after the Board has ceased to function.

In general terms, Part II (Currency) of the Currency Act 1963 established the new monetary unit and provided that, after a date to be proclaimed, all cheques, contracts and monetary transactions would be in terms of decimal currency. All references to amounts of money expressed in £ s. d. prior to C Day in Commonwealth acts, ordinances, instruments, etc. and in contracts, cheques, etc. would be construed as references to exactly equivalent amounts in decimal currency. Honorable senators will be aware that all coins of sixpence - or five cents - and above, and all notes, will have exactly equal counterparts in both the new and the old currencies.

All £ s. d. amounts actually owing at C Day will be converted into decimal currency to the nearest cent in accordance with a table set out in the Act wherever odd pence amounts are involved. All percentages expressed in money terms - for example, £5 per cent, per annum - will be construed as equivalent percentages expressed in dollars and cents, that is, $5 per cent., not $10 per cent. As a result of these blanket provisions, very few Commonwealth acts, ordinances, etc. require specific amendment immediately, although they will clearly have to be brought up to date as opportunities arise. Most private contracts will continue in force without any revisions being necessary.

Part II of the Currency Act 1963 will continue as Part II of the Currency Bill with the changeover date now confirmed as 14th February 1966. There will be a number of minor drafting changes in the interests of clarification, together with a new provision that wills and other testamentary documents will not be invalidated if written in £ s. d. after C Day. There will also be a provision that certain amounts payable periodically in accordance with pre C Day contracts, such as life insurance premiums and hire purchase instalments, will be payable to the nearest cent, as in the table already included in the Currency Act. The exact conversion basis will apply after C Day in reference to amounts in £ s. d. in other contracts entered into before C Day.

No changes are proposed to Part III (Coinage) of the Currency Act, which establishes the composition of the new coins and provides for their dimensions and designs to be prescribed. No changes are proposed either to Part IV (Legal Tender) except to the extent that this is modified during the transition period by the new Part V (Transitional Provisions).

Until a date to be proclaimed - probably about two years after C Day - it will be permissible to execute contracts and all other forms of monetary transactions, except cheques, other bills and exchange and promissory notes, in terms of £ s. d. The purpose of this is to enable businesses, particularly those which have not had their monetary machines changed over to decimal operation, to continue to work in £ j. d. during the transition period if they so desire. One of the main features of the changeover will be the complete conversion of all bank operations from £ s. d. to decimals in the four days prior to C Day. It will therefore be necessary for all cheques to be written in dollars and cents after C Day. The same will apply to other bills of exchange and to promissory notes.

I turn now to cash transactions. Part IV (Legal Tender) of the present Currency Act made the new bronze 1 cent and 2 cent coins legal tender for the payment of amounts up to 20 cents, and the new cupronickel 5, 10 and 20 cent coins and silver 50 cent coins legal tender up to five dollars. The new Bill will provide that mixed lots of £ s. d. and decimal coins will similarly be legal tender for amounts with these values, whether expressed in £ s. d. or decimals, during the transition period - as well as being legal tender for decimal amounts, only, after the end of the transition period. The main limitation is that it will be legally permissible to tender £ s. d. coins only in multiples of 6d. in payment of decimal amounts, and to tender decimal coins in multiples of five cents in payment of £ s. d. amounts. A shopkeeper who sells an article at 7s. 4d. will therefore be able to insist, if he so wishes, on receiving precisely 7s. 4d. rather than the nearest decimal amount of 73 cents, or 7s. 3.6d., and one selling an article at 72 cents to insist on that amount rather than 7s. 2d., or 71 2/3 cents, the nearest £ s. d. amount.

Undoubtedly there will be a few misunderstandings and petty arguments in this area, but none of them should be any more difficult of solution than the problem we often face at present when writing a cheque for a grocer’s bill which ends in a halfpenny. Some of us disregard the halfpenny and a probably lesser number of us round up to the next penny. But our relationships with our grocers and other shopkeepers seem to have survived reasonably well over the years, and I see no reason why they should not continue to do so after decimal currency is introduced. There is indeed no problem of this nature which cannot be solved by the customer tendering a higher amount in either currency - a multiple of either 6d. or five cents - and taking the exact change, just as most transactions are settled now in retail stores, supermarkets, etcetera. For example, the shopkeeper selling an article for 7s. 4d. would give 2s. 8d. change for a dollar note or a 10s. note, and the one selling an article at 72 cents would give 8 cents change for 80 cents made up from four 2s. pieces, or four 20 cent coins, or a mixture of both coins.

The conversion of wage and salary payments is a matter of some concern. Industrial awards which are laws of a State will be outside the ambit of the Commonwealth’s legislation but, by virtue of clause 10 (3.) of the new Bill, references to £ s. d. amounts in all other awards and wage contracts will be automatically construed after C Day as their exact decimal currency equivalents. In many cases this will involve fractions of a cent. The Australian Council of Trade Unions and the National Employers Policy Committee have been conferring on the conversion of these amounts and have agreed on an approach aimed at minimising complications in making wage calculations. The Decimal Currency Board, too, has examined this matter and has found that for practical purposes wage calculations would, in most circumstances, not need to be taken beyond two decimal places of a cent.

There will be no question of rounding unit wage rates, such as hourly rates, to the nearest cent and then multiplying. Just as with wage calculations made at present under £ s. d. awards and contracts, all calculations will be carried through to the final amount with as much precision as necessary and it is this amount which will, if necessary, be rounded to a whole cent.

Except for payments by cheque, it will be permissible for employers to continue making their wage calculations and payments in £ s. d. during the transition period. For that purpose it may be necessary to convert decimal currency amounts into their £ s. d. equivalents for a time when existing awards are reissued in decimal currency or new awards are made in the new currency. This should be no more difficult than the reverse process.

There are two new provisions relating to banking which are worthy of comment. The first of these will provide that, notwithstanding section 98 (3.) of the Bills of Exchange Act, Thursday, Friday and Saturday, 10th-12th February 1966 will be nonbusiness days for banks. This is to enable banks to close for genera] banking business during the four days preceding C Day while their machines and banking records are being converted.

The second provision relates to postdated cheques, which are used extensively in hire purchase and similar agreements. There will be numbers of such cheques in existence after C Day still expressed in £ s. d. These will be validated provided they are certified by a banker to have been drawn before C Day. lt will be desirable to ensure that cheques do not unnecessarily become stale by virtue of this procedure. After the end of the transition period, all transactions will need to be conducted in dollars and cents. Any references to amounts of £ s. d. in contracts, instruments, and so on entered into or made during the transition period - under clause 18 (1.) - will then be automatically converted into dollars and cents on an exact basis under clause 10. All payments after the end of the transition period will have to be in terms of dollars and cents, and clause 19 provides for any amounts of £ s. d. to be converted for this purpose on a nearest-cent basis.

It may help if I summarise the arrangements in the various stages of the conversion operation. Before C Day no decimal coins or notes will be legal tender and no document written in terms of dollars and cents will have any legal basis, unless it is dated 14th February 1966 or later.

At C Day all £ s. d. amounts then actually owing will be converted into decimal currency on the nearest-cent basis. References to £ s. d. amounts contained in laws, contracts, and so on, with continuing force will be converted to decimals on an exact basis. Decimal currency will become the official currency on C Day, and decimal notes and coins will become legal tender from that time. From C Day onwards, all cheques and other bills of exchange, and all promissory notes, must, be executed in dollars and cents.

During the transition period, contracts and other monetary transactions may be arranged in terms of cither £ s. d. or dollars and cents. The amounts owing under such contracts and transactions must be settled in terms of dollars and cents if payment is made by cheque. If payment is made by cash, and the amount owing is a multiple of sixpence or five cents,- either £ s. d. or decimal notes and coins may be used, as these . will be. completely interchangeable for such amounts. The 5, 10 and 20 cent coins will, in fact, not only have exactly the same value, as the existing sixpence, shilling and florin, but they will have exactly the same weight and will be virtually’ indistinguishable in diameter and colour. If odd pennies or cents are involved in cash payments due during the transition period, it will only be’ legally possible to settle these with the appropriate coins, that is threepences, pennies and halfpennies in payment of amounts less than sixpence and 1-cent and 2-cerit coins in payment of decimal amounts less than 5 cents. Alternatively, payment may be made -by tendering any higher coin which is a multiple of 6d. or 5 cents in any mixture of new and existing coins or notes.

After the end of the transition period all references to £ s. d. in contracts with continuing effect will be converted into decimals on an exact basis. Payments of amounts owing in terms of £ s. d. will however be made on a nearest-cent basis. After the end of the transition period, no contract or other document written in £ s. d. will have legal effect and threepences, pennies and halfpennies will be legal tender only in multiples of sixpence - as will have been the case during the transition period for banking transactions and for cash payments of decimal amounts. All £ s. d. notes and coins from sixpence upwards will continue to be legal tender on the same basis as decimal notes and coins.

One minor change which has been made in the new Bill is the deletion of the previous sections 34 and 35 of the Currency Act 1963. These dealt with the use of the Trust

Fund for the purchase of metal for coinage and the inclusion of unissued coin in the Treasurer’s statements and accounts. It has been considered that these provisions would more conveniently be included in the Audit Act 1901-1964. An. appropriate revision to that Act will be introduced later.

I have already mentioned that most references to £ s. d. amounts in existing Commonwealth legislation can be construed after C Day as references to dollars and cents, by virtue of the blanket provisions of the Currency Act; that is, that all such references to £ s. d. amounts are in general to be converted on an exact basis, except that percentages expressed in money terms are. to be construed as equivalent percentages in .decimal currency. -There are, however, a number of laws in which money references need to be specifically amended. A simple example is a reference to a return being submitted to the nearest pound; future returns in decimals will obviously need to be to the nearest dollar, rather than the nearest two dollars-. There are several cases where references to. odd amounts of pence need to be separately replaced by. references to new decimal currency amounts rather than by their exact . equivalent - for example, postal charges. About 30 .acts will require minor revision in this way. Appropriate legislation will be introduced later in the session after a complete examination has been made of each and every reference to amounts of money in every act of Parliament.

There are also a number of acts which will need specific amendment in due course to adjust rates and tariffs which are now expressed in £ s. d. amounts which do not convert easily into decimals. Separate legislation covering these matters will also be introduced later in the session. The Currency Bill has no application to the new decimal notes. I shall shortly be introducing a new Reserve Bank Bill to authorise the issue of decimal notes on and after C Day.

Honorable senators would probably appreciate a brief run-down on progress made to date on the change-over arrangements. Afer its establishment in mid- 1963, the Decimal Currency Board concentrated in the first place on the arrangements for converting £ s. d. cash registers, adding machines and accounting machines to decimal operation and, after settling most of the procedures for these and other monetary machines requiring conversion, it has now reached a position where a public education programme over the period immediately preceding C Day - 14th February 1966 - is one of its principal concerns.

The machine conversion programme involves the free conversion, or replacement, at Government expense of more than 360,000 machines and the payment of cash compensation to owners of more than 120,000 machines. Owners will be able to apply this cash compensation either towards the conversion costs of existing £ s. d. machines or towards the cost of new decimal machines. Thus, the owners of nearly 500,000 machines will be receiving Government assistance in one form or another. The cost to last year’s Budget was approximately £2 million - largely expenses associated with pre-conversion preparations - and a further £15 million could be involved this year. We are hopeful that the cost to the Budget in the next two years combined will be kept below £10 million.

The great bulk of the costs to the Government will be for the conversion of 240,000 cash registers, adding machines and accounting machines. As an indication of the variety of the other machines involved, free conversion or cash compensation will be available to owners of 100,000 petrol pumps, 80,000 price computing scales, and lesser numbers of franking machines, deposit recording machines, pushed card tabulators and electronic computers, cheque writers, parking meters, ticket issuing machines, price computing fabric measuring machines, self service petrol pumps, coin counting machines and coin tube machines. Machines which will not be eligible for Government assistance include most coin vending machines, poker machines, gas meters, electricity meters and totalisators. The usual grounds for the exclusion of these machines have been the low unit cost for what in most cases is a comparatively simple conversion operation, or the impossibility of controlling and administering suitable compensation arrangements, remembering that the expenditure of public money would be involved.

As the banks will be changing over completely to decimal operation by C Day, they have been given priority in the machine con version arrangements. Conversion of bank machines has already commenced and the way now seems clear for the banks to operate in £ s. d. up to Wednesday, 9th February 1966, and, after closing down for normal business on Thursday, 10th February, and Friday, 11th February, to reopen in full decimal operation on Monday, 14th February.

The most time-consuming part of the Decimal Currency Board’s operations has been the negotiations with machine companies on conversion costs. Machine conversion costs to be met by the Government have largely been determined by the Board following detailed negotiations with the machine companies on the appropriate rates for cost elements such as direct labour and overhead, on prices for the machine parts needed, and on conversion times for each type of machine - estimated by actual conversion studies using approved engineering techniques. When total costs for each group of machines have been ascertained, the cost will be spread over the number of machines to be converted, and payment will be made to the companies for each machine converted on the basis of a unit conversion ra*e.

Because of the extent of the preparations required for machine conversion - leasing and equipping of premises, training of staff, ordering machine parts and “ loan “ machines from overseas, and so on - and because of the limited capital resources of some of the converting companies, the Board is assisting them with temporary finance. These advances will be recouped by deductions from payments to be made later for conversion work.

It is planned to replace certain machines with new decimal models, instead of converting them. This applies mainly to the less expensive models, and only where the cost of replacement does not exceed the estimated cost of conversion. The Board has so far approved the replacement of some 60,000 £ s. d. machines which would otherwise have been eligible for free conversion. The Board has authorised machine companies to order agreed quantities of “ loan “ cash registers, adding machines and accounting machines. These will be provided free to machine owners while their eligible £ s. d. machines are being converted at Government expense.

Cash registers, adding machines and accounting machines will be converted on a regional zone basis, supervised by the Decimal Currency Board. The Board’s zone programme plans were recently made public. Conversion of the machines will commence in each State simultaneously, and in three areas of each State at the same time - city, suburban and country. Detailed maps have been drawn up and issued for the information of machine companies and machine owners.

Because of the large number of companies involved and the even larger number of individual models of machine, it is not possible to ensure that each zone will have the same proportion of each model of each company’s machines. Some companies may have few, if any, in the first zones, and will be permitted to move into later zones before those zones are reached by other companies. It will therefore be seen that the zones are no more than a rough indication of the order in which the bulk of the machines will be converted. Machines other than cash registers, adding machines and accounting machines will be converted separately from the zoning arrangements.

Cash compensation payable to owners of cash registers, adding machines and accounting machines will be a proportion of the cost of converting a younger machine, the proportion payable diminishing as the age of the machine increases. Negotiations on conversion costs for this purpose have been completed with most companies, and compensation rates for some 40,000 machines have already been published. Other rates will be published as soon as the conversion costs are settled with the companies concerned. Payment of this cash compensation has commenced.

All details of Government decisions on free conversion and cash compensation, on decimal coins and notes, and on the changeover generally have been published and made available through the Decimal Currency Board’s mailing list, through Commonwealth Treasury offices in each State and through banks, as well as through a large network of voluntary speakers set up by the Decimal Currency Board. The supply of material produced especially for schools commenced at the beginning of 1965. In all, it is planned to distribute 15,600,000 letters to school children, 160,000 manuals to their teachers and 120,000 posters to all schools throughout the country.

A booklet designed to assist smaller businesses was recently distributed to approximately 50,000 businessmen who responded to newspaper advertisements placed by the Board.

The Board’s programme to inform the general public of the changeover arrangements involves a steady stream of information via newspapers, television, radio and other media which will culminate in a large scale publicity effort during January and February 1966. The concentration of effort during this latter period has been decided on the advice of an expert advisory committee. Every household in the country will receive at the time a special brochure describing the new arrangements, together with a conversion card suitable for shopping purposes. The results of a nation wide survey designed to measure the awareness of the general public and small businesses have been analysed, and the Board’s forthcoming intensified education programme is being framed in the light of the information gained.

Most Commonwealth departments will change over to decimal operation on C Day in all transactions with the public and in all accounting arrangements with the Treasury. In particular, the PostmasterGeneral’s Department will change over completely. The principal exception will be in the taxation field where returns in respect of income earned in 1964-65 and earlier years will continue in £ s. d. until 30th June 1966. Most State authorities will also be changing over completely at C Day. For example, all railways throughout the Commonwealth will be operating in decimals from C Day and most other transport authorities are expected to follow suit. The changeover arrangements for private enterprise will depend largely on the timing of the machine conversion zoning programme. As this programme may take up to two years to complete, some companies may still be operating in £ s. d. until late 1967, but large numbers of them are making special arrangements to change over from C Day.

The three Australian mints are now producing more than 10 million decimal coins weekly and have already minted some 400 million 1-cent and 2-cent coins. Six months after it was opened last February by His Royal Highness the Duke of Edinburgh, the new Royal Australian Mint had struck its 100 millionth coin. By C Day approximately 550 million decimal coins should be available, or nearly twice as many as the banks have requested by the changeover date. About 450 million of these coins will be 1-cent and 2-cent bronze coins produced in Canberra, Melbourne and Perth. In addition, there will be 30 million each of 5, 10 and 20-cent cupro-nickel coins, produced in London, and 10-20 million of the silver 50-cent coin, to be minted in Canberra. Distribution of these coins to the banks will commence before Christmas, and the banks will commence distributing them to major bulk users of coins during the week before C Day. The testing time will come in the weeks following C Day when the extent of the general public’s demand for each of the new coins will first become evident. However, the three mints will be able to produce another 500 million or more coins in the following 12 months and this is expected to be adequate in the circumstances.

It is expected that the present threepences, pennies and halfpennies, which will have no counterparts in the new system, will have been almost completely replaced by 1-cent and 2-cent coins by late 1967 or early 1968. The sixpences, shillings and florins may remain in active circulation for several years longer, as the banks will have no incentive to sort them from the new 5, 10 and 20-cent coins, with which they will be completely interchangeable, and the general public will find they have a continuing use for them both in shopping transactions and in the operation of parking meters, vending machines, public telephones, etc.

The production programme for the new decimal notes is progressing well. I shall refer in more detail to this subject when introducing the new Reserve Bank Bill to authorise the issue of these notes. Generally speaking then, the arrangements for the changeover appear to be proceeding satisfactorily and there seems every prospect, that all preparations necessary before

C Day will be completed on time. The passage of the legislation before the Senate will assist all those members of the community actively concerned in the changeover to complete their plans with confidence. I commend the Bill to honorable senators.

Debate (on motion by Senator McKenna) adjourned.

page 1765

DECIMAL CURRENCY BOARD BILL 1965

Second Reading

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– I move -

That the Bill be now read a second time.

As I have already explained in my second reading speech on the Currency Bill 1965, the purpose of this Bill, which I commend to honorable senators, is merely to give continuing effect to the provisions relating to the Decimal Currency Board in the Currency Act 1963.

