House of Representatives
2 October 1945

17th Parliament · 3rd Session

Mr. Speaker (Hon. J. S. Bosevear) took the chair at 8 p.m., and read prayers.

page 6208


Motion (by Mr. Chifley) agreed to -

That the House, at its rising, adjourn to to-morrow, at 10.30 a.m.

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Demobilization - Reconstruction Training


– The Daily Mirror of the1st October reported that a senior Army officer at the Showground, Sydney, had stated that Army discharges under the points system would not commence for at least two weeks. Will the Minister for Post-war Reconstruction state whether that is the intention of the Government in connexion with the general plan of demobilization?

Minister for Post-war Reconstruction · CORIO, VICTORIA · ALP

– I have not read the newspaper report referred to, but, even assuming it to be correct,’ there is no discrepancy between it and the statements in regard to demobilization that I have made to this House. Had the honorable member studied the plan of demobilization, he would know that the 1st October was the date from which members of the forces were to begin to flow from their units to their home States for ultimate discharge. They may not be discharged for a fortnight, because of the necessity to examine their X-ray photographs and other documents, but meanwhile they will be on demobilization leave at their homes. The Government’s plan has not been changed.


– Has the Minister for Post-war Reconstruction received from the Queensland branch of the Australian Prisoners of War Relatives Association requests for an amendment of the Commonwealth reconstruction training scheme regulations to include all exprisoners of war in category No. 1, which includes professional and vocational training? In view of thepriva tions of ex-prisoners of war, especially men now being repatriated from Japanese camps, does the Minister not believe that they are entitled to be considered as suffering from incapacity, and entitled to the benefits of the scheme?


– I have received a communication from the organization mentioned by the honorable member. I think that there must be some misunderstanding, because reconstruction training is available to all persons who, as the result of incapacity caused by war - and this includes prisoners of war who became incapacitated during their captivity - are unable to carry on their prewar occupations. Therefore, I am certain that prisoners of war are covered by the reconstruction training scheme in its present form.



– I ask the Minister for the Army which is correct and official, the statement that he made in regard to the complete demobilization of the Australian forces early next year, or that made by the honorable member for Eden-Monaro that practically two years will elapse before most of the soldiers have been discharged?

Minister for the Army · CAPRICORNIA, QUEENSLAND · ALP

– Not having read the statement of the honorable member for Eden-Monaro, I am somewhat at a disadvantage. It must have been of a very high order if it reached the standard of the statements and speeches which that honorable member usually makes. I shall compare it with my statement. I have no doubt that it proved very illuminating to the people of Australia.

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Australian Collaborators with Japan - Japanese Atrocities - Ambon Operation - Working Conditions of Troops in Timor.


– Will the Minister for the Army state whether any action has been taken to bring to Australia for trial those Australians now in the hands of the Americans in Japan and the Philippines who are alleged to have collaborated with the Japanese, by broadcasting propaganda on Japanesecontrolled radios?


– I expect to be able to SupplY definite information to-morrow.


– Will the Minister for the Army state whether Australian forces operating under the South-East Asia Command have yet made any arrests, arising out of atrocity charges, of Japanese who have come into their hands? If so, how many have been arrested ?


– I have asked that the number of arrests made in each area shall be collected and furnished to me. [ hope to be able to make a statement at a very early date.


– The Minister for the Army told me last week that he would make a statement to the House before it rose on the tragedy of Ambon, where, early in the Japanese war, Australian troops were landed without adequate equipment, munitions and medical supplier. Will the Minister be able to make that statement within the next day or so?


– I have taken steps to obtain the information, which I hope to be able to furnish to the House before it rises.


Minister for the Army · Capricornia · ALP

by leave - The honorable member for “Wentworth (Mr. Harrison) asked questions in the House last week based on allegations which have appeared in certain sections of the daily press, to the effect that Japanese soldiers in Timor were working a fivehour day and enjoying easy conditions, whereas Australian soldiers were working slavishly on fatigue duties. As honorable members are aware, a good deal of criticism and allegations of a similar nature have appeared in certain sections of the daily press, and I replied at the time that all ranks of the Army, from the Commander-in-Chief down to privates, were equally concerned to ensure that Japanese personnel were not given “soft” treatment. Allegations against the Commander of the Australian Forces in Timor still persisted. I was aware from my own personal knowledge of Brigadier Dyke, the Australian Commander in Timor, that he was a man of forthright character who would be the Inst one to hesitate in requiring the

Japanese under his control to perform to the full the duties that he considered should be carried out by them, and it was not because of any lack of confidence in this officer’s capacity that I had further investigations made to ascertain the full facts.

I am now in a position to state that these inquiries have established that there is no warrant for suggestions by newspaper correspondents that Japanese in Timor were accorded soft treatment as a deliberate policy of the Australian commander. So far as they went, the original reports written by those correspondents were accurate; but they were not complete reports, nor were they written with a sense of responsibility for the lives of Australian personnel such as Brigadier Dyke has. In accordance with the orders of the Supreme Command and of the Commander-in-Chief of the Australian Military Forces, Brigadier Dyke was directed to take all measures to ensure the security of his forces and to avoid taking any unnecessary risks. Brigadier Dyke has reported that it was his firm determination that the Australians under his command should not suffer a single avoidable casualty. Therefore, after the Japanese commander had signed the surrender at sea and had given assurances that the surrender terms would be carried out, his task was to land troops on Timor as expeditiously as possible so as to establish his authority ashore. The Japanese on the island outnumbered the Australians by five to one, and Brigadier Dyke has stated that when the Australians landed a party of Japanese was on the beach adjacent to their lean-to shelters. When the Australians reached the beach, they brought their barges ashore and commenced to unload then». Having regard to the need for the smooth and rapid establishment of his small advance party, the Australian commander decided not to take any risk by endeavouring to put the Japanese to work at that stage. However, he immediately sent a small Australian reconnaissance party to check the Japanese assurances that breech-blocks had been removed from the guns in the area and that arms and ammunition had been placed in dumps. As soon as he had established that this had been done, he organized Japanese working parties to unload further barges as they came ashore and, generally, to clean up the area. At this stage only two interpreters were available. Through them the Japanese command was given the instructions of the Australian command and were directed to furnish further working parties. Brigadier Dykes has stated that during this period he and all the Australian members of his advance parties worked long hours in establishing their head-quarters and in organizing the Japanese working parties. He has no hesitation in stating that by no other means could the position have been established as expeditiously as it was. He has also advised that Japanese parties worked under their own officers and non-commissioned officers, but with Australian armed guards, and that he was justified in his view that greater efficiency couldbe achieved by using the existing Japanese organization rather than by putting in complete control Australians who could not speak Japanese. It has also been reported that the amount of work which the Japanese were capable of doing was greatly affected by the incidence of malaria in the Japanese area; this was shown by the fact that nearly 50 per cent. of the Japanese strength was on the sick list all the time, thus affecting the number of Japanese available for work. Brigadier Dyke makes no apology for his direction that the Japanese should work a day of six hours; he has stated that thebest results were obtained by this means, and his aim was to achieve results, not appearances. He also makes no apology for the fact that the Australian soldiers were required to work hard, because this was necessary to establish a well-ordered camp under hygienic principles, which was completely foreign to the Japanese. Further, many Australians engaged on arduous duties were employed on specialist work, which the Japanese could not have done. It has been reported that within two days of the landing, 600 Japanese were at work in the head-quarters area, whilst others were engaged in bringing trucks of ammunition and arms from 170 miles away.

Perhaps one of the most forceful allegations against Brigadier Dyke was that the Japanese were permitted to live in their well-ordered and neatly laid out village a few miles from the point of the landing, whilst the Australians were required to build a new camp in an area from which bombed debris had been removed. It was claimed that the Australians should have taken over the Japanese camp and made the Japanese build a new one. Apparently it was not appreciated that the Japanese area was infested with malaria, whilst the ares chosen for the Australians was practically free of malaria.

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Intra-state Traffic - Government Ownership of Interstate Airlines.


– Can the Minister for Civil Aviation say whether the Civil Aviation Department is responsible for the issue of licences for aeroplanes to stop at country aerodromes for intrastate passengers? If not, is there any State authority responsible for the issue of such licences, and what are the conditions under which they are issued ? As existing airlines are deterred from taking any progressive action to serve country people because of the confusion regarding government policy, will the Government make an immediate statement of its intentions? If the Government proposes to take no action with regard to servicing such towns as Taree, Kempsey, Coff’s Harbour, Grafton, which were served by air routes before the war, will the Government, in order to assist the successful demobilization of air pilots, indicate whether it will give any assistance to the establishment of new services for this purpose now that the war has ended ?


– The Civil Aviation Department issues licences for the operation of civil air services and it stipulates that aircraft and aerodromes shall be up to the required standard of safety. It is probable that a conference will be held next week for the purpose of discussing with certain operators of intra-state air services matters of general interest, as well as the future of their services. If the honorable member will put his question on the notice-paper,I shall give a more detailed reply.


– Does the Minister for Air propose to inform the House this week of the Government’s plans during the recess in connexion with the legislation relating to the Government ownership of interstate airlines ?


– The Government’s plans under the National Airlines Act have not yet been fully developed. I have informed the House that I am awaiting the return from overseas of the Director-General of Civil Aviation, Mr. McVey. After I have conferred with him, I shall be in a better position to make a pronouncement.

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– Is the Minister for Munitions aware that there is little prospect of the motor-body industry in outh Australia being revived at an early date owing to the acute shortage of panel steel? Can the Minister supply any information regarding the present position and the possibility of increasing the production of steel?

Minister for Aircraft Production · HINDMARSH, SOUTH AUSTRALIA · ALP

– I shall have the position examined in order to see how far it Ls possible to increase the production of panel steel so as to meet the demands of the motor-body industry.

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Port Delays


– Can the Minister representing the Minister for Supply and Shipping say how many ships are held up in Australian ports? Is it true that several ships are held up because of a request for the provision of additional amenities for seamen? Is it true that the war risk bonus to seamen is continuing although the risk was removed with the end of the war?

Minister for Defence · WEST SYDNEY, NEW SOUTH WALES · ALP

– I shall ask the Minister for Supply and Shipping to provide an answer to the honorable gentleman’s question to-morrow.

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Indonesian Seamen


– Last week, I asked the Prime Minister whether he had any information about a request from the Trades and Labour Council of Queensland concerning the waiving of the penalty provisions of the Immigration Act in respect of Indonesian seamen. He said that he had had discussions with the Dutch authorities. Can he make a statement on the general subject of Indonesian seamen in Australia ?


– Two questions were asked about Indonesians in Brisbane. In reply to the first I said that I had not received representations’ from the Trades and Labour Council of Queensland, and, in reply to another question on the following day, I said that such a communication had been received. Steps will be taken to remove from the mainland Indonesian seamen who have left their ships in Australian ports, I understand on strike. I am advised that there are some technical and legal difficulties because of the conditions in which some of the Indonesian seamen are living, but one thing I can make clear is that there will be no waiving of the requirements of the Immigration Act in favour of Indonesian seamen.

Mr Harrison:

– Can the right honorable gentleman say anything about the loading of the Dutch ships held up in Australian ports ?


– I cannot give complete “details. I did have consultations with the Dutch authorities. I elicited from them that four of the ships were loaded, to what degree I cannot say, with arms and ammunition. It was finally agreed that arms and ammunition should be loaded on one ship by Dutch personnel and that the Commonwealth Government will take all possible steps to ensure the loading of the mercy ships. I understand that the ship carrying arms and troops has left Brisbane. Difficulties are arising in regard to the other ships, but every effort is being made to ensure that the so-called mercy ships shall be loaded.

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– Did the British Government some time ago invite Australia to make available qualified young men from the Australian forces for appointment to the British Colonial Service in

Malaya and elsewhere for emergency restoration of civil administration in those countries ? If so, what attitude has the Government adopted towards the matter? Can the Prime Minister make a statement about it?


– So many organizations have submitted requests from time to time for men to be made available for various purposes that I am not able to recollect offhand whether an application has been received regarding Australians qualified to enter the British Colonial Service.

Mr Menzies:

– I referred, not to unofficial applications, but to one which, I suggest, was made by the British Government.


– At the moment, I have no recollection of such an application, but I shall have the matter investigated and inform the right honorable gentleman of the result.

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– Will the Minister for Commerce and Agriculture make a statement on the progress of the buffalo fly southwards, the efforts which are being made to combat it, and the progress which has been made to provide in Australia supplies of DDT for the purpose of checking this menace ? Last year, the Minister promised to visit north Queensland to obtain information personally about this problem. In view of the importance of these matters to the cattle industry on the eastern seaboard of New South Wales, will the honorable gentleman make this statement before the House rises?

YARRA, VICTORIA · ALP; FLP from 1931; ALP from 1936

– I shall have an investigation made, and supply the details requested by the honorable gentleman. I hope that within the next few weeks, I shall proceed north in accordance with my earlier promise, and I shall inform the honorable member when I propose to do so.

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– In view of the present high export value of wheat, is it the intention of the Government to sell from the next harvest wheat for stock-feed in Australia at concession prices and with such a subsidy from the Government as will involve the growers in a loss,on realization, compared with the price which they would receive if their wheat were sold at the export value?

Minister for Commerce and Agriculture · GWYDIR, NEW SOUTH WALES · ALP

– Matters relating to wheat for stock-feed, and the subsidy payable on wheat from the next harvest, have not yet been determined by the Government, but they will be fully investigated. The concessional price will be discussed with members of the Wheatgrowers Federation and similar organizations, and the Australian Wheat Board, which is the Commonwealth Government’s adviser on this subject. The Government takes notice of the advice tendered by the majority of members of the Wheat Board. In no circumstances will an injustice be done to Australian wheat-growers.

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Proposed Stop-work Meeting.


– Will the Minister for Labour and National Service inform me whether it is a fact that a stop-work meeting of members of the building trades has been arranged for to-morrow in Melbourne, in furtherance of the advocacy by the Building Trades Federation of a goslow policy in the industry? Having regard to the interruption which this stopwork meeting will cause in the construction programme in Victoria, has the Government taken any action to persuade the men concerned or their officials to defer such a meeting, or adopt constitutional means in order to have their complaints considered?

Minister for Labour and National Service · MELBOURNE, VICTORIA · ALP

– I know from press reports that a stop-work meeting is to be held in Melbourne to-morrow, and it is expected that 4,000 or 5,000 employees of the building trades will be present. I hope that at the stop-work meeting, the majority will decide not to go slow in future.

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Meeting at Quebec.


– I ask the Minister for Commerce and Agriculture whether a Food and Agriculture Conference is to be held at Quebec on the 16th October; whether Dr. Noble and other departmental officers will represent Australia; and whether Mr. R. C. Gibson, of the Primary Producers Association of Australia, will also attend, but in an advisory capacity only? Is the Minister aware that considerable dissatisfaction has arisen among primary producers throughout Australia about the meagre representation of their great industries at this conference, and will he take steps to ensure the more adequate representation of primary producers by persons who will not be limited to acting in only an advisory capacity?


– The Minister for Commerce and Agriculture has asked me to answer this question, as the matter was arranged while I was acting for him. A conference is to be held at Quebec; it will be attended by a number of representatives ; and Mr. Gibson has been appointed as one of the advisers to proceed to Quebec to assist the delegates.

Mr Abbott:

– The only one!


– The request of the honorable member for the representation of other organizations will be considered, but I point out that Mr. Gibson is the president of his association, which represents a very large number of primary producers. It should also be remembered that transport difficulties are very great. Although I promise the honorable member that his representations will be considered, I can hold out very little hope that any alteration of the representation will be made at this stage.

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Impressed Motor Vehicles


– As the Commonwealth Disposals Commission is permitting former owners of impressed small ships, tractors and other equipment to purchase them back, will the Minister representing the Minister for Supply and Shipping favorably consider the granting of a similar concession to former owners of motor cars who are aware of their present location?


