26th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Alister McMuIlin) took the chair at 3 p.m., and read prayers.
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– by leave - I wish to inform the Senate that the Minister for Primary Industry (Mr Adermann) is currently engaged on an official visit to Europe and North America. Mr Adermann’s itinerary has included attendance at the opening plenary session of the International Wheat Council, and discussions at the headquarters of the United Nations Food and Agriculture Organisation in Rome and the International Wool Secretariat in London. He expects to return to Australia before the end of this week - on 19th August. The Minister for the Interior (Mr Anthony) is acting as Minister for Primary Industry during Mr Adermann’s absence.
Mr McEwen, the Minister for Trade and Industry, has suffered a recurrence of a dermatitis condition which he expects will keep him away from this week’s sitting of the Parliament. He anticipates being back next week. In his absence, the Minister for Social Services (Mr Sinclair) will deal with matters in the House of Representatives relating to the Trade and industry portfolio.
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– It is with regret that I have to inform the Senate of the death of Mr George Henry Gray, member of the House of Representatives for Capricornia, .Queensland, who died on 2nd August at the age of 58.
George Gray was elected to the House of Representatives as the Australian Labor Party member for Capricornia in the general election of 1961, and was returned in subsequent elections. He became a member of the Library Committee in March 1962. He was born at Orange, New South Wales, and graduated in economics at the University of Sydney. He enlisted in the Australian Military Forces - CMF - in September 1939, transferring to the 2nd Australian Imperial Force in November 1942. He subsequently served ‘in New Guinea.
George Gray was a quiet, sincere man who believed passionately in northern Queensland and in the defence of Australia. During his parliamentary career he worked assiduously for his ideals. 1 move:
That the Senate expresses hs deep regret at the death of George Henry Gray, member of the House of Representatives for the Division of Capricornia, Queensland, places on record its appreciation of his long and meritorious public service and tenders its sincere sympathy to his widow and family in their bereavement.
– On behalf of the Opposition I express sincere regret at the passing of George Henry Gray, member for Capricornia. He was a humanitarian with deep and sincere convictions which were demonstrated in his extensive involvement in public affairs. He was born on 2nd October 1908 at Orange in New South Wales and was educated at public schools and at the University of Sydney. Later he distinguished himself by study in agriculture and commerce. He was a Fellow of the Institute of Commerce and of several other professional institutes.
From 1930 to 1939 he was a farmer in Queensland. Soon after the outbreak of war he enlisted in the Australian Military Forces and served in New Guinea, attaining the rank of captain. He served as Secretary of the North Queensland Canegrowers Association from 1951 to 1954, and from 1955 to 1962 he was Secretary of the Rockhampton Agriculture Society. He was a director of the Rockhampton Co-operative Housing Society, and for six years until 1965 was Chairman of the Queensland Bush Children’s Health Scheme. He belonged to many other bodies, in all of which he served with honour and dignity. His interests were varied. He had strong ideas on the social credit economic theory. He was recognised as Australia’s most accomplished exponent of the case against the fluoridation of water.
George Gray joined the Australian Labor Party thirty-four years ago. He became a member of the House of Representatives for the Division of Capricornia in 1961. In the Parliamentary Labor Party he was held in high esteem, and at the time of his death he was secretary of the Party’s northern development committee. His earlier interest in defence matters was manifested during his parliamentary service. He was secretary of the Opposition’s defence committee and recently he designed and built a prototype tank, which he offered to the Australian Army.
The late Mr Gray was a devoted family man, was respected in his community and was active in his church. He was an elder of the Presbyterian Church and an active member of its public questions committee. I knew him and had great affection for him. To his widow and family I extend the deep sympathy of all members of the Opposition, who join with me in supporting the motion proposed by the Leader of the Government in the Senate.
– I wish to associate the Australian Country Party with the remarks that have been made by the Leader of the Government in the Senate and the Leader of the Opposition. I was very pleased indeed to look upon George Gray as a friend. We have heard the previous speakers tell of the deeds of this man, not only in war but also in peace. He served his country well in war and, as we have heard, in time of peace. He was obviously possessed of a sense of civic responsibility and he discharged that responsibility in a very worthy and very able manner. It is quite obvious that not only is the Commonwealth Parliament of Australia a loser by the passing of George Gray but so also is the Commonwealth of Australia itself. To his sorrowing wife and family I extend very sincere sympathy.
– The Australian Democratic Labor Party desires to be associated with the motion of condolence to the wife and family of the late honourable member.
Question resolved in the affirmative, honourable senators standing in their places.
– I suggest that as a mark of respect to the memory of the deceased gentleman the sitting of the Senate be suspended until 8 p.m.
– I am sure that the suggestion meets with the approval of the Senate.
Sitting suspended from 3.8 to 8 p.m.
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Governor-General’s Message
– I have to announce to the Senate the receipt of the following message from His Excellency the GovernorGeneral:
Casey,
Governor-General Message No. 18
A Proposed Law intituled ‘Constitution Alteration (Aboriginals) 1967’ as finally passed by the Senate and the House of Representatives of the Commonwealth, having been presented to the Governor-General for the Royal Assent, His Excellency has, in the name of Her Majesty, assented to the said Law.
Government House,
Canberra, 10 August 1967.
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– I have to inform honourable senators that Mr Speaker and I wrote to the Presiding Officers of the Canadian Parliament on the occasion of the celebration of the centenary of the establishment of the Canadian Federal legislatures, in the following terms: 21 June 1967
Dear Senator Smith and Dear Mr Lamoureux,
Our Parliamentary colleagues in the Senate and in the House of Representatives join with us in sending through you to the Senate and Commons of Canada the warmest of good wishes in anticipation of the Centenary on 1 July of the establishment of your Houses as Federal Legislatures dedicated to the advancement of your people.