Debate (on motion by Senator McKenna) adjourned.

page 1765

RESERVE BANK BILL 1965

Second Reading

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– I move -

That the Bill be now read a second time.

The purpose of this Bill, which is complementary to the Currency Bill, is to amend the provisions of the Reserve Bank Act relating to the note issue to authorise the issue of decimal currency notes on and after 14th February 1966, the date of the changeover to a decimal currency system in Australia. Under the present Act, the Reserve Bank of Australia is authorised to issue, through its Note Issue Department, Australian notes in denominations of 5s., 10s., £1, £5 and £10 or any multiple of £10. By clause 4 of the Bill, the provision specifying the denominations in which notes may be issued will be repealed and replaced from C Day by a new provision authorising the issue of Australian notes in any of the denominations of $1, $2, $5, SIO, $20 or $50 or in such other denominations as the Treasurer determines.

As the Treasurer announced in August 1964, it is proposed initially to issue decimal currency notes in denominations of $1, $2,

SIO and $20, the exact equivalents of lbs denominations of notes at present on issue. However, as I have indicated, the relevant new provision will leave scope for the issue qf notes in additional denominations. In particular, consideration will be given to the issue of a $5 note should that become desirable. lt is possible that there will be a continuing need to issue notes in existing denominations during the transition period. Accordingly clause 7 of the Bill will provide the necessary authority for their continued issue from C Day until a date to be fixed by proclamation. The present Act provides that Australian notes are. a legal tender throughout Australia. This provision will continue to apply to notes in existing denominations issued . prior to C Day and, by virtue of a proposed amendment in the Bill to the definition’ of “Australian note”, will apply to. the new decimal - currency notes. The Bill also provides that notes in existing denominations issued during the transition period will be legal tender. Printing of the new design decimal notes commenced earlier this year and the production schedule of the Reserve Bank’s Note Printing Branch provides for adequate supplies of all denominations to be available to meet requirements from C Day. For security reasons, full details of the new notes, including official reproductions, will not be issued until shortly before C Day. Unless, notes of existing denominations are specially requested, banks will confine issues from C Day to the new decimal notes, and it is expected that the majority of the notes at present in circulation will be replaced by the new decimal notes in a relatively short period. I commend the Bill to honorable senators.

Debate (on motion by Senator McKenna) adjourned.

page 1766

STATES GRANTS BILL 1965

In Committee.

Consideration resumed from 23rd November (vide page 1743).

Clause 5 (Grants to States).

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– During the course of the debate, I understand, Senator Wright asked for the reasons why Victoria was given an extra £600,000 at the June

Premier’s Conference. At the conference, the Premier of Victoria alleged that Victoria’s share of the financial assistance grant was inadequate. He claimed that by comparison with New South Wales Victoria had a preponderence of disabilities on the expenditure side and lacked the mineral resources from which New South Wales was drawing substantial royalties. Among other things, Mr. Bolte pointed out that when the 1959 agreement was made the difference between the per capita grant to his State and that to New South Wales was 9s. 7d.. Because of the increase in the grants since that date, the gap had risen to around 12s. a head in 1964-65.

Mr. Bolte said that he could not agree to an arrangement under which Victoria’ received less than the per capita amount paid to’ New South Wales. When all’ otherPremiers had agreed on a new five years arrangement, Mr. Bolte continued to dissent. The Prime Minister . (Sir Robert Menzies) conferred with’ -him, and Mr.* Bolte then agreed to accept- the new arrange-‘ ment if £600,000 Were added to the grant which Victoria would receive for 1965-66 tinder the proposed new formula. The effect of this addition was to reduce to about the 1959-60 level the differential between Victoria’s grant per head and that of New South Wales.

Senator O’BYRNE:
Tasmania

.- Clause 5(1.) provides-

There is payable to each State, .during the year that commenced on . the first day of July, One thousand nine hundred and sixty-five, and during each year .subsequent to that year, for the purpose of financial assistance, an amount equal to the sum of-

an amount that bears the same proportion to the amount of the grant under this section payable to that State during the year preceding the year concerned as the population of that State on the thirty-first day of December in the year concerned bears to the population of that State on the thirty-first day of December in the year preceding the year concerned. . . .

On this population basis, it is evident from the statistics that the ratio for the bigger States, New South Wales and Victoria, is greater than that for Tasmania, and as time goes on this difference will continue to grow. When reasons for the grants were given in the verbatim reports, these matters could be made known to the Parliament and to the public at large. Now the stage has been reached at which the details of these agreements are more or less private and confidential. We do not have them available for scrutiny and debate. After all, the purpose of this debate is to ensure that the reasons for the assistance to the States and the administration of the Commonwealth Grants Commission are to the satisfaction of the Parliament.

I should like to direct attention to a disability that the State of Tasmania will have to face this year and next year, and possibly its effect will be cumulative in the future. Part of the Tasmanian Government’s policy is to raise revenue by taxes on betting. At present there is a system under which starting price bookmakers are licensed to operate in various districts. People who wish to bet on horse or dog races visit their local bookmaker and place their bets, and their transactions are concluded either favorably or unfavorably. On every betting ticket a tax is paid to the State Government. This is part of Government policy. From what 1 can gather, the Commonwealth Grants Commission is trying to persuade the State Government to introduce a totalisator agency board system, because the Commission considers that that system, having been successful in other States, would produce more revenue for Tasmania, and as a consequence adjustments could be made in the annual assistance grants to the State. As it happens, in other States, before the T.A.B. was introduced, there was a great deal of illegal starting price bookmaking, in hotel bars and on street corners, involving all types of people. Seeing that evil, in 1934 the then Premier of Tasmania, Mr. A. G. Ogilvie, introduced the present system to provide the public with a legal form of betting, and this system has produced revenue to a degree that has been satisfactory, I understand, to the State Government.

I have attended conferences in Tasmania at which the policy of the State Government in relation to this form of tax gathering has been re-endorsed. Legal starting price bookmakers operate in various towns and districts of the island State, and with them people place their bets and from them they can collect on winning bets within a few minutes of official notification of the race result. That is a custom that has grown up and the people seem to like it. I believe that the pressure that appears to be building up, in an attempt by the Grants Commission to persuade the State Government to alter its policy, is getting very close to undue influence. Perhaps it might be referred to as being the national interest.

Senator Morris:

– It is not really changing a policy; it is changing a method, is it not?

Senator O’BYRNE:

– On page 73 of its report, the Commission had this to say -

It was submitted that the introduction of the offcourse totalisator in Victoria in March 1961 had produced an unfavourable adjustment for racing taxation for Tasmania in the year of review, 1961-62. This resulted from the Commission’s procedure of comparing the taxation of off-course betting in Tasmania, where off-course bookmakers operate, with the effort made for that year by the standard State of Victoria where the off-course totalisator operated. This procedure would result in a substantial adverse adjustment for Tasmania when the calculations included the operations of the off-course totalisator in New South Wales, which came into operation during 1964-65. The State-

That is, Tasmania - would be faced with an unfavourable adjustment of over £1.00,000 in 1964-65 and over £200,000 in 1965-66, if the Commission adhered to its present methods of calculating the adjustments for racing taxation.

The point I make is that while the bargaining is going oh between the Prime Minister and the Treasurer, and the Premiers, over the. grants to be made. to the States and the formula which will operate - the formula is mentioned in the clause with which we are now dealing - not only the Parliament but also the Senate in particular as the States House and the mouthpiece of the States at the Federal level, should have background information on the extent to which the policies of the State Governments are influenced by the pressure applied under this formula.

Senator HENTY:
Minister for Civil Aviation · Tasmania · LP

– I should like to answer Senator O’Byrne’s question while it is fresh in our minds. I think it shows a complete lack of understanding of the functions of the Commonwealth Grants Commission. It has nothing to do with the legislation now before us. If I remember rightly, the Commission was set up by the Lyons Government because taxation revenue and consequently living standards were lower in certain States than they were in the more populous States of Victoria and New South Wales. The idea of setting up the Grants Commission was born and it was decided that the level of prosperity should be measured by conditions in what were called the standard States - Victoria and New South Wales. State revenues are averaged with a view to making grants to claimant States, to bring them to the level of the standard States. Western Australia and Tasmania are the only remaining claimant States. lt is not correct for the honorable senator to say that the Commission tells the Tasmanian Government that it should do this or that or that it should not do this or that. The Commission merely points out that the standard States are raising additional revenue by the betting operation known as the Totalisator Agency Board. If Tasmania wants its grants to be comparable to those made to the States in which revenue is increased by this form of betting, it should also adopt the system. But Tasmania is not compelled to do so. On the other hand, if it does not do so it cannot expect to be brought up to the level of the standard States. This matter is different from that raised by the honorable senator. There is no suggestion that Tasmania must introduce this system of betting.

Senator O’Byrne:

– The way in which I raised the matter may not have been correct but the Minister has given me the answer that I wanted.

Senator HENTY:

– If Tasmania, or any other State for that matter, is wise enough it will endeavour to raise, in one way or another, sufficient revenue so that it will not be-

Senator Morris:

– Disadvantaged?

Senator HENTY:

– Disadvantaged. That is the word I was seeking. I thank my colleague, a former Deputy Premier of Queensland. I think I have cleared up Senator O’Byrne’s question.

Senator GAIR:
Leader of the Australian Democratic Labour Party · Queensland

– I had hoped to direct some remarks to this measure during the second reading debate. However, because of a magical list that operates in this place and which evidently supersedes Standing Order No. 403 relating to the rules of debate, I did not get the opportunity to do so. In any case, I do not propose to make a second reading speech now. If clause 5 of the Bill deals with the financial relationships between the Commonwealth and the States and the grants that are made to the States, I should think it gives me a pretty wide scope because that is in fact the gist of the Bill. It provides for the payment of grants to the States.

Senator McKenna, in his remarks during the second reading debate, made a brief but very interesting survey of the financial relationships that existed between the Commonwealth and the States when the system of uniform taxation was introduced. I was pleased to hear him admit that this system was forced on the States during a period of war emergency. Let me say at the outset that on principle I am opposed to uniform taxation; but I have always claimed to be a realist and I am realistic enough to appreciate that to disturb the system now after it has been in operation for so many years would be almost impossible. However, I repeat that I am opposed to it in principle and always have been because I believe that nothing did more to destroy the status of sovereign States than did uniform taxation. Senator Willesee described it, in the course of his remarks, as a form of unification. That is just what it is. It is a unification of the financial arrangements of the Commonwealth.

There is an old saying that finance is government and government is finance. That is equally as true today as ever it was. I contend that a government without taxing powers and the right to raise its own revenues is not a government at all. Too frequently, in dealing with their financial relations with the Commonwealth, the States have been placed in the position of mendicants begging from the Commonwealth the return of some of the revenues it had collected from these States. The Commonwealth would give the idea that its tax collections come from people and from sources independent and altogether different from the people of the States. In fact, any grant made to the States is really a return to them of a measure of taxation collected from their own people. So it is not so magnanimous of the Commonwealth to make these grants. As I said by way of interjection when the Leader of the Opposition (Senator McKenna) was speaking, I would much prefer the term “reimbursement”. The term “grant” is often interpreted as meaning a gift whereas in fact they are not gifts. These so called grants are a return to the States of a percentage of the total taxation revenue collected by the Commonwealth on its own behalf and on behalf of the States.

With increasing responsibilities of the States - and they have increased - of course it was necessary for the Commonwealth Government to readjust the original formula. The formula might have been of advantage to Queensland in some small respect and a disadvantage to States like Victoria because one of the matters for consideration under the old formula was the level of tax that was being paid by the people of the States at the time uniform taxation was introduced. Victoria, having been in the hands of an anti-Labour Government for many years, had low taxation and, of necessity, the poorest standard of social services in Australia. By contrast, Queensland had high taxation from which it provided social services better than most States and at least as good as those in New South Wales.

That factor militated against Victoria without question. It was always a bone of contention at the Premiers’ Conferences which I had the pleasure of attending for eight or nine years and led to demands for an adjustment of the formula. In 1955 or 1956, 1 advocated very strongly a readjustment of the formula. I am prepared to concede that the formula of 1959 is more favourable and I believe it will function with a greater measure of justice to the States than did the old formula towards the end of its life because it was outdated. It had been in operation for many years. Costs and charges, including the cost of maintaining services, had greatly increased. There was a set figure for distribution and the rest depended on the mood of the Commonwealth Government. It made a supplementary grant which was always represented as a gift from a magnanimous Government. Of course, it never conceded that it was collecting more in taxation from the people of the States, but the truth is that taxation had increased tremendously, particularly excise revenue. In the year I was advocating a readjustment of the formula, the Commonwealth Government collected more in excise than it distributed to all the States put together.

I was interested in the factual survey made by the Leader of the Opposition (Senator McKenna) and in the fact that he was prepared to concede thai “ tax reimbursement “ is a better term than “financial grants”. As reference throughout the years had been made to financial grants, they were accepted as such, but too many people believe - and the Commonwealth lets them believe - that the Commonwealth is being Santa Claus to the States. That is not correct. The States are merely getting back some of their own. If they did not have that source of revenue, on1 what else could they depend? I used to point out to the Prime Minister that under the Constitution, the States had the power and the right to tax incomes long before the Commonwealth. Of course, he would concede that very readily and he would say: “ Go ahead and tax “. Of course, everyone knew that a State Government could not duplicate the taxation on people in any one State. The field of taxation had been taken over by the Commonwealth. It is true that the Commonwealth Government relinquished the amusement tax and the Prime Minister would say: “ Go into the field of amusement tax”. But there was an odium attached to the amusement tax. No political party with any sense would want to touch it after it had been dropped by the Commonwealth.

The attitude of the Commonwealth might appear to be smart and bright, but that is not the way to treat a State government that has been faced with increased responsibilities in the maintenance of hospitals, schools and many other institutions that come within the category of public services. To quote figures has very little meaning when one has regard to the great change that has taken place in money values over the years. To say that a State got so much in one year and that it gets ten times as much today does not mean very much in actual fact because the purchasing power of the £1 has diminished until it is down to 5s. or 6s.

Senator Lillico said he felt that uniform taxation had led to an attitude of irresponsibility among the States. He said the States were inclined to be more wasteful because they did not have the responsibility of collecting the money they received from the Commonwealth Government. I have no evidence that they are wasteful, but I have evidence that during the years I attended conferences of Premiers some States were not prepared to accept their own responsibilities with a view to balancing their budgets and facing up to the necessity of keeping their finances in an orderly fashion. I stand here with some measure of pride as a former Treasurer and Premier of a State and I can say that in a period of 18 years, there were only 2 years when the Queensland Government showed a deficit. One was in 195S-S6 owing to a protracted strike in the pastoral industry when wool was not being carried by rail and was carted by road. The State’s railway revenue fell by £1.5 million or thereabouts. That explained the small deficit in Queensland’s budgetary position that year.

It cannot be said of Queensland that we were not prepared to accept our responsibilities. If we felt it necessary to increase freights and fares, we did so and accepted the resultant odium; but I know that other States, particularly the claimant States that could depend on a handout from the Commonwealth Grants Commission, avoided the unpopularity associated with increases of freights and fares merely for political reasons. I also know that the Commonwealth Government, in many cases, was responsible for embarrassing the State Governments by its actions in pushing up the wages and salaries of the tall poppies in the Public Service and in the judiciary which meant that the States were faced with the responsibility of making similar increases to counterparts in their own States.

The TEMPORARY CHAIRMAN (Senator Wood:
QUEENSLAND

– Order! The honorable senator’s time has expired. Before Senator Morris proceeds I would like to inform Senator Gair that last night I called him but he had left the chamber.

Senator MORRIS:
Queensland

.- Whilst I do not entirely subscribe to everything that Senator Gair said, I do recognise the fact that he has been a very experienced Premier and Treasurer of the State of Queensland. We have differed on many occasions but we have agreed on many occasions. I will pay him this compliment and say that he has been always a very loyal Queenslander and has fought for Queensland to the best of his ability - and that has been pretty solid. I go all the way with him and say that for many years Queensland did not receive a fair share, I believe, of the broad general finance which was available after the introduction of uniform taxation. However, it was not my purpose to rise and to make any lengthy comments. I felt that the Committee should be aware of the comments that Senator Gair wished to make and rose to give him an opportunity of continuing his comments after- 1 sat down. That was the real purpose of my rising.

Senator GAIR:
Queensland

.- I am very grateful to you, Mr. Temporary Chairman, and to Senator Morris for the courtesy extended to me to permit me to continue with what I have to say on this very important matter. Let me say with all the emphasis at my disposal that it is not good for the Commonwealth Government to continue to adopt the attitude of being the dominant factor in this Federation. We know that the Commonwealth Government is. the dominant factor but there is no necessity for it to convey the impression that it is merely shovelling into the Treasuries of the various States money to replace funds that have been wastefully expended by the States when, in fact, that is not the case.

The Commonwealth Government has to recognise that the States have responsibilities and there is no escape from them. The States are faced with increased populations, services and needs, because what was good enough 25 years ago is not good enough today. All of us are expected to advance with the times and to provide all the modern methods and means and services required by the people. The Commonwealth and the States are a partnership and should function and operate as such. It is true that we have our respective fields. It is true that the field of the Commonwealth has widened considerably in post-war years and that the Commonwealth has assumed a great deal more responsibility, financially and otherwise, than it formerly had. I believe that is good. It has brought about uniformity in many cases. Previously, I mentioned the differences and discrepancies that existed in the various States in the matter of social services. Now that social services are under the control of the Commonwealth Government they are uniform throughout Australia.

States differ according to their geographical position, their population, their industries and their potentials. Reference was made in the course of the debate last night to the work of the previous Government of South Australia. I would not take away any of the credit due to the former Premier of South Australia, Sir Thomas Playford, for his personal effort and enthusiasm for his State. But I do not overlook the fact that South Australia was very propitiously placed geographically. It is a small State with about 65 per cent, or 67 per cent, of its people domiciled in the capital. It has ‘ a good port. It is close to Melbourne and it enjoyed a ‘good deal of the overflow of industry from Victoria, lt has not been handicapped by the distribution of population and great distances from which Queensland suffers. Great distances are a tremendous disadvantage for a State like Queensland. If the gentleman who was in charge of South Australia had been in charge of a State like Queensland, would he have enjoyed the measure of success that he has claimed? Do not forget, Mr. Temporary Chairman, that a lot of this build-up in South Australia took place during the war years when Queensland was a garrison State, when the civil population had little or nothing and when it was overrun, fortunately, by American and Australian troops who had to be fed, transported and maintained in many ways. I recollect going to Melbourne during those years. I could count on my fingers and toes the number of uniformed personnel whom I saw in the streets and restaurants or anywhere else. That shows the difference between the various States during those war years.