– Motor vehicles, having been impressed a considerable time ago, would not now be in very good order.

Mr.Conelan. -Former owners of them are still prepared to purchase them.


– In that case, I shall be pleased to bring the matter to the notice of the Commonwealth Disposals Commission.

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– During the debate on the Papua and New Guinea Provisional Administration Bill, the Minister for External Territories said -

Honorable members opposite Raid that this bill makes no provision for white settlers. It- by which he meant the Government has many plans in mind, which include schemes for the benefit of white settlers.

Will the Prime Minister ask the Minister for External Territories to make a statement before the end of this week, giving some indication of the plans that he has in mind for these white settlers, who have suffered great physical and mental hardships, as well as, in many instances, severe capital losses, and losses of income from properties and businesses, which are still continuing owing to the inability of the Government to aid in their rehabilitation?


– I shall arrange with the Minister for External Territories to supply as much information as possible before the end of the week.

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– I ask the Prime Minister whether, as the press has reported, the Government intends to amend the Commonwealth Conciliation and Arbitration Act? If so, is the legislation to be brought down during this week?


– The Government has been, and still is, examining the Arbitration Act. I am unable to indicate the nature of the proposed amendments. It is not intended to bring down amending legislation during this sessional period.

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Housing- : Criticism by Public Servant ; Imposition of Fine.


– I ask the Minister for Post-war . Reconstruction whether a senior officer of his department, who some time ago wrote to the Canberra Times a letter in which he referred to the lack of a housing policy in Canberra, has been fined£2 for an alleged breach of the Public Service Regulations ? Will the Minister state whether the fine was paid? Is it intended that regulations shall be enforced against public servants, but not against other members of the community who are guilty of organized disobedience of them?


– In having written a letter to the Canberra Times; an officer of the Department of Post-war Reconstruction committed a breach of the Public Service Regulations, for which he was dealt with in the proper manner under those regulations I have no comment to make.

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– Can the Minister representing the Minister for Supply and Shipping say whether it is intended to abolish petrol rationing before Christmas of this year ?


– That is a long time ahead, and I cannot say exactly what can be done.

Mr Fadden:

– Give us a bit of encouragement, at any rate.


– The right honorable member may be assured that I am in his corner.

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– In country districts in New South Wales, and especially in the northern rivers district, a very large proportion of the timber milled is sent away in execution of defence orders or orders from the city, so that very little remains for the building of homes in the locality. Will the Minister for Works and Housing take action to see that saw mills are permitted to retain a reasonable proportion of their output for local requirements?

Minister for Works and Housing · WERRIWA, NEW SOUTH WALES · ALP

– I cannot say whether the position is as has been stated by the honorable member, but I shall have inquiries made, and shall supply him with an answer as soon as possible.

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Hospital Accommodation

Postmaster-General · BARKER, SOUTH AUSTRALIA · ALP

– Has the Minister for Repatriation checked the statement which he made last week that military hospitals were being used to accommodate the overflow from repatriation hospitals ? I have here a letter from an inmate of the Northfield Military Hospital who says that tubercular suspects have been dumped together, two in a cubicle. I shall hand the letter over to the Minister. The writer states that he thought it better to write to me” than to emulate our chief warrior, and call myself an Army spokesman”.

Minister for Repatriation · FRANKLIN, TASMANIA · ALP

– I said last week that it had been necessary to close several wards in repatriation hospitals because of the difficulty of obtaining staff, and some of the patients had been accommodated in military hospitals

Mr Archie Cameron:

– There seems to be no shortage of patients.


– The honorable member, as a military man, knows that in the matter of staff, repatriation hospitals are no better off than civilian hospitals, but the position has improved and we hope to get more staff in the near future. If the honorable member will give me the letter to which he referred I shall have the matter investigated.

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– Having regard to the excellent work done by the Volunteer Air Observers Corps, which was recently disbanded, will the Minister for Defence consider including members of this organization in the category of those who have qualified to receive defence medals.


– Requests in respect of defence medals and other decorations seem to be growing. However, I shall look into the matter mentioned by the honorable member.

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Fate of Civil Servants


– Will the Minister for External Territories make & statement with a view to allaying the anxiety of the relatives of members of the civil administration who were in New Guinea at the time of the Japanese occupation. and are still missing? Can the Minister say whether any fresh information is available, and whether anything is being done to clear up the matter ?

Minister for External Territories · EAST SYDNEY, NEW SOUTH WALES · ALP

– Inquiries are proceeding, and certain information has been obtained, but the department, before making an announcement, is taking measures to confirm the information. It is hoped that a statement on the subject will be made later this week.

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Motion (by Mr. Chifley) agreed to -

That Standing Order 70 (11 o’clock rule) be suspended for the remainder of this week.

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Second Reading

Debate resumed from the 12th September (vide page 5304), on motion by Mr. Chifley -

That the bill be now read a second time.

Leader of the Australian Country party · Darling Downs

. -This measure is one of the bills which may be regarded as complementary to the budget. The Taxation Department’s methods of accounting in connexion with tax collections is purely on a cash basis. No adjustments are made in the actual year of collection or assessment for tax outstanding, or for tax collected for previous years. This is a convenient way for the Treasurer to keep a handy and fairly liquid sum in reserve for contingencies - especially in a preelection year. Tax assessed and debited to ledger accounts, hut remaining unpaid at the 30th June last, amounted to approximately £38,000,000. In addition to this, there is an amount of approximately £33,000,000 representing arrears in respect of 275,000 assessments which had notbeen issued by the30th June, 1945. This information was disclosed in reply to questions asked by the Leader of the Opposition (Mr. Menzies) and myself. The conclusions to be drawn from the non-collection of this tax last year are: (a) estimated taxation revenue will be increased appreciably this year if a vigorous plan of collection is adopted; (b) if this legally collectable amount of more than £70,000,000 is not collected almost in its entirety, government appeals for voluntary victory loans will lose much of their force; (c) non-collection or a half-hearted attempt at collection leaves a dangerous amount of spending capacity in the hands of the public and is unfair to those taxpayers who have discharged their obligations, because as long as unpaid tax remains uncollected those who pay tax obviously have to pay at a higher rate; (d) collection of these arrears will mean that taxation could have been reduced this year beyond the amount contemplated by the Treasurer and earlier than the 1st January, 1946, when the meagre reduction of 6¼ per cent. will operate.

Besides these general criticisms, there are four specific matters which should receive the early attention of the Treasurer and which he would do well to consider in connexion with this bill. They are: (1) the Income Tax Assessment Acts are now so complicated that a person would require a law degree, an accountancy qualification, and training as an income tax assessor to interpret them; (2) the rebate system, introduced to replace the deduction system when taxes were comparatively low, has now proved so anomalous and inequitable with saturation-point taxation rates, that it should be abolished; (3) the whittlingdown effect of child endowment benefits by the incidence of taxation has by now become such a serious anomaly that the position should be rectified; and (4) the pay-as-you-go taxation plan has developed some curious and unforeseen results concerning returning servicemen, especially in the professions, which should also be examined for the purpose of correction.

Taking these four points in order, a good example of the complicated nature of the taxation laws occurs in clause 5 of this bill, which reads -

Section One hundred and sixty ad of the principal act is amended by inserting before paragraph (a) the following paragraph: - “ (aa) For the purposes of assessments for the financial year which commenced on the first day of July, One thousand nine hundred and fortyfive, the sum of the rebates allowable under this division shall not exceed the difference between the total tax payable before allowing the rebates and an amount equal to

Fifty per centum of the amount of tax which would have been payable (after deducting all rebates) if the rates of tax set out in the Income Tax Act 1945, prior to any amendment of that act, had been applied in the assessment of the taxpayer, and the amendments made by the Income Tax Assessment Act (No. 2) 1945 (other than the insertion of this paragraph) were disregarded; “

Another example occurs in section 85 (3) of the Assessment Act -

Where any premium is paid to a taxpayer for or in connexion with the grant by him of a sub-lease, or for or in connexion with the goodwill or licence attached to or connected with land the subject of a sub-lease so granted, and is, under section Eighty-four of this act, included in the assessable income of the taxpayer of the year of income, and he has paid any amount to acquire the lease of the premises the subject of the sub-lease or the goodwill or licence, so much of the total deductions to which he would but for this sub-section be entitled in respect of that amount during the period for which that sublease is granted as bears to those deductions the same proportion as the premium included in his assessable income bears to the total of the premiums received or to be received by him for the grant of that sub-lease or for the goodwill or licence shall be an allowable deduction, and he shall not during that period be entitled to any further deduction in respect of that a mount otherwise than under this sub-section.

The third example is section 159 (2) -

Where an amount of income derived from sources in Australia is included in the taxable income of a taxpayer, and income tax is paid by the taxpayer on that amount of income under the law of the United Kingdom and under the law of a State, and the sum of the Commonwealth and State rates is greater than one-half of the British rate, the proportion which the Commonwealth rate bears to the sum of the Commonwealth and State rates shall be ascertained, and the taxpayer shall he entitled to a rebate of tax of the sum obtained by applying to that amount of income a rate which shall bear that proportion to the following: -

where the sum of the Commonwealth and State rates is greater than the British rate - one-half of the British rate; and

where the sum of the Commonwealth and State rates is not greater than the British rate - the excess of the sum of the Commonwealth and State rates over one-half of the British rate.

I give those examples in order to show how complicated the income tax law is becoming when simplification should be the aim. Are there any members of this House who can say what those sections mean, who can really understand them without the most minute consideration of a legally trained mind? Dozens of similar examples could readily be found from a perusal of the assessment acts.

My second point deals with the rebate system as compared with the deduction system. Time and again in this House, I have stressed the need for a reform of this inequitable plan, which totally disregards the sound taxation principle of “ ability to pay “. Instead of a deduction from income for each dependent child based on the predetermined cost of keeping such child, a rebate of tax only is allowed, which cannot under any circumstances amount to more than £8 for any child for which endowment is receivable - a totally inadequate sum, as any family man knows. This maximum rebate of £8 operates from £477 upwards. The argument is advanced that child endowment is the compensating factor. Apart from the double waste of manpower involved in paying out child endowment at banks and post offices and taking some or all of it back through the taxation office, a close mathematical analysis clearly shows the anomalies. I have dealt with this particular aspect in this House before, and do not intend to reiterate my previous arguments, or to have reproduced the tables, on which the argument is based, which have been already published in Hansard.

The fourth matter, that of payasyougo anomalies, can best be illustrated by the following example, which has already been put before the Treasurer by me in correspondence. I know the Treasurer’s arguments, but I submit that no matter what arguments are put forward the fact remains that an injustice exists which should be speedily ended.

It is an example of the unfairness of the present system and can be regarded as an average case of a professional man returning to his business after discharge from the Army. It has been supplied to me by the society of returned medical officers of Queensland, and is called an average case because the person concerned is a married man with one child, who, during each year pays normal insurance premiums and medical expenses. The figures cited, therefore, are not those of a case specially selected to show the inequity of the present system but of an actual case of hardship brought about by service in the forces. In December, 1943, this man was discharged from the Army, and he recommenced his professional practice in J anuary, 1944. His total income for the year ended the30th June, 1944, was £744, and was made up as follows: - Income from employment, £323; professional income, £336; and income from property, £85. Taxation paid on his income was £216, made up as follows: - £4 transition tax on wages, one-third of transition tax on professional income £11, and £201 provisional tax based on an assumed income for the full year. Although his provisional tax was assessed on an income much greater than his actual earnings from his profession, the “ forgiveness “ of three-fourths of the tax on such professional income was based on the actual income only, and amounted to £82.

For the year ended the 30th June, 1945, his income was estimated at £2,000, made up of income from employment, £100; professional income, full year, £.1,860; and income from property, £40. Taxation on this income, after allowing all rebates, will work out as follows : -

If he had earned this year’s income during the year ended the 30th June, 1944, the “ forgiveness “ of three-fourths of the tax on his professional income would have been £600. On the actual professional income earned in 1944, the “ forgiveness “ was £82. Thus, on a comparison of the two years, he is penalized to the amount of £518 by virtue of the fact that he was discharged in December, 1943, and recommenced practice in January, 1944, instead of at a date six months or more earlier. This is not an isolated case. A Brisbane barrister, who served in New Guinea, has also approached me regarding his own case. It is similar in principle to that which I cited. In view of these demonstrable anomalies and difficulties, the present bill does not go nearly far enough and, consequently, I move -

That all the words after “That” be left out with a view to insert in lieu thereof the following words : - “the bill be withdrawn and redrafted as an instruction to the Government to provide - (a) a complete, simplified and consolidated income tax assessment act;

for the abolition of the ‘rebate’ system and its replacement by the ‘ deduction ‘ system ;

more equitable treatment for the man with family responsibities, irrespective of child endowment;

for the revision of the pay-as-you-go plan to correct anomalies which have become apparent, especially with regard to ex-servicemen ; and

for the reduction of taxation commensurate with national, financial and economic capacity, with particular relation to -

the effect of high taxation on the recuperative power of Australian primary and secondary industries, and

the obvious under-estimate in revenue and over-estimate in expenditure as disclosed by a critical analysis of the budget.”

Minister for Works and Housing and Minister for Home Security · Werriwa · ALP

– The matters raised by the Leader of the Australian Country party (Mr. Fadden), particularly his suggestions for a simplification of income tax, will be brought to the notice of the Treasurer (Mr. Chifley) and the Government, and will receive full consideration. However, at present, the amendment is not acceptable to the Government, and I shall oppose it.


.- I desire to speak briefly on this bill, because I believe that (theGovernment, despite everything which has been said by honorable members on both sides of the chamber during the budget debate, has still shown that it is not prepared to recognize the implications of its present taxation policy. To-day, in Australia, we are noticing a continued drift from the position of high production which prevailed in the early years of the war. We are seeing a growth in the number and extent of industrial disputes. The list of disputes last week-end was as serious as it was in some of the worst periods that we experienced during any part of the war, and included stoppages on the waterfront, in the production of coal and power, and in the construction programme for private homes and factories. These may be symptoms of a number of ills. Certainly, one of the most potent causes of the present decline of production is the tremendously high taxation which all sections of the community are called upon to bear. I again ask the Government to examine this particular matter. Unless the Government is able in the next few months to indicate a substantial measure of relief, the decline will continue.

In the war years, 34 per cent, of the total expenditure by the Government was met from revenue. The remainder was provided by public loans or bank credits. Suddenly, in a year which for all accounting purpose, and for many administrative purposes, we are treating as virtually a war year, we find that the proportion of war expenditure financed from revenue has jumped from 34 per cent, to 65 per cent. Because of that fact, the Government has found it necessary to maintain taxation at the present exorbitant rates. The House should ask whether it is reasonable for the Government suddenly to impose upon the community this burden of expenditure from revenue, when in the early years of the war we financed so great a proportion of the war effort from public loans and bank credits.

I know the answers with which the Government will meet that assertion. One answer, of course, is that the Government fears an extension of an inflationary process, if it does not pay out of revenue as much as it can for the expenses of this year. But I repeat that the Government is treating the financial year 1945-46 as virtually a war year. When we discussed the Estimates, we discovered that it had been deemed impracticable substantially to reduce most of the departmental expenditure. Departments, we were told, could not unwind, as rapidly as we might desire, the war-time processes. But as nine months of the financial year follow the cessation of hostilities, the Government should have relaxed the severe financial method, which it applied during the actual war years. Instead of doing so, the Government has chosen to take the- present course. Consequently, I believe that it i» worthwhile to examine for a moment the argument about the danger of inflation.