Although our countries are geographically somewhat remote, there has been a community of interest and thought which, we hope, will long continue.
With sincerest regards,
President. Speaker.
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– I present the following papers:
Civil Works Programme 1967-68.
Commonwealth Payments to or for the States, 1967-68.
Estimates of Receipts and Summary of Estimated Expenditure for the Year Ending 30 June 1968.
Expenditure -
Particulars of Proposed Expenditure for the Service of the Year Ending 30 June 1968.
Particulars of Proposed Provision for Certain Expenditure in respect of the Year Ending 30 June 1968.
Government Securities on Issue at 30 June 1967.
Commonwealth Income Tax Statistics.
National Income and Expenditure, 1966-67. and move:
That the Senate take note of the papers.
Tonight, the Treasurer (Mr McMahon) is delivering in another place his Budget Speech for 1967-68. It is my privilege to outline to the Senate the Budget proposals of the Government.
First 1 want to speak briefly about our recent economic experience, take stock of the economy at the moment, and then say something about our prospects.
A year ago, the effects of drought were still lingering, consumer spending was sluggish, and private capital expenditure seemed to be slowing down. For these reasons, last year’s Budget was designed to be expansionary.
The economy responded much as we intended. The year 1966-67 was one of strong and varied growth. On the demand side, public authority expenditure led the way. With a much better season, rural output and incomes both increased notably. Consumer spending also revived. While building and construction for commerce and industry and private spending on plant and machinery tended to fall away, there was a considerable lift in dwelling construction.
For 1966-67 as a whole, gross national product rose by 9%. After making full allowance for price increases, there was an increase of between 5% and 6% in national production in real terms. This achievement was close to the best of recent years.
The number in employment in 1966-67 was 2.5% greater than in the year before. This was a smaller increase than has been usual. The lower migrant inflow has been a factor in the smaller rise in civilian employment.
Domestically, therefore, supply and demand seem to have been pretty much in balance.
Wage rates have increased strongly: over the year to June, minimum weekly wage rates rose by about 7%. As to prices, the consumer price index rose in the first three quarters of 1966-67 at an annual rate only a little above 2%. However, in the most recent quarter, the rise approached an annual rate of 5%.
Externally, results have been mixed. Taken as a whole, the export performance over the past year has been splendid - the best we have ever had. Imports increased little as compared with- 1965-66, though the rate was rising in the later months of 1966-67. The substantial trade deficit in the preceding year thus gave place to a useful surplus of $95m. With defence and civil aid and other payments abroad increasing, the net deficit on invisible payments widened and net receipts of capital from abroad fell a long way from the record level of 1965-66. In the outcome there was a loss of $177m in external reserves. The offsetting increase in our drawing rights in the International Monetary Fund and the credit extended to New Zealand reduced the net adverse movement io $125m.
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The Budget provides for total expenditure in 1967-68 of $6,483m and total revenues and similar receipts of $5,887m. Thus the estimated gap to be financed from borrowings of various kinds is $596m. This would be $61m more than the amount borrowed last year.
On these figures, expenditures will be $561m or 9.5% greater than those of last year - when the increase over the previous year was 11%. The increase in revenue will be $499m - or 9.3%: last year it was $309m or 6% .
These aggregates of expenditures and receipts reflect our judgment as to the kind of Budget the economy needs to keep it healthy during the year and beyond.
As we now see the prospect, we can expect another, good year. The supply of labour, material and plant is adequate to sustain a good rate of growth. With normal additions to the work force from our own population and net immigration, a rise of 3% in employment seems feasible with out putting much strain on the labour market. lt would be normal to expect some further gain in overall productivity. The capacity for expansion is certainly there.
The rural industries will depend, as always, very much on seasonal conditions. For some major districts a good season is not assured as yet. Given a good season greater production will certainly be achieved.
On the side of demand there arc also grounds for confidence.
Consumer spending has been growing strongly and we can expect this trend to continue. Employment is bound to go on rising and so are average earnings. Generally, conditions seem set. not for a boom, but for a good steady expansion of consumer demand.
Let us now consider the prospects for the other main segment of private^ spending, that is, capita! expenditure. Expenditure on dwelling construction has been increasing steadily. The flow of finance appears to be keeping up. If anything, the year ahead might see some further increase in dwelling construction. An increase In non-residential construction also seems likely.
Increased consumer spending can be expected to make heavier demands on production and hence on plant capacity. Various big projects associated with minerals, oil and gas are in train. Bank lending and unused overdraft limits are high and monetary liquidity is adequate to support a substantial increase in business expenditure. All told, therefore, the indications are that private capital expenditure in general will gather impetus as the year goes on.
Let us turn now to public authority expenditure. The allocation of resources between the public and private sectors was the crucial question we faced when framing the Budget.
There is scope in the economy for production to rise at much the same rate as last year. Total expenditure also could increase about as fast as production without upsetting the balance of demand and supply. Consumer spending has revived and we expect private Capital expenditure also to do so. There could obviously be trouble if, at the same time, public spending were allowed to continue to rise at the rate of the past few years. We could quickly find ourselves overspending, with resources over-stretched, prices rising fast and a heavy external deficit.
The Government does not want to take the risk that these conditions will emerge. Already rising wage rates have created a cost problem worrying for all; serious for the exporting industries and acute in the case of some sections of the wool industry. Externally our position is und;r some stress. It could become difficult if an excessive rise of demand led to a strong upsurge of imports.