I found in the years that I was attending Premiers’ Conferences that the State which was provident, which was anxious to balance its budget and which was reporting surpluses, was not encouraged very much to do so; nor was it rewarded in any way for what it had achieved. During the war years, about which I have had something to say, the governments of which I was a member showed a bit of vision. They looked ahead. They said: “This is a time of buoyant revenues. This is a time when we are receiving more than usual incomes from the Commonwealth and other people such as the American Government for the provision of services required because of the war.”

Instead of sinking that income into consolidated revenue as did most of the other States that received additional income, the Government with which I was associated created trust funds, including a trust fund for the rehabilitation of our railways which had done an excellent job during the war years and were run down. We were able to draw on those trust funds in the postwar years and carry out all this work without any call on the Commonwealth. But at meetings of the Australian Loan Council and at Premiers’ “Conferences immediately we’ made a strong case’ for additional funds the Commonwealth Treasurer and the Prime Minister of the day would say: “ You are not a poor State. What about those trust funds that ‘ you have?”.’ We “ carried a penalty for years because we’ showed a bit of vision and were provident. But other States which had dissipated their revenue’ in’ one way or another were helped over the’ stile. That is not the way in which to maintain financial . arrangements between the Commonwealth and the States.

It will be recalled that during my speech on the Budget I spoke about the promises that the Commonwealth made to the Queensland Government in relation to the Burdekin scheme, the Koombaloomba hydro-electric scheme, the Tinaroo Dam, and the irrigation schemes at Dimbulah and Walsh River, which have been responsible for building up towns like Mareeba and Dimbulah and increasing the tobacco production of this country. Those schemes were carried out without a penny of Commonwealth money even though, after having approved the schemes, the responsible Commonwealth Minister promised very faithfully to assist. I mention those facts to show that we were able to supplement an inadequate loan allocation with funds that we had built up ourselves. As far as I know, none of the other States had the vision to do that. We always felt that the Commonwealth owed us a great deal more than we owed it.

As I said at the outset, 1 am glad that Senator McKenna made a brief historical survey of the financial arrangements between the Commonwealth and the States. 1 was glad to have his admission that the present arrangement was forced upon the States. 1 do not think any State was prepared to forego its sovereign status, but the status of the States has been affected by the introduction of the uniform taxation system. I repeat that I am realistic enough to know that, as the system has been in operation for a long time, it cannot now be disturbed. But the Commonwealth should not lose sight of the fact that the States still have responsibilities. Indeed, their responsibilities are increasing just as are those of the Commonwealth. However, their field of taxation is limited; it is almost non-existent. The present Government of Queensland has found it necessary to increase the stamp duty on cheques from 3d. to 6d.

Senator Morris:

– Is that not fairly uniform throughout Australia?

Senator GAIR:

– That is happening because the Queensland Government finds it necessary to get money from somewhere to make ends meet. I am not criticising or blaming the State Government; I am merely pointing out that the field of taxation that is open to the States is very limited. It includes probate and succession duties, stamp duty, land tax to a limited degree, and a few other forms of taxation that do not return the States very much.

Senator Ormonde:

– What percentage of the States’ income would they represent?

Senator GAIR:

– I cannot say offhand, but in the aggregate it is very little.

Senator Wright:

– Is the honorable senator referring to what the States get by way of tax reimbursements?

Senator GAIR:

– No. I am referring to the percentage that the States raise themselves. What the States receive from the Commonwealth is set out in the parliamentary documents. I believe that the States would do better under the 1959 formula. I am glad to note that Queensland is to receive an additional sum of £1 million. I imagine that Mr. Bolte put forward a very good reason why Victoria should receive an extra amount of £600,000. I am prepared to say that for years Victoria was handicapped because of the taxation provision that was taken into account under the old formula. The per capita tax that was paid at the time of the introduction of the uniform taxation system militated against Victoria because Victoria was a low tax State and Queensland was a high tax State. I make no apology for that.

The TEMPORARY CHAIRMAN:

Order! The honorable senator’s time has expired.

Progress reported.

page 1772

TOBACCO MARKETING BILL 1965

Second Reading

Debate resumed from 23rd November (vide page 1703), on motion by Senator Anderson -

That the Bill be now read a secondtime.

Senator BENN:
Queensland

.- The people of all countries are engaged in a constant struggle for economic security. The three Bills relating to the tobacco industry that are before the Senate are designed to provide a measure of security for the tobacco growers of the Commonwealth. One of the bills provides for a stabilisation scheme to be established. The other two bills are machinery measures which fix the charges that will be levied upon tobacco delivered for sale or sold at auction. The question to which the Senate must address itself is whether or not the tobacco growers should have a stabilisation scheme. To answer that question it is necessary to examine some other primary industries. By governmental action, a measure of security has been afforded to primary producers in several industries. For instance, when the wheat growers sow the seed, they know fairly well what they will receive for each bushel of wheat produced. They are almost able to assess their income as the crop comes up and matures. But for the Australian tobacco growers, a different situation exists.

The tobacco industry has suffered tribulations over the years. It cannot be termed a new industry because, to my knowledge, it has operated in parts of Queensland for very many years. Like other industries, it has gone ahead. In 1956 Australian tobacco growers produced only 6 million lb. of tobacco, but by 1963-64 the quantity had increased to 33 million lb. That rapid increase in production brought problems with it. I shall mention a few of them. I shall address myself to the question of whether tobacco growers in the Commonwealth are entitled to a stabilisation scheme. An examination of the facts will take us a long way towards finding a satisfactory reply.

In 1961, when a fair season was enjoyed by the tobacco growers, auctions of tobacco leaf were held in north Queensland. In that year there was great distress in the industry. Although production had increased to 29 million lb. in that year, the tobacco could not be taken from the growers by the manufacturers. Sales were unsatisfactory and some tobacco growers were forced to leave their farms. In 1963 sales were held again in Queensland. Although 6,115 tons of tobacco leaf were offered for sale, 3i per cent, of that amount was unsold. The farmers - honest and willing workers - had pro.duced the leaf but it could not all be sold. The result was that the tobacco growers carted the unsold leaf back from the auction market to their farms. I cannot imagine anything more disheartening for a primary producer than to spend a whole season producing tobacco leaf, curing it in the sun and in kilns and taking great care during the growing period, only to find that he cannot market all the leaf.

Wage and salary earners who are not paid their correct wages and salaries can go to law and have their cases examined and a reason determined as to why they were not paid. The legal processes are open to them to recover what is owing. The tobacco growers work incessantly to produce the tobacco leaf, take it to the auction and not all of it is sold. But there is no recovery for the growers in respect of tobacco leaf unsold at auction. Tobacco leaf that is rejected by the manufacturers cannot be used in other industries. It is not a consumable commodity, like wheat. Only last week a newspaper reported that a quantity of tobacco leaf was destroyed in Brisbane. I have read of many occasions on which tobacco leaf has been destroyed on the Brisbane dump. In 1964 the situation was not good for the tobacco growers. Although I am speaking of conditions in Queensland to illustrate the experiences of tobacco growers, the same is true of conditions in New South Wales and Victoria. What I am saying in respect of the Queensland tobacco growers applies equally to growers in Victoria and New South Wales. In 1964, 7,406 tons of tobacco leaf was produced and 654 tons remained unsold at the end of the season. A quantity of 654 tons of tobacco leaf did not attract a bid in 1964. Today we have before us legislation offering a form of stabilisation for the tobacco industry.

The average price realised for Queensland tobacco leaf in 1964 was 129.6d. per lb. The average price during the previous two years was 140d. per lb. In addition to the fact that a quantity remained unsold in 1964, a lower price was received for the tobacco that was sold. To make matters worse, in 1964 production increased by approximately 1,300 tons. That increase in production upset the arrangement that exists in respect of tariff charges on imported tobacco blended with the Australian leaf in the production of cigarettes and cut tobacco. I think it is common knowledge among honorable senators that there operates today and has operated for a number of years an arrangement between the Commonwealth Government and the cigarette and tobacco manufacturers that should the manufacturers use a certain percentage of Australian grown leaf, they will pay a concessional rate of duty on imported tobacco.

The increased production of 1,300 tons in 1964 created a problem for the tobacco growers in all States. Excess production of tobacco places the cigarette and tobacco manufacturers in a very happy position, because it is sold by auction. I do not say that the manufacturers engage in any collusion on the market floor; but they can select the very best leaf and offer any price which might reasonably be accepted. This is an enviable position in which to be in respect of a primary product. The policy of the Australian Labour Party is to grant everyone engaged in a worth while industry in the Commonwealth a measure of economic security. So the question whether the tobacco growers in Australia should have a stabilisation scheme must be answered in the affirmative. They are justly entitled to such a scheme.

Tobacco is grown in southern Queensland as well as in northern Queensland. It is grown in northern New South Wales also. So tobacco sales are conducted in Brisbane every year. The sales in 1963-64 produced a very sad state of affairs. The percentage of unsold leaf was unprecedented. Many of the growers thought that it was time they left their properties, lt is not for me to make an examination of the whole of the industry in order to see whether the tobacco manufacturers should be compelled by some law to buy and use Australian grown tobacco. I have my own opinion on this matter. 1 have said before that the flavour of smoke is only a matter of the palate. The manufacturers have no way of determining what is a good tobacco or the palatability of tobacco. In a moment 1 will tell the Senate about an experiment I conducted last weekend. I engaged in a little deception. I enjoyed the humour of it.

But first, I point out that tobacco is not grown easily. It cannot be grown as easily as wheat and some other crops. It requires certain soils. The seed bed requires attention. When the plants are planted out, they require constant attention by the grower. The growing period is not long. When the leaf is harvested the grower has to sun dry or kiln dry his tobacco before it can be taken to the market. Skill is required not only to grow tobacco but also to cure it for marketing. The growers have to be experienced in the types of tobacco. So I say that the body of experienced tobacco growers that we have in Australia at the present time is an asset to the nation.

One feature that we have to keep in mind is that only one crop a year can be grown. So, if a grower does not receive a reasonable income for a crop he has to wait another 12 months before he receives any further income. His position is not like that of a dairy farmer, who may lose some of his cows in one month and then, by replacing them, pick up in the next month because he receives monthly cheques from a factory. The tobacco grower’s financial position is almost hopeless if he cannot grow a good crop and have his leaf sold at a reasonable price. Now I will tell the Senate what I did last weekend.

Senator Mulvihill:

– This is the deception?

Senator BENN:

– Yes, this is the deception in which I engaged. Last week each honorable senator received a letter and a packet of cigarettes from W. D. and H. O. Wills (Aust.) Ltd. of Sydney. There was no printing on either the packet or the cigarettes. I bought a packet of Rothmans cigarettes and put the unbranded cigarettes in the Rothmans packet.

I met a friend of mine who is a fitter and turner. I said to him: “ Would you like to sample a new cigarette?” After he had been smoking one of these cigarettes for a while he said: “ This is a good smoke. It is milder. It is a better . cigarette.” When he had finished it, I said: “ What did you think of it?” He said: “ It will do me. There will be a big sale for those cigarettes.” I also offered one of these cigarettes to each of three clerks. They enjoyed it. They said that it was really a good cigarette. Then I met an engineer and had a chat with him. I thought he might have finer tastes than some of the other fellows; but he enjoyed the new cigarette. I gave away about 13 of the cigarettes that I received, just as an experiment. I obtained an honest opinion from each, smoker. The opinion was to the effect that the cigarette was one of the best that he had enjoyed for. a long time. That shows that the manufacturers cannot gauge the palatability of a cigarette. They do not know whether poor class leaf will produce good cigarettes to smoke, or whether top grade leaf will produce a poor cigarette to smoke. I leave it at that. I enjoyed the experience. I did not wish to do any harm to Wills or Rothmans.

Now I must deal with what is proposed in the legislation that is before us. Under it the Commonwealth Government and the State Governments concerned will shoulder the responsibility for stabilisation of the tobacco growing industry. There will be an annual Australian marketing quota of 26 million lb. Then there will be a grade and price schedule to cover the sale of the marketing quota and designed to yield an average minimum price of 125d. per lb. of tobacco at the auction sales. Also there will be a Commonwealth arbitrator to settle disputes.

A board, which will be called the Australian Tobacco Board, will administer this stabilisation scheme. It will control and regulate exports of tobacco leaf. I am not clear on this point. I cannot understand why Australia is exporting tobacco leaf. Perhaps it is thought that at some time in the future - in the next decade or in 20 or 30 years’ time - we will have surplus leaf which we will be able to export. The Board will negotiate also with manufacturers, growers and appropriate government bodies on matters relating to tobacco leaf. I have no objection to that. I have had experience of boards. In Queensland we have primary products marketing boards which have been functioning for 30 or 40 years.

Another function of the Board will be to allocate the quantity of tobacco leaf between the producing States according to a special formula acceptable to the Australian Agricultural Council. I know that the Government representatives on the Board, will be men who are good administrators. They will be able to ascertain the “manufacturers’ requirements and the production capacity of the growers. 1 think that they, will be able to do their work very efficiently after the Board has functioned for a while. Another. function of the Board will bc to determine .the basis of allocation. I understand that the basis of allocation will have to come up. for consideration at some time or other. It is to be related to the average quantity of leaf sold from each farm over the last five years. Personally, I have no objection to this formula because Queensland will receive a quota of a little over 14 million lb., Victoria will receive approximately nine million lb. and New South Wales will receive the balance. This is about the only time, perhaps, in the history of Australia that New South Wales has received a little handful. The allocation for New South Wales is scarcely worth mentioning. It seems that Queensland and Victoria said: “ We will let the tail go with the hide “, and they threw in two million lb. or three million lb. for New South Wales.

The Board will fix the quotas, and I know that the quotas which will be fixed will affect some of the growers adversely. That will be all right as far as the Board is concerned. It only fixes the quotas for the States. But it will limit the acreage of crop to be grown and the quantity of tobacco to be produced. Some trouble will arise when the States turn to allocating quotas to the growers. I have examined this proposal, and I think that it is essential for the Board to keep a register. Before the Board starts to function, it should arrange with the States for a register to be kept of the growers engaged in the tobacco industry this year. Next year the Board could ascertain the difference between the amount of tobacco leaf produced this year and the amount that they will be allocated next year.

I have mentioned this fact because some tobacco growers will suffer a very severe reduction in the quantity of tobacco they will be entitled to produce. Perhaps at some time in the future the industry will expand. If that is so, the Board will be required to consult with the States regarding the expansion. At that stage the States will be able to say to those growers who will have to yield some of their production -this year or next year in the interests of the quota system: “ We will grant you an increased quota “. I have seen a similar situation arise in the sugar industry. In that industry they deal in assignments. I am sorry that Senator Sherrington is not in the chamber because he could explain the whole system very clearly. In the sugar industry they refer to an assignment, for the land. A person could go to Queensland tomorrow and produce 1,000 tons of cane next year, but he would not be able to sell one ton of cane to a mill if he did not have an assignment for the land on which the cane was grown.

The Australian Tobacco Board will have to create a condition of order in the tobacco industry so that something can be done for the growers when the tobacco leaf is not sold. Because of loss of income, something will have to be done to protect the financial interests of the growers. One can appreciate the fact that if a grower is to get a quota this year which is less than the amount of leaf he produced last year and if other growers in the district are to have a similar experience, the land on which the tobacco leaf is grow i will increase in value. It must increase in value because the land will be allotted the quota and not the individual farmer. I believe that the scheme is not perfect, by any means, but I am confident, as I stand here, that after the Board has functioned for a year or two, it will see daylight and will be able to do much good for the tobacco growers.

Another function of the Board will be to determine a suitable grade and price schedule. Perhaps a grade and price schedule is overdue. Of course, when the Board determines the schedule it will be publicised in all the tobacco growing districts. Perhaps at last the growers will know the grade of their leaf and what it will attract when it is offered for sale in the auction room. The Board is to determine a sales date schedule also. That is an excellent proposal. If tobacco growers know when auctions are to be held, they will be able to give up the work in hand, cart the leaf to the auction mart and store it there before the sale commences. The final function of the Board is to negotiate with the Commonwealth Government as necessary on all matters related to tobacco marketing. Of course, the Board will have many other functions to perform but, because my time is getting on, I cannot deal with all of them.

The Board will be comprised of four grower representatives, four manufacturer representatives, one representative of each of the three State Governments concerned, and one representative of the Commonwealth, who will be chairman. That makes a total of 1 2 representatives. At the moment 1 do not know why there should be four manufacturer representatives on the Board. At the Committee stage of this Bill I propose to move an amendment in the hope that we will have the numbers to pass it. The tobacco industry can be made into a worthwhile industry. I said a little while ago that prewar 5.1 million lb. of tobacco leaf was produced in Australia, and that 33.1 million lb. was produced in 1963-64. Queensland’s production, which I know best, was 6.7 million lb. in 1958-59 and 17.2 million lb. in 1963-64. There are 15,000 acres given over to the growing of tobacco in Queensland. Good tobacco growing land is available to expand the industry considerably. Also, the State Government has the money to provide small irrigation schemes in the tobacco growing areas of Queensland. Some years ago I recall seeing irrigated tobacco leaf growing on the Walsh and Barron Rivers. There was a huge difference in the leaf that was grown under normal conditions and the leaf that was grown under irrigation. Then the Tinaroo Dam was constructed and much of the Mareeba area was given over to the production of tobacco leaf. That increased considerably the incomes of the growers in the area.

We have experienced tobacco growers in New South Wales, Victoria and Queensland. As I said before they are an asset to the nation. I am going over these sugges tions, because I think they are worthwhile. The present growers should be registered. Growers next year and in future years should be registered also. If those growers have to sacrifice their output because of the introduction of the quota system, some compensation should be afforded to them. Perhaps they could have their quotas increased.

If this industry can be expanded to the point at which we can produce 90 per cent, of our requirements instead of having to import leaf grown in other- countries as at present, it will be much better for the Commonwealth. I just cannot understand why we are so weak with the manufacturing companies that we allow them to import so much leaf and blend it with Australian leaf. They have no pecuniary interest in the tobacco growing industries in other countries. This is Australian. No preference is given to any sugar brought here from overseas. We can produce in Australia all of the sugar we require. We can produce all of the wheat we consume, and we can produce all of the dairy products we need. We should be able to meet the whole of the market requirements with tobacco that is grown in the Commonwealth.

Senator MORRIS:
Queensland

– It is very pleasant to hear from Senator Benn tb at the Opposition is in favour of this legislation. I was rather curious to hear the development of a thought expressed in his last few sentences, and rather sorry that he did not proceed, because I was not quite sure of the point he was trying to make. He said he could not understand why we were so weak with the tobacco manufacturers. I would say that he could make that comment only from a lack of knowledge of the development of the tobacco industry over the past 15 years. A great deal of tobacco is grown in Queensland and from time to time I have had considerable interest in watching the development of the industry. I recall the early stages, when a very, very small percentage of Australian leaf was included in cigarettes and tobacco manufactured in Australia. I think the percentage then was about 7 or 8 per cent. That was soon after this Government came to power. Since then there has been a most interesting development of this industry in Australia and specifically in Queensland. From less than 10 per cent., the percentage of Australian leaf included in tobacco manufactured in Australia has steadily increased to very nearly 50 per cent. This has not come all of a sudden, of course. Every year the Government has increased the percentage of Australian leaf which must .be included in Australian tobacco to enable manufacturers to benefit from the rebate on import charges on tobacco. I believe it can be said with complete truth that if any industry has been progressively helped over the whole of the 15 years of office of this Government, it is the tobacco industry.