I say, in reply to the Governments contention that it must syphon off the purchasing power of the community by taxation in order to prevent the development of inflationary processes, that the bulk of the purchasing power of the community which was created during the war resides in the lower-income groups. The rapid and extraordinary growth of the number of taxpayers in those groups during the war years was remarkable. In them we find residing the bulk of the purchasing power of the community. According to calculations which I made some time ago, it amounts to 70 per cent, of the total purchasing power of the community. I speak now of the income groups under £250 per annum and from £251 to £500. The Treasurer has supplied a table showing the movement of incomes in a number of groups for the years 1939-40 and 1943-44 inclusive. It will be of interest to honorable member* and others who make a study of taxation matters -

I direct special attention to the particulars in relation to the £251-£500 income group, for they show that a very substantial proportion of the purchasing power of the community now resides there. That income group has increased very greatly during the war years. In 1939-40, the 220,110 taxpayers in this group provided £80,128,000 of income and the corresponding figures for 1943-44, which was the last year for which the Treasurer was able to give me details, were: income earners, 1,029,636; income earned, £363,146,000. That is a tremendous . increase. Lest honorable members should misunderstand my purpose in making these remarks, let me say that I express no regret whatever at this development. I applaud it. My purpose in referring particularly to this group is to indicate the enormous advance in the number of income earners who receive between £5 and £10 a week. Apparently the Government fears that if the huge volume of purchasing power which this income group represents be not regulated, any inflationary process in the community may be accelerated. Possibly that is the reason for its refusal to reduce taxation. But that is the approach of the economist, and not that of the realist, to the facts. Many of these persons, for the first time in their lives, have a bank balance. Never before had they accumulated money as they have been able to do in the last few years. Having this money, they have the means to pay a deposit on a home if they desire to purchase one, or to meet any of the emergencies, such as illness, death, or accident, which arise in family life. To imagine that these individuals will spend carelessly the money that they have accumulated is, in my opinion, completely unrealistic. As the people concerned have put this nest-egg in savings banks, or invested it in some way, I am sure that they may be trusted not to throw it away. They are not likely to spend it without due consideration, even in providing housing, if they already have reasonable accommodation. They will be wise enough to hold their money for a year or two at least until housing costs become stabilized and the prices of commodities in general return more nearly to those of pre-war days. The Government’s fears of inflation in respect of these people are quite unwarranted.

I consider that the Treasurer is acting unwisely in reducing the borrowing programme by maintaining taxation at the existing high rates. I also consider that estimates of revenue are unsatisfactory. The Treasurer has estimated that revenue will decline by £3,000,000; he has therefore reduced his estimates by a corresponding figure. The Opposition challenges the reliability of these figures. We consider that the estimate of revenue is unduly conservative. The Treasurer, for example, has estimated that the revenue from the pay-roll tax will decline.

We consider that his figures in this regard are pessimistic. Other estimates of reductions of revenue are also unjustifiable in our opinion. It should be remembered that about 275,000 income tax assessments which could not be sent out last year because of the shortage of man-power in the Taxation Department will be issued this year. Our view is that the revenue will considerably exceed the Treasurer’s estimate. The whole outlook justifies a very much more substantial reduction of taxation than has been foreshadowed. Undoubtedly, a need for the reduction of taxes exists, and a substantial reduction would have good results not only in the ranks of the employees, who, it is generally admitted by all impartial observers, are not making their best efforts to-day because they know that much of any increased earnings would have to be returned to the Treasury in additional taxes, but also in the ranks of employers who are to-day not displaying the initiative and the desire for adventure in new enterprises which undoubtedly would be noticeable if taxes were not so high.

The taxation policy of this Government is in marked contrast to that of the governments of other English-speaking countries, in which an appreciation has been shown of the need to encourage a maximum productive effort in the postwar years. In Great Britain this spirit has been expressed in specific proposals to encourage both industrial development and the export trade. The United Kingdom. Government did not wait for the end of the war to take steps in this direction. Well before the cessation of hostilities it adopted a programme which was designed to encourage individual initiative in industry in a big way. The only evidence of any such intention by this Government has been the shadowy proposal to establish the Industrial Finance Department of the Commonwealth Bank. So far nothing more tangible than that has been done. Unless the Government adopts a more progressive policy and takes effective steps to reduce taxation, investors are not likely to hazard their money in new industries, and workers will not be stimulated to increase their income by making a greater productive effort. The Government’s policy will not bear close examination. It is well known that in Australia to-day many of the allegedly wealthy taxpayers are not interested in increasing their income, because they know that if they succeed a considerable increase of taxation would bdebited* against them. But .they are noi left with a balance for their own use. in the real sense. On paper, perhaps h profit is shown in respect of a particular enterprise; but it is represented by additional equipment, or increased stock* which have had to be carried, largely a.« the result of war shortages and a variety of other circumstances, certainly not in the form of liquid cash resources which could be used by the taxpayer for his own needs. I believe that 90 per cent, of the high income-earners in Australia during the last five years have been able ti. keep themselves going only by eating into their capital resources. Under the opera tion of the pay-as-you-earn system, thhigher the income the less will a taxpayer be able to retain during the first three years, because the tax that he pay> reaches 20s. 0£d. in the £1. I believethat the maximum which any taxpayer could retain is approximately £1,100, irrespective of the amount of income earned. In a young country like Australia, most taxpayers with big incomes derive then from going concerns in the form of businesses or country properties. Usually, a substantial amount has to be provided for estate duty upon the death of the taxpayer; consequently, the majority of the taxpayers in those groups have found it necessary to insure themselves for big sums; For taxation purposes, only £100 of the amount can be brought into the assessment, and the tax is reduced by a rebate. A taxpayer with a large income may pay from £500 to £1,000 a year in insurances, in order that estate duty may be met upon his death. If the estate duty cannot be met in that way. the business may be crippled; there may be no opportunity to set aside proper reserves for such a contingency. Those people have not been able to live on th<amount remaining to them after their tax has been assessed. I use that again as an illustration of the incapacity of many of those to whom, normally, we would look to develop industry in this country by the investment of their surplus resources, because the margin left to them is not sufficient. The Government has fumbled two attempts to restore some semblance of economy. The first attempt was in connexion with the payasyouearn system of taxation. It rejected the proposal to institute post-war credits, which would have left a margin and given an incentive to investment, but introduced the payasyouearn system, which had been enthusiastically sponsored by the Leader of the Australian’ Country party when he was Prime Minister and Treasurer. However, instead of adopting the system wholeheartedly, thus giving to individuals and industries the spur which would have been provided had it been unencumbered by a premium provision, it attached to it a premium provision which, during the three most critical .financial years of the war, withdrew the benefit that the taxpayer otherwise would have enjoyed’.. The Government fumbled its second attempt in the presentation of the budget for this year. The country was crying out for substantial tax relief, which was essential to a wholehearted effort by employers, employees and all producing industries; yet the relief proposed is to be merely a 6£ per cent, reduction of tax, which, in many instances, is not likely to take practical effect until some time after the middle half of next year. The Government cannot hope to re-absorb in industry the hundreds of thousands of servicemen and other war workers who are to be re-established unless it revises its taxation policy. The Treasurer may have found himself unable to make a detailed examination of his capacity further to reduce taxes because of the sudden ending of the war. I can only express the hope that, within the next month or so, with the Parliament in recess, he and hia Cabinet will find it possible to examine the financial situation afresh, not merely having regard to that aspect, but also recognizing the effects of financial policy in promoting .industrial unrest and the decline of production that are in evidence throughout Australia to-day. I repeat that, unless the Government provides that spur which would be given to Australian economy by the prospect of an increased income, and the benefits and amenities arising therefrom, our dreams of an expanded post-war Australia, with better living standards for all, cannot be realized. I hope that the Minister for Works and Housing (Mr. Lazzarini) will impress upon the Treasurer the arguments that have been advanced. I am certain that he must appreciate the force of them.


.- I support the amendment of the Leader of the Australian Country party (Mr. Fadden). If our tax laws could be so simplified as to be readily understandable, the people would be more inclined to accept the many burdens imposed on them. I am strongly of the opinion that, if the tax rates could be lowered, especially in the discriminating manner provided for by the amendment, considerable advantage would accrue to the community, because industry would be revitalized and employment would be provided quickly for service men and women when demobilized. According to a statement by the Treasurer (Mr. Chifley) in connexion with the present Victory Loan, taxation is now imposed for the double purpose of attempting to meet our very heavy commitments and preventing inflation. The extra amount that would be left in the hands of men with families, especially those who have small incomes, by the reduction of income tax, would be expended mostly on essential articles of diet or clothing, and the expenditure would not cause inflation. Much larger purchases of woollen goods for the clothing of families would not be likely to affect the huge wool surplus of 10,000,000 bales so greatly as to cause a marked increase of price. I urge the utmost simplification of the methods of imposing and assessing tax. I have always considered that the replacement of deductions by the system of rebates has had a very bad psychological effect. The deduction of a fixed amount for a dependent wife or child was very much better than the present complicated system, under which the rebate becomes exhausted when the income reaches a certain figure. A system which gives concessions but exhausts them at a certain level of income, is most unfair. Many taxpayers whose incomes range from £500 to £1,500 a year have committed themselves to the higher education of their children, or to the payment of premiums on insurance policies which cannot be altered without considerable loss. I, therefore, urge the Government to consider during the recess the advisability of altering the system along the lines suggested.

The Leader of the Australian Country party has mentioned the payments which an ex-serviceman had to make by reason of the method of assessment adopted and the incidence of the pay-as-you-earn system. There should be an alteration of the practice in order to avoid such anomalies, which would arise only while servicemen were being demobilized. Whatever might be done would not constitute a precedent that would have to be followed continually. The Government should make certain that ex-servicemen will be treated as justly in connexion with past taxes as the civilian who has not been out of Australia. My experience as Treasurer leads me to believe that at a time like this we shall give a tremendous fillip to industry if we can steadily reduce tax rates so as to give to the public an assurance that they will be able to keep more and more of their earnings. This will encourage thrift, because those who invest their savings will be assured of a reasonable return. Capital investments on a much greater scale than before the war will be necessary if we are to develop our industries and provide full employment for all.

Question put -

That the words proposed to he left out (Mr. Fadden’s amendment) stand part of the question.

The House divided. (Mr. Speaker - Hon. J. S. Rosevear.)

AYES: 38

NOES: 15

Majority . . . . 23



Question so resolved in the affirmative.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Bill - by leave - read a third time.

page 6222

INCOME TAX BILL (No. 2) 1945

In Committee of Ways and Means: Consideration resumed from the 12th September (vide page 5308), on motion by Mr. Chifley -

That, in lieu of the tax imposed upon incomes by the Income Tax Act 1945 . . . (vide page 5306).

Question resolved in the affirmative.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Lazzarini and Mr. Frost do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Mr. Lazzarini, and passed through all stages without amendment or debate.

page 6223


Second Reading

Debate resumed from the 30th August (vide page 5041), on motion by Mr. Beasley that -

That the bill be now read a second time.


.- From time to time, members belonging to all parties in the House have, paid well merited tributes to the work of the Commonwealth Public Service during the war. Additional time was worked and, in the case of many of the senior members, especially of the permanent public service, very strenuous effort was put into the war. I should like to know whether the Government has considered giving any material recognition to the work which those officers have done. There is precedent for this, both in the field of Government administration and outside it. Parliament has already passed a measure providing for the payment of gratuities to service men and women. Whilst I recognize that there is a great difference between the conditions under which members of the armed forces have, in many instances, been required to serve, and those under which members of the Public Service have worked, it nevertheless remains true that the work of many public servants has been comparable with that of the work of some members of the forces who have served only on the mainland. The difference between service abroad and service rendered within Australia was recognized by the Parliament, which provided a very much higher rate of gratuity for service abroad. We have a precedent for action. by the Government to recognize materially and financially the extra effort put forth during the war by the Public Service. Moreover, many private concerns have given bonuses to employees who have been with them through the war or have rendered notable service. I think it is proper to raise this matter here, because I am sure that if the Government found that it was practicable to make a recognition of the help so freely given by the Public

Service during the war, it would have the support of all sections of the Parliament. I invite the Minister to say whether any special consideration has been paid to this matter by the Government, and, if so, whether a decision has been reached.

The second matter that I raise in the hope of obtaining some information from the Government relates to a decision recently given by the Commonwealth Public Service Arbitrator, Mr. Boniwell, in a claim by some thousands of members of the Public Service for higher wages. I understand from correspondence that has reached me from members of the Public Service in my electorate that a claim for higher wages was submitted by the Federated Assistants Association on behalf of its members in June, 1945. Typists, machinists, and assistants, some thousands of whom are employed in the Public Service, were affected by the application. The arbitrator refused any increase, although it is claimed by those writing to me that strong, reliable evidence was given to prove that the work had increased in quantity, quality, fatigue and pace since the last award, which was made in December, 1929. Sixteen years seems a very long period to elapse without any adjustment of wages having been made. I assume that costofliving adjustments have been made in the period, but I am not fully informed on that point. I should like the Minister to give us some information on that matter also before the debate concludes.

The bill deals principally with the system of making provisional promotions in the Public Service, and the method of dealing with appeals in respect of provisional promotions. A representative committee from within the Public Service considered the question of whether any change was desirable of the law regarding the selection of officers for ‘ temporary duty, and the question of whether promotion should be based on relative efficiency or whether promotion should be given to the senior efficient officer engaged the attention of the committee. The Minister, in his second-reading speech, gave the House the personnel of the, and I do npt need to cover that ground again, but, quite clearly, an issue of this kind is important not only to members of the Service who may be personally and directly affected by it, but also to the Parliament and the public as a whole. The public has an interest in ensuring that the highest efficiency shall be maintained within its Public Service. The committee reported at some length. I consider that it examined the matter reasonably and carefully, and I do not propose to challenge its conclusions. I think a reasonably accurate summary of the committee’s conclusions is that it considered that there should be no departure from the rule of promotion according to relative efficiency in the higher grades of the Public Service, but that there was room for a change in regard to the lower grades, particularly the fourth grade, where the work done is, in some instances, of a repetitive character and no very high degree of skill or aptitude may be called for. Determination of relative efficiency between two or more officers called upon to do one of the less responsible jobs within the Service can create administrative difficulties which promotion, on the basis of selection of the senior efficient officer, would overcome, and a strong majority of the committee reported in favour of a modification -of the past practice. The Service organizations were evenly divided on *the issue as far as the number of unions were concerned, although the number of employees covered by the organizations proposing an alteration greatly exceeded the number of employees who contended that no alteration was desirable. The New South Wales and Victorian regional groups of the Institute of Public Administration, which gives special attention to problems of this kind, recommended no alteration of the basis of selection for promotion. The comment of the committee is -

Even those members of the committee who felt most strongly that the basis must continue to be “ the promotion of the fittest “ recognized that there is a strong case for some multiplication of the strict letter of the present rule in the case of certain positions in those grades of the Service which are concerned mainly with routine or repetitive work because the present rule may well be thought to require a search, in every grade of the Service, for even the slightest differences in relative efficiency. Ultimately, the issue narrowed itself into the question whether the test of “ senior efficient officer” could bo applied. without loss of efficiency to the Service, to any positions at all and, if so, to ‘what positions.

The committee went on -

In the nature of things, it is difficult for selecting officers to discriminate between competent employees in positions of a “ mass “ type, particularly where the discrimination hat to be made for promotion to a post which though of slightly higher grade, is of similar character to those from which the application* came, and which does not involve .functions of supervision or control.

The Chairman of the Committee, Professor Bailey, who did not agree with the majority view, thought that in the long run it would reduce the efficiency of any part of the service to which the proposed modification applied, and the Commissioner of’ Taxation had similar fears. Those honorable gentlemen who would be interested in seeing the argument’ worked out in detail would be well advised to examine the report which was presented on the 20th June last.