While we keep the progress of the economy sure and steady, our balance of payments can be manageable. Our export prospects are certainly good and, in particular, the big mining developments now under way or imminent will add increasingly to our earnings abroad. On the other side of the ledger, we expect imports to increase. Additionally, we face some big external commitments in the period immediately ahead, especially for defence. Capital inflow is unpredictable. Allowing for a rate of inflow comparable with that of 1966-67, some further loss of external reserves is likely in this financial year. We do not want that loss to be aggravated by an over-stimulated demand for imports.
On a balancing of these probabilities, we do not think it would be in the nation’s interests to put further restraints on consumption. The taxes imposed in 1964-65 and 1965-66 in order to shift resources to defence are still effective and new restraints could immobilise rather than divert resources.
Equally, however, we do not think that consumption expenditure needs any stimulus now. The tasks to be done and the demands to be made on resources are too numerous and heavy for us to be able to afford too strong an increase in consumer spending.
Nor do we wish to depress private capital expenditure. Some of it might not pass the test of high national priority but the private sector is responsible for the largest part of production and has, therefore, a critical role to play in national growth and progress.
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One reason why we have drawn the reins on public spending more tightly than, before is to provide room for balanced expansion of the private sector. For some years now the public sector has been setting the pace and doing so strongly. That it should have done so is in part based on historical need: that is, the need for large and rapid defence expansion coinciding with unparalleled demands for works to serve great new developments and improve facilities for education, transport, power and fuel supply - in a word, to establish the foundations for larger economic growth.
To recognise these necessities does not mean, however, that the requirements of the public sector must over-ride everything else. Essentially, this involves the problem of choice and allocation of resources. Pressed hard by competing claims, we had to decide what the broad allocation of resources should be. As I said earlier, the private sector has a major part to play in growth. It also has a major role to play in national security since basically defence must be built upon the growth of our manpower, our industrial capacity and our ability to pay our way abroad.
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These are the reasons why we have made a strong effort this year to bring the increase in expenditure within tighter limits. The goal we set was 9% and within the practical limits set by our commitments for defence, we have gone close to achieving it. I shall now explain what we propose in respect of the main expenditure groups.
Again this year defence commitments have been a dominant element !in the Budget. Last year, expenditure was $950m. This was 27% above expenditure in the previous year.
This year we are providing $l,U8m for defence - an increase of $l68m or 18% on 1966-67.
May I recall that in 1962-63, five years ago, our defence bill was $428m, nearly $700m less than the estimate for this year. Over the four intervening years the rate of increase has averaged 22% per year.
We have accomplished this expansion without serious distortion or disruption of our domestic economy. We have done it through fiscal and monetary means without the direct controls associated with a proclaimed state of war. Lest anyone should suppose that it has all been costless, let him reflect how much could have been done if all those additional expenditures and the resources they represent had gone into the enlargement of our industrial capacity and other basic facilities for growth.
It is not, however, the present level of defence spending so much as the rate of escalation that concerns us most. Plainly we cannot continue for long to meet anything like the rate of increase of recent years without deep impairment of the economy. As it is, estimated defence costs this year will be equivalent to 5% of what we think gross national product is likely to be, calculated at factor cost. Among the countries of the Western World, only the United States, Britain and France are at present devoting a larger proportion of their resources to defence than we are.
Total defence expenditure is one aspect of the problem: our mounting external costs of defence are another and more serious aspect. Five years ago, our external costs of defence were well under $100m a year. This year they could rise above $350m. At this level they would represent 1 1 % or more of our export earnings. Some of this expenditure will be met from credits arranged abroad but, though helpful in spreading payments, credits simply carry the liabilities forward. Even so the net cash outgo this year will be well above $200m.
Defence must, and does, rank high in our national priorities. We must be prepared to play an effective role in our own defence and, in co-operation with our Allies, in the security and stability of this part of the world. Our effectiveness will grow as our resources develop, but we would not be helping either ourselves or our Allies were we to attempt to overreach our capacity. Defence subtracts from the resources available for growth.
DEFENCE FORCES RETIREMENT BENEFITS
We propose to seek an amendment of the legislation governing the Defence Forces
Retirement Benefits to give common entitlements to all servicemen on full-time continuous duty for periods of twelve months or more by admitting to the benefits of the scheme those now excluded because they are enlisted for periods of less than six years.
This extension of the scheme will give cover to National Servicemen, who are enlisted for two years. If any of the servicemen now to be covered is discharged through invalidity or dies, he or his widow and children will receive the same pensions or other benefits as permanent members of the Forces.
While serving in special areas such as Vietnam, servicemen are, in addition, covered by the Repatriation legislation. Thus, for example, a married private soldier totally and permanently incapacitated as a result of war service will receive a pension of $31.50 per week under the Defence Forces Retirement Benefits legislation, together with a basic pension of $34.55 per week under the Repatriation legislation. Additional Repatriation benefits are, of course, provided in respect of children and by way of medical and hospital treatment.
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Both in our foreign policy and our defence planning our goal is international peace. Along with this must go economic progress. These are the aims of our international aid.
The scale of our economic aid to developing countries is not as well known as it should be. Unlike other aid-giving countries, we give all our official aid in grants, not in repayable, interest-bearing loans, tied or untied. Our official aid this year, estimated at $142m, will probably represent about 0.75% of our estimated national income. Only France among the countries of the West can point to a better performance than that. Australia’s aid, moreover, has grown rapidly in recent years whereas that of other donor countries has been static or declining.