Sitting suspended from 5.45 to 8 p.m.

Senator MORRIS:

– Before the suspension of the sitting 1 was commenting on the splendid work the Government has done in encouraging the tobacco industry in Australia. I have had the opportunity to check some of the figures I cited earlier and I find that I was moderate in my claim. In 1955 the percentage of Australian leaf which, of necessity, was included by the Australian manufacturers was Ti per cent. Now it is 50 per cent. By including this quantity of Australian leaf in the manufacturing process they obtain the special rebate. That is a very important aspect. A great deal has been done in that regard.

In the period of office of this Government the tobacco industry has increased in value from about £1 million a year to between £13 million and £15 million at the present time. As a Queenslander, I recognise that approximately one-half of this amount is earned in Queensland. Tobacco growing is a very progressive and lucrative business provided the leaf can be sold. The legislation with which we are now dealing is splendid because it will introduce into the primary side of the tobacco industry the characteristics which have made the sugar industry so lucrative over the years. Although it is not perhaps very lucrative at the present time, these difficulties will pass and the industry, I believe, will be profitable very soon again. The present rationalisation plan, if I may use that term, is another example of the forward thinking of a good progressive government. I believe that those engaged in the industry recognise that.

As we look at an industry which has grown in a short time to such large proportions in Australia, and especially in

Queensland, we cannot help feeling that a tragedy is associated with it. The tragedy is that this industry presents one of the most curious anomalies one would find even in the realms of government administration. On the one hand, there is encouragement to an industry which is becoming increasingly lucrative and, on the other hand, there are sections of the administration doing everything they can, and wisely so, to reduce the use of tobacco because of its now known association with lung cancer. Only today I read in the Melbourne “ Sun “ an article on research into lung cancer. Dr. Holman, a former President of the Tasmanian Branch of the British Medical Association and the Australasian College of Radiologists, and a member of the National Radiation Advisory Committee - obviously an authority on the association between tobacco and lung cancer - is reported in this way -

All the efforts of years of cancer research had been offset by the increase in lung cancer, Dr. William Prout Holman said yesterday . . . Lung cancer from smoking was the despair of humanity, he said.

I should like the following statement by Dr. Holman to be well noted by honorable senators. He said -

We have an opportunity to cut the lung cancer death rate - I would estimate after 20 years it would be one-sixth of the present rate - yet all you hear are words, words, words!

He then goes on to say what he would do in relation to advertising but I shall return to that later because it is relevant to something else I want to say. At this point let me repeat that I believe there is a wonderful opportunity for research in this field, and I believe that this is one of the greatest responsibilities of the tobacco manufacturers. I know that in America they are embarking upon very wide research work. We should be doing more in Australia.

Before I develop that argument, as I propose to do, I should like to return to a most interesting comment made by Senator Benn. Like other honorable senators, I received through the mail a few days ago a packet of cigarettes, quite well packaged but, as Senator Benn said, without any label. We know that they came from a cigarette manufacturer. They were sent out for a specific purpose. They were made from reject tobacco - tobacco which was said to be of no value whatsoever - to illustrate to those who received them that the tobacco was unusable. I was most interested to hear of the experiment which Senator Benn carried out. I carried out an experiment of a different kind. I have been a smoker for many years, unfortunately, and probably I smoke too much but I regard myself as a reasonably good judge of a cigarette. I was deeply interested in trying out these cigarettes for myself. I was not satisfied with one sample so I tried several of them and I am bound to . say that I could find little fault with them. They are mild, with perhaps not very much flavour, but I say emphatically that they are a better smoke than quite a number of cigarettes of known brands which.! have bought from time to time.

My mind goes back to the Second World War and 1 remember some of the cigarettes we were issued in the Middle East. Compared with those cigarettes, the ones that honorable senators received through the mail are magnificent. Perhaps I had better not say. too much about the cigarettes we received in the. Middle East .because they have a certain, tradition about them which is best not mentioned. Suffice to say that the tests I made of the cigarettes which were posted to all honorable senators convinced me that they were by no means unpleasant. From the manufacturers’ point of view there may be something about the tobacco used in them which makes it undesirable for cigarettes. I do not know, but I do know that the tests I made prove to me that it is very difficult for anyone to say with any degree of certainty that one type of leaf is good and that another type of leaf is not good. This surely points to the fact that there is a big open field for research into tobacco generally. Having said that, I want to return to Dr. Holman’s remarks which I mentioned a little while ago. I remind honorable senators that I have been interested in this subject for some little time. On 30th September 1964 I asked the following question of the then Minister for Health, the late Senator Wade - 1 direct a question to the Minister for Health. Sir Ernest Marsden, the noted New Zealand nuclear physicist, who has just returned from an overseas study of cancer, is reported to have stated, inter alia -

We can reduce lung cancer by one-third very easily now.

The causes of lung cancer have been discovered. The noted physicist I have cited stated that the causes were certain tobaccos and high ash coals and, to a lesser extent, other things. I repeat that Sir Ernest Marsden said -

We can reduce lung cancer . . .

Those are not the words of a layman. Sir Ernest was sent overseas to study this terrible problem of lung cancer. He was very emphatic in saying that the causes of lung cancer had. been discovered and could be eliminated. In his answer to me, Senator Wade who was then the Minister for Health, stated - . . seven components of tobacco smoke are capable of inducing cancer. These ‘ components are referred ‘to as polycyclic compounds and vary in their carcinogenicity. The most important-anil most- carcinogenic of this group are benzo(a)pyrene and dibenzo(a,i)pyrene

They have been quoted as the characteristics of the chemicals.. Senator Wade then specified in detail what these chemicals were. Later, on 31st March 1965, I asked another question of the Minister representing the Minister, for Health’. I referred to the fact that the scientist had stated that the causes of cancer were known and could be eliminated. I asked whether anything was being done by any organisation in Australia in an endeavour to isolate these causes and ultimately to produce a tobacco free of these dangerous chemicals. Both the question I had asked and the answers contained some very interesting information. In answer to my question on 31st March last, Senator McKellar stated -

In answering the question which the honorable senator asked of him on 30th September 1964, the previous Minister for Health, the late Senator Wade, mentioned that there are seven components of tobacco smoke which are capable of inducing cancer. These components are called polycyclic compounds, and vary in their propensity for promoting cancer. The Minister also mentioned that the concentrations of the polycyclic hydro-carbons may vary according to the method used in curing and ageing the tobacco and, further that it was possible that certain tobaccos may be less carcinogenic than others due to factors such as the nature of the soil in which the plant was grown, the type of plant, and so on.

The Minister then referred to the methods of curing and whether the tobacco was cured by one method or another. He mentioned even such details as the season and the climate where the plant was grown. If all these things are known, surely it is the responsibility of someone to take the research further than it has gone. Let me be fair about this. I am not saying I believe this is the responsibility of the Government. That is a very popular assertion to make.

Senator Dittmer:

– Why is it not the responsibility of the Government?

Senator MORRIS:

– I will develop my theme and Senator Dittmer may develop his argument later. If. Senator Dittmer can find anything in the social or economic life of Australia that can be criticised while he is sitting in Opposition, he automatically points to the Government and states: “ This is the responsibility of the Government “.

Senator Dittmer:

– Of course it is the responsibility of the Government.

Senator MORRIS:

– That is a matter of opinion. Senator Dittmer is the type who comes into this chamber most infrequently and then tries to take command of the dis- . cussion. I say to him: Just sit tight and do not be such a larrikin.

Senator Dittmer:

– Cut that out. You are not going to get away with that.

The PRESIDENT:

– Order!

Senator Dittmer:

– He is not going to get away with that.’

Senator MORRIS:

– I do not interrupt while Senator Dittmer is speaking. He will have his opportunity to answer my arguments. We have a Government in power now which has done tremendous work in encouraging the tobacco industry. Having encouraged it to the stage where there is. danger of overproduction, the Government has taken the next step to ensure that grave difficulties will not face the producers; The Government, admittedly with the cooperation of the producers, has now introduced the scheme under discussion which will provide orderly marketing for the tobacco industry. This has been done by the present Government notwithstanding the fact that the previous Government did not do one thing to help this industry. I defy any member of the Opposition to define one thing that was done by the Labour Government to assist the tobacco industry.

Senator Dittmer:

– Do not forget that the Lyons Government wrecked the industry in the 1930’s.

Senator MORRIS:

– Having made my point emphatically, regardless of the difficulties, 1 say that it is too silly for words to suggest that the Government having done all this and the people having continued to smoke, it now becomes the Government’s responsibility to carry out research to prevent the damage that is done to people by their own act in smoking. The responsibility for research in this matter lies clearly, firmly and absolutely in the province of those people who are benefiting from the manufacture and sale of cigarettes and tobacco. I refer to the tobacco manufacturers themselves. It is their responsibility, in my opinion, to see that this is done. Let us be very clear about this. As I have said, I smoke and I know many other honorable senators smoke also, but it is not the Government’s responsibility that we smoke. It is our own responsibility. If we are injured as a result of smoking, it is a self inflicted wound and nothing else. I recognise this and, having recognised it, I have tried to take the steps that are desirable: Of my own accord, I have reduced the amount of tobacco I smoke. There is nothing noble about this; it is plain common sense. If we do smoke, it is no good running along to a government and crying about it and asking: “ Why do you not do something to prevent an injury to me which is self inflicted by this habit? “

I repeat that according to the scientists to whom I have referred - and they are really leading scientists in their field - there are tremendous opportunities to rectify this situation. If those opportunities are present, the responsibility is with the manufacturers to do everything within their power to remove this danger. If they do that, we will overcome the anomaly of one Government doing everything to help the industry while other government departments are pointing out the dangers of it. Australia will be using 26 million or 30 million ib. of Australian produced tobacco but if we are the first in the field to make the discoveries necessary to eliminate these carcinogenic characteristics from tobacco, the whole world will be open to our exports of tobacco. I recognise quite clearly that in comparison with world parity prices of tobacco our prices are very high. But I am perfectly certain that, as high as they are, we could retain this price if we were able to go to the world markets and say that we had a product which had been produced in conditions which had removed the damaging ingredients in it. If that were so I believe we could double, treble or even quadruple production in this industry in a very short time.

Senator KEEFFE:
Queensland

.- In addressing myself to the subject under debate I want first of all to comment on a few of the remarks passed by Senator Morris. I was surprised when he made a statement at the opening of his address which was critical of the substance of the story told to us by Senator Benn. He claimed that Senator Benn did not know the industry at all.

Senator Morris:

– I supported his comments.

Senator KEEFFE:

– Senator Morris said, in the first place, that Senator Benn did not know what he was talking about. I intend to refute that statement. If Senator Morris wants to make another statement about it later he can do so. On behalf of the Opposition, Senator Benn presented a very good case for support of the general aspects that he placed before us. I feel that Senator Morris, in drifting all over the place in applying himself to this subject, did not make out a very good case for the Government. First of all he said that it was not the duty of the Government to eliminate cancer if cancer were caused by cigarette smoking. I believe it is the responsibility of the Government to play its part in this field. After all, if food, drugs or anything else are proved to be dangerous then the Government is obliged to take the necessary steps to see that such goods are pure if they are available for public consumption in any way. Should not the same conditions apply to cigarette smoking? Equally I say that there is a great responsibility on the manufacturers. I think that Senator Morris might have developed his argument better had he stated that some of the money spent on lavish advertising by manufacturers should be diverted to assist in the elimination of lung cancer.

Senator Morris claimed ; and I believe Senator Dittmer very justifiably interjected at that time - that this Government had done a tremendous job for the tobacco growing industry. That statement is not true. The only encouragement in recent times - and I paid a tribute to the Government for this recently - was given when the Government, to some degree, stood over a couple of the large manufacturers and said: “ You must use this quota of leaf “. The stabilisation plan, too, if it is continued and encouraged in any way by the Government, must be, in its end result, of some value to the growers. However, how far will this encouragement be taken?

As I develop my argument on this matter there are a number of statements that I want to quote. As I mentioned recently in this chamber I believe that at least one of the large manufacturers is determined vo see that the stabilisation plan does not work. I think that this is a tragedy. I think it is the responsibility of the Government to see that these proposals are carried out in an orderly manner.

Senator Webster:

– What authority does the honorable senator have for saying that?

Senator KEEFFE:

– Senator Webster will be the next speaker and he can tear me to pieces then if he wants to. What I am saying in relation to the growers is that they are a group who have continual struggles to face. They operate in an industry which for a number of years has had no stability whatsoever. In my opening remarks I was critical of the Government because I felt that it had not given sufficient support to the growers. I want to quote a statement by Mr. Agostinelli chairman of directors of the South Queensland Tobacco Growers Co-operative Association Ltd., and a recognised authority in the tobacco industry. He made this statement a few days ago at a public seminar. He traced the early history and problems associated with the industry and then said - in 1956, the major manufacturer withdrew its underwriting of the Australian Crop . . .

Then he went on and said -

With this false sense of security, growers were lulled into producing more and more tobaccolittle townships in Australia were becoming tobacco towns - even State Governments were convinced that many millions were to be spent on irrigation schemes and the Tinaroo Falls Scheme in North Queensland came into being. One could see far away Western Australia growing tobacco and doing well, Victoria expanding, New South Wales and Queensland likewise, until the year 1961.

That year was the black year in the history of tobacco growing. He continued and said -

This year will go down in history as the year when the Australian crop was vilified by manufacturers and the results of this year may take many generations to forget. Manufacturers in this year virtually sent Western Australia to the wall and many other parts of the nation. Little towns, little people lost all they possessed and had. One could write pages of incidents that happened in this country in 1961. Being a depression migrant, one could not describe the aftermath for it had no parallel. The Federal Government was advised in good time by growers’ organisations but the Ministers of the day somehow failed to see, let alone avert, the catastrophic result of that year. However, it did manage to grant every grower in distress in Australia £150 as a heart balm.

Mention of this is incorporated in a document that has been placed in this Senate by the Minister for Customs and Excise (Senator Anderson). I think the total sum that he mentioned was £175,000. Mr. Agostinelli continued -

Subsequently, the growers that weathered this storm saw an alignment of big business at the Auction Sales throughout Australia that, in this year of 1963, we find growers receiving about 119d. per lb. which is just covering growing costs. By this, I mean that bidding at auction has become farcical to the point where growers are hard pushed to get a minimum reserve that is placed on their leaf.

In his final remarks Mr. Agostinelli said -

While growers welcomed a stabilisation plan, the underwriting of the Federal Government of a 26 million lb. production has, in many cases, caused deep concern amongst growers, for the retrenchment of acres to produce 26 million lb. has been severe in many cases.

A few days ago some cigarettes were distributed to members of the Parliament by one of the major manufacturers, W. D. and H. O. Wills (Aust.) Ltd. The Minister passed some critical remarks at the time and I also am critical of this action because this was a gimmick and was not in the very best taste. I think it was a gimmick that misfired because it proved that even the poorest quality Australian leaf makes a reasonably good cigarette - at least one which could be put into the cheaper class and which is still smokeable

I want to mention a number of other remarks made by recognised authorities and to read extracts from a letter forwarded to me by the manager of one of the major tobacco manufacturing companies. I think it is significant that when I tried in this chamber some time ago to obtain information relating to imports of South African tobacco there seemed to be some delay in getting the information. Since then, in a letter to me, the Minister in question has said that certain statistical information was not available. I do not think that this state of affairs is very satisfactory. However, if that is the way that the Department runs its business then I suppose we have no alternative but to accept it. In a previous comment on this subject I said that too much South African tobacco was coming into Australia and I claimed at that time that there were a number of reasons why this should not happen. I now want to refer to a very significant aspect of our imports of South African tobacco and exports of tobacco from South Africa to other countries.

Senator O’BYRNE:
TASMANIA · ALP

– Is this South African or Rhodesian tobacco?

Senator KEEFFE:

– I am referring to South African tobacco. It is a crying shame that Australia is the greatest importer in the world of South African tobacco. In 1964- 65 Australia imported 5,802,500 lb. of flue cured tobacco and 2,120,000 lb. of air cured tobacco. I ask honorable senators to keep the terms “ flue cured “ and “ air cured “ in mind, because I wish to follow up this aspect of the matter in a few moments. The next biggest importer of tobacco from South Africa was Holland, which imported more than 4 million lb. of flue cured and 935,000 lb. of air cured tobacco. The United Kingdom was next, with an importation of 3,243,300 lb. of flue cured and 406,000 lb. of air cured tobacco. It is significant that Australia heads the list, in spite of the fact that we can grow leaf which is equal to that grown anywhere else in the world and which in many cases is superior.

What is the reason for these huge imports of South African tobacco? As one of the manufacturers admits in a letter that I shall quote shortly, it must be because the tobacco is cheaper. Apart from the two countries I mentioned a moment ago, no other country comes anywhere near Australia in the importation of South African tobacco. In a moment or two I shall quote further from the document which contains the information I have mentioned.

I want to develop my argument that too much leaf is being imported. If honorable senators want to know some of the other relevant statistics, they are set out in previous submissions that I have made in this place. I now propose to quote from a letter that was written to me by Mr. R. A. Irish, the chairman of Rothmans of Pall Mall (Australia) Limited. In his opening para- . graph he said - - I have just had the. opportunity of reading your speech in the Senate of 20th October last, and would like to take the opportunity of giving you certain facts. “

Then he dealt with a number of matters which are not relevant to the argument that I am developing tonight. He said further -

In fact, our overseas shareholder knows nothing of the Australian’ tobacco dispute, except what they have read iri our Annual Report. - The next point of great importance is that we do not buy any of our tobacco, through any associated company overseas. We, ourselves, decide what we will buy, and it is important to note that it would not pay us to’ pay Id. per lb. for imported leaf if we could get suitable quality in Australia, as the duty protection makes it .unprofitable to import if local leaf is available.

Then follow. a. couple of paragraphs after which this significant statement is made -

You make a reference to South African tobacco. It is true that -we, and other companies, import from there but this is a special type of air-cured tobacco which is not grown in Australia. It is a very high quality in this particular type, and it happens to be cheaper than comparable tobacco .we could secure from the United States of America. Apart from the economics of our own company, I think you will agree it is in the national interest for us io buy the appropriate quality in the cheapest market. Even so, such tobacco costs us a great deal more than Australian leaf because of the duty factor to which I have referred.