Other matters covered by the bill include the setting up of a consultative council to permit of regular discussion between representatives of the Administration and of the staff on matters of general public service concern. In this respect, we are following, in principle, the example of Great Britain, Canada and New Zealand. Great Britain has what is known as the Whitely Council and there are similar councils functioning in Canada and New Zealand. It is proposed that for the Commonwealth Public Service there should be a council of six representatives of the administration and six representatives of the staff who should meet about three times a year to consider matters such as staff welfare, sick leave, and seniority. The council is not to asked to deal with individual cases but with principles. Another amendment, which will interest honorable members, covers the re-appointment to the service of officers who have resigned to contest parliamentary elections. Others deal with the re-appointment of an officer convicted of a criminal offence whose conviction has been quashed ; leave of absence to officers appointed to represent the Commonwealth in other countries or who take service with prescribed international bodies, such as Unrra ; and permission to an officer of the Public Service to be a director of an organization such as a cooperative society. I understand that the purpose of the last-mentioned amendment is to enable the formation of a cooperative building society in Canberra, but I think- that the Minister will find, if he examines the clause, that it goes much beyond that. I propose in committee to submit an amendment that, I believe, will give expression to the intention of the Government and, at the same time, avoid the undesirable practice of public servants accepting directorships without the authority of the Public Service Board. I regard this bill as one which should interest honorable members, all of whom have a very live concern with matters affecting the Commonwealth Public Service. As far as it sets out to improve the existing legislation and to meet the wishes of the Public Service itself and adopts the recommendations of a representative Public Service Committee, the measure should receive the support of all sections of the House.


.- I was most gratified to hear the honorable member for Fawkner (Mr. Holt) pay such a well-deserved tribute to the officers of the Commonwealth Public Service for their efforts during the war. Remarks of that nature are most refreshing, particularly at a time when it appears to be a popular and common practice to refer to the average public servant as a bureaucrat who endeavours to regiment the whole life of the community. Those of ns who sit in this Parliament are in a position to appreciate the true value of the Public Service. I know what- the Public Service generally has been called upon to do during the war. Public servants have worked extra hours of duty without additional payment; worked short-handed; and, for less remuneration, worked harder than or just as hard as the employees of- private enterprise. The Public Service generally has done an excellent job, particularly during the war years, and I endorse the praise expressed by the honorable member for Fawkner.

The honorable member referred also to an award by the Public Service Arbitrator. Actually, nothing was given to the applicants. Like the honorable member, T believe that the Government should give serious consideration to the payment of some gratuity, or the grant of special leave in recognition of the efforts of public servants in war-time. Some people were paid high wages during the war, but those who received least in the way of remuneration for their services were the public servants. The suggestion that Commonwealth public servants should b<granted additional leave on full pay, or a gratuity is worthy of consideration, and I hope that the Government will view the matter favorably at the appropriate time.

I welcome this amending bill. As a former public servant I know that officers of the Service generally have worked for many years under various disabilities. One of the main sources of discontent within the Service over a long period has been the promotion and appeals system. The Government saw fit to establish an expert committee to consider this matter. Professor Bailey was chairman, and the other members of the committee were four representatives of the administrative side of the Commonwealth Public Service, and four representatives of the largest Public Service organizations. Those people were expert in public service administration, and, after they had considered the matter thoroughly, they submitted their report to the Parliament. Some of the recommendations were unanimous and others were majority decisions, but seven of the nine members of the committee agreed with every recommendation. Therefore, we can accept that report with a great deal of confidence. The Government, in adopting the recommendations and embodying them in this bill, will improve the Public Service generally, because the proposed amendments will make for better working and administration.

In the main, the system of promotions has not been substantially altered. Promotions in all the higher grades of the Services will be on the basis, first, of efficiency, and where efficiency is equal, efficiency plus seniority. In the lower grades of the Service, where there has been a great deal of discontent for many years, the system has been altered in a number of instances for the purpose of providing that the senior officers shall get the promotions. That provision will remove any causes of discontent without detriment to the efficiency of the Service.

Fourth division officers principally will be affected by this amendment, and the senior officer will always be capable of efficiently performing the duties of the position.

The appointment of a promotions appeal board will meet with general satisfaction. Promotion on the ground of efficiency, without a proper system of appeals, always leaves the senior administrative officers of the Service open to the charge that favoritism rather than efficiency influenced their selection. That charge has been levelled against administrative officers on many occasions, partly by disgruntled applicants and partly by other persons who, while not being applicants for the position, had taken an interest in the proceedings. The promotions appeal board will consist of a chairman, a representative of the department concerned, and a representative of the employees. All risk of favoritism will thereby be removed, and public servants will feel satisfied that when they apply for a promotion, they will receive a fair hearing. If their appeal is rejected, they will know that they have been defeated by a better man and not as the result of favoritism, friendship or the introduction of “backdoor “ methods. This provision will make for a more contented and efficient Public Service. In my opinion, the appeal boards will not be overworked, because the mere presence of these bodies to hear appeals against provisional promotions will mean, in the majority of cases, that departmental heads when dealing with promotions will consider more carefully the merits of the various applicants before making their recommendations. As the result of the establishment of the appeals board, the number of appeals against promotions will gradually diminish, because more reliable recommendations will be made in the first instance by the departmental heads.

The creation of a joint council and classification committees representative of the administration and public servants’ organizations, will improve the efficiency of the Public Service. I am gratified that the Government is recognizing that these organizations have rights, and oan assist in the control of the Public Service. The officials of Public Service organizations, are sound, responsible men. Heads of department? see the administration from one side; organizations see it from the opposite side, for they have to safeguard the interests of employees. They know where faults and failings occur in the administration. They endeavour at all times to rectify those shortcomings, and their object is certainly to see that the employees of the Commonwealth shall receive fair and just treatment from their employers. They are also keen to see that the Commonwealth Public Service shall be conducted efficiently. Regular consultations . between the administrators and the representatives of the organizations will create more effective control in the Public Service. If the House accepts this bill, we shall have a happier and more efficient Public Service.

I desire to make one comment upon the provision which has been inserted in the bill to grant to Commonwealth public servants the right to contest parliamentary elections, and, if defeated, to return to the Service without loss of salary or status. To date, the position has been that Commonwealth public servants have been denied that right of citizenship. If they desired to contest .a seat in the Parliament, they were obliged to resign from the Public’ Service. If they were defeated, and were fortunate enough to he re-appointed to the Service, they lost all rights of seniority and status which they had gained over a period of years. In fact, the Commonwealth public servant was denied the right, which every other citizen possesses, of contesting a seat in the Parliament without the loss of the whole of his accrued rights. This bill will remove that anomaly, and give to Commonwealth public servants an additional right of citizenship. It will not do any injustice. I welcome all the provisions of the bill and commend it to the House, in the hope that it will be agreed to without amendment.

Minis- ter for Defence · West Sydney · ALP

– wi reply - The honorable member for Fawkner (Mr. Holt) referred to the services which Commonwealth public servants have rendered in the national interest during the war. It is quite true that they gave most efficient and loyal service. They worked overtime and accepted directions of various kinds without complaint. To date, the Government has not considered any recognition of their services, so I am not able to indicate anything definite in that regard.

Mr Holt:

– Will the Minister examine the practicability of it?


– The Public Service Board has been examining it, hut I am not able to indicate what the decision will be. The honorable member for Fawkner referred also to complaints regarding the hearing of claims submitted by typists and machinists to the Public Service Arbitrator, Mr. Boniwell. The problem arises from the fact that the wage-pegging regulations prevent the granting of increased remuneration. The report dealing with this matter will be laid on the table of the House in the near future. I thank the honorable member for Bourke (Mr. Bryson) for his commendation of the bill. Having been associated with the Commonwealth Public Service for a long time, he recognizes the value of the work performed by public servants, and their right to take, through their organizations, a more responsible interest in the workings of the various departments. I commend the bill to the House.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 15 agreed to.

Clause 16- (1.) Section ninety-one of the Principal Act is amended by omitting from sub-section (2.) all the words from and including the words “ any Act in any State or elsewhere “ to the end of thatsub-section and inserting in their stead the words “ any law in any State or elsewhere “. (2.) This section shall be deemed to have come into operation on the first day of March, One thousand nine hundred and forty-five.

Section proposed to be amended -

01.- (1.) . . .

(2.) Nothing herein contained shall be deemed to prevent an officer from becoming a member or shareholder only of any incorporated company, or of amy company or society of persons registered under any Act in any State or elsewhere but an officer shall not take any part in the conduct of the business of the company or society otherwise than by the exercise of his right to vote as a member or shareholder.


.- The purpose of this proposed amendment of the principal act is to enable an officer of the Commonwealth Public Service to act as the director of a co-operative society. I understand that the issue arose in connexion with the formation of. a co-operative building society in Canberra and it was considered that as the law stands a Commonwealth public servant is debarred from accepting such an office. I am entirely in accord with the proposal to amend the principal act to enable that to be done, hut the explanatory memorandum which the Government has made available to honorable members indicates that the amendment will go a good deal further than that.

If it were agreed to it would enable an officer of the Public Service to become a member or shareholder in any incorporated company. The restriction on his taking part in the conduct of the business of the company or society otherwise than by the exercise of his right to vote would be eliminated and he would be able to become an active member without any restriction. I have consulted departmental officers concerned on this matter and, as a result, I move the following amendment which I think will meet the wishes of the members of the Service and yet avoid the danger which I see in the wider amendment proposed by the Government: -

That, in sub-clause (1.) all the words from and including “ by omitting “ to the end of the sub-clause be left out with a view to insert in lieu thereof the following words: - “ - (a) by omitting from sub-section (2.) the word ‘ Act ‘ and inserting in its stead the word ‘ law ‘ :and

by adding at the endthereof the following sub-section : - (3.) Notwithstanding anything contained in this section, an officer may, with the approval of the Board (which approval may at any time be withdrawn), act as a director of a co-operative society which is registered under any law in any State or elsewhere and does not enter into contracts for the supply of goods or services to the Commonwealth.

Minister for Defence · West Sydney · ALP

– The purpose of the clause is to amend section 91 (2.) of the principal act which is mandatory and prevents an officer from taking part, inter alia, in the conduct of the business of a company or registered society otherwise than by exercising his right to vote as a member or shareholder. By this provision an officer of the Service is prevented from becoming a member of the directorate of even a co-operative society. The Government considers it unreasonable that a greater restriction in this regard should be placed upon a Commonwealth public servant than upon a State public servant. The proposed amendment is based on the existing provisions of the New South Wales Public Service Act and the corresponding acts of other States. Although the mandatory provision will be removed the amended sub-section will still be restrictive in that officers will be required to secure the permission of the Public Service Board to act in the manner referred to. It is important that officers of the Public Service who become associated with private or co-operative companies shall not be in a position to influence the business of the Government because of the position that they occupy in the Service. I have noticed that a case of this kind arose recently in connexion with a Melbourne municipality. However, as the amendment of the honorable member for Fawkner (Mr. Holt) will not take away from public servants the scope which the Government desires them to have in relation to co-operative societies and the like, and business activities generally, I accept it.

Amendment agreed to.

Clause, as amended, agreed to.

Remainder of bill - by leave - taken as a whole and agreed to.

Bill reported with an amendment; report - by leave - adopted.

Bill - by leave - read a third time.

page 6228


Second Reading

Debate resumed from the 12th September (vide page 5301), on motion by Mr. Lazzarini -

That the bill be now read a second time.


.- A most extraordinary and disappointing approach to the problem of public health is revealed in this bill, which provides us with another illustration of doing last things first, as was done when the Unemployment and Sickness Benefits Aci was passed. The foundation of a national health policy should be complete and adequate and intelligent supervision of the bodily health of infants, preschool and school children, and of the physical culture of school children and the diet of the community. If such supervision were provided, the necessity for free hospital beds would be greatly reduced. The Government has at its command a most representative and expert body for consultation in matters of thi» kind from which it can be sure of 100-per-cent. co-operation. Unfortunately, it has not referred this proposal to thai body. I am speaking, of course, of the National Health and Medical Research Council. Twenty years ago, the BrucePage Government appointed a Royal Commission on Health, which recommended that there should be established a Federal Health Council and a Medical Research Council. The Federal Health Council was immediately formed, and, though its functions were limited chiefly to matters of public health administration, it co-ordinated medical policy in many important matters, including -

Vital statistics.

Medical control of migration.

Control of venereal disease.


School medical services.

Metropolitan milk supplies.

The health of aborigines.

Control of leprosy.

Maternal mortality.

Control of poisons.

Control of preparation and sale of biological preparations.

It also unified the medical attack on tropical diseases, cancer, and malnutrition. Ten years later, the Medical Research Council was formed and combined with the Federal Health Council to form the National Health and Medical Research Council.

Mr. Hanlon, the Queensland Minister of Health, speaking at a meeting of this body in 1938, said -

At the first meeting of the former Council. Dr. Page, who was then Acting Minister for Health, and has again on the occasion of this conference assumed that portfolio, expressed his conviction “ that the conditions in Australia are such as to afford a unique opportunity for the establishment of a state of health amongst the people considerably in advance of any standard which has hitherto been attained. While this objective is undoubtedly possible, it cannot be achieved except by the utmost devotion of all authorities separately concerned in this work and by the most harmonious co-operation in all matters between those authorities.” That statement is just as true to-day as it was when Dr. Page made it, and I am sure we shall have harmonious co-operation of all here.

This harmonious co-operation in all matters between the respective Commonwealth and State authorities should be the method of approach in a matter so vital as national health, and any action should he under the guidance of the expert opinion brought into being by the Commonwealth and State Governments. Were it proposed to install electrical equipment in this House, expert opinion would be secured. Bodily health is much more important than the acoustic properties or the lighting of this chamber. The Government has brought down two health measures almost simultaneously. The first, dealing with an attack on tuberculosis, makes a balanced approach to the subject as the result of the recommendations of this expert body, in fact, two years ago, the Government, after a debate in this House, adopted the recommendations of the National Health and Medical Research Council in regard to the treatment of tuberculosis in repatriated servicemen. Apparently, however, no advice has been given by that expert body in respect of the second measure, which is now before the House. I shall show that the Government’s action flatly stultifies other recommendations which it has made, and will lessen the value of the action proposed to be taken under the Tuberculosis Bill. The States disagree with the proposal, and opposed it very forcefully in their discussions with the Commonwealth, accepting it only because they were given no alternative. The first point that I make is that all the recommendations in respect of the stamping out of tuberculosis indicate that children should be removed immediately from the source of infection. Fifty per cent. of contacts are infected before they are five years old, and 65 per cent. before they reach the age of puberty. A medical survey committee of this House reported in 1943 that the shortage of beds for the treatment of tuberculosis alone in Australia was 2,963, and that the shortage

For all classes of patients was about 10,000. The provision of essential accommodation for patients and their contacts and associated measures, is a prime necessity. However, the Government has preferred to expend money on the proposals embodied in the bill. As I have stated previously, it is “ putting the cart bef ore the horse “. In 1944, at a conference of Commonwealth and State Ministers, Mr. Hanlon, then Acting Premier and Minister for Health in Queensland, maintained that the Commonwealth’s scheme was fundamentally unsound. He claimed that a contribution towards the maintenance of beds in hospitals rendered no assistance to the dental services and the treatment of out-patients, which were maintained by those hospitals , yet, with out such services, many more sick people would have to be accommodated in the hospitals. Mr. McKell said -

The problem was not so much the granting of assistance to patients in hospitals as the provision of more hospital accommodation. The New South Wales hospitals were approximately short 3,300 beds. If the sum represented by the payment of 6s. a day were paid by the Commonwealth to the State to enable it to bring up to date the hospital position by providing additional beds, that would be of more benefit.