This year, our expenditure under bilateral and multilateral aid programmes will increase by ?9m to $50m - that is by 23%. The main increases will occur in our contribution to the International Development Association and in emergency assistance for Indonesia. The amount of $5.2m for Indonesia is special assistance over and above normal Colombo Plan aid to that country. We are providing $9.5m in anticipation of the coming into effect of food aid obligations under the International Grains Agreement. A gift of 150,000 tons of wheat to India, valued at nearly $9m, has already been arranged.
Defence aid of some $6m will be given to Malaysia and Singapore.
The grant to the Administration of Papua and New Guinea will increase this year by almost $8m to $77.6m - that is, by 11%. The Administration intends to provide additional capital for the Papua-New Guinea Development Bank, which has now started operations. If through the year the Bank’s requirements seem likely to exceed its resources, we shall consider adding enough to the grant to permit the Bank’s needs to be met. Over and above the grant, Commonwealth Departments will incur in the Territory expenditures of an aid character amounting to about $14m.
In all of this aid-giving we clearly recognise our obligation to help the needier people of the world. We do this, knowing that the transfer of resources to others must subtract from our own resources and especially our external resources. These are anything but unlimited.
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I turn now from international to domestic needs - those in the field of social and health services and repatriation. Overall, we expect expenditure in this field to rise this year by more than $50m to a total of about $1,332m.
Payments from the National Welfare Fund will rise this year by an estimated $40m to $ 1,071m.
We propose to give additional assistance to larger families by increasing child endowment for children under 16 years by 25c to $1.75 a week for the fourth child in a family, by 50c to $2 a week for a fifth child and so on, with a further 25c being added for each successive addition to the number of children. A family including nine children under 16 years, for example, will under this proposal receive an additional $5.25 weekly. These new rates will apply on and from 19 September, the commencing date for the regular four-week and twelve-week child endowment pay period.
Later I shall announce taxation concessions that also will give benefits to families.
Benefits for the Moderately Retarded
We propose to extend eligibility for social services benefits to intellectually handicapped persons while they are in State institutions when they can benefit from training specifically designed to help. them. Other mental patients will continue to be eligible for payment of pension on discharge, together with arrears of pension for up to twelve weeks of the period spent in the institution.
Legislation will be introduced to authorise the Commonwealth Acoustic Laboratories to supply hearing aids on loan for a nominal hiring charge to pensioners and their dependants with defective hearing who would benefit from their use.
We intend to open discussions with the States with the object of working out mutually acceptable arrangements for the assistance of deserted wives and wives of prisoners.If the States can reach agreement on the principles to be followed, we will offer to meet half the cost of State assistance where the wives concerned have children.
The cost of these four proposals is estimated at $7m in 1967-68 and$10m in a full year.
I have already referred to the decision to apply the benefits of the Defence Forces Retirements Benefits Act to National Servicemen and other classes of servicemen.
As to Repatriation, expenditure is estimated to increase this year by about$11m to some $261m.
Having carefully reviewed all repatriation benefits we have decided to increase pensions for war orphans. For children who have lost one parent through war service, the weekly pension will rise by SO cents to $4.40 for the first child and to $3.25 for the second and other children. For those whose mother also is dead, the weekly pension will rise by $1.00 to $8.15 for every child. These increases will cost $127,000 this year and $169,000 in a full year.
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The basic responsibility for education, constitutionally and in fact, still remains with the States. Nevertheless, the Commonwealth’s role in this field has been growing and its financial contribution has been increasing rapidly. For example, over the past six years the increase has been almost fourfold.
Total Commonwealth expenditure on education this year is estimated to be about $194m. This is $51m or 35% more than in J 966-67.
This total includes payments to the States specifically for education. These will increase by 50% to SI 18m.
Additionally, the Australian National University and its affiliated colleges will receive just on $24m or more than $4m in excess of last year.
The cost of the various Commonwealth scholarship schemes will rise by $4,700,000 to nearly $29m.
Current expenditures by the Commonwealth on education will this year amount to about SI 07m - this includes some $3m for the Soldiers’ Children Education Scheme, which is a Repatriation item - and capital expenditures will total about $83m. Administrative expenditures associated with education amount to another $4m.
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Except for expenditures on business undertakings, education accounts on the average for nearly a third of State expenditures from their revenue funds. Revenue grants to the States by the Commonwealth represent more than half of State revenues excluding business undertakings. These Commonwealth grants therefore help them in a big way to meet their education costs. In 1967-6.8 Commonwealth general revenue grants to the States will be about $936m as at present estimated or $58m more than last year. Other specific purpose revenue payments are estimated at $44m - about $7m less than last year, when payments related to drought were heavy. These figures do not include the Commonwealth payments specifically for education to which I have referred; these will add about $49m to Commonwealth revenue-type grants to the States. For the first time total Commonwealth revenue assistance will exceed a billion dollars - about $ 1,028m in all.
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On capital account Commonwealth specific purpose payments to the States will this year be $3 19m - a 28% increase on last year’s figure. This includes $69m for capital expenditure on education to which I have referred. It includes also $160m under the Commonwealth Aid Roads arrangements and more than $6m for beef cattle roads and the Gordon River road in Tasmania. For railway standardisation projects in Western Australia, South Australia and New South Wales, more than $37m is to be provided. Over $6m is included for Tasmanian Hydro-electric development and $5m for the South Australian Natural Gas Pipeline. Natural Disaster payments of a capital nature will approach $13m.
These specific purpose payments are additional to the funds the Commonwealth borrows or provides from its own resources for State works and housing programmes. These programmes will this year total $677m or 5% more than last year. The combined borrowing programmes of the States and their authorities for capital works and housing in this financial year will be close to $ 1,000m.