The Government is also aware that we, more than any other company, have done our best to foster and facilitate a sound Stabilisation Scheme, and the records will show you that we have consistently paid the highest average prices at the Australian auctions and have, also, paid well above the floor’ price established by the Government.

Those statements do not appear to me to be consistent with what the growers themselves allege. In view of the fact that it has been impossible for me to obtain in this chamber details about where the South African tobacco is going, I would much rather believe the growers. 1 now propose to quote from a document which has been circulated to the Minister for Trade and Industry (Mr. McEwen), the Minister for Customs and Excise (Senator Anderson), the Minister for Primary Industry (Mr. Adermann), and the secretaries of their Departments. It bears the date 28th October 1965, and reads -

We have to point out that during their formative years, Rothmans purchased a “ run of the Grades “ from the crop . . .

Let me say here that, if a firm is trying to develop an industry and is doing so properly, it should not come under criticism. But it would appear that this company is not doing its best for the Australian tobacco industry. 1 believe that -members of the Government Will admit that privately if they will not do so publicly. The statement continues - and despite their repeated claims that they only buy the top grades of leaf and pay’ the highest prices it is a well known fact that up to 1963 they registered all their purchases at 10Od. and over in the name of “ Rothmans “ and their purchases below 10Od. in the name of- “ Nelson “ their chief buyer who is also a registered toacco manufacturer. This fact is known to the Commonwealth Departments concerned. .

If a company buys the top grades of leaf in - it’s own name and buys the’ lower grades in the name of- somebody else so that fact will not become known publicly, it is deserving of the strongest censure. The statement continues -

It is on record, and proof would be available through customs sources that all their low grade purchases during this period made in the name of “ Nelson “ were in fact paid for by Rothmans and used in their factories.

As a typical example we quote the case of their, purchase of 2,736 bales weighing 308,189 lb. at 35d. per lb. in July 1959 in Brisbane.

Honorable senators will recall my reference earlier to a statement by Mr. Agostinelli, an expert and a grower, that 119d. a lb. would barely cover production costs. The statement I have just quoted is a further indictment of this organisation. This last statement proceeds -

Tn 1958 there was a quantity of tobacco leaf left unsold on the Brisbane floor and after representations to Wills who at that time were underwriting certain grades in the crop, this leaf was re-examined by Mr. Munster of Wills and the Queensland Board’s Chief Appraiser, Mr. Holborn. Some of the leaf was cleared but about 160 tons comprising these 2,736 bales were classified as “ Reject “.

During the intervening period from about October 1958 to July 1959 this leaf had to be moved several times and stored under highly unsatisfactory conditions, and stacked four and five bales high.

In July 1959 Mr. V. Brink, Rothmans Leaf Director, approached the Queensland Board and negotiated the purchase of all this leaf at 35d. per lb.

The leaf by that time was in such a shocking state that the Queensland Board insisted on the bales being inspected prior to delivery and despite the fact that Mr. Brink was prepared to take every bale the Queensland Board refused to sell some of the bales because of their condition.

Now I want to take one or two other extracts from the informative document from which I have been quoting and which 1 think ought to be brought to the notice of the public. I draw attention to this part -

We would like to draw your notice to yet another aspect of these South African imports of tobacco leaf which we feel is having a detrimental effect upon our industry.

American pressures upon your Government for the continued importation by Australia of tobacco leaf is a subject with which you are more than familiar.

Further on this statement appears -

South African tobacco leaf is, according to the best information we can obtain, both .from Australian and overseas sources, amongst the poorest smoking quality tobacco leaf in the world.

Yet, as I pointed out a little earlier, wc are delighted to import into this country 5,802,500 of flue cured tobacco and more than 2 million lb. of air cured tobacco.

I have no doubt that Senator Morris will accept my criticism in the spirit in which 1 directed it. Although this Government claims that it has done everything possible for the tobacco industry, it should have a very serious look at a number of aspects of that industry. I am speaking particularly on behalf of tobacco growers in Queensland. A lot of them have only small financial backing and are cultivating small areas. Many of them are share farmers. If they place their tobacco leaf on the auction noor after a season’s work and do not get a bid for it, or get a bid which is below production costs, it is perfectly obvious that they cannot afford to stay in the industry. They may be forced to move away from the district. I refer to Inglewood, Yelarbon, Mareeba, Dimbulah and a number of small centres in the far north of Queensland.

After planting their crops, many tobacco growers do not have any money left over. They are forced to live on credit they obtain both for services rendered and for goods supplied in the hope that they will be able to pay their bills after they dispose of their crops. How heartbreaking it must be when they find that they are not able to dispose of their leaf at the tobacco sales at a satisfactory price. Consequently, the people in their district who have extended credit cannot be paid for the goods or services they have supplied. In this way, a whole community can become depressed because this Government does not have sufficient backbone to implement a stabilisation scheme and to stand over the major manufacturers who want to prostitute the industry in order to obtain greater profits for themselves.

Senator WEBSTER:
Victoria

.- The tobacco marketing legislation before the Senate consists of three measures: The Tobacco Marketing Bill, the Tobacco Charge Bill (No. 1) and the Tobacco Industry Bill. It is interesting to note, Mr. President, that the first legislation in respect of tobacco enacted by the Commonwealth imposed a levy in 1955 for research. Previously a wartime board had been established, but not by legislation. It was established under a national security regulation.

I compliment the Government for the legislation with which we are dealing. It is the first legislation relating to the marketing of this important primary product. I give the Bill very great support. I realise that substantially it has been requested by growers throughout Australia. This first attempt to establish a stabilisation scheme for the tobacco industry will be in the interests of growers, manufacturers and Australia’s future!

The Commonwealth is not greatly involved in the Tobacco Marketing Bill which simply provides the administrative set-up for the Australian Tobacco Board. The other Bills provide the finance and the necessary channels through which it will be directed. It is to be expected that this measure will provide stabilisation of the volume of tobacco grown and an assured stabilised price for the growers who produce within a quota limit. At present it is expected that a volume of tobacco above the quota may be grown. Not all of the surplus is assured of sale. In the future, legislation may be necessary to take care of overproduction.

Cigarette and cut tobacco manufacturers claim that it is essential to mix a proportion of Australian leaf with overseas leaf. I concur in the hope of previous speakers that as we progress the influences and interests that demand a large volume of imported tobacco may diminish so that a greater proportion of Australian leaf may be used. Last year, cigarette manufacturers used a proportion of approximately 43 per cent, of Australian leaf. Following negotiations by the Government, in the coming year manufacturers will be required to use a proportion of 50 per cent, of Australian leaf. This is a major step forward and one with which all tobacco growers must feel quite pleased.

The basic Australian quota to be purchased by manufacturers is 26 million lb. That figure represents the average leaf sold in the three years ending 1964. The average minimum price expected to be paid to growers is 125d. per lb. A quick calculation shows that the growers are thus guaranteed a return of about £13 million. The plan provides growers with an assured market at a minimum price, for a reasonable level of production. There is an assurance that the industry will not develop at an unsatisfactory rate and that the principle of stabilisation of crop and price should provide encouragement to improve the quality of leaf produced.

The tobacco industry has had many difficulties in becoming established. Those people who have stayed with the industry are to be congratulated on the quality of their production and the economies they have effected on their farms. However, many difficulties lie ahead. A number of people in Victoria have written to me letters seeking my support for the complete rejection of legislation which encourages the production of a crop which, when it is passed through a manufacturing process, can be regarded as harmful to health. I have also had representations from the growers and manufacturers. Irrespective of their arguments, the tobacco industry is vitally important to many people and is here to stay.

Research is essential to overcome the problems of growers including seasonal failures. Research is quite definitely needed to eliminate health hazards. I hope that all the factors which are now being investigated can be turned to the benefit of the industry and the betterment of the community. In a very few years tobacco growing has become a most important primary industry. In 1956 tobacco production was about 5 million lb. Five years later production had increased to 30 million lb. In the 1964 season production reached the all time high level of 34 million lb. It is therefore clear that the tobacco growing industry is immensely important to the Government and to the community. In the 1964-65 season, the net revenue to this Government from tobacco alone was £8,897,000 and’ the net excise revenue from cigarettes and cigars was £85,537,000. A total of £94,434,000 of revenue accrued to the Commonwealth from this source. This is certainly a very important industry.

In 1964-65 our imports of tobacco were approximately 28.2 million lb. It is interesting to note that the leaf that we purchase from Rhodesia sells in that country at approximately 40d. Australian per lb. and that the leaf that we purchase from the United States sells in that country at approximately 62d. Australian per lb. Apparently, it is not possible to calculate the average price in Australia. But we can see that the industry is doing particularly well when it can look forward to an assured price of 125d. per lb. for the next four years. I believe that this legislation will put the industry on a very sound basis. The industry should flourish.

I represent Victoria, so I direct my remarks to the position in that State. Basically, three States are concerned with this legislation and will share in the allocation of the 26 million lb. quota. Queensland, the largest grower, is to be allocated 14 million lb., Victoria 9,662,000 lb. and New South Wales 2,338,000 lb. I am led to believe that there was general agreement in Queensland and New South Wales on the stabilisation proposals; but that was not necessarily so in Victoria. Early in July I put it to the Minister for Primary Industry (Mr. Adermann) that the problem in Victoria revolved around the quotas that the growers would be given. There were several factions of growers in that State. I believe that the Minister replied correctly in July when he wrote to me as follows -

I have read with interest the case put forward on this matter, and I am aware that, in a matter of this nature, it is very difficult to devise a system of farm quotas which is satisfactory to all growers,

His concluding statement, which is the most important thing he said and of which people who comment on this Federal legislation should be well aware, was -

You will appreciate, of course, that the issue of marketing quotas for tobacco leaf is a matter for the State authorities and outside the competence of the Commonwealth.

It is interesting to note that Victoria’s share of the 26 million lb. Australian quota has been divided among the Victorian growers on the following basis - (a)Each grower’s market quota shall be based on the average of his leaf sales over the two year period 1962-63 and 1963-64. This shall be his base-period production. If a grower’s crop suffered some particular disaster in either of these years this circumstance would be taken into account.

  1. Where a grower’s base period production does not exceed 10,000 lb., his market quota shall not be less than the average of these two years.
  2. In the case of larger growers, the market quota shall be arrived at by the application of a percentage deduction which shall increase by an equal amount of each 1,000 lb. by which the baseperiod production exceeds 10,000 lb.

The maximum deduction, however, shall not exceed 30 per cent.

I believe that it is fair to say that only persons with a detailed knowledge of the complex nature of crop planting and cultivation and merchandising in the tobacco industry could grasp the serious effects of the stabilisation scheme as it is embodied in the Victorian farm quotas. That is not to say that the quotas have not been considered very thoroughly by the relevant people in Victoria.

There is some reason to believe that producers who, over past years, have been particularly efficient, have taken good care of their crops, have looked after their share farmers who are an integral part of this business, and who have invested heavily in houses on their farms and equipment to do such a good job, will find that their quota is less than last year’s production. Being a whole milk producer, I am well aware that if you are fortunate enough to have a contract to supply, say, the Melbourne metropolitan area you can over-produce, if you wish; but it will be your responsibility to dispose of your over-production. I see no reason why that should not apply when an industry knows that it has an assured sale of a particular quota. It would suit me if I were able to plan my income on that basis.

One of the most important tobacco growing areas in Victoria is the Myrtleford area. I was never more impressed than I was by representations that were made to me, not by someone interested in earning money but by the Myrtleford Shire Council. Undoubtedly, the councillors of that shire realise the problems that a reduction in quotas might create in that area. They raised the possibility that the north-eastern part of Victoria will be very seriously affected by this allocation of quotas. I make these points because I believe that, perhaps, more consideration should be given to an early increase, if possible in the allocation to Victoria. This is not likely to happen because, apparently, Western Australia missed out considerably in this matter. It had growers who are not now in the business. Other States are probably sharing its quota. It is fair to say that not a great deal larger quota would be required in Victoria to make many of the growers quite satisfied.

This industry is of vital importance to Victoria. We believe that the quality tobacco that can be grown in Victoria is not surpassed in any other State. We believe that in the last year or so we have produced the quality tobacco that is being sought by the manufacturers at the present time. Other municipalities in north-eastern Victoria have stated that people will leave their areas because of this reduction of production as a result of the quotas being allocated on the basis of production in 1962-63 and 1963-64. If somebody grew tobacco in those years and then went out of the business, he would be given a quota and would come back into the business and grow tobacco again. But the man who has built up his production over the past four or five years and who grew a substantial quantity last year may receive a quota which represents a terrific reduction on last year’s production. There are faults in this scheme. I believe that they can be satisfactorily adjusted only within the State sphere.

I sum up by making two or three points which I believe may be of assistance to this industry in the future. I believe that it is fair to say that generally there is great satisfaction with the scheme in tobacco growing and manufacturing circles. I believe that it is entirely unfair to criticise major companies, as has been done in the Senate this evening. Business generally has to look after itself, and if it does not have good management, it can easily crash. We have witnessed company crashes recently, and they have been the subject of debate in this place and elsewhere. I would like to pay a great tribute to those who, in the last few years, have established the manufacturing side of the tobacco industry in Australia. The name R. A. Irish has been mentioned. It gives me great pleasure to say that R. A. Irish will go down in history as being one of the most efficient accountants and businessmen in Australia. Indeed, the cigarette manufacturing company that he has built is not one which should be criticised by the public, by tobacco growers or by other tobacco manufacturers. This man has built an enormously profitable company and he has built it on the demands of the Australian people. 1 suggest that it would be wise for the Commonwealth to investigate the position which has been created at the present time by the Rhodesian situation. I have mentioned that a very moderate increase of volume and quotas is needed to satisfy the growers from my State. We import substantial quantities of leaf from Rhodesia and these are subject to the sanction which this Government has announced. I agree that there would be difficulties in making a definite announcement on this matter at the present time. It is the wish of all of us to see Rhodesia back in the world trade as soon as possible, but if the present position continues for any length of time and if Australia imposes sanctions against Rhodesia, I ask that consideration be given to increasing the quotas of the Australian growers to compensate for that portion of the leaf that is imported from Rhodesia. As I understand it, the Rhodesian leaf is no better than our own Australian leaf.

Some recognition should be given to those who have invested heavily, as I mentioned previously, in plant and equipment to build up production. I believe that they were encouraged to do this so that the industry would be expanded as quickly as possible. We now have the situation where some growers, particularly in Victoria, have a big investment-

Senator Lacey:

– The honorable senator could help the industry by taking up smoking.

Senator WEBSTER:

– I shall come to that point shortly. I cannot promise to take up smoking but I will add my comments to those of Senator Morris and Senator Benn.

Senator Branson:

– What about the free packet of cigarettes that the honorable senator was given the other day?

Senator WEBSTER:

– Perhaps I should deal with that matter now. I am not a smoker, ‘but my secretary is and I gave the cigarettes to her. When I lit a cigarette for her I. found that its manufacture was not up to the company’s normal standards. When I lit the cigarette with a car lighter the tobacco pulled out of the end. This does not normally occur. However, my secretary found no fault with the cigarettes. She told me that she gave cigarettes to her sister and to somebody else and they thought that they were quite all right - a bit hot in spots perhaps but quite smokeable. There was no serious objection to them. This would certainly lead one to believe that perhaps the 5 per cent, inferior grade tobacco from which they were manufactured would be quite acceptable to the Australian public. But I am inclined to think that the manufacturers know the article that they want to sell.- 1 believe that if cigarettes of the type we received were sold at a reduced price, they might- become a very big seller.

I was mentioning the point that some recognition should be given to those who have heavily invested in plant and machinery which might fall into disuse. I further suggest that some thought should be given to the establishment of a fund which would enable the Australian Tobacco Board to carry, perhaps, a buffer stock of tobacco on its own behalf. We have an annual overproduction of 26 million lb. of tobacco and perhaps ‘some scheme could be devised whereby the Australian Tobacco Board could hold surplus stock for some time. With the increase in Australia’s population and the possibility of exporting tobacco envisaged in this Bill it might be possible to dispose of the surplus later. The grower would not be able to hold the stocks himself. Perhaps we could introduce a scheme similar to that which has recently been introduced into the honey

Industry, whereby the Reserve Bank of Australia could guarantee money to hold a buffer stock when the price of tobacco fell below a certain figure. I suggest that serious consideration should be given to that proposal.

Finally, I believe that the important matter which Senator Morris raised, the elimination of health hazards in smoking, could be the saviour of the Australian tobacco industry. If we could find an answer to the toxic ingredients in cigarettes, people could smoke without any worry about the effect on their health, There are, of course, many other health hazards around us. The atmosphere of big cities is laden with exhaust fumes from motor cars and the smoke from factory chimneys. These things are as great a menace to the community as is smoking. However I agree that an investigation needs to be made into smoking with a view to the elimination of its toxic effects.

Finally, I turn to the Tobacco Charge Bill (No. 1) 1965 and the Tobacco Industry Bill 1965. It is interesting to note that under the Tobacco Charge Act (bio. 1) 1955, the charge imposed on leaf sold by growers was one halfpenny per lb. and that under the Tobacco Charge Act (No. 2) 1955 the charge imposed on leaf purchased by manufacturers was fixed at twice the rate imposed by the Tobacco Charge Act (No. 1) 1955. The purpose of the Tobacco Charge Bill (No. 1) 1965 is to increase the charge on sales by growers from one halfpenny to three-fifths of a penny per lb. Consequently the charge on purchases by manufacturers will be raised from one penny to one and one-fifth pence per lb. in accordance with the provisions of the Tobacco Charge Act (No. 2) 1955. It is expected that the increases will mean an additional £32,500 per year of which the Australian Tobacco Board will get £30,000. The increased charges have been wisely chosen as when decimal currency is introduced within the next few months, they will immediately become one-half cent and one cent. Thus the conversion is made easy.

The purpose of the Tobacco Industry Bill is to provide that moneys to be paid into the Tobacco Industry Trust Account, from amounts received under Tobacco Charge Acts, will be reduced by the amounts which are paid to the Australian Tobacco Board. I have great pleasure in commending this legislation to the Senate.

Senator DITTMER:
Queensland

.- I listened with interest to the speeches made by Senator Benn, Senator Keefe and Senator Webster. I agree to some extent with Senator Webster, although I do not go entirely along with his reference to possible other factors in lung cancer. It is interesting to note that in the compulsory chest X-ray examinations which were held in New South Wales, it was found that the incidence of lung cancer was much less in people from rural areas than in people from the metropolitan areas. To be able to make an accurate assessment, one would have to know the smoking habits of the people, the type of tobacco they smoke, how often they smoke, and the atmosphere in which they smoke, but it was interesting to note that in the metropolitan area it was found that the incidence of lung cancer was nearly twice as high in the inner city area as it was in the suburban areas. That would in some measure bear out what Senator Webster said, but that is not the whole answer, because statistically it would appear inevitable now that we must assume a causative relationship between cigarette smoking and lung cancer.