The general consensus of opinion at the conference was that the Commonwealth’s scheme would merely cause voluntary contributions to cease, destroy hospital insurance schemes, and make people, already sufficiently depressed before sickness, even more depressed by the feeling that they were being treated as paupers. It will not give a better service, and it has not been recommended by any authoritative body. What is needed in Australia is, not that hospital beds shall be free, but that more of them shall be provided. Only last year, my wife was taken ill with pneumonia in Melbourne, yet despite my wide acquaintance with the medical and nursing professions 1 was unable to secure her admittance to a hospital, and the best that I could do was to secure the services of a nurse for a short period daily. What must be the position of many others who have not the contacts that I enjoy? Therefore, the proposal in this hill is not a way in which money should be expended. Free medical treatment has never been asked for by either hospitals or patients. Nor has the Government’s free medicine scheme. Substantial expenditure is involved in the two measures. The provision of additional hospital beds, or the taking of those fundamental steps which would prevent unnecessary sickness, would be far better. If that were done, we would be able to maintain more strongly that typically British independent co-operative movement, the friendly societies, which has done so much to organize medical benefits for the people.


.- This step in the implementation of the Government’s social services programme is evidence of its sincerity in regard to the furtherance of national welfare. I commend the Social Security Committee, which in the last three or four years has submitted reports containing valuable recommendations. This bill, which is the outcome of one of those reports, provides for assistance by the Commonwealth to public hospitals and to certain approved hospitals. The total amount to be provided in the first year will be about £5,000,000. The fact that the total Commonwealth commitments on social services is to be approximately £75,000,000 a year, compared with £16,000,000 a year in the period prior to the war, indicates the interest which the Government is taking in the welfare of the people. If the means test in relation to pensions be abolished, the amount will be more than £100,000,000 a year, which will be greater than was provided for all purposes in the record pre-war budget. The Government intends that facilities shall be provided to improve the health of the people and to treat those who have been stricken down by sickness and disease, irrespective of their financial means. The agreement that is to be implemented was the outcome of a conference of Commonwealth and State Ministers. Paragraph 8 provides -

The State shall ensure’ that no means test is imposed on, and that no fees are charged to or in respect of, qualified persons occupying beds in public wards in public hospitals.

Paragraph 9 reads - (1.) The State shall ensure that the charges per day payable in respect of beds in nonpublic wards in public hospitals shall be reduced by the amount of the Commonwealth. Hospital Benefit Rate for Non-public Wards. (2.) The State shall ensure that no increase, in those charges is made without the concurrence of the Commonwealth and that any such increase made after the first day of September, 1945, and prior to the date of tha agreement shall cease to be applied, as from the date of the agreement, unless the Commonwealth concurs in the increase. (3.) The State shall ensure that, except with the concurrence of the Commonwealth, no charge is made for extra services or extra comforts in public or non-public wards in public hospitals.

That is good, so far as it goes. I point out, however, that the bill deals only with the treatment of sickness and disease, without taking any steps to prevent them. I hope that the Government will consider in the near future the subsidizing of the various organizations that are engaged in national fitness campaigns, as well as the prevention of malnutrition, and the education of the public in regard to correct ways of living, proper dieting and the like.

There has been a tendency in modern times to increase the use of drugs and surgery in the treatment of sickness and disease. Everything possible should be done to prevent the extension of such methods of treatment. The Government should establish national health services, and subsidize members of the medical profession who can engage in wider research, even to the length of sending them abroad from time to time to investigate the most up-to-date practices, sothat they may be able to educate the people along more modern lines. Although paragraph 11 lays it down that nothing in the agreement shall be construed so as to affect the State’s, control of clinical teaching and research in the public wards of public hospitals, at the same time there is provision for the establishment of a National Hospital Council for the investigation of the various methods of treatment, and the standards which are to be observed in the hospitals that are to be subsidized under this scheme. That is to be found in paragraph 10, which reads -

The Commonwealth and the State, in eonjunction with any other State which entersinto an agreement with the Commonwealth interms similar to the terms of the Agreement,, shall establish a council, to be known as the-

National Hospital Council, the functions of which shall include the establishment of standards of construction and service for hospitals.

That is a very useful provision, the effect of which will be to raise the standard of service in the public hospitals to a much higher level than now exists. There is mo doubt that medical science is backward in Australia. An autopsy of 3,000 patients at Massachusetts General Hospital who had died showed that the diagnosis had been correct in only 52 per cent, of the cases. That is due to one of the most tragic fallacies of the age, namely, that the primary cause of disease is bacterial infection. I am not disputing that it is a cause, but am merely contending that it is only a secondary cause, the real cause being the lowering of resistance in the human body. Medical treatment overlooks the fact that man is a machine, and is governed by the same principles as any other machine. He needs air, fuel and power. The body is governed by what is termed the tripod of life, the three circulatory systems - the respiratory system, the circulation of the blood, and the nervous system. The most vital is the nervous system. A man can do without air for three minutes and without water for three days, while he can live for about 40 days without food, but if he is deprived of nervous power, death is instantaneous, as is shown in the case of a man executed by hanging. In other countries, the practice of osteopathy and chiropractic is officially recognized. In 1932, a royal commission in British Columbia inquired into these treatments, with the result that legislation was passed legalizing them. I urge that the National Hospital Council, which is to be set up under this legislation, should make inquiries with a view to providing facilities for the treatment of patients by the newer methods not yet officially recognized by the medical profession. Facilities should be provided m public hospitals, and people who have to go elsewhere for treatment should receive taxation concessions in respect of the expenses incurred. I have here the history of the case of a young man who was stricken with an ailment known as dermato-myositis, and who was taken to a public hospital for treatment. The par ticulars are set out in a letter written b his father, Mr. T. A. Lever, on the 21st February, 1944, to the honorable member for Cook (Mr. Sheehan) : -

About eighteen or nineteen months ago my son complained that it was getting hard foi him to walk. He went to see a doctor who told him there was nothing wrong with him; a week or two later he found that he could not bend down to put his shoes on or go to work. We called in the doctor who still said there was nothing wrong with him. After that my son found it was getting hard for him to put his arms up above his head. ] rang up another doctor who when he knew we had the first doctor would not come. 1 told him I wanted another doctor’s advice. He told me to ring back the other doctor as there was another doctor in his place; I rang and got the other doctor. He came twice and told me he could not find anything wrong; he told me the best thing to do was to get him into hospital under observation. I asked him to do that, he would not; he told me to get a specialist. All this was costing me money.

I got in touch with a Doctor Owen of Marrickville who also could not find anything wrong, but did put him into hospital under observation. After being there three weeks they could not diagnose his complaint and he was transferred to Prince Alfred Hospital under one of our most eminent specialists. After five weeks in there they found out he had dermato-myositis. After he had been in hospital for niue weeks they told me it was incurable and he would die as no one in the world had ever survived it. I then took him out of hospital two days before his 21st birthday.

Here I shall interpose a description of the disease dermato-myositis taken from Osier’s Principles and Practice of Medicine -

An acute or subcute inflamation of the muscles of unknown origin associated with oedema and dermatitis.

Steiner collected 28 cases from the literature and reported two cases from the Hopkins Clinic.

The nature of the disease is unknown; the muscle inflamation is multiple and associated with oedema and dermatitis.

The muscles are stiff and firm but fragile with serious infiltration, great proliferation and the interstitial tissue and fatty degeneration.

The onset is usually gradual ; the muscles of the extremities being first involved and later those of the trunk.

There is moderate fever with sweating and enlargement of the spleen.

The skin over the affected muscles is oedematous and the dermatitis takes various forms erylhematous, urticarial or erysipelatiod. Pain is present on movement or pressure and sensory changes may occur. The course is usually progressive and after some months death may result from involvement of tha muscles of deglutition and respiration perhaps with broncho-pneumonia.

The duration is usually one to three months. Of Steiner’s 28 cases, seventeen died.

If recovery is affected there is atrophy of the muscles. The features suggest trichiniasis which may be distinguished by examination of a portion of muscle.

Mr SPEAKER (Hon J S Rosevear:

– Will the honorable member point out what this has to do with either the bill or the schedule?


– Paragraph 10 of the schedule provides for the setting up of a National Hospital Council, the functions of which shall include the establishment of standards of construction and service for hospitals. I have cited an instance in which manipulative surgery as practised by chiropractors could not be provided for a patient in one of the most important public hospitals in New South Wales. When the treatment was applied outside the hospital it proved to be successful. The Commonwealth is contributing towards the cost of conducting public hospitals, and he who pays the piper should call the tune.


– It is a bit farfetched, but I think there is a connexion.


- Mr. Lever’s letter continues -

Now during his stay in hospital he was getting worse. He went blind in his left eye, he could not sit up nor put his hands together or bend his legs or straighten his arms, he was getting worse gradually. When I spoke to the doctor about him going blind in one eye and the condition he was in he told me “that was his muscles tightening up and he would gradually go like that until he died.

Such was the history of his case up to the time he came out of hospital. In fact he was much worse than what I have explained.

In desperation I then turned to a chiropractor who in the interview told us that if we could give him some occasion where his nerve energy had been squeezed he may ,be able to do something, otherwise he would not take the case on. He then asked if the lad had had a fall on his shoulder at any time, we said “ No “. He then wanted to know if he had been pulled by the arm by any one or anything very hard. We remembered that his left arm had been pulled in. a lathe some years ago and the sleeve of his overall had to be cut away to get him free. The chiropractor said that would probably squeeze his nerve energy a little, but not sufficient to make him get in the condition he was in at present ; something else must have happened to make him go like he was. I gave him nothing else.

We went home and told the boy what the chiropractor said and he told us that he could tell us how it did start, but until the deductions of the chiropractor he never associated it as the cause. He was striking with a 14-lb. sledge hammer on a piece of J square high-speed steel drawing it down to $ square, as at the time J square was unprocurable, he said lie jarred himself that much that he was fagged out and all hie muscles went hard and he could not put hie arms above his head, the same as he is now; but after a day or two he seemed to get fairly right again but not quite. Two or three weeks after he said he found it was getting hard for him to walk and his condition was getting worse.

After hearing all this the chiropractor said he would take the case on. Now I might state that after two months of adjustment*he has got his sight back and can read small print with his left eye. He can walk without his muscles grabbing, only he has not the energy to walk far. He could not hold his head up when he caine home from hospital, it would always fall on one side; he can hold it up all day now; he could not swallow a pea when lie came home without nearly choking; he can now eat a hearty meal without any ill effect.

The Taxation Department informs me that they will not allow chiropractor fees a* doctor’s expenses, but they will allow hospital and doctor’s fees under whose treatment Ingot worse; they will allow these as deductions.

I think for the benefit of the community in general that the Government of this country should recognize the chiropractor as is done in Canada, the United States of America and other parts of the world and then people who are cured by them will be able to get their tax deductions allowed.

The hospital authorities wrote to the young man’s father confirming the fact that they could do nothing for him. The letter, which was signed by the resident medical officer of the Royal Prince Alfred Hospital, is as follows : -

This is to certify that Thomas Lever, age twenty, is suffering from dermato-myositis and is unable to attend his work. In my opinion his condition is slowly progressive and the treatment only palliative.

When it was learned in certain influential quarters that this patient was to be treated by a chiropractor, strenuous efforts were made to prevent it. The persons concerned were evidently prepared to let him die rather than that orthodox medical ideas should be “ debunked “ and this modern treatment recognized.

Mr Menzies:

– What does the honorable member mean by recognizing it? It is not illegal.


– There are no facilities in public hospitals for practising this form of healing.

Sitting suspended from 6 to8 p.m.


-The Leader of the Opposition asked what I meant by recognizing “ chiropractic. I meant legal recognition similar to that granted in the United States of America, where every State has legally recognized the science and set up the necessary provision for its regulation and control and for the issue of licences to practise. It is important that a new science should be in the hands of people qualified by necessary training. It is a fact, as the right honorable member said, that chiropractors can carry on under common law, but they have no statutory recognition and I understand that in the Australian Capital Territory they cannot practise because of a provision in the ordinance that manipulative treatment may not be carried on. In 1932 Mr. Justice Murphy, of the Supreme Court of British Columbia, was appointed as a royal commissioner to inquire into the whole method of treatment. He reported as follows: -

The evidence shows that the theory of the cause of disease, according to chiropractic, is diametrically opposed to the theory entertainedby the medical profession. The chiropractic theory as enunciated in evidence is that the movable segments of the spine should be in perfect alignment in order to have perfect health. The nerve-bundles that make up the nerves that go from the spinal cord out into the tissues of the body come out through openings called foramen, and if there is any slipping of the vertebrae, such slipping changes the shape of the opening sufficient to make pressure upon these nerves and in this nay cuts down the mental impulses to the tissues served by such nerves. Chiropractors feel that there is a healing power in the brain of 100 per cent., and if it is allowed to travel over the nerves and to get to the tissues they will be 100 per cent. perfect, if it is not impeded or interfered with in any way. Chiropractors speak of this pressure on the nerves as an interference and the percentage of health is cut down in ratio to the amount of inter- ference”. The slippiug-out of normal line of a vertebra is in chiropractic parlance termed a “ subluxation “. “ Chiropractic theory makes no claim to cure disease. The diseaseis allowed to get well as a result of removing subluxation, or at least modifying it so as to end pressure on the nerves.

In other words if that pressure is removed Nature is allowed to do the job. He went on -

The medical theory as likewise set out in evidence is that “ disease originates from various causes, not from one single cause: that the cause, for instance, of pneumonia is different from the cause of diphtheria; that the cause of diseases of the valves of the heart is totally different from the cause of the different types of disease of the muscles of the heart “, and so on with regard to each particular disease. “ The medical profession does not believe that all disease has a common basis.”

As the practice of each profession is based on its theory, the consequence is that the course of training and the methods of treatment adopted by the chiropractic and the medical profession are poles apart. Since chiropractic holds that practically all diseases, other than those resulting from physical injury originate in subluxations of the vertebrae, fundamentally the chiropractor does not require to make a diagnosis of diseases at all. What he is concerned with is the location and correction of one or more subluxations and nothing else. Whilst his training to detect subluxations is intensive, he does not study the diagnosis of disease to anything like the degree that the physician must, since the latter holds that diseases may have a great number of causes, and since the cause must be known if the treatment is to be successful.

We know that intricate phraseology in dead languages creates an air of mystery about medical science. The Royal Commissioner went on -

Diagnosis, then, has a very different meaning to the chiropractor from what it means to the physician. To the chiropractor it means the discoveryof subluxation. Fundamentally, for the purpose of treatment, he is not concerned as to what disease his patient is suffering from. To the physician the recognition of the particular disease is all-important, since upon such recognition depends the treatment he will adopt.

Following the recommendations of the commissioner, an act of Parliament was passed in British Columbia - Act No. 12 of 1934, assented to on the 29th March, 1934 - and I commend it to the consideration of the Minister and to the National Hospital Council if it be set up. Chiropractic, which was given legal recognition in that province, was described in that act as -

The science of palpating and adjusting the articulations of the human spinal column by hand only.

It is drugless and non-surgical. Honorable members will realize the importance of that in view of the tremendous importance that healing by drugs and, particularly, surgery have developed to-day. It is a matter which vitally affects the community, particularly in view of the following provision in the schedule to the bill : - 1.1. The agreement may provide that nothing in the agreement shall be construed so as to affect the State’s control of clinical teaching, and research in the public wards of public hospitals.