Expenditure on Commonwealth capital works and services will rise this year by 9% to $5.l6m. The largest single item is Post Office capital works, on which expenditure will rise by 17% to $240m. I want to refer to the Post Office in detail later. Here I point out that the net requirement from the Budget’ to finance this expenditure will be $181ro. The remaining $59m will be provided from internal Post Office sources, mainly depreciation funds. Most of the capital expenditure this year will be for extending and improving telephone services.
Capital expenditure for civil aviation will total more than $35m - a 23% increase on last year. Most of this will be for airport development, mainly at Sydney and Tullamarine.
Expenditure by the Snowy Mountains Hydro-electric Authority will taper off. lt is estimated at less than $42m - nearly $7m less than last year’s expenditure.
For works in the Australian Capital Territory $56m is being provided - $4m more than last year. In the Northern Territory works expenditure will be $27m.
On beef cattle roads in the Northern Territory expenditure is estimated to exceed $3m. Two new projects estimated to cost $4,650,000 will be started- one, the Daly Waters to Cape Crawford road and the other, the restoration and sealing of the road from the Barkly Highway to Anthony’s Lagoon.
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Because of the number who have already taken advantage of the War Service Homes scheme, it seems likely that there will be fewer applicants for advances this year. The provision has therefore been reduced to $45,500,000, which is $13,600,000 less than the amount disbursed last year. We shall seek additional funds if the amount now being provided proves insufficient.
The running costs of Business Undertakings - the Post Office, the Commonwealth Railways and the Broadcasting and Television Services - add heavily to Budget expenditures, though in total the outlays will be more than offset by revenues “ earned. Together, these costs are expected to increase by 10% to $410m.
Expenditures on assistance to industry are estimated to rise this year by 28% to $230m. The group includes bounties and subsidies, support of industrial research and assistance to the Queensland sugar industry. With increasing sales, bounties and subsidies on phosphate and nitrogenous fertilizers are expected to rise by nearly $7m to almost $40m.
Under arrangements made :a»t year, an amount of almost $20m is to be made available to the State of Queensland io enable it to meet interest and repayment obligations in respect of advances by the Reserve Bank to the Queensland Sugar Board in respect of 1966 season No. 1 Pool sugar We have decided to provide further assistance! to the State to enable it to provide assistance to the sugar industry in respect of the 1967 sugar crop. The provision we arc making for this purpose is 510m. Depending on prices realised for export sales we are prepared to increase this assistance up to. a total amount not exceeding $15m. The assistance we are providing in respect of both the 19p6 and 1967 crops will be repayable by the Stale in future years.
Administrative and Other expenditures
I now come to the residua! group of expenditures which in all are estimated to increase by 4% to $689m. They include the running costs of Commonwealth Departments, estimated to rise by 9% to $378m. Debt charges are estimated to rise bv 8% to $102m.
Current expenditures in the Territories other than Papua and New Guinea - that is, in the Australian Capital Territory, the Northern Territory , and the minor territories - are estimated to increase by, 16% to $52m. This excludes educational costs covered by the figures for education I have already mentioned. I add that we are providing $1.4m for operational ‘expenditure and $1.2m for capital expenditure on a programme, due to come into effect at the beginning of 1968, to increase facilities for the education of Aboriginal children in the Northern Territory.
These increases are substantially offset by reductions in other expenditures. Payments amounting to $27m were made last year to finance drawings in Australian currency by other countries from the International Monetary Fund. No provision has been made for similar payments this year. Expenditure on the introduction of decimal currency is expected to decrease by 50% to $8m.
I mention at this point that the action to be taken by the Commonwealth in relation to Aboriginals, following ihe approval by
Referendum of an amendment of section 51 (xxvi) of the Constitution, is now under detailed and careful consideration by the Government. The Commonwealth’s object will be to co-operate with the States to ensure that together we act in the best interests of our Aboriginal people.
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Population growth is vital to our development. We are providing $25m this year for assisted passages and $5m to Commonwealth Hostels Limited as a contribution towards the accommodation costs of migrants. In addition, $3. 9m is being provided for improvements at migrant hostels - $2.5ni more than last year. We attach the greatest importance to maintaining our immigration programme at a high level. It is, however, becoming increasingly difficult to attract migrants to this country. Because of Europe’s increasing prosperity, interest in migration has declined there. Moreover, British migration, until now the mainstay of the programme, has been falling off.
Special steps have already been taken to stimulate migration from Europe. Last year we offered additional assistance towards passage costs and recently, by increasing our own assistance, we eliminated the last of the arrangements requiring certain categories of migrants to take out loans to meet part of their passage costs.
The immigration target will be maintained at last year’s figure of 148,000 settlers, including 92,000 assisted migrants. This programme is designed to yield about 70,000 workers a year.
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Retirement pensions and allowances have been reviewed by the Government.
The last adjustment to pensions payable to retired members of the Commonwealth Superannuation Fund and the Defence Forces Retirement Benefits Fund was made in 1963, when the proportion of pension payable from Consolidated Revenue was increased to the amount that would have been payable if the pensioners had retired at the end of 1959. Those who have retired since 1959 have not received any increase in their pensions despite the large increases since then in salary levels.
The Government has decided that the Consolidated Revenue proportion of existing pensions should be brought up to the amount that would have been payable if retirement had taken place on 30th June 1967. This will be of considerable benefit to former Commonwealth officers and members of the Permanent Defence Forces, and their widows. The estimated cost is S7.7m for a full year and $5.45m in 1967-68; this will be offset to some extent by reductions in entitlement to social service pensions.