These bills are important in that they are an attempt to put on a rational basis an industry which is in extreme difficulty in many areas of the eastern States of Australia. It was therefore unfortunate that a senator from Queensland, Senator Morris, should introduce a measure of acrimony into the debate. Everything was proceeding very smoothly, and then he referred to my presence in this chamber. I am here as often as he is and probably for as long as he is; but I do not need to be here as long as he is, because I can gather in a few minutes the thoughts, ideas and ideals of the speakers on both sides of the chamber, whereas he takes hours even to contemplate what they are talking about. He is regarded by most as a former distinguished member of the Legislative Assembly of Queensland, but he was an accident, really, because a brilliant man who is the present Deputy Premier of Queensland thought that it was inevitable that his party would never become the Government and he resigned. Let us proceed with this, irrespective of any mutterings on the other side. I will not cop it from anyone, particularly when it is untrue. He said that the welfare of the citizens was not the responsibility of the Government. How ridiculous is that? Repeatedly the Government has boasted of its social services and the way in which it is looking after the elder citizens of the Commonwealth. Anyone knows that the welfare of the citizens is the responsibility of the Government. He talked of selfinflicted wounds and said that if anyone smoked cigarettes and contracted lung cancer the Government had no responsibility. Laws are introduced ad lib not only to protect the community as a whole but also to protect individuals. I instance the traffic laws and infectious diseases laws. I will not specify the particular diseases that are so provided for. Why are potential suicides stopped? Suicide is self inflicted. The State makes certain that if it has the opportunity to stop a person from committing suicide it will take the measures necessary.

The honorable senator spoke of the previous Labour Government. Surely people on that side of the chamber should be the last to talk about the way in which governments have looked after the tobacco industry. I recall that when I was a child - not that I smoked cigarettes as a child, and I do not smoke them now, Sir - the Honorable Frank Forde, when Minister for Customs, established a prosperous tobacco industry in Mareeba and in Queensland in general. But immediately the Lyons Government came into power it willy nilly destroyed that industry, with no recognition of the rights of the growers at that time.

Senator Benn:

– Destroyed it overnight.

Senator DITTMER:

– Yes. Sentor Benn would realise it more than I do. He would have known the industry completely at that time and he would be better able to tell the story than I am. He realises that the Lyons Government just destroyed the industry overnight. There are a few aspects with which I want to deal. It is unfortunate that under this legislation the growers do not appear to have adequate representation. Also, there does not appear to be any provision for the manner in which their representatives will be chosen - whether they will be chosen by the Government or elected by the growers. In most phases of orderly marketing, particularly in the agricultural industries, the representatives are chosen by the growers - agriculturists, pastoralists or otherwise. This legislation does not specify the manner in which the representatives will be chosen. I shall be interested if the Minister will tell us how they are to be chosen.

I do not say that the manufacturers or the growers in this industry should not provide some measure of money for research purposes, but in view of the amount of £94 million that the Government gathers in revenue from tobacco, surely the Government can afford something for research purposes, knowing the menaces with which smokers. are faced. I can recall one manufacturing company which in nine years made a profit of over £14 million and put £4 million into reserves. We know what the major company - of which a school mate of mine is the head - has accumulated over the years. Seven brothers were foundation members of that firm. When the poorest died he left £2 million. That was nearly 30 years ago. As honorable senators know, the equivalent of that at the present time would be near enough to £9 million. There are fortunes in tobacco and surely the manufacturers can make a contribution, when they realise that every ounce of tobacco that they sell or every cigarette that is smoked represents a menace to the health of a person. The person may not be I, and he may not be you, Sir, but it does represent a menace to someone’s health. Surely the manufacturers should make a contribution to the research necessary to determine potentially carcinogenic agents so that if this habit or addiction continues the health of people will be protected.

I understand that the area of land at present under cultivation for tobacco in the three eastern States approximates 26,000 acres. I sometimes wonder whether, if this research is not to be intensified, if it is not to be embarked upon by the Government and contributed to by the manufacturers and growers, we should not cease to have tobacco at all. If we put the value of an acre at £100, the resumption of all of the land would cost only £2,600,000. If we put it at £200 an acre, the cost would be £5,200,000. If we put it at £300 an acre- which is probably the maximum value of the best tobacco land - the cost would be £7,800,000. That is little enough to pay to eliminate the deaths that will occur inevitably as a result of the smoking of tobacco. I am not thinking now in terms of the manufacturers, because they have their profits. One particular firm, as everyone knows, is not now so much concerned about the enormous profits in tobacco. It is involved in the pastoral industry, the ice cream industry, the soft drink industry, and the foodstuffs industry. It has spread its wings, its capital is protected and its dividends are provided for. The other major group has made so much profit that within a comparatively short period it would not have any real reason to regret the loss of the investment that was made originally.

This is a particularly difficult industry. It calls for the most serious attention. I do not know a lot about this type of agriculture, but I know sufficient. I have been interested in agriculture all of my life. Tobacco is a difficult industry. One has to sterilise the soil and watch the leaf day by day until it is finally sold. I know of no industry which calls for so much attention as docs the tobacco industry.

No-one is more sympathetic to the tobacco growers than is the Australian Labour Party of which I am a member. When we saw what could happen to them at the hands of manufacturers, we realised that it was inevitable that in the process of time a good government - or a bad government such as we have at present - would have to look after the growers, or endeavour to look after the growers or pretend to look after the growers. Let me give a concrete example of this. I know that when tobacco was booming incompetent, lazy growers, entered the industry but they could not expect the remuneration to which a competent grower was entitled. 1 know many competent growers. I know some who put their leaf on the floor for sale and were offered 40d. a lb. by the manufacturers. They refused that offer because they had a fairly large capital investment in the industry. Let me interpose here that although I am referring to a specific case I could multiply it many times. As I have said, these competent growers were offered 40d. a lb. for leaf for which they had expected to receive 120d. a lb. They refused the offer because it did not even meet the cost of production, let alone their repayments to the bank in interest and amortisation. The manufacturers’ representative then offered growers 60d. a lb. They refused again because that figure would not get them out of their financial obligations. Then the manufacturers’ representative offered them 80d. a lb. They accepted it, not because it was the price they thought their leaf was worth but because it would at least meet their financial commitments. The competent growers - I have in mind two partners - had used their energies constantly minute by minute, hour by hour, day by day, for no remuneration to themselves. If that leaf was worth 80d. a lb. finally, it was worth 80d. a lb. initially.

I did not receive a free packet of cigarettes although apparently every honorable senator in this chamber and every member in the other place received one. No attempt was made to bribe me so I did not get a free packet of cigarettes. Therefore, I cannot say whether they were good or bad but I have heard from my colleagues on this side of the chamber that they were quite good. Senator Webster also said that they were quite good. He did not smoke them himself, but his secretary and apparently some of her friends smoked them and they told the honorable senator that they had no complaint about the cigarettes. The good reports about the cigarettes makes the case the manufacturers have been putting up all the more vulnerable because the leaf used in the cigarettes had been rejected. I remind honorable senators that the manufacturers said they were prepared to spend £100,000 on Australian leaf to save £1 million duty on imported leaf.

The people who smoke the cigarettes said that they were quite good but that no real endeavour had been made to make a well finished cigarette. They were loosely packed, unlabelled and unattractive. Even the box in which they arrived bore no name. In other words, every endeavour was made by the manufacturers to discredit the tobacco leaf and the cigarettes but they were accepted, not only in this place by the representatives of the people but also, according to what I have read, by nearly all the representatives of the people in the. other place. Only two or three of them said that the cigarettes were no good. I do not claim that those honorable members were in the hands of the manufacturers.

Senator McManus:

– Those cigarettes were not as well packed as the cigarettes the honorable senator smokes.

Senator DITTMER:

– The honorable senator is looking only at the packet. I smoke only half of each cigarette because I realise that the menace lies in the last half of it. Perhaps the people who said that the cigarettes were no good did not know how to appreciate tobacco or else they were beholden to vested interests.

Senator Webster:

– Is the honorable senator supporting or opposing this proposal?

Senator DITTMER:

– I do not need the honorable senator’s help. I am supporting the industry and I will support the Opposition’s amendment when it is put forward. If the honorable senator had listened carefully to me, he would have noticed that I praised him at the commencement of my remarks.

Senator Webster:

– I know that. I just wanted to find out whether the honorable senator was supporting the scheme.

Senator DITTMER:

– I said that I was supporting it. If the honorable senator had listened he would have heard me say that.. I am speaking now of the difficulties of the people engaged in the industry and of the people at the end of .the chain who smoke the finished product. I will handle my own case in my own way. Does the honorable senator mind that?

Senator Webster:

– Not at all.

Senator DITTMER:

– He will have no chance of stopping me in any case. I hope he realises that, too. At long last the Government is attempting to do something for the growers in this industry but we on this side of the chamber do not believe that it is going far enough. It is not giving the growers adequate representation. It is not stating how the growers’ representatives will be determined - whether they will be appointed by the Government or elected by the growers. We believe that the people engaged in any industry should choose their own representatives. The Government has not said that the growers will be able to do that.

Further, there is no mention in the Bill of a research representative or whether he should come from the field of medicalscience or of pure science. This is important from the point of view of the ordinary people. Efforts should be made to find a solution to the problem of lung cancer. Although there is no definite proof of a direct relationship between cigarette smoking and lung cancer, there is statistical evidence to that effect. Almost inevitably there must be a casual relationship. The Government of the day must recognise that it has a responsibility for the welfare of the people of Australia irrespective of what any one person may say in his stupidity.

The time is long overdue when the tobacco industry should be put on a rational basis, when there should be a recognition of the nation’s responsibility to the growers, and when there should be a recognition of the ill effects of an addiction to smoking. The Government has not said just how far it will go in the field of research. When we think of the tremendous number who are dying of lung cancer, which is almost inevitably the result of cigarette smoking, we must realise that this is a tragic situation about which the Government is doing little or nothing.

We have only to recall the representations which have been made to the Government about cigarette advertising on radio and television. The Government has control over these mediums although newspaper advertising comes under the control of the States.1 Nothing concerete has been done; nothing concrete is being done. We see on television beautiful young girls and athletic’ young men portraying the attractiveness of cigarette smoking despite the fact that year by year more and more evidence is being accumulated associating cigarette smoking with lung cancer. More and more time is being devoted to these attractive advertisements to persuade young persons to take up this evil habit of smoking. They use sex in the advertisements and a jingle -

Daytime or night time It’s always the right time.

This is the way they set out to sell cigarettes. Is it not time the Government made a real effort to curtail smoking? On television one sees an aeroplane land, a business man steps out and one of the first things he does is to light a cigarette. The whole thing is out of proportion. I do not know of any other disease that is so carelessly disregarded as is lung cancer associated with cigarette smoking but this Government has done very little to persuade the States to ban newspaper, radio and television advertising of cigarette smoking. If the Government cannot give a lead what hope is there for those who are submitted to this advertising? I am not pleading for people in the age groups of 40, 50 or 60 years who smoke because possibly already the incipient stage of carcinoma of the lung is already there. I feel I have a responsibility to speak for the younger generation against this pernicious addiction to smoking.

Senator SCOTT:
Western Australia

– In this debate on the Tobacco Marketing Bill members of the Opposition have accused the Government of not doing much to promote the production of tobacco in Australia. Let us go back a few years. We find that since this Government was elected to office, production of tobacco in Australia has increased many times.

Senator Morris:

– The increase has been astronomical.

Senator SCOTT:

– Absolutely. If we go back to 1948-49, we find that the Labour Government which was in office did so little to promote tobacco growing that less than 3 million lb. of tobacco was grown in those years in Australia. Between 1956 and 1965, production of tobacco has increased from 6 million lb. to more than 26 million lb. This has all been brought about by the encouragement given to the Australian tobacco growing industry by the Commonwealth Government. Since it was elected to office, this Government has increased the percentage of Australian tobacco leaf that must be used in cigarettes before importers of tobacco leaf can obtain a concessional duty. If my memory serves me correctly, the percentage of Australian leaf to be used in manufactures in 1949-50 to obtain the concession was 5 per cent, or less. The balance of 95 per cent, foreign leaf could be imported at concessional rates of duty. This Government has gradually stepped up the percentage from 5 per cent, to 10 per cent., then to 15 and 20 per cent, and now it is 47 per cent. The Government has done this to encourage the growing of tobacco leaf in Australia and that is why the astronomical increase has been achieved. Tobacco manufacturers are encouraged to purchase Australian leaf to obtain the concession on imported leaf.

Until 1961, this expansion of the tobacco industry went along quite smoothly. Then some problems arose in the selling of tobacco leaf. In that year, the Commonwealth Government made available £175,000 to alleviate distress in the industry. Then prices paid to the growers were unsatisfactory. In 1964 the growers received such low prices at auction that they put their heads together, formulated a plan after consultation with State Ministers of Agriculture and placed it before the Commonwealth Government. As a result, the Government has produced this Bill which provides, among other things, for a stabilisation plan administered by an Australian tobacco board.

Senator Hendrickson:

– How did Western Australia fare?

Senator SCOTT:

– I will come to that when I have concluded the line of argument I was developing. It is proposed to do away with the auction system. There wilt be an annual Australian marketing quota of 26 million lb. and a grade and price schedule to cover the sale of the marketing quota, designed to yield an average minimum price of 125d. per lb. based on a normal crop fallout. It is proposed to increase the rate of charge under the Tobacco Charge Act (No. 1) 1955 from one half-penny to three-fifths of a penny per lb. These charges on the sale and purchase of tobacco leaf are to meet the administrative expenses of the proposed Tobacco Board. With contributions by the manufacturers, it is intended that a maximum annual amount of £30,000 will be made available to the Board for administrative expenses.

In the Bill before the House, emphasis has been placed on the States of Victoria, New South Wales and Queensland. Members of the State Governments of those, three States and growers from those States will be members of the Board. The Board will not include growers from any other State. Western Australia was a fairly large producer of tobacco leaf but because of a lack of research, a problem arose over salt which affected production. The tobacco leaf produced was unsatisfactory and growers had to discontinue growing tobacco. Very little leaf is grown in Western Australia now but I believe that the problems facing the industry can be overcome with research. I understand that the climate in the south of Western Australia is wonderful for the production of tobacco and I hope that at some future time Western Australian growers will be given an opportunity to participate in the proposed production.

I wish to place on record my contention that some of the statements made by Opposition senators, particularly Senator Dittmer and Senator Keeffe, were not correct. For instance, they said that this Government had done very little to help the tobacco industry. In fact, no other Government since Federation has done as much for the tobacco growers as the present Government has done.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I intervene very briefly in this debate merely to invite the favour of a comment from the Minister for Customs and Excise (Senator Anderson) regarding representations that were made to me this afternoon, just before the Senate embarked on the debate on the three bills which deal with the tobacco industry. In common with my colleagues on this side of the chamber, I support the three measures. The one qualification- to that support is that we have an amendment, which we shall move at the Committee stage, relating to the membership of the Australian Tobacco Board.

This afternoon I was interviewed by tobacco growers from Victoria who claimed that they represented some 400 of their fellows in that State. They did not speak and did not purport to speak on behalf of tobacco growers from any State other than Victoria. They indicated that when the stabilisation scheme was put to them in the broadest outline some time ago they were told that they would have an opportunity to look at the detail of the legislation at their leisure. On that basis they affirmed, almost unanimously and- despite whatever misgivings they held, the principle of stabilisation and, in fact, the one which broadly is enshrined in the Tobacco Marketing Bill now before the Senate.

Now, on looking at the Bill they have misgivings on the ground that there are possibilities for anomalies to occur. They inquired whether there was a prospect of the Bill being deferred for some period to enable that matter to be investigated and also to enable them to make representations in respect of it. I was told by them that complementary State legislation is not proposed in the State of Victoria until the new year, probably in the autumn. One can understand that all the details of a scheme cannot be put at once to growers when it is first proposed. One can understand, also, the desire of growers to look with practical eyes, at their leisure, at the proposals that have been incorporated in the Bill. I invite the Minister to state whether there are factors of a political, practical, seasonal or other nature that would operate to prevent effect being given to the wishes of these growers from Victoria. I do not know whether the Government has had such representations before it, but I should appreciate it if the Minister would offer a comment on the representations that were put to me and which I now put to him.

Senator McMANUS:
Victoria

.- Like Senator McKenna, I also have had some conversation today with representative tobacco growers who have been in Canberra. I was very pleased to learn from them that they support the principle of stabilisation. They told me, as they told Senator McKenna, that a meeting was held at Myrtleford some time ago, called’ by the Victorian Tobacco Leaf Marketing Board and the Victorian Tobacco Growers Association Ltd., at which they were asked for their opinion of a stabilisation plan. They claim that they supported the principle of stabilisation at that meeting but that they understood that when the scheme was prepared they would be given an opportunity to examine it and consider its implications. They thought that the scheme would not have been introduced, as is proposed, without giving them what they consider to be adequate time in which to examine it. Furthermore, there is a feeling amongst some of them that, as the -Minister for Trade and Industry (Mr. McEwen) said this week, in regard to matters of this kind it is for the primary producers to decide. They feel, therefore, that the Government might well have given them opportunity similar to that given to the wool growers. That is to say, they think that the Government should have announced the stabilisation scheme, given details of it to the growers, and then allowed the growers to vote on it.

I emphasise that the growers who have spoken to me and communicated with me by letter have been strongly in favour of stabilisation. They appreciate the fact that the Government is prepared to assist them in this direction, but they feel that the scheme has been brought forward without giving them time for adequate consideration, particularly as there are a number of matters associated with it which they would have liked to consider. They would have liked a poll of growers, but they realise that since the Government has already proceeded so far with the proposal it will not be prepared to accept that proposition although, as I have said, Mr. McEwen has declared that in matters such as this the choice should be left to the growers.

Senator Hendrickson:

– Why cannot the Government do that now?

Senator McMANUS:

– I think that the honorable senator has been long enough in the Senate to know that when a bill reaches the stage that this Bill has reached it is almost certain that the Government will not withdraw it. I certainly would support a proposal for a poll if it were put forward, but even if a poll is not possible I would like the Government to defer action, particularly in regard to quotas, until the growers have had a chance to look at the proposal and to suggest ways and means by which the proposed arrangement of quotas might be improved.

Many Victorian growers have pronounced dissatisfaction with the quotas. They claim that, so far as they have been informed, the years which have been chosen as the basis for determining the quotas are not in their opinion those that should have been chosen. I suppose it is natural always to expect argument on what should be done. Nevertheless they suggest, in relation to the years that have been chosen, that some very progressive growers who have worked hard and gone to considerable trouble to expand or to improve their stake in the industry will be penalised by the quotas as they are to be determined. On the other hand, other growers who have reduced their stake in the industry of late will be in a position, because the quotas may be determined in accordance with the production of earlier years, to profit as a result of the quotas. It is claimed that there is already in operation a system of trafficking by some of these people who were at the stage of reducing their stake in the industry. The growers presented evidence to me and to other honorable senators that that is occurring. I feel that it is something which the Government cannot disregard and which should be considered by it.