I urge the Government to review that provision. It may have far-reaching consequences and mean that medical science, as it is known to-day, will remain static instead of adopting modern methods used in other parts of the world and to a limited extent here. The Government is making provision in this bill for the expenditure of £5,000,000 on treatment in public and private hospitals. Medical men will have the opportunity of practising on people at the Government’s expense. The Government should therefore ensure that the most modern facilities and methods shall operate. I bring this matter before honorable membersbecause of my own experience. I consider that it is my duty when I have had things revealed to me to spread the knowledge. In 25 years I never knew a day without suffering. Yet for ten years, since having this new treatment, I have never had an ache or pain.With the Government Whip (Mr. Sheehan), I hold the record for attendance in this House since I have been a member, not having missed a day’s sitting in five years. I have cited the case of young Lever. I saw that lad taken into a chiropractor’s rooms on a wheel-chair. I saw the X-ray plates that had been taken of his condition. Months afterwards I saw him walk in. The last time I saw him he came striding in after having been on a fishing excursion. After having received treatment from the chiropractor he worked on a lathe in his home. Now he is back in the engineering trade. That is virtually a modern miracle. I have witnessed hundreds of cases of all kinds of diseases that have received beneficial results from this treatment. My own disease was osteomyelitis, one of the most painful conditions one can be stricken with. Others are cases of abnormal blood pressure, paralysis and sleeping sickness, with which my own son was stricken when he was seven. Now he is an all-round athlete and is studying law at the university, after having spent years in the Army. Sleeping sickness is a dreaded disease, the cause of which is unknown to the medical profession. Others are meningitis, asthma, mental ailments and epilepsy. I know one man who for five years was subject to epileptic fits. He . was unable to work. Yet with one simple manipulation by a manipulative surgeon he was restored to health and went back to work. He has married and has settled down as an active member of the community. I urge that the Government review this provision rather than allow the methods of treatment laid down in public hospitals to remain static and unprogressive. Under present conditions medical men in the hospitals will not co-operate with recognized chiropractors. I know one progressive medical man who turned his mind to chiropractic and adopted it in his own practice. Because he could not obtain the co-operation of the hospital staff and other doctors, he had to establish his own institution, which is doing very good work in the community. If the agreement is passed in its present form it may not be reviewed for five years, and the only province of the Commonwealth will he to investigate methods of treatment and advise State governments and State instrumentalities. Other than that, the Commonwealth does not appear to have any say unless this provision be reviewed now. When it does come up for review, five years hence, the Commonwealth will have the opportunity to lay down provisions in regard tofacilities to be installed or added to the institutions that will be subsidized. This is a matter which involves great cost to the community. Unless we get down to the fundamental causes of disease, many millions of pounds expenditure inexcess of what is provided for in this bill will he necessary. I appeal to medical men attached to the hospitals to forget their prejudices, to think farther afield, and adopt some of these modern methods. Unless they do they will carry on in the same old way. One of the most tragic things in the community is the indiscriminate operating on people stricken in various ways. Vital organs are cut out. We would not take out a vital part of a machine, throw it away, and not replace it. We are at this disadvantage when dealing with the human machine that vital parts cannot he replaced. If drugless and non-surgical methods are introduced in hospitals and national fitness schemes are brought into being we can look forward to the time when we shall have a healthy, virile race in this country.


– The right honorable member for Cowper (Sir Earle Page) put his finger on the vulnerable spot in this bill when he said that it would not encourage the establishment of one extra bed in hospitals so sadly in- need of them. He f further said that if money proposed to be expended were devoted to the establishment of beds in hospitals it would accomplish something really worth while. He said that even he, with all his medical contacts, could not arrange to have hia wife treated in a hospital in Melbourne, because no beds were available. This bill will encourage those who can afford to pay to be treated elsewhere to take advantage of public hospitals. That, again, would injure the poor, who have no means of obtaining medical treatment other than in public hospitals. The right honorable gentleman touched on a vital matter. The Government is starting at the wrong end in its endeavour to establish hospital benefits. If this is the first step towards nationalization of medical services, I am totally opposed to it. I agree that it is necessary to subsidize hospitals, particularly public hospitals, but I do not believe in encouraging persons, who can afford to pay for treatment in intermediate or private hospitals, to take advantage of this scheme, because it will worsen the conditions which at present obtain for those who are not so well circumstanced. In his second-reading speech, the Minister (Mr. Lazzarini) said -

The Commonwealth proposals involve the State foregoing revenue from public ward patients’ payments, and this revenue will be made up to the State by means of the Commonwealth Grants.

As I stated, I believe that the provision of financial assistance to public hospitals is satisfactory, as far as it goes, but another point must be considered. 1 should like to know how this proposal will affect the honorary medical system, which has operated for many years in public hospitals. Does the Government propose to pay medical practitioners who attend patients in those hospitals? That matter must receive consideration. If the Government considers that honorary medical officers must treat in public hospitals patients who can afford to enter intermediate or private hospitals, a problem will be created which is likely to have repercussions upon the whole honorary system. As the Minister will know, the practice has been to make extensive inquiries into the ability of patients in public hospitals to pay for treatment. This is necessary, because of the limited accommodation in those institutions and the need to treat those who cannot afford to pay for admission to intermediate and private hospitals. If this legislation envisages the extension of public hospital facilities to those who can afford to enter intermediate or private hospitals, certain features of the present honorary system will require careful examination. Before the Government embarks upon any scheme which is likely to affect the honorary system in public hospitals, the Minister should give further consideration to the proposal. Would it be fair to ask physicians and surgeons to attend in an honorary capacity, patients who can afford to pay. for treatment in intermediate and private hospitals? The following resolution was unanimously carried by the honorary staff of the Royal Prince Alfred Hospital and forwarded to the Board of Directors: -

That in the event of the extension of admissions beyond the groups already authorized, members of the profession who act as honorary medical officers to public hospitals be asked to inform the Boards of those hospitals that they are unwilling, except in cases of emergency, to treat patients admitted to public wards who can afford to pay private or intermediate fees.

There is the gauntlet, and the Government must pick it up. The honorary medical staff of one of Sydney’s greatest hospitals have declared that they will not treat patients in public wards who can afford to pay intermediate or private fees. Honorary medical officers render a great service to the poor. They are prepared, without fee, to give the benefits of their specialist experience and skill to people in necessitous circumstances. But they contend, very reasonably, that it is grossly unfair to expect them to give those benefits, free, to a patient who may have an income of thousands of pounds per annum. That is a just complaint, and challenges the Government either to nationalize medicine immediately or to recognize that these honorary physicians and surgeons are entitled to more consideration than the bill extends to them.

The introduction of a system of payments to honorary medical officers will not guarantee that they will give their services to patients in public hospitals. And how will the Government remunerate them for their services? “Will they be paid by way of government appropriation? If so, that will be equivalent to the nationalization of medical services. If the Government adopts that proposal, shall we get from those medical practitioners the services which are required in the interests of public health?

Mr Daly:

– Why should we not get them?


– Nationalization is a great levelling force. All the “ tall poppies “ are reduced to a common level. Education, experience, ability, incentive, and hard work at times when others were enjoying leisure receive no recognition. Every one becomes an automaton. If research and specialist experience and knowledge are not recognized, doctors will be reduced to a mediocre level and incentive will be destroyed. The mortality rate and birth-rate, and general level of health, will suffer considerably. Three aspects of honorary medical advice in public hospitals require consideration. The first is - the curative treatment of patients. The second is educational - the teaching of medical students and young graduates. I emphasize the great importance of that. If the Government proposes to pay medical practitioners for the services which they now render in an honorary capacity - and it is obvious that they are not seeking any remuneration for those services - third-rate and fourth-rate medical practitioners and young graduates will be placed on the panels of our great public hospitals and standards will suffer, because the young graduates will lack experience and the advice of specialists under whose supervision they now receive their training. The third aspect is scientific research for the advancement of medical knowledge. This, in itself, is very important and should not be discouraged by removing incentive. Some men are prepared to devote their lives to research and experimentation. All of the features I have mentioned would suffer if the honorary medical system were abolished.

It redounds to the credit of the medical profession that there are between 1,600 and 2,000 honorary medical officers in public hospitals in New South Wales. If the Government abolished the honorary system, mediocre practitioners would be retained. Honorable members opposite cannot refute that statement. Skilled physicians and surgeons would be able to earn considerably more in their consulting rooms and surgeries than they would receive from the Government. Doctors would assess their desire for payment on the basis of their knowledge and experience, and no amount which the Government could offer would satisfy them. That is why I am alarmed at the prospect of this departure from the honorary system. If the Government proposes to nationalize our medical services, it is starting at the wrong end. Its proposals will penalize, not the medical profession, but the poor who cannot afford to pay for treatment in intermediate and private hospitals. This proposal will place a person in affluent circumstances on the same level as a poor person who cannot afford to pay for hospitalization. The result is obvious. I have read the resolution from the honorary medical staff at the Royal Prince Alfred Hospital. They are not prepared to treat patients who are able to pay intermediate or private fees. One great danger which threatens - it has obtained, in all public institutions since the outbreak of war - is the understaffing of our public hospitals. The Government’s proposal will aggravate understaffing.

Let us now examine the method by which the Government proposes to pay medical practitioners for their services. Presumably, the intention is to pay a doctor according to the number of times that he attends a public hospital. If that is so, what is termed “payment for sessional attendance” would lead to less frequent hours of attendance in public hospitals. Specialists would devote more of their time to their own practices, which would be more remunerative than the fees for sessional attendance. “We all are human. The specialist would weigh the fees for sessional attendance against the amount which he could earn in his consulting rooms and, naturally, would devote more of his time to treating patients who could afford to pay. Therefore, this proposal is dangerous in the extreme.

Another point must be considered. The Government’s proposal will mean that in all hospitals it will be necessary to compile a roster, or time-table, to which doctors would work. Consequently, different doctors would attend at different sessions. Do honorable members realize what that would mean to the unfortunate patients? A patient may be under the care of a specialist for one session and under another doctor in another session. Honorable members know the value of individual treatment and continuity of treatment to patients in hospital. We should not encourage in any way a breaking down of the present honorary medical system in public hospitals. If we do, the reaction must be upon patients who have no way of combating it, because, being poor, they must seek treatment in public hospitals. So far as I am able to see, this proposal, in itself, is most dangerous to those on the lower ranges of income who cannot afford to pay for specialist advice. I consider that the incentive of many honorary medical officers would be lost under this scheme. It is obvious, also, that a great deal of work would be done by young medical practitioners who would not have the benefit of the supervision of older and highly qualified men. Baldly put, the position will be that senior medical men who are prepared to give honorary service under existing conditions would not be willing to serve as medical hacks.

Mr Holloway:

– If they are highly skilled men how could they be described as hacks?


– When such men are required to serve according to a timetable they would regard themselves as medical hacks. They would consider that they had been relegated to the status of panel doctors who practise under schemes that we know to be in operation in some other places.

Mr Menzies:

– In any case how could such work be done according to a timetable?


– I have pointed out that such a. procedure would he quite impracticable and unsatisfactory. Patients need the continuous attention of their medical practitioner, and unless this is forthcoming they are liable to become disheartened, with consequent ill effects on their general condition. I do not disagree with the proposal to subsidize occupied hospital beds, but I disagree with the policy which this bill seeks to implement, because I believe that it will have the effect of reducing the number of beds in intermediate and private hospitals which are now available for people who cannot afford heavy hospital and medical expenses. Under the Government’s scheme such beds are more than likely to be taken by people who are able to pay for such treatment. If this is the first step in the scheme to nationalize the medical profession a beginning is being made at the wrong end. We should not do anything that will reduce the prospects of the poorer people in the community receiving specialist hospital treatment from honorary medical officers. I do not believe that this policy will tend to improve our medical services. The work of honorary medical officers in public hospitals has meant a great deal to the health of the nation, and the Government should do nothing to discouragea continuance of it.


.- The honorable member for Wentworth (Mr. Harrison), as usual, has made a lot of irresponsible statements in his attack on this bill. He has also been inconsistent, for, although recently he wanted the means test abolished in relation to invalid and old-age pensions, he apparently considers that a means test should be enforced in relation to hospital treatment.

Mr Harrison:

– That is nonsense. Surely the honorable member can appreciate the differences between the two cases.


– The honorable gentleman also said that medical practitioners who are now giving honorary service would object to doing so under the scheme of this bill, and that therefore honorary medical service in public hospitals throughout Australia would cease. Ibelieve that the proposal of the Government will prove to be much more satisfactory than the present procedure. I see no reason why medical practitioners should not be prepared to serve on a salary basis. The honorable member for Wentworth serves his constituents on a salary basis, and I have not heard that he has any objection to doing so or that it affects his efficiency. Skilled tradesmen, legislators and the leaders of industry also serve efficiently for salaries. Why should medical practitioners adopt a different attitude?

The procedure envisaged in this bill is already in operation at the Brisbane General Hospital. I have visited that institution, and I have every reason to believe that the service rendered therein is entirely satisfactory. It should be remembered that medical practitioners who serve in public hospitals gain valuable experience which is most useful to them in their private practice, and I believe that they are repaid in that way 200-fold for any honorary service they give.

The right honorable member for Cowper (Sir Earle Page) said that this bill had been introduced without the support of expert advice and that no notable authorities had been consulted in regard to it. The right honorable gentleman apparently overlooked the important f act that the measure is based upon a unanimous report of the Social Security Committee of this Parliament, the members of which are Senator Cooper, who cannot be accused of socialistic tendencies, Senator Tangney, Mr. Haylen, Mr.Ryan, Sir Frederick Stewart and myself. The report which we presented to the Government was the result of an exhaustive investigation of the whole subject. The matter is dealt with in the seventh interim report of the committee, dated the 15th February, 1944, which was presented to the Parliament on the 9th March, 1944, and ordered to he printed. The committee recommended the adoption of a Commonwealth-wide scheme on the following basis : -

Payment by the Commonwealth from a fund raised by taxation for the purpose of a subsidy of 6s. 6d. per daily occupied bed,for general medical, surgical and obstetric cases conditional upon -

  1. provision of public bed accommodation without additional charge to the patient;
  2. an allowance, equal tothe rate of subsidy towards the cost of an intermediate or private bed, in a public or private hospital of an approved standard;
  3. payment into a trust account for the extension and improvement of hospital services of any savings resulting to a State from the payment of this Commonwealth hospital benefit subsidy.

It also recommended the appointment of a medical hospital expert, an architect and a layman to supervise hospital services throughout the Commonwealth. The Treasurer (Mr. Chifley) was successful in obtaining the approval of the conference of Commonwealth and State Ministers to our proposals with the variation that the amount of subsidy was fixed at 6s. a day instead of 6s. 6d. The committee found itself confronted with many difficulties in relation to hospitalization in Australia. One of the most troublesome of these was the inadequacy of the constitutional power of the Commonwealth. The only method by which the Commonwealth can provide financial assistance to inmates of hospitals, other than under section 51 of the Constitution, is by affording financial assistance to the States under section 96 of the Constitution, or by agreement with the States.

In its deliberations the committee gave consideration to the following three alternative methods for conferring hos- pitalbenefits on patients as distinct from improved hospitalization generally: -

  1. a flat-rate subsidy per daily occupied bed, based upon the average amount now received from patients’ fees;
  2. a per capita of population grant to the States for hospital purposes; and (c)a contribution to the States approxi mating 50 per cent. of the present bed cost, per day, of the hospital public bed accommodation.

The Minister stated in his second-reading speech that the Premiers Conference had unanimously agreed, in 1944, to adopt a scheme on the principles outlined in the bill. The committee faced great difficulty in considering this subject by reason of the fact that there were no universal standards in relation to hospitals in the Commonwealth. Variations existed in every State and it was extremely difficult to harmonize them. There were variations, for example, in revenue from patients’ fees, and in subsidies from charitable and other sources. Tables 16, 17 and18 of the committee’s report indicate how great these were in relation to both treatment and maintenance. I do not desire to deal in detail with the diversities of administration that we found to exist, but with the consent of the House I shall incorporate in Hansard the three tables that I have mentioned. They are -

The committee recognized the right of the .States to impose varying conditions in respect of hospitals within the States, and it attempted to devise a scheme which would enable the Commonwealth to confer benefits on the people and the States without discrimination. Its scheme, therefore, .had to be prepared with considerable care. Ultimately it decided unanimously to recommend the payment of an amount equal to the average of the highest amounts collected from patients’ fees. A conference of Commonwealth and State Ministers decided that 6s. a day would cover the fees.