A comparable adjustment will also be made in existing pensions under the Parliamentary Retiring Allowances Act, at an estimated cost of $85,000 in a full year and $60,000 in 1967-68.
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As I said earlier, wc expect receipts from all sources, except borrowings, to be about $5,887m. With expenditure of $6,483m there will be a gap of $596m.
Mainly because we expect economic conditions this year to be more buoyant than last year, we estimate that the rate of increase in total taxation revenues will be greater - about 8%, compared with last year’s 6%.
The central objective of the Budget is to promote conditions favourable to sound and efficient growth, with consumer spending and private capital outlays rising steadily. To avoid overstraining our resources we have put a close limit on the rise in Budget expenditures. We do not think the added restraint of a general increase in taxation necessary to restrain demand. Postal and some other charges will be increased; but they are directly related to the increasing costs and outlays of the Post Office and other Departments and to the necessity to provide increased and expanded services. They are not general taxation measures.
On the other hand we have not felt that general reductions in taxation are needed. We are therefore leaving the general level of taxation unchanged. What we have done is to survey the whole field of taxation in order to ensure that, as far as it was financially practicable, we would provide concessions wherever we felt there was a real need and benefits could and should be given, especially for those with family responsibilities. 1 shall now explain these concessions.
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The allowances for maintenance of dependants have remained unchanged since the financial year 1957-58 and in that time their value to taxpayers with families has diminished a good deal. We have decided to increase the allowances by $26 a year. The increase will apply over the whole range of these allowances. To give some examples, the allowance for a wife will be increased from $286 to $312, for one child under sixteen years from $182 to $208, and for other children under sixteen years from $130 to $156.
The higher allowances will apply in assessments based on income of the current income year 1967-68. For salary and wage earners they will be taken into account in reduced tax instalment deductions expected to come into operation on or about 1st October next.
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It is proposed to raise to $1,200 the maximum allowance for payments by a taxpayer for insurance or superannuation cover for himself and his family. The limit is now $800.
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The age pension means test was liberalised last April. As a corollary to this, it is proposed to increase the amount of income that aged persons may derive free of income tax.
In the past, the age allowance has been related to an aged person’s net income from all sources, which is quite often a different amount from his taxable income and this has often been misunderstood by the taxpayers concerned. We propose to remove this complication for 1967-68 by basing the allowance on taxable income instead of net income.
For 1967-68 no tax will be payable by an aged person whose taxable income does not exceed $1,196. For a married person qualified by age no tax will -be payable unless the combined taxable incomes of the husband and wife exceed $2,106. The qualifying age for the allowance is sixty years for women and sixty-five years for mén.
page 13
In the last two Budgets temporary measures were adopted for woolgrowers who were forced by drought to advance shearing dates and shear their sheep twice in the one year. The measures permitted the proceeds of the advanced clip to be taxed in the year in which tax would ordinarily be payable on them.
It is proposed to continue these measures for 1967-68 and future years. It is also proposed to extend them to woolgrowers who are forced to advance shearing; dates by other natural disasters, such as fire or flood.
Some time ago the Treasurer announced that the special 20% depreciation allowances on primary production plant would be continued beyond their present termination date of 30th June 1967. It is now proposed to continue the allowances without placing any limit of time as to their operation.
A further proposal is that the cost of erecting sub-divisional fences be allowed as a deduction in the year in which it is incurred.
The final proposal affecting primary producers relates to forced sales of livestock due to fire, drought or flood. Under the present law a primary producer may elect that the net proceeds of these sales be taxed over five years if the proceeds are used principally in replacing stock that has been sold. An alternative method of accounting for the proceeds is proposed in relation to sales in the 1967-68 income year and subsequent years. Under this proposal, a primary producer may elect that the profits of a forced sale be applied to reduce the value of replacement stock for taxation purposes. The broad effects of an election will be to defer tax on the profits until the stock has been replaced and sales are made in the normal course of business.
A review of sales tax exemptions and classifications has disclosed a need for some adjustments in the light of technological and other developments. It is proposed to effect a number of such adjustments. Some will result in the extension of present exemptions, some in their withdrawal and others will vary the classification for rating purposes.
Stamp Duties in the Australian Capital Territory
It is also proposed, during 1967-68, to introduce legislation to impose stamp duties in the Australian Capital Territory. The duties will become payable from a date to be announced later.
Effect on Revenue lt is estimated that these proposals will result in a net cost to revenue of $l7.5m in 1967-68 and $37m in a full year. The cost for 1967-68 is mainly attributable to the proposed increase in allowances for dependants.
page 14
We are also proposing some increases in revenue charges, the most notable being those of the Post Office. These proposals are related to particular purposes and are not general revenue measures.
During 1967-68, the expected higher level of business activity and of housing development will place increasingly heavy demands on the Post Office.
The Post Office also faces the problem of rising costs in running its services. It continues to install the latest technical equipment and to improve operating methods and techniques. By these means, productivity has been steadily improved, as is shown by the fact that business done has increased faster than staff numbers. For example, between 1959 and 1966 the postal staff increased by 10% but handled 31% more traffic. By their nature, however, the services provided by the Post Office require a lot of labour and labour costs have gone on rising. This year it is estimated that Post Office wage and salary costs will rise by more than $19m. Of this increase, over $13m is due to the increases awarded in the National Wage Cases and other recent arbitration decisions, including the full year cost of the Interim Margins Award. When higher prices for materials used and other cost increases are also brought to account, the Post Office will be headed for a loss of over $40m in this financial year if charges are not increased as proposed. Financing a loss of this order would pose a serious budgetary problem. Without the estimated increase in revenue of $36m to be obtained from the higher charges, the net call of the Post Office on the Budget this year would, it is estimated, rise from $l81m to $2 17m. There has been no general increase in postal tariffs, or in telephone local call fee and trunk charges, since 1959.