I realise that a figure has to be chosen in regard to the total production of the industry. The suggestion of the growers to whom I have referred - and they have tried to be constructive, not destructive - is that in view of what has happened in Rhodesia something should be done to try to minimise the dissatisfaction among the more progressive Victorian growers with the quotas that are proposed. I think that Senator Webster put forward a proposition on those lines. I do not know to what extent that may be possible, but I certainly would support it. As the Government has gone this far and has met the wishes of the industry in regard to a stabilisation scheme, it would not be too much for it to go a little further and to ask the growers what are their complaints in regard to the quota system, to examine those complaints, to ascertain whether the growers have a legitimate grievance, and if so to take action to remedy that grievance.

I realise that in recent years this has been a somewhat difficult industry for the Government and others. The attitude of these primary producers is that over the years the Government has encouraged them to improve their stake in the industry. No doubt the Government realises that production of our own tobacco would have an effect upon our overseas balances and that the industry could be a much more valuable element in the primary producing sector of the economy. For that reason it has encouraged the growers to take a bigger stake in the industry and to go to considerable trouble to. improve the quality of the leaf. These people having been encouraged to take a bigger stake in the industry, to put more of their capital and energy into it and to give it more of their attention, and an admirable stabilisation scheme having been adopted, the Government ought to be prepared to go a long way to assuage what seems to me to be genuine dissatisfaction about one aspect of that scheme.

As I said earlier, I assume that at this stage it is useless to speak about having a poll. I emphasise that I should like to see one held. It would be a democratic way of dealing with the problem. Indeed, it is supported by Mr. McEwen as evidenced by his statement that in matters such as this the growers should have the right to approve or disapprove a stabilisation scheme. If it is not possible to hold a poll, I should like the Government to do what it can to defer final action, particularly in regard to quotas, until it has given the growers a further opportunity to place before it evidence about the way in which they believe they have been disadvantaged.

Those are the views that I wished to express. 1 believe that the adoption of this scheme will prove to be a progressive move, but it would be even more progressive if the Government were to take action to defer its implementation until the dissatisfaction had been dealt with finally.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– in reply - The proposed stabilisation scheme has been adopted after a long period of negotiation between this Government, the Governments in the States concerned - particularly Queensland, New South Wales and Victoria - growers in the industry, and the manufacturers. It has been achieved in a spirit of co-operation. The period of negotiation has been a long, hard and anxious one. The proposed stabilisation scheme has been considered by representatives of the growers and has been approved by the House of Representatives. Now it is being considered by honorable senators. But at this eleventh hour it is put to me that we should defer the scheme. I say quite frankly that such a proposal cannot be countenanced. The scheme has not been introduced as the result of an arbitrary decision by this Government but is the outcome of a request by the growers for the industry to be stabilised. Now, when we are on the very brink of passing legislation that will stabilise the industry, it is put to mc that because of representations that have been made in the lobbies of this place all that has been achieved should be put in jeopardy by deferring introduction of the scheme.

Senator Hendrickson:

– But only because of promises that have been made.

Senator ANDERSON:

– I do not want to be interrupted. The history of the tobacco industry has been one of good seasons and good returns to the growers and bad seasons and bad returns. It was because of past experience that the growers themselves, through their organisations, went to the State Governments and have come to this Government and have asked for a stabilisation scheme-. After holding many conferences we have arrived at a stabilisation scheme which the growers, including those of Victoria, and their organisations have said is acceptable to them. Where necessary, the State Governments will pass complementary legislation. The Commonwealth has played the part of negotiator in the interests of the industry. All this having been done, and an interim committee which has functioned in the same way as it would if the scheme had been in full operation having been set up for the season that has just concluded, it is suggested that we should defer the scheme. We cannot defer it. If that proposal were accepted, it would prejudice, not only the stabilisation scheme, but also the growers and the industry as a whole.

During this debate members of both the Government and. the Opposition parties have said that they accept the scheme as being a good one for the industry. Senator Benn, who led for the Opposition, and also the Leader of the Opposition (Senator McKenna) have indicated that at the Committee stage the Opposition proposes io move an amendment in relation to the structure of the Australian Tobacco Board. I do not propose to canvass the arguments that may be advanced in support of that proposal.

It is not right to say that over the years the Commonwealth Government has not made a very real contribution to the development and progress of this industry.

One has only to look at the percentage content of Australian leaf in manufactured tobacco products for support of that statement. In 1953, which is a fair while ago - I could go back further - the content of Australian leaf was 6 per cent, in the case of cigarettes and 10 per cent, in the case of tobacco. The percentage has been increased progressively over the years until at the present time it is 47 per cent, in relation to both cigarettes and tobacco. As from 1st January next the percentage will be 50 per cent, in both cases. Those figures are indicative of the policy that has been pursued persistently by this Government to encourage the use of Australian leaf in the manufacture of cigarettes and tobacco.

The Commonwealth Government, I repeat, has spent a tremendous amount of time on this measure. The Minister for Trade and Industry (Mr. McEwen), the Minister for Primary Industry (Mr. Adermann), and I have been involved in lengthy negotiations wilh the growers and their representatives and with the manufacturers and their representatives. We have co-operated with the Governments of New South Wales, Victoria and Queensland to arrive at a stabilisation scheme. Those efforts should not be prejudiced at this stage.

It is true that an interim committee was functioning during the last selling season. It is equally true that we ran into some difficulties. The Government met those difficulties and I do not wish to canvass them now because they have been fairly widely covered in this debate. It was always expected that there would be problems in establishing a scheme of this nature. The interim committee was able to overcome the difficulties and at present it is considering problems that have arisen in the light of the experience gained in the preceding season. It may well be that when this legislation is enacted and the stabilisation scheme comes into force- after the States have passed their complementary legislation - growers and manufacturers will be able to draw together in the interests of good management of the industry.

Senator Benn said that the proportion of Australian leaf used in manufacture should be even higher. I remind him that although the quota is fixed at 26 million lb., the yield of quota tobacco for the season just ended was only about 23.6 million lb. Honorable senators will appreciate that a great amount of study and research has been devoted to the question of quotas. Senator Webster, Senator McManus and Senator McKenna each referred to a Victorian group of growers. I remind them that quotas within Victoria are not matters for the interim committee. They are decided by the Victorian growers’ organisation. It is a principle of the proposed stabilisation scheme that State quotas should be fixed by the State growers’ organisations. The whole argument put in relation to a Victorian group of growers revolves about the position of the Victorian growers’ organisation, to which those growers should direct their problems.

The Victorian- Tobacco Leaf Marketing Board is a statutory marketing authority, formed under the auspices of the Victorian Government as a result of a poll of growers. Senator McManus referred to a poll. At least the marketing authority in Victoria came into being as a result of a poll about two or three years ago in which an 80 per cent, vote of Victorian growers favoured such an organisation. Similar boards operate in Queensland and New South Wales. The Tobacco Growers Council is the Federal body of * growers’ organisations and is composed of representatives . of the growers’ boards. A well defined line is drawn between State growers’ organisations and the Federal body. I repeat that the quotas are fixed by the State organisations.

It is heartening that honorable senators on both sides of the chamber support the proposal. It will benefit the industry by bringing to it security. Teething troubles no doubt will be encountered at the outset. There are bound to be difficulties but at least the interim committee has the advantage of the experience it has gained as the forerunner of the Australian Tobacco Board which will be created under this legislation. We have gone through the first year and overcome the difficulties encountered. I believe it would be disastrous to pause now and return to a position whence we may well have to start all over again along the same hard road. I ask the Senate to give a speedy passage to the second reading stage of this legislation so that we may examine the amendments which the Opposition wishes to move.

Question resolved in the affirmative.

Bill read a second time.

In Committee.

The Bill.

Senator BENN:
Queensland

.- I wish to refer to clause 6 of the Bill, which reads in part - (1.) The Board shall consist of twelve members, namely: -

  1. one member to represent the Commonwealth;
  2. one member to represent the Stale of New South Wales;
  3. one member to represent the State of Victoria;
  4. one member to represent the State of Queensland;
  5. one member to represent tobacco growers in the State of New South Wales;
  6. one member to represent tobacco growers in the State of Victoria;
  7. one member to represent tobacco growers in the State of Queensland;
  8. one other member to represent tobacco growers; and
  9. four members to represent tobacco manufacturers.

The proposed membership of the board is there set out. The Opposition wishes to change the proposed membership. I therefore move, in respect of clause 6 -

Leave out sub-clause (1.), insert the following sub-clause: - “(1.) The Board, shall consist of thirteen members, namely: -

one member to represent the Commonwealth;

one member to represent the State of New South Wales;

one member to represent the State of Victoria;

one member to represent the State of Queensland;

two members to represent tobacco growers in the State of New South Wales;

two members to represent tobacco growers in the State of Victoria;

two members to represent tobacco growers in the State of Queensland;

one other member to represent tobacco growers; and

two members to represent tobacco manufacturers.”.

Honorable senators will note that the Opposition proposes that two Board members are sufficient to represent the manufacturing companies. We believe that two members should be appointed to represent tobacco growers in New South Wales, instead of one member as provided in clause 6 (.1.) (e); that two members should be appointed to represent tobacco growers in Victoria, instead of one member as provided in clause 6 (1 . ) (f); and that two members should be appointed to represent tobacco growers in Queensland, instead of one member as provided in clause 6 (1 . ) (g). If our amendment is carried, there will be 13 members of the Board, instead of 12 as provided by the Bill. We believe that it is essential to have on the Board as many representatives of tobacco growers as possible. It would be futile to have on the Board four members representing the tobacco manufacturers. Under the Bill, the Board seems to be lopsided.

Senator KENNELLY:
Victoria

– I support Senator Benn. I speak without having the relevant documents in front of me; butI understood thatthe growers always had a majority of representatives on a marketing board. One would expect the Country Party to support that principle. Despite the great number of marketing authorities in both the Commonwealth sphere and the State sphere, I cannot call to mind one instance in which there has not been agitation for the growers to have a majority on a board and in which that agitation has not been successful.

Senator Sim:

– That is not the position in respect of all boards.

Senator KENNELLY:

– If the honorable senator can tell me the boards on which there is not a majority of growers, I will be pleased to hear about them.

Senator Sim:

– The milk boards in Western Australia and South Australia are two examples.

Senator KENNELLY:

– That does not detract from our support of this great principle which members of the Country Party have supported both in and out of season in all houses of parliament. Marketing legislation has played a major part in the development of our primary industries.

Senator Benn’s amendment is designed to give tobacco growers a majority on the Australian Tobacco Board. All that his amendment does is increase the membership of the Board from 12 to 13 and give the growers seven representatives on the Board and, therefore, a majority. It is true, as Senator Benn has said, that his amendment would reduce the number of representatives of the manufacturers from four to two. But over the years the principle has always been that the growers should control their own product. No-one has been stronger in advocating that principle than have members of the Country Party in both Federal and State spheres.

Senator Webster:

– We agree with that statement.

Senator KENNELLY:

– I hope that my friends in the corner not only agree with that but also will vote for the amendment. I do not want them to agree and then run away when a vote is taken. I hope that the Government will consider this amendment.

I do not want to go into what I have heard about cigarette smoking and so on. I smoke. I like to smoke. I am not concerned about whether smoking brings ills to people. I suppose that in life one has to take risks.

Senator Morris:

– Did the honorable senator like the cigarettes that he received?

Senator KENNELLY:

– No, I did not. I am quite honest about it. I have never thought that anything that is cheap is much good. I am certain that one does not derive much benefit from anything - cigarettes included - that one gets in the way we got those cigarettes. I was pleased to hear the Minister for Customs and Excise (Senator Anderson) tell us how this industry has progressed over the years. Naturally, a government that was in office for as long as the present Government has been in office would automatically increase the percentage of Australian leaf that the manufacturers must use in order to obtain the benefit of customs duty concessions. I give the Government credit for increasing the percentage. This industry is important not only to the growers but also to the finances of this nation, from the point of view of the collection of excise revenue.

I wish that the Government would support the amendment moved by Senator Benn because it would achieve something which all primary producers desire, namely, control of the marketing of their own products. That has been achieved in our most important industry - the wool industry. I understand that Senator Sim is interested in that industry. He would not want people other than the growers to control it. If that principle is right for the wool industry and for the egg industry-

Senator Sim:

– The egg industry is not controlled by the producers.

Senator KENNELLY:

– It is in Victoria. The Victorian Egg Marketing Board has a majority of egg producers on it.

Senator Sim:

– Not all egg boards have a majority of producers.

Senator KENNELLY:

– I told honorable senators that I did not have the relevant documents in front of me. I am delighted to know that Senator Sim, as a wool producer, wants the wool producers to control their own industry. I hope that he will apply to the tobacco growers the same principles as he applies to the industry in which he is interested.

Senator Lillico:

– What about the pea industry?

Senator KENNELLY:

– I will leave my good friend to deal with the pea industry when it comes up for discussion. He knows much more about it than I do. I do not think I need to make an appeal to my friends in the corner on this matter. Over the years their cry has been that the producers must control their own industry. Here is an opportunity for them to back their words with votes, so that in this industry, too, the growers will control the marketing of their own product.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– The amendment proposed by Senator Benn follows, in substance, an amendment that was moved in another place. Therefore, the responsible Minister and the Government have had time to examine it. I can tell the Committee that the Government is not prepared to accept the amendment for reasons, some of which I now propose to give. The point that has been made with some force by Senator Kennelly is that there should be greater weighting in favour of the growers. I want to remind the Senate - and it follows in substance the point that I made in the second reading debate when speaking in terms of the States - that this is a regulatory stabilising scheme. It is for the purpose of regulating the industry. But we have to remember that in each State there is a growers’ organisation. The growers’ organisations will take a very active part in the stabilisation scheme because they, in turn, will fix the quotas in respect of the leaf to be observed within the States.

The growers will be represented on the Australian Tobacco Board, and in addition, there will be growers’ organisations, with a very real function to perforin, in each of the States where the industry operates. So in the first instance it is not, as it would appear, simply a matter of having four growers’ representatives, four manufacturers’ representatives, three States’ representatives, whom I shall come back to in a moment, and a Commonwealth chairman. In addition, in each State there are growers’ organisations which have a function to perform in relation to the scheme. Therefore, there is a far heavier representation of growers than there appears to be on the face of it.

The next point I want to make is that it should be remembered that the Minister for Agriculture in each State is also going to have the responsibility of nominating a member of the Board. In the nature pf things, the States concerned are vitally interested in the preservation of the industry, and the representative of the States in each case is going to be a man who has an abiding interest in the development and progress of the industry. So there will be four growers’ representatives and three representatives nominated by the States who are going to see to it that their representatives take a proper view of their responsibilities and there will be a Commonwealth chairman whose function will follow the same pattern. In addition, there are in each State the existing growers’ organisations which have a function in relation to the fixing of quotas in the States concerned. In all those circumstances I believe that there is fair and reasonable representation.

The only other point that I want to make is that the stabilisation scheme is one which was negotiated in a spirit of co-operation between the growers, the manufacturers and the State Governments concerned. This proposition was canvassed and accepted. Having the situation where this proposition has been canvassed and negotiated, I suggest that it would be completely inconsistent and illogical for us to turn round and alter the proposal at this stage. For those reasons I say to the Committee that the Government is not prepared to accept the amendment.

Senator KENNELLY:
Victoria

– I only want to say one thing: 1 think that the argument which has been advanced by the Minister is illogical. First of all, this is Commonwealth legislation. There is nothing in the Bill to say that the States’ representatives must be tobacco growers. I do not mind the existing provision as long as the growers have a majority. Clause 6 of the Bill provides that there shall be one member to represent New South Wales, one member to represent Victoria and one member to represent Queensland. There is nothing there to say that they must be growers. Then the clause says that there shall be one member to represent tobacco growers in New South Wales, one member to represent tobacco growers in Victoria, one member to represent tobacco growers in Queensland and one other member to represent all tobacco growers. Irrespective of what the Minister stated the facts to be, if this clause is carried in its present form there is no guarantee that there would be, and there need not be, a majority of growers on the Board. For that reason I think that Senator Benn’s amendment should .be carried.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– I want to make it perfectly clear that I did not say that the representatives whom the State Governments nominate will be growers’ representatives. All I said was that there would be three representatives, one nominated by each of the State Governments. Because of their interest in the industry and because of their desire to see that the industry is preserved and that the stabilisation scheme functions properly, the representatives of the States on the Board would take a proper view of all the problems involved. I also went on to say that tha State growers’ organisations had a responsibility and that we can regard that as another weighting factor in favour of the growers. In fact, State organisations will do all the actual physical marketing of the leaf. So, in addition to having the growers’ representatives on the Board, the growers’ organisations will have a function to perform in the States.

Question put -

That the words proposed to be left out (Senator Benn’s amendment) be left out.

The Committee divided. (The Chairman - Senator T. C. Drake-Brockman.)

AYES: 22

NOES: 27

Majority . . 5

AYES

NOES

Question so resolved in the negative.

Senator BENN:
Queensland

.- Clause 17 (1.) provides -

Subject to this section, the Board may employ such persons as it thinks necessary to assist the Board in carrying out its functions and exercising any of its powers.

It will be recollected that the Minister referred in his second reading speech to the position of arbitrator. He said -

Because the system will provide for minimum prices applicable to specific grades, provision must be made to settle disputes on grades. A very competent man, in the person of the late Mr. P. C. South, was appointed to the position of Arbitrator as a Commonwealth public servant, just prior to the commencement of sales in March this year.

He then explained that Mr. South had passed away suddenly before taking up his duties, and he went on to say -

In the difficult situation which thus arose, arrangements were made with W. D. &H. O. Wills (Aust.) Ltd. for the secondment to the Commonwealth for the 1965 selling season of Mr. F. M. Munster to carry out the functions of Arbitrator.

I have not the slightest doubt that Mr. Munster is a very impartial gentleman who is able to carry out the work efficiently. The clause provides that the Board may employ such persons as it thinks necessary to assist’ it in carrying out its functions and exercising any of its powers. It becomes obvious that the Commonwealth Government has not an arbitrator to appoint, so it has to draw on a tobacco company to supply an officer. I ask the Minister to state what the Government’s intentions are. I shall have to move an amendment to the clause unless I get a satisfactory reply. The grading of tobacco is technical work, and if the Commonwealth Government proposes to select cadets from matriculants, employ them for a number of years and have have them properly trained as graders of tobacco and arbitrators, this can easily be achieved by sending them overseas for training in the manufacture of tobacco and in general grading. On their return they could be employed in their proper sphere.