Mr Menzies:

– “What is the average bed cost?


– The Social Security Committee reported that in 1941-42 it was 12s. 10½d. That was as close to the average as the committee could calculate the cost, after an extensive investigation of the payments received from public hospital patients in Australia. The amounts ranged from 3s. 9Jd. per occupied bed per public patient per day in Victoria, to 5s. 9d. in New South Wales. Overall in Australia, an average of 4s. lid. a day was received from all public hospital bed patients. The committee decided to adopt the highest amount - 5s. 9d. in New South Wales - and to allow for an increase of the cost of living. On .that basis, it considered that 6s. 6d. a day would be a reasonable payment to meet all costs. However, the amount was reduced to 6s. a day by the conference of Commonwealth and State Ministers. The varying amounts received presented a problem, and the most equitable basis was chosen. I have a table which, with the consent of the House, 1 shall have incorporated in Hansard -

The table, shows that had the public hospitals of Australia received 6s. a day in 1941-42 for each publicly occupied bed, their revenue would have been £550,000 greater than was actually received. It is safe to assume that that amount will be considerably increased under the present scheme, which will thus prove very valuable to the hospitals. The most noteworthy features of the bill are these: It provides for the payment of hospital benefits of 6s. a day to public ward bed-patients; free treatment in all public hospitals, with no means test; payment to intermediate and private ward patients of 6s. a day, the usual fees to be reduced by that amount; and the distribution of surplus subsidies and donations over a base year, towards the cost of capital expenditure on hospitals. The agreement is to extend over a period of five years. It is only necessary to consider schemes of this nature which are operating throughout Australia to-day, to realize the benefit that will be conferred on the people. To my mind, the best scheme of the kind in Australia is the Sydney Metropolitan Hospitals Benefit Scheme. I pay public tribute to the benefits which that scheme has conferred on the people and the hospitals of the Sydney metropolitan area during its existence. Without doubt it has earned commendation for every one associated with it.

Mr Harrison:

– That is a contributory scheme.


– Yes, without any means test.

Mr Harrison:

– Being contributory, there would be no means test.


Mr. R. A. Miller, an excellent personality and the director of this organization, stated in evidence before the Social Security Committee -

The scheme was established in 1033 by a donation of £2,000 from the Government of New South Wales. The revenue increased from £31,000 a year to £400,000 a year. Originally a payment of 5s. a day was made to public hospitals for occupied beds, and in 1942 the payment was 7s. Od. a day.

The scheme is sympathetically controlled and efficiently administered. It has not only benefited the individual by removing from him a direct financial burden, but has also been of tremendous value to the hospitals in New South Wales, by rs?!!?] providing them with revenue which, prior to its advent, was not available to them, because many patients could not afford to make any payment, even when occupying public wards.

Mr Menzies:

– Who are entitled to benefits under the scheme?


– The scheme is on a contributory basis. The payment of only 6d. a week by the wage-earner entitles the whole of his family to the benefits of the scheme. There is also a private scale of payment, up to ls. a week, at which rate the benefit amounts to £4 4s. a week. A somewhat similar scheme, which cannot, because of its overhead costs, compare in efficiency with the Sydney scheme, is that of the Hospital Benefits Association of Victoria. Members will be interested to hear an extract from the evidence given to the Social Security Committee in November, 1943, by Mr. C. L. McVilly, secretary to the Charities Board of Victoria, 61 Spring-street, Melbourne -

The Hospital Benefits Association of Victoria is a body incorporated under the Companies Act. On its executive committee sit representatives of hospitals, the Bush Nursing Association, the British Medical Association, and contributors. The number of contributors at 30th June, 1943, approximated 47,200, and during the twelve months closing on that date £20,275 were distributed as benefits. A calculation shows that of this sum £8,G82 was paid in respect of public ward patients; £17,593 was paid in respect of intermediate and private patients.

In answer to the argument of the Deputy Leader of the Opposition (Mr. Harrison), that a scheme of this nature will increase the demands on public ward accommodation, I quote the evidence given by Mr. McVilly on the point -

It will be observed that of the benefits granted, approximately 34.5 per cent, were to public ward patients and 05.5 per cent, for intermediate and private accommodation.

That bears out the assumption that every person wishes to give to his family the best hospital attention procurable. If possible, intermediate or private ward accommodation is obtained for those who are near and dear to us, in order to ensure privacy and efficiency. I believe that, on that account this scheme will increase the demand for intermediate and private accommodation, far beyond the demand for public ward accommodation. Those two very important schemes, which are well -worth, hearing in mind, have done yeoman service for the community, pending the introduction of Commonwealth legislation.’ I pay tribute to them, and to those associated with their activities, as well as to the members of industrial organizations and miners lodges who are administering similar schemes on behalf of the communities of workers whom they represent throughout Australia. They have pioneered the way in safeguarding the people against the financial

The scheme has been proved sound in a wide sphere. When operated on a Commonwealth basis, it will react to the benefit of the people and of this Parliament. As I mentioned earlier, there is no doubt that the hospitals will benefit, by having guaranteed to them a given amount for each patient. Their revenue will be greater than they have been receiving from public payments; thus they will have a substantial sum which they will be able to devote to maintenance costs and the like.

An important change, which I hope will be introduced into other Commonwealth and State legislation, is the abolition of the means test. If there is one social service in Australia in respect of which there should not be a means test, it is that connected with the medical health and welfare of the people. Irrespective of our means or our income, the best medical attention should be available demands that are made for hospital attention, and the like. The Commonwealth has to accept this important responsibility, which has been carried privately for so long. The Social Security Committee, at page 10 of its Seventh Interim Report, sets out the payments that have been made on a contributory basis to the hospitals of Australia under the various schemes in operation. With the consent of the House, I shall incorporate it in Hansard -

to us. Consequently, I commend the Government for the introduction of this very important change. I, personally, take a little pride in the fact that it was recommended by the Social Security Committee.

Another important feature of the bill, which will interest the Deputy Leader of the Opposition, is the provision that it makes for more hospital beds. We all know that there has been a shortage of hospital beds for a long time. One of the most important causes of the shortage is that hospitals for civilians have not been built during the period of the war, because of the necessity to make provision for members of the services who sorely needed them. I agree that the shortage to-day is about 17,000 beds. From the additional revenue which the hospitals will receive, they will be able to set aside a sum for capital expenditure. It is estimated that an expenditure of

about £1,000,000 per annum for ten years would, provide all the most uptodate hospital and medical accommodation required in Australia. It is a wonder to me that some of the private hospitals in Australia, particularly in country areas have been allowed to be established, let alone staffed, A statement by Dr. Lilley, Superintendent of the Royal Prince Alfred Hospital, showing the state of affairs in some country maternity hospitals, is interesting, in that it reveals some of the difficulties that must be overcome. If we are to have really decent medical services in Australia, the States must co-operate with the Commonwealth. This statement by Dr. Lilley taken from evidence given before the committee related to a maternity hospital in the country, when the committee was investigating the subject -

Small Private Hospital (Country Town).

This is the only maternity accommodation available in this town. One medical practitioner refuses to use it and has requested that it be closed. This doctor refuses to send his patients to this hospital and travels to attend them at a town 25 miles away.

The committee was informed that, provided a hospital meets the standard requirements of the regulations in regard to housing and equipment, there is no power available to close it, even though the quality of its work, aseptic standards, &c, may be detrimental.

The hospital is staffed by one nurse aged approximately 70 years who works alone. The husband lives on the premises and conducts a butcher’s shop on the property next door, as well as a dump for second-hand furniture at the rear of the .hospital.

The butcher’s shop is housed in a small hut and an attempt has been made to fly-proof it, but there were as many flies inside as outside at the time of inspection.

A few portions of meat were hanging in a chest, the floor was covered with meat scraps and the whole premises were in a shocking state of uncleanliness.

The labour room in the hospital was untidy and unclean. Bowls, dressings, &c, were distributed on the floor. The only sterilizing facility was a small enamel sterilizer which was boiled on the kitchen stove.

Other instances are given, but I only mention one to show the position. That shows that there is need for better hospital accommodation as well as more beds. In addition to providing for the making of grants by the Commonwealth through the States, this bill will also provide for the improvement or elimination of unsatis factory hospitals through the” activities of the National Hospital Council. It has been said that the introduction of the scheme will adversely affect the finances of public hospitals by discouraging private donations. I cannot see the force of this objection. For the first time, public hospitals will be guaranteed payment for the treatment of patients, and I repeat that there is no likelihood that there will be ia run on these institutions as has been suggested. A scheme of this kind should be administered sympathetically, and I hope that a competent staff will be appointed to do the work. The metropolitan hospital contributions scheme in Sydney is «. model of what such an organization should be. I suggest that the Government should give full publicity to this scheme. Recently, the sickness and unemployment benefits scheme came into operation, but because it was not sufficiently publicized, a great many people do not know about it. The introduction of this scheme brings Australia into line with Great Britain, Canada and New Zealand, and is a step in the direction of implementing the Atlantic Charter.

Melbourne PortsMinister for Labour and National Service · ALP

– The right honorable member for Cowper (Sir Earle Page) criticized the bill on the ground that the Government was starting at the wrong end. The criticism of so eminent a medical man as the right honorable gentlemen must be given attention when he discusses a subject of this kind, but I believe that he was wrong when he said that it would be better to spend the money on the construction of new buildings, rather than on subsidizing the cost of treating patients. Every one knows that, for the next year or two, it will be practically impossible to embark upon any large-scale construction work, because materials will not be available. This scheme, however, can be inaugurated immediately, and put into effect on the 1st January. The right honorable gentleman was also wrong when he said there was nothing in the bill which would add to the existing hospital accommodation for patients. The scheme has been so drawn that there will be a surplus each year, and the bill provides that this surplus shall be expended upon the provision of new buildings and improved facilities. If ordinary contributions to a hospital should fall off in any one year, the deficit is to be made good out of the surplus for that year, but the surpluses for other years will not be affected. Thus, the fund for capital expenditure will be constantly increasing until the time comes when it is physically possible to embark upon a building programme.

The honorable member for Reid (Mr. Morgan) made some suggestions in regard to matters which, I think, are already provided for in the bill. For instance, he suggested that arrangements should be made for masseurs, radiologists and dentists to practise at public hospitals, and this has already been done.

The honorable member for Wentworth (Mr. Harrison) asked how the Government proposed to meet the situation when doctors now giving their services free of cost in public hospitals would decline to do so because patients were being paid for. I agree that they should no longer be expected to do so, and a scheme of payment is being worked out. The honorable member did himself less than justice when he suggested that only doctors of mediocre ability would continue to give honorary service.

Mr Harrison:

– I said that that would be the tendency.


– Every one knows that in the most poverty stricken districts in the great cities the most eminent medical practitioners give their services free in the hospitals.

Mr Harrison:

– I said that this scheme would tend to destroy that spirit.


– I do not agree. There is nothing in the bill to alter the customs and practices at present observed in public hospitals, except that a scheme will have to be worked out for the payment of doctors who now do honorary work. The only doctors who work permanently in public hospitals, and no where else, are salaried men. The other doctors give a part of their time free of cost, and patients who have a preference for a particular doctor know what hour of what day he will be consulting at >a particular hospital, and they attend accordingly. Since this bill was introduced, a conference between Commonwealth representatives and the State Ministers for Health was held, and it was agreed that the doctors would be paid out of funds supplied by the Commonwealth. A conference will shortly be held with the British Medical Association to discuss the matter of payment.

The honorable member for Martin (Mr. Daly) said that this scheme was based largely upon the recommendations of the Social Security Committee, and with that I agree. This committee conducted a searching inquiry, and its findings have been closely examined by Cabinet. Many of them have been incorporated in the bill. Honorable members of all parties in this Parliament have declared that the health of the people should be the first concern of the Government. The bill represents a step towards giving effect to this principle. This is the beginning. Surely no one would object to that. I think that now that the scheme has been agreed to unanimously by the State Ministers for Health and has been adopted already by five States and iB in process of being adopted by the sixth, it will be possible to bring it into operation on the 1st January on the agreed basis. That should remove all objections from the Opposition, and I hope that the second reading will be agreed to.

Leader of the Opposition · Kooyong

– The Minister for Labour and National Service (Mr. Holloway), who is in charge of this bill, usually has a very .soothing effect upon me, but to-night he has only succeeded in rousing me. Various comments on the hill have been made from this side of the House, and I am bound to say that I have not so far heard any real answer to them from the Government side of the House. I am hoping, therefore, that the honorable member for Denison (Dr. Gaha) will give the House the benefit of his great technical knowledge and experience of this matter before the debate ends.

Dr Gaha:

– In this House I am a politician, not a medical man.


– We have always offset the honorable gentleman’s defects as a politician by regarding him as probably a good doctor. The debate is about certain matters on which there is a good deal of common ground. Every honorable member will agree that the country needs the best possible hospitals that itcan get. The comments chat were made on various hospitals now existing are, alas, very well merited. We need the best hospitals withwhich science can provide us, and we need the best and most continuous medical service. We need all those things to be made available as readily as possible to the people. So far, we are on common ground. There is not even any dispute that the Social. Security Committee, of which the honorable member for Martin (Mr. Daly) has been a most assiduous member, has done good, useful, and careful work. But the real problems that arise on this bill do not touch any of those matters at all. Here is a bill under which the Commonwealth proposes, in agreement with the States, to provide the sum of 6s. per day per bed by way of subvention to the various hospitals in the States. It is stated by the honorable member for Martin that investigation shows that the average cost per bed per day is 12s. 10½d. I think I am reproducing his figure correctly. This bill provides for a subvention of 6s. a day. The remainder of the money has to come either from the States or from public donations, and yet the Minister at the table tells us in his blandest manner that thisbill makes it a complete certainty that there will be a surplus available for further building.

Mr Holloway:

– So it does.


– In other words, the Minister is quite confident that the States and the public between them will pay more than 6s. 10½d. a day and that, therefore, a surplus is assured. That is an enviable degree of confidence, but 1 should like to know very much on what foundation it rests, because experience indicates that when the Government undertakes responsibilities private citizens are not so willing to undertake responsibilities as they were before. To take an extreme case, I have yet to hear of people making voluntary contributions to the Taxation Commissioner. I heard one honorable member say “ Oh ! “ He is perhaps the person who sends so much to the Taxation Commissioner each year as conscience money. The truth is that as soon as the

State undertakes responsibilities out of the revenues of the State the people tend to be less free with their donations to the same cause. Is there any guarantee in this bill that the State governments themselves will allow their contributions to go on and to increase from time to time in the presence of the Commonwealth payment? Unless those two questions can be answered confidently there is no foundation for the confidence of the Minister that a surplus is assured by the donation to be made from the Commonwealth. That, of course, is a very important question, as the right honorable member for Cowper (Sir Earle Page) willagree, because the prime problem, as hehimself has pointed out, is how we are to get more hospitals and more beds in hospitals ; and, unless this bill offers some reasonable assurance, that there shall be more beds in more hospitals available for people, the bill does not go very far. A second observation was made by the honorable member for Martin.He took my colleague, the Deputy Leader of the Opposition (Mr. Harrison) to task and said that he was inconsistent in opposing the abolition of the means test in this matter. There is, of course, no inconsistency whatever. This side of the Parliament has for a very long time stood for the abolition of the means test when the scheme itself is on a contributory basis. In other words, our proposition is that if citizens, as citizens, become contributors to social benefit, they are entitled to that social benefit as contributors and not because of their poverty. That is the whole foundation of our case for the abolition of the means test, but here the means test is to be abolished, but no contribution is to be imposed. The honorable member for Martin destroyed his own case when he applauded the New South Wales Metropolitan Hospitals Benefits Fund. It is a contributory scheme.