With one or two minor exceptions, the increases in charges now proposed are the same as those put before Parliament towards the end of the last financial year. They are to operate from 1st October next. The adjustments proposed are expected to yield in 1967-68 an additional sum of $36m in Post Office revenue, or $17m less than if they had been introduced from 1st July as originally planned. They will yield $64m in a full year.
Other changes of an accounting and procedural kind are proposed to help the Post Office operate as a business undertaking. The Post Office is required to conduct its operations in accordance with the best business practice. The Government is convinced that this objective would be better served if the financial machinery of the Post Office were changed from the standard Treasury and Departmental system to a commercial form more suited to business requirements. After a thorough study the Government has decided to create a Post Office Trust Account into which Post Office revenues will be paid and from which its expenditures will be met. The Department’s net requirements for capital purposes each year will be provided annually under one-line appropriations from the Budget and paid to the Trust Account.
The Department will thus operate its own trading account, but will remain subject to the control of the PostmasterGeneral and, of course, of Parliament. The new arrangements will, in fact, give Parliament greater opportunities to examine the affairs of the Post Office. Its commercial accounts and annual report will, as now, be tabled in Parliament each year. An innovation will be the tabling at Budget time in Parliament of a White Paper giving estimates of commercial results and expectations, the proposed capital programme, together with the way it is to be financed, and other information on Post Office affairs.
Further information concerning the proposed new financial arrangements will be given shortly and legislation will be introduced during the current financial year with the objective of having the new administrative arrangements operate from 1st July 1968.
While it has important national obligations to meet, the Post Office should earn sufficient revenue to cover its operating costs over a period of years. It is reasonable also that its earnings as a business undertaking should make some contribution towards the expansion of the telecommunications network. Some retention of profit for capital purposes is standard business practice. Against this background the Government decided to increase Post Office charges.
In accordance with the policy of progressively recovering from the air transport industry a greater proportion of the large and increasing cost’ of providing, maintaining and operating airports and airway facilities, the Government has decided to increase by 10% the rates of air navigation charges payable by all aircraft operators. These increases will take effect from 1st January 1968 and are estimated to bring in $257,000 additional income in 1967-68 and $893,000 in a full year.
The rates of air navigation charges have been increased by 10% in each of the last five years. Despite this, the gap between the amount that it costs the Commonwealth annually to provide aviation facilities for the industry, and the amount of revenue received annually from the industry for the use of these facilities, has continued to widen. Thus general taxpayers, rather than the aviation industry and the users of air services, are required to meet the cost of these facilities to an increasing extent. The Government has decided that additional measures are necessary if this trend is to be arrested and (further progress made towards the objective of requiring commercial aviation to meet an increasing share of the cost of facilities provided for it at public expense and properly attributable to it.
It has therefore been decided, in addition to increasing air navigation charges, to introduce a passenger service charge which will be payable by passengers on both domestic and international air serservices. Details of the scheme will be announced at an appropriate time by the Minister for Civil Aviation. Legislation to give effect to it will be introduced during the current financial year. The charge will be calculated to yield revenue of Between $4m and $5m a year at present traffic levels.
page 15
1 said earlier that estimated expenditures of $6,483m will exceed estimated receipts of $5,887m by $596m. This amount will have to be covered by net borrowings at home and abroad.
Part of the borrowing requirement arising will be met by net drawings on the credit arrangements for defence purchases in the United States - this year estimated at $123m compared with last year’s $91m. That will leave $473m to be borrowed from other sources. The comparable figure in 1966-67 was rather less at $444m.
We will continue to borrow abroad on acceptable terms but it would be a delusion to suppose that great sums can readily be borrowed overseas.
So far as our borrowing prospects abroad can be assessed, we would expect redemptions again to exceed new loan proceeds although to a smaller extent than last year when the excess was $82m. The amount then remaining to be covered by net borrowings in Australia should not exceed the net $527m borrowed locally last year.
We cannot estimate with any accuracy how much of the amount to be raised locally will come from the Australian public. We shall aim at raising as much as we can from that source. We can be sure that a considerable amount will come directly or indirectly from the banking system. In all probability, some borrowing from the Reserve Bank will be necessary- The substantial direct payments abroad financed from the Budget will, however, have offsetting monetary effects.
page 16
We cannot measure precisely either the monetary effects or the economic impact of the Budget. What we can do to assist interpretation is to break down the estimates into economic categories.
Expressed in the national accounts form, in which form they are comparable with the national accounting statistics for the economy as a whole, the estimates indicate that total Budget outlay will this year increase by 10% compared with an increase of nearly 12% last year. This outlay includes direct payments abroad. Mainly because of defence commitments, these external payments are estimated to rise to S652m or $147m more than last year.
Outlay within Australia is estimated at $5.554m and will exceed estimated receipts by only a small margin. Receipts include an estimated $330m of revenue which is expected to result from the growth of incomes and economic activity. This revenue being itself the consequence of the economic expansion expected this year will not have offsetting effects on those Budget outlays that add to incomes and spending in Australia.
We are confident that the effects of this Budget, combined with the steady rise in private spending for both consumption and investment, will keep the economy growing at a healthy rate and will keep resources fully employed. The Budget will help us achieve our central aim, which is to strengthen the economy and give greater scope for private spending.
As the year goes on, the Government will as always be ready to meet particular needs or eventualities. Monetary policy can and will be used as necessary to help keep the economy on the right course.