Senator ANDERSON:
Minister for Customs and Excise · New South Wales · LP

– I understand that the Government intends to advertise publicly for a person suitable for appointment. The appointment will be made, naturally, by the Minister.

Senator Benn:

– By the Public Service Board.

Senator ANDERSON:

– That may well be, but the appointment will be made departmentally. It is of the very essence of the scheme that the person so chosen will be a person of great experience. I am not in a position to give the honorable senator any more information than that.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

Bill (on motion by Senator Anderson) read a third time.

page 1800

TOBACCO CHARGE BILL (No. 1) 1965

Second Reading

Consideration resumed from 23rd November (vide page 1703), on motion by Senator Anderson -

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without requests or debate.

page 1800

TOBACCO INDUSTRY BILL 1965

Second Reading

Consideration resumed from 23 rd November (vide page 1704), on motion by Senator Anderson -

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1800

STATES GRANTS BILL 1965

In Committee.

Consideration resumed (vide page 1772).

Clause 5 agreed to.

Clauses 6 to 9 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Third Reading

Bill (on motion by Senator McKellar) read a third time.

page 1800

STATES GRANTS (SPECIAL ASSISTANCE) BILL 1965

Second Reading

Debate resumed from 16th November (vide page 1525), on motion by Senator Henty -

That the Bill be now read a second time.

Senator WILLESEE:
Western Australia

.- This Bill follows the States Grants Bill 1965 which we debated yesterday and earlier today. That Bill was designed to reimburse the States out of tax moneys collected by the Commonwealth, although the reimbursements are euphemistically called assistance to the States. The Bill now before us is designed to grant special assistance to Western Australia and Tasmania over and above the allocations to which those States normally are entitled under the uniform taxation arrangements. The special assistance grants are made to Western Australia and Tasmania because they are the two remaining States which are entitled to make a special claim on the Commonwealth. The grants, which are the result of recommendations made by the Commonwealth Grants Commission, will this year amount to £12 million for Western Australia and £83/4 million for Tasmania.

There is generally some confusion associated with the presentation of these bills because the general allocation is made every five years whereas grants to the States are made from time to time. I should like to mention to the Senate the principle and methods on which the Commonwealth Grants Commission makes these allocations at this time. I say “ at this time “ because the time has varied over the years since the Commission was set up in 1933. The following comment appears on page 39 of the 1965 report of the Commonwealth Grants Commission -

During the initial period of its work the Commission considered compensation for disabilities arising from Federation as a possible basis upon which its recommendations should be made.It considered also the basis of financial need. In its Third Report (1936) the Commission finally rejected the principle of compensation for disabilities arising from Federation–

I point out that was 36 years after Federation - and chose in place thereof the principle of financial need, which is expressed in the following terms - “ Special grants are justified when a State through financial stress from any cause is unable efficiently to discharge its functionsas a member of the Federation and should be determined by the amount of help found necessary to make it possible for thatState by reasonable effort to function at a standard not appreciably below that of other States.” This principle has remained unaltered–

That is, unaltered since 1936 - as the basis on which the Commission’s recommendations have been made but, from time to time, methods of applying the principle have been adapted to changing circumstances. Basically the financial need of a claimant State is assessed by a comparison of its budget result with the average budget results of those non-claimant States which the Commission decides to regard as standard States.

There has been an interesting alteration in this regard over the years. Because of disabilities arising out of Federation, obviously there was some need for reimbursement to the smaller States - smaller on a population basis - and as the Commission points out, grants on this basis continued until 1936. In the days when there were three claimant States and three standard States the allocation was made on the basis of the three standard States which were the three eastern States of Queensland, New South Wales and Victoria.

In 1961 the number of standard States was reduced to two because at that time South Australia ceased to be a claimant State. This left New South Wales and Victoria as permanent standard States. Queensland and South Australia were regarded as standard States, but because they were not considered to be permanent standard States in the sense that New South Wales and Victoria were, the 1959 agreement between the Commonwealth and the States provided that Queensland and South Australia could make claims on the Commonwealth if they felt they could not carry on without additional assistance. Therefore although at that time there were four nonclaimant States, it was felt that grants should be made on the basis of two standard States only, namely New South Wales and Victoria. That is the situation which exists today.

When dealing with the Bill yesterday, Senator Wright roamed away from the point as he usually does. Generally he commences on a theme and ranges far and wide from it. When dealing with the general matter of grants to the States he seemed to attribute all progress in this field to the efforts of Tasmanians. He said that in 1933 Joseph Lyons, a Tasmanian and Prime Minister of the day, was responsible for the establishment of the Commonwealth Grants Commission, and that in 1900 the Braddon clause in the Constitution - Braddon was another Tasmanian - gave Tasmania equality with the other States of the Commonwealth in the distribution of portion of Commonwealth customs and excise collections.

If the honorable senator studies history more closely, he will find that the Commonwealth Grants Commission arose from the economic problems of the depression. When the Scullin Government was in office, the Public Accounts Committee was charged with the responsibility of examining the claims of the claimant States as they are known now. Under the tremendous economic pressures of those years, it became necessary for the Commonwealth Government to look at the budgetary position. People were literally starving. Thousands were out of work. An economic depression was sweeping the world and its impact was felt no less in Australia than in other countries.

One of the members of the Public Accounts Committee was Mr. J. B. Chifley who later became Prime. Minister. He resigned from that Committee to go into the Cabinet as Minister for Defence. The Public Accounts Committee was meeting every two days over many months examining principally the problems of the States which were seeking assistance from the Commonwealth. It has been said that Mr. Chifley got his great appreciation of the firm economic relationship between the States and the Commonwealth from his association in those days with the Public Accounts Committee. Friend and foe acknowledge that he had a brain for finance and he played a prominent part in the economic investigations of those days. Mr. Chifley was a member of the Public Accounts Committee when it recommended that a permanent committee should be set up to oversee and examine the claims of the States on the Commonwealth. The task was taken from the shoulders of the Public Accounts Committee and given to the body which has been known since 1933 as the Commonwealth Grants Commission. The Public Accounts Committee lapsed and it was not reconstituted until after the change of government in 1949. Its Chairman was Professor Bland, a member of the House of Representatives, who had a great reputation for his writings on relations between the trade unions and Public Service Administration and that sort of thing. The Public Accounts Committee was set up about 1950 under Professor Bland and it is still active today.

It is interesting to see bow the problems covered by the Bill before the Senate have been growing by leaps and bounds. The Opposition pointed out last night, in the discussion on the measure to provide general reimbursements to the States, how much the Commonwealth has been brought into the financial administration of the States. This

Bill provides for special grants because it. is within the power of the Commonwealth to go to the aid of the States for all sorts of purposes. These include flood relief, special developmental projects, northern development in W.A., the standardisation of railway gauges and so on. There has been lack of flexibility in these things. An answer given in another place reveals that in the five years before 1950, six special grants were made by the Commonwealth. Between 1951 and 1960, there were eight special grants. In 1963-64 the number had leapt to 14. These were given for particular projects ranging from roads, railways, universities, hospitals, a water supply for Western Australia and special northern development particularly when the Government was in electoral difficulties in that area. Special grants were also made for meat production.

I mention these matters only to give some idea of the diversity of areas into which the Commonwealth finds it must go irrespective of the way in which it would like to hide behind the Constitution and say that these are jobs for the States. Regardless of the outdated Constitution, the Commonwealth is being forced year by year to enter different fields. In passing, I might say that I have never considered the Constitution to be anything more or less than a political document .written by politicians - irrespective of whether they were then in politics or not - at a time and in an atmosphere wherein they thought it was best for the Commonwealth of Australia. The Constitution is a political document and in the past few years, this Government- has not amended it as it should have been amended for the development of Australia.

I remember 1950 when I was young and green in politics and I spoke on northern development in this chamber. I suggested that it was difficult for any Commonwealth Government, irrespective of its political colour, to undertake special projects in distant parts of Australia. I said we could not expect any Commonwealth Government to take a punt and say: “ We will spend so many millions on this project. It might not be economically sound but we think Australia should do it “. I pointed out that on the other hand, it was not very realistic to expect State Governments, probably with small majorities, to decide to approach the Commonwealth for aid particularly if the

Commonwealth Government was of a different political colour. Young and green as I was, to quote Henry Lawson I suggested that a Senate committee or something of that nature should be set up to have oversight of this type of development. I suggested that such a committee should make recommendations as to whether a particular project should be carried out after consulting witnesses such as representatives of State governments, Commonwealth finance officers and others.

In making some research in connection with this Bill, I noticed that the present Leader of the Opposition (Senator McKenna) when speaking on special State grants in the same year - 1950 - also suggested that a permanent Senate committee should be set up to examine the question of special grants to the claimant States and, indeed, to other States which might have special projects in mind outside the propositions contained in their budgets. I notice that the Vernon Committee report - that stillborn report - also referred to1 this matter. It stated that obviously there was no informed forward planning by the States and there was not sufficient examination of special projects.

The Vernon Committee suggested a special projects committee should be set up. It did not say whether such a committee should come, from the Senate or from both Houses. It did not say whether the Committee should be a technological committee; but’ it is interesting to note that, over the years, three different sets of people have arrived at the same conclusion. The Vernon Committee had the advantage that the Prime Minister (Sir Robert Menzies) had asked Sir James Vernon for his report on this matter. The right honorable gentleman did not get round to asking the Leader of the Opposition or’ me but the result seems to be exactly the same, because although Sir James Vernon was asked for his suggestion, it is not getting any more consideration than was given to the suggestions made by Senator McKenna and by me.

I repeat that it is pretty obvious if we are to have uniform development and some priority in development- a proposal that was dodged by Sir William Spooner when, the Northern Division of the Department of National Development was set up - and

If we ate going to have a sane approach to development, there must be some sort of supervisory committee. I do not know whether it would be a committee of par* diamentarians, a committee of the Senate not bound by electoral considerations or a combination of parliamentarians and technological people. But as the Vernon Committee pointed out, it has been suggested - not only by Senator McKenna and myself but also by other people - ‘that someone should be looking at these projects and saying what should be done about them whether they are in Queensland, Victoria or New South Wales.

Debate interrupted.

page 1803

ADJOURNMENT

International Development Association

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 - 77 sil the Senate do now adjourn.

Senator MULVIHILL (New South Wales) f_l 1.0]. - I rise to make some observations in regard to Australia’s membership of the International Development Association. Had time permitted I would have made my submissions in this respect when the estimates for the Department of External Affairs recently were considered in this chamber, but since it was not possible to do so on that occasion I propose to present them now. As honorable senators know, the primary purpose of the Association is to promote economic development and increased productivity, and to raise living standards in the less developed countries. I do not think anybody would quarrel with that objective.

When the Association was launched in 1960, it was proposed that the United States of America and the United Kingdom would each provide 50 per cent, of the capital. Australia was one of the countries which might be regarded as being in the top echelon of members, while other countries, such as Afghanistan, formed the lower structure. It can be said, of course, that there is a three-tier structure of aid involving the International Bank for Reconstruction and Development, the International Monetary Fund and the International Development Association. It is fitting to point out that on 17th May 1960, when legislation dealing with Australia’s membership of the Association was introduced, my Leader, Senator McKenna, stated - i hope the funds will have been lent out . . and that they will be working in the underdeveloped countries.

I think it is in order for us today to indulge in a little stocktaking in regard to Australia’s membership of the Association. This brings me to a question which I addressed on 22nd September last to the Minister representing the Minister for External Affairs. I wanted to know just what had been done by the Association. I was informed that the completed projects included highway contruction in Haiti and in Swaziland, and an irrigation project in India. These projects involved a considerable sum of money.

I have no question concerning the last two projects, but I do wish to say something about the project in the Caribbean island cif Haiti. In these days when there is much discussion of aid for underdeveloped countries nobody questions the right of people to speculate as to whether the money that is provided is devoted to the purposes for which it was provided. That is why I was very perturbed when I noticed that aid had been provided for Haiti. Subsequent research revealed the amazing fact that among the authorities which considered this island to be a very poor financial risk was the United States State Department in 1963, when it broke off diplomatic relations with Haiti. That meant an immediate turning off of the tap of economic aid. The United States had been fairly generous to Haiti and to one or two other Central American republics, but despite the money that had been channelled to Haiti it had the dubious reputation of having the lowest standard of living of any part of the world. As a result, the United States decided that it was throwing good money after bad.

It may be said that there was political bias or something of that kind associated with the termination, of American aid. However, next door to Haiti we find the Dominican Repubic which at that time had a Socialist Prime Minister, Juan Bosch. He also went on record as saying that the Duvalier Government of Haiti was a source of irritation, of border incidents, of corruption and of brutality which could not be tolerated. As a matter of fact, the United States Government sought to curb the border activities and more or less to keep the trouble within bounds. The point I want to make is that the people in those two countries are poles apart. I think it is fair to say that today Juan Bosch of the Dominican Republic would not necessarily see eye to eye with the United States State Department, but nevertheless that was an instance of two authorities condemning the Government of Haiti.

I wish to be fair to the Minister for External Affairs (Mr. Hasluck) in making this criticism, but I feel that there has been a failure to maintain effective liaison between the Department of External Affairs and the Department of the Treasury. 1 say that because the International Development Association is operated by a Board of Governors and I should imagine that officers of our Treasury Department would have a say as to which countries should receive benefits from the Association. In 1960 there was in this Parliament unanimity of opinion that the Association could perhaps provide a more flexible means of making international aid available than, say, the International Bank and other such bodies: However, I think that we should not continue to underwrite countries in which there is nothing to show for the aid that we provide. I say “ nothing to show “ advisedly.

I know that one of the aims, in theory at least, of the Association is to look not so much at the nature of the government in the saddle in a particular country as at the degree of its development. I suppose we adopt a similar attitude in regard to many of the African States. However, when we look at some of the countries which have received aid from the International Development Association, I can think of many countries which would provide a better result. Venezuela is one such country which comes to mind, because in that country there is a positive attempt by the Government to raise standards. In Haiti there is a dictator. If honorable senators look at a map of the country they will see that there is a highway which runs from the capital to the hinterland. Apparently the dictator has his palace at Saint Marc. In effect, therefore, the money that has been provided by the taxpayers of Australia has done no more than construct a bitumenised highway for the dictator and his goon squads to use on their journeys backwards and forwards. It has done nothing for the people of Haiti-. That is not only my opinion. It is also the opinion of the United. States Government and of Socialist leaders such as the former President of the Dominican Republic. Nevertheless, Australia is remaining passive in this respect.

It may be said that it is an accepted principle to provide such aid. I say that that is not so and in support of my contention I point to two countries which, at the time of which I am speaking, had governments which differed considerably ideologically. I refer to the Republic of Ireland under De Valera and the Yugoslav Socialist Republic under Marshal Tito. Those were two of the few countries in Europe which did not accept American postwar aid immediately because they thought that there were strings attached to it. That is a debatable question in both countries. I had the opportunity to obtain admissions from government officers in those countries that perhaps their tactics had been wrong. The point I am making is that in those instances conditions were imposed in relation to the aid which was provided by the Western powers. Yet, in 1965, when Australia could expend money in many , more laudable ways, we find that nothing has been done to stipulate the purposes to which the financial aid that we provide is put. There has been no protest. We have not been told why our representatives remained passive when priorities were being established, or why we had to go right to the bottom of the barrel, at it were, in choosing a nation as the recipient of aid.

The dictator Duvalier is renowned for the brutalities and the mutilations that he practices on political prisoners. Yet, we go along with the giving of aid. We are one of the few countries stupid enough to do so. It may be said that the die has been cast. Honorable senators may ask: What can we do about it? Prompted by the role played by larger powers, such as the United States, I think that if we are to educate our people in the responsibilities that they should assume towards other countries, in future years when perhaps a larger slice of the Commonwealth Budget is devoted to international aid it will be advisable to make an example of countries which obviously are prepared to take the money that is provided and, instead of using it for the benefit of the people use it to prop up corrupt regimes. There is no question that that has been done in the instance 1 have mentioned. It is a classical example. The research I carried out was prompted by the answer I received from the Minister.

The United. States of America has certain committees before which Federal agencies must testify and justify decisions that are made. I suppose this is a matter in relation to which there is an intermingling of the activities of the Department of the Treasury and the Department of External Affairs. I am not criticising the Department of External Affairs directly. I know some of its senior officers such as Mr. Forsyth and Sir James Plimsol!. They certainly would not attempt to defend what has happened in the Caribbean. I concede that officers of the Treasury would have a knowledge of budgetary problems, but when it comes to matters of foreign policy there are people more competent to make a decision than they are. Ever since the advent of Adolf Hitler it has been proved that, if certain bankers could see profit in a particular project, they would be in on it. I do not believe that the peace or the economic well being of this world should be left completely to the banker’s mind. The Department of External Affairs has competent officers. It is they who should tell our representative on the Board of Governors what attitude should be adopted.

As a percentage, Australia’s contribution would be far less than that of some of the larger powers. However, it is a question of getting the greatest value for the money spent and of doing the greatest good for the greatest number. I am sure we could achieve that objective by helping other countries. The Government has a responsibility to instruct some of our representatives on these international agencies to ensure that when they cast their votes they try to translate into action what Australians think. I do not think any honorable senator in this chamber, irrespective of the party to which he belongs, would in any circumstances be prepared to underwrite this corrupt little republic in the Caribbean. I resent the fact that the money of Australian taxpayers is being squandered in the way that I have mentioned. As five years have elapsed since this proposal was the subject of a unanimous decision by the Parliament as a whole, it is time that it was reviewed. If this fellow to whom .1 have referred wants his own form of independence, let him survive by his own efforts. I do not think that countries like Australia should be expected to provide for him particularly when the money so spent could be diverted to other countries where there is so much to be done.

Senator GORTON:
Minister for Works · Victoria · LP

.- Senator Mulvihill has raised a matter about which I know virtually nothing. It arises from a question that was asked of and answered by the Minister for External Affairs (Mr. Hasluck). I shall endeavour to obtain a number of the facts so that we all may know how this sort of thing works. At the moment I do not know. 1 shall endeavour to discover, for example, who is on the Board of Governors. I take it that the honorable senator is speaking about an international fund which is administered by a Board of Governors which is drawn from a number of countries and which is responsible for allocating money that is paid into the fund.

Senator Mulvihill:

– That is right.

Senator GORTON:

– I shall endeavour to ascertain who is on the Board of Governors, whether it arrives at its decisions by a majority vote, when the particular work to which the honorable senator referred was undertaken, and all such matters that have a bearing on the point raised. It may be that in relation to these international funds a country has not a right of veto. I am not saying, of course, that even if h has a right of veto it would want to exercise that right. As I have indicated, I shall endeavour to make all the facts known.

Question resolved in the affirmative.

Senate adjourned at 11.14 p.m.

Cite as: Australia, Senate, Debates, 24 November 1965, viewed 22 October 2017, <http://historichansard.net/senate/1965/19651124_senate_25_s30/>.

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