Mr Morgan:

– The subventions provided for in this bill will be paid from the National Welfare Fund.


– I have yet to believe that that is a contributory scheme.

Mr Fadden:

– I have yet to believe that it is solvent.


– I know that it is not.

Mr Holloway:

– The right honorable member for Darling Downs (Mr. Fadden) would like to have charge of it.


-If he were in charge, it would be more solvent than it is now. But there is no system of contribution at present. The National Welfare Fund is not a contributory scheme. There is no Commonwealth scheme envisaged which is in any way parallel with the scheme in New South Wales. Here is an entirely non-contributory scheme, and, therefore, when it is said that the means test is to he abolished, the Deputy Leader of the Opposition is entirely right in going on to ask what will be the effect of its abolition upon the medical services given to the people. I am not going to discuss whether there is merit or not in a salaried medical service. I am not going to discuss whether there is merit or not in having a salaried specialist service in hospitals. All I do say is that the present system of honorary medical officers, honorary physicians and honorary surgeons, in the public hospitals, particularly in the teaching hospitals of Australia, has been of such immense value to this country that this country does not even yet begin to realize it. I am not here to hold a brief for medical men as medical men. I have crossexamined lots of them in my life, and I can say quite; safely that on the whole they are very poor witnesses, hut I believe that they are first-class men and that there is. no profession that has rendered more noble services to Australia than has the medical profession. Their record of self-sacrifice and honorary service in this country is a very great one, and it has been enriched in the last few years by the staggering performances of medical men in prison camps, particularly under the control of the Japanese. That is not merely something on which we should just stand back and cast an admiring look and say even an admiring word. It has a much more practical significance than that. In a great teaching hospital like the Melbourne Hospital you have the very leaders of surgery and medicine available for clinical instruction, not only to advanced medical students, but also to young medical practitioners who are themselves acting in a full-time capacity in those hospitals.

Without that clinical instruction those younger medical men could never reach the degree of skill and experience that they ultimately achieve ; and that clinical instruction is provided by men in an honorary capacity, because they are dealing with hospitals in which those who have claims upon the community are given the first right to attention. That clinical instruction is of the first value to the creation of the medical profession.

Mr Holloway:

– It will remain just the same.


– The Minister therefore believes that the men at the very top of their profession, who could, if they thought only of money, he devoting their whole time to earning their own incomes, will be equally prepared to do that when the patients they will treat in public hospitals may include scores, even hundreds of people, well able to pay for themselves.

Mr Holloway:

– The Leader of the Opposition is talking about teaching.


– I am talking about the work that they do in hospitals. Surely the Minister realizes that a distinguished surgeon or physician, who is teaching as he treats, is doing the clinical job, giving treatment to the patient and at the same time expounding to the young practitioners and students around him all the subtleties of the task he is undertaking. We are dealing with a remarkable problem, the problem of people who are instructors at the very moment that they are treating others. That, after all - I am speaking subject to correction - is the essence of the work done by those men. It is not to be supposed that they and their successors are going to devote themselves in the future . to this task when they know they are being invited to treat people many of whom might well be paying in the normal course for professional services. The honorable member for Martin (Mr. Daly) said something to the effect that many honorary medical officers were themselves young graduates and were getting great experience ; the matter was not all one way ; that the patient, on the one hand, got treatment, but, on the other hand, the young medical practitioner got experience. Perfectly true, but in the great teaching hospitals the clinical instruction that is being received is not being received from young medical practitioners. They are the people who are receiving the benefit of it.

Sir Earle Page:

– To be teachers, men must be first class.


– Precisely, and they are not first-class men after one, two or three years, when they are engaging in this mutually beneficial operation to which the honorable member referred. No medical man who is a member of this House would admit for a moment that the clinical instruction that takes place in our great teaching hospitals is not conducted by the very finest medical practitioners this country can produce. Therefore, I approached this bill with a feeling of anxiety as to how far this system, which has contributed more than anything else to raising the medical skill in Australia to the level it has reached, would continue under a proposal of this kind, and unfortunately all we have had on that matter from the Minister is a very frank expression of his own view that, after the bill becomes law, the medical men will be paid for their services in hospitals. £f that is so - and I believe it is, because doctors are human beings after all - what will the position be? Medical treatment in public hospitals will tend to be salaried treatment by those who desire to take on salaried posts in hospitals, and the moment that happens you can exclude all the higher ranges in the profession, because they are not looking for salaried posts in hospitals. In addition, public hospital treatment will be reduced to treatment by the relatively young and inexperienced practitioners.

Mr Holloway:

– Nearly all the great deeds in the forces, to which the right honorable gentleman referred, were performed by salaried doctors.


– I do not doubt that. But does the Minister expect that the honorary physicians and surgeons at the Melbourne Hospital will take salaried positions at that institution? I do not suppose for one moment that they will. I think that they will say, “If the Government has decided that salaried practitioners shall attend to patients in the Melbourne Hospital, we have no complaint. We shall have all the more time for our own practice, and our own affairs”. The effect of that upon the general level of medical skill and attention will be disastrous.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 7 agreed to.

New clause 5a.

Melbourne PortsMinister for Labour and National Service · ALP

.- I move -

That the following new clause be inserted: - “5a. - (1.) There shall be payable, for each financial year, to such of the States as the Minister determines (being States which have executed agreements with the Commonwealth under this Act), by way of financial assistance, a sum not exceeding in the aggregate Five hundred thousand pounds. “ (2.) The amount to be paid to any such State for any financial year shall be such amount (if any) as the Minister determines. “ (3.) An amount payable to a State under this section for any financial year shall be paid upon condition- that an amount not less than the first-mentioned amount is used by that State, in that financial year, in such manner and subject to such conditions as the Minister approves, in or towards the payment of salaries to medical practitioners, and to professional persons of such other classes as the Minister approves, attending qualified persons in public wards in public hospitals. “ (4.) In the last preceding sub-section, the expressions ‘ qualified persons ‘ public wards ‘ and ‘ public hospitals ‘ have, in relation to any State, the same meanings as those expressions have in the agreement ‘executed between the Commonwealth and that State under this Act.”.

This clause has been drafted as the result of the conference of Commonwealth and State Ministers of Health, which was held . after the original bill had been introduced. This clause is designed to overcome the problem to which the honorable member for Wentworth (Mr. Harrison) referred. Arrangements will be made for the payment, if necessary, of medical practitioners who at present are giving their services in an honorary capacity to public hospitals. It provides also that the State shall pay those physicians and surgeons. A conference with the British Medical Association will be held this month to decide the scale of fees and associated matters.


.- The statement which the Minister (Mr. Holloway) has just made is utter nonsense. Physicians and surgeons, who are teaching medical students in our great public hospitals, are able to earn thousands of pounds a year.

Mr Holloway:

– That point has already been answered.


– I heard the Leader of the Opposition (Mr. Menzies) raise the point, but the Minister failed to answer it. These men are so famous in private practice that patients may have to wait for a month or six weeks before they can consult them. Yet these men are willing to give their time in the teaching hospitals so as to ensure that their knowledge and experience shall be conveyed to young graduates. Any suggestion that the Government can pay them a fee commensurate with the value of their work is ludicrous. These men are teaching because they love their work. They are not interested in the financial side, but desire only to make certain that the spirit of the profession shall live.

About three years ago, the Government introduced at 4 a.m. the Pharmaceutical Benefits Bill and honorable members were told that the measure had to be passed without delay because the Government hoped to implement its free medicine scheme in the following week. Three years have elapsed but the scheme has not been brought into being, because satisfactory terms were not made with the general practitioners. If the Government encountered difficulties in dealing with general practitioners, what obstacles will it meet when it deals with specialists? The question will always arise as to whether a doctor is entitled to get his fee from patients who can afford to pay him. The great Mayo Institute in the United States of America, which has performed wonderful work, ensures that the rich shall pay for the poor. It could not have undertaken its researches unless the rich had paid for their treatment. I have no axe to grind in this matter, because I no longer carry on my general practice. But I point out that the Government is starting at the wrong end. Its first step should be to increase the size of hospitals, and make it easy for young graduates to learn their profession. Nothing in this world is worth ‘more than health and life. One patient travelled thousands of miles to consult me. When I asked him why he had come so far, he said, “ My life is worth it. It is the most important thing in the world for me “. Apparently this Government believes that the object must always be to reduce standards. The introduction of a system of salaried medical officers will drive out of the Commonwealth many first-class physicians and surgeons, and our mortality rate will increase out of all proportion to what it should be in view of our climate and resources.

Mr Lemmon:

– Humbug.


– I have given more honorary service to poor patients without counting the cost than the honorable member for Forrest (Mr. Lemmon) has ever dreamed of. The Government’s proposals are unsound. Let us begin with fundamentals by adapting the recommendations of the National Health and Medical Research Council. Having done that, the Government might then consider giving effect to its present proposals. Its policy of destroying the means test will react to the detriment of the general standard of health throughout Australia.

New clause agreed to.


Melbourne PortsMinister for Labour and National Service · ALP

.- I move-

That the Schedule he left out with a view to insert in lieu thereof the following Schedule: -


Hospital Benefits : Heads of Agreement.

  1. The agreement shall not have any force or effect unless and until authorized or approved by the Parliament of the State concerned.
  2. The agreement shall be in force for a minimum period of five years and thereafter shall be subject to termination after [here specify a period of notice by either party of noi less than one year].
  3. The Commonwealth shall, subject to compliance by the State with the provisions of the agreement, pay to the State, by way of financial assistance, in respect of beds occupied by qualified persons in public and non-public wards in public hospitals, amounts determined in accordance with the agreement.
  4. The amount to be paid by the Commonwealth for any financial year in respect of beds in public wards in public hospitals shall be determined by multiplying the Commonwealth Hospital Benefit Bate for Public Wards by the number of daily occupied beds in public wards in that financial year.
  5. The amount to be paid by the Commonwealth for any financial year in respect of bods in non-public wards in public hospitals shall be determined by multiplying the Commonwealth Hospital Benefit Rate for NonPublic Wards by the number of daily occupied beds in non-public wards in that financial year.
  6. – (1.) The State shall, out of the amount paid to the State for each financial year under paragraph four of this Schedule, set aside the amount (if any) ascertained by subtracting from the amount so paid the aggregate of -

    1. the amount ascertained by multiply ing the Commonwealth Hospital Benefit Expenditure Rate for Public Wards by the number of daily occupied beds in public wards in that financial year; and
    2. the amount by which donations (in cluding voluntary contributions) received by public hospitals during that financial year and used for the maintenance of public hospitals is less than [here insert an amount determined by the Commonwealth and the State based on the average amount received bypublic hospitals during the financial years 194.2-43 and 1043-44 by way of donation (including voluntary contributions) and used for the main tenance of public hospitals]. (2.) The State shall not use the amount so set aside, or interest thereon, otherwise than for capital expenditure on public hospitals as approved by the Commonwealth.
  7. If the amount paid to the State for any financial year under paragraph four of this Schedule is less than the aggregate of the amounts referred to in clauses (a) and (b) of sub-paragraph (1.) of the last preceding paragraph, the Commonwealth shall pay to the State the amount of the difference.
  8. – ( 1.) Subject to the next succeeding paragraph, the State shall ensure that no means test is imposed on, and that no fees are charged to or in respect of, qualified persons occupying beds in public wards in public hospitals. (2.) The State may permit a public hospital to charge fees in respect of beds in a public ward which are temporarily used as non-public ward beds.
  9. – (1.) The State shall ensure that the charges per day payable by qualified persons in respect of beds in non-public wards in public hospitals shall be reduced by the amount of the Commonwealth Hospital Benefit Rate for Non-public Wards. (2.) The State shall ensure that no increase in those charges is made without the concurrence of the Commonwealth and that any such increase made after the first day of September, 1945, and prior to the date of the agreement shall cease to be applied, as from the date of the agreement, unless the Commonwealth concurs in the increase. (3.) The Commonwealth shall not refuse its concurrence under the last preceding subparagraph in respect of any increase of charges necessitated by increased costs. (4.) The State shall ensure that, except with the concurrence of the Commonwealth, no charge is made to qualified persons for services or comforts in public or non-public wards in public hospitals for which it was not customary to make a charge as at the first day of September, 1945.
  10. The Commonwealth and the State, in conjunction with any other State which enters into an agreement with the Commonwealth in terms similar to the terms of the agreement, shall establish a council, to be known as the National Hospital Council to advise the Commonwealth and the States with respect to any matter relating to hospitals which is referred to the Council by the Commonwealth or a State. 1.1. The agreement may provide that nothing in the agreement shall be construed so as to affect the State’s control of clinical teaching and research in public hospitals.
  11. The agreement may contain such incidental and supplementary provisions as are necessary to give effect to the Commonwealth Hospital Benefits Scheme.
  12. The agreement shall contain definitions substantially to the following effect and such other definitions as are necessary. - the Commonwealth Hospital Benefit Rate for Public Wards ‘ means Six shillings or such other rate as is, from time to time, agreed upon between the Commonwealth and the State; the Commonwealth Hospital Benefit Rate for Non-public Wards’ means Six shillings or such other rate as is, from time to time, agreed upon between the Commonwealth and the State; the Commonwealth Hospital Benefit Expenditure Rate for Public Wards’ means [here insert an amount determined by the Commonwealth and the State based on the average amount recovered during the financial years 1942-43 and 1943-44 from patients in public wards for each daily occupied bed] or such other amount as is from time to time agreed upon between the Commonwealth and the State; public hospital’ means a hospital (not being a tuberculosis hospital within the meaning of the Tuberculosis Act 1945) which-

    1. is ordinarily recognized as a public hospital; and
    2. is in receipt of a grant for maintenance from the State, and includes a State institution used for hospital purposes and a ward in any other institution maintained or subsidized by the State which is used for hospital purposes and is for the time being approved by the Commonwealth; public ward ‘ means a ward which is ordinarily recognized as a public ward ; non-public ward ‘ means a ward other than a public ward; qualified person ‘ means a person who was ordinarily resident in Australia at the time of admission to a public hospital and is occupying a bed for the purposes of hospital treatment, and includes, where two or more children are born at one birth, any child born at that birth in excess of one, and also any newly born child except during the time the mother of that child is occupying a bed, but does include a member of the staff of a public hospital receiving treatment in his own quarters or a person whose fees are borne by the Commonwealth or who has received, or is entitled to receive those fees under any law in force in the State; and daily occupied bed ‘ means a bed occupied by a qualified person for a full day (the day of admission and the day of discharge together being counted as one day).”.

The substance of the proposed new schedule was agreed to by the Commonwealth and State Ministers for Health in conference recently. The memorandum, which clearly compares the proposed new schedule with the present schedule, has been circulated to honorable members. The agreement shall not have any force or effect until it has been authorized or approved by the Parliament of the State concerned.

Barker · ALP

– Honorable members are becoming accustomed to these lopsided agreements under which the Parliament completely abdicates its responsibility. After these agreements have been made, honorable members are told that they are not valid until they are authorized and approved by the Parliament of the State concerned. But no provision is made that the agreement shall be subject to amendment by the Parliament of the Commonwealth, which has to provide the money with which to meet the subventions under this bill. The principle underlying the “ Heads of agreement “ is wrong. The Government has not fully considered this matter or, if it has, it has not arrived at a satisfactory con- clusion. This is only another of the matters the validity of which the High Court will have to determine. I shall not be surprised if, by the end of this financial year, several important Commonwealth acts will have been declared invalid. I do not know whether that