In our view businessmen can wilh confidence make plans with the expectation that the economy will continue to grow steadily. Indeed, if we all plan in this way our expectations are the more likely to be realised.
Even the most cautious amongst us can scarcely fail to be confident of the future of this country. Vast new discoveries of resources are becoming almost a commonplace. In this recent phase, each discovery has inspired further effort and further effort has led to new discoveries.
As far ahead as we can see Australia has all the potentialities for sustained growth and we in Australia are in truth making creditable efforts ourselves.
These efforts together with these great natural resources are the source and foundation of growth.
There are, too, other pre-conditions of growth we cannot afford to neglect and there are many questions we should ask. Our workforce is growing and gaining in competence. Is it growing fast enough for all the tasks now crowding upon us? Management has a critically important task to fulfil. Is management everywhere doing the job national greatness demands? Are we mobilising the capital we are accumulating and allocating it to the right uses? Are we sufficiently conscious of the critical necessity to control costs of production? Are we efficient? To ask these and other questions is not to belittle the achievements of those who are in fact finding the answers to our problems. They simply remind us that if the opportunities that lie before us are great, the efforts they demand are equally great too.
Debate (on motion by Senator Murphy) adjourned.
page 16
Motion (by Senator Henty) proposed -
That the Senate do now adjourn.
– Mr President, I take advantage of the motion for the adjournment to speak on a matter which I would have been out of order in bringing before the Senate tonight if the Budget statement which has been presented to the Senate by the Minister for Supply (Senator Henty) had made some mention of it. I desire to draw the attention of the Government to the acute state of poverty that exists among a section of our Australian community. In my opinion, the Government is unrealistic in not recognising this fact. The Government praises itself for its achievements in respect of the economic growth and wealth of the country. That acute poverty should remain unobserved amid such wealth would be an indictment of any government. If no redress is to be given to the sufferers in times when we are appropriating money for other purposes, the stage will be reached when revolution or industrial action will be needed to obtain justice for some 800,000 people who are living below the subsistence level in Australia at the present time.
Mr President, today outside Parliament House 1 attended a meeting of representatives of pensioners from practically all States of the Commonwealth. After this meeting, I spoke with some of these people privately. I heard of the cases that they have brought forward and of the conditions under which they are living. I heard of people who are receiving an insufficient rent allowance to enable them to meet the demands of a hungry landlord and of those who have mortgages on their homes or who arc renting properties but are not receiving a rent allowance. I heard of the burden of water rates, land taxes and sewerage charges that are levied on these people each year. It is well nigh impossible for them to meet those costs. Some councils, actuated by a spirit of benevolence, allow rates and taxes to accumulate and be a charge upon the estate of the owner of a property at the time of his or . her death. Therefore these people who possibly came into the world in debt leave it in debt also. This is because we are not providing sufficient to enable them to have a reasonable standard of living in our present supposedly prosperous economy.
Many of the matters that were discussed with me today were discussed also in a television session on Channel 2. Good, respectable women who appeared on that programme discussed their approaches to the problem. They told how they cannot afford to buy the food that they desire to eat. They are restricted to a meagre diet. They can rarely go out and cannot have any amusement other than the amusement that was shown on the television programme which they make in the community for themselves. They cannot buy new clothes, especially the clothes with which we know women like to adorn themselves from time to time. This is the state in which we find a section of our community today.
This matter possibly is not thought to be important by some political parties as it is not considered that increased social welfare is an election winner. Someone, invariably raises the question of who will pay for increased pensions. While this situation arises from time to time, a stage in the degradation and oppression of these sections must be reached where an uprising will take place in the community and the possibility of an electoral victory Will be lost by the Government because it has not met the changing conditions of the times and given these people a reward comparable with what they were receiving some years ago. The value of the £, or the $, has been destroyed and what these people receive today by way of pension has not the same value as it had in the past. We have moseys to pay for overseas ventures to stop some forces of independence, but we have not money to pay to these deserving Australian citizens. Possibly some of these people are relatives of ours. There may be among them the parents of some honourable senators on the Opposition side, if not on the Government side. Those people are living in poverty.
– Order! The honourable senator must’ not canvass the inadequacies of the Budget. If he confines himself to his original thoughts, he will be in order.
– With the greatest respect, Mr President, may I say that I would be here all night if I canvassed the inadequacies of the Budget. I am trying to speak on something that is not mentioned in the Budget. If the Bridget did not make sufficient provision for this section of the community and if I were to ask in my speech now for this provision to be increased, I would acknowledge that there would be some justification for calling me to order. But I am raising a matter that is not contained in the Budget at all. The question of whether it should have been included in the Budget is something, may I say with respect for your ruling, that 1 will leave for the Budget debate.
– This is contrary to the spirit of the arrangement whereby the Leader of the Opposition obtained the adjournment of the debate for the purpose of making a speech on the Budget later.
– Next Tuesday.
– I am fully aware that when my Leader, Senator Murphy, speaks on the Budget he will speak about its inadequacies. Today I attended a meeting at which the pensioners’ case regarding poverty was put up. If the matter I am discussing had been included in the Budget, I would have been unable to discuss it tonight. I am discussing something outside the Budget.
-Order! The matter raised by the honourable senator would be discussed more appropriately duringthe Budget debate than on the motion for the adjournment of the Senate.
– Mr President, I respect your ruling. I will not continue.
Question resolved in the affirmative.
Senate adjourned at 9.8 p.m.
Cite as: Australia, Senate, Debates, 15 August 1967, viewed 22 October 2017, <http://historichansard.net/senate/1967/19670815_senate_26_s35/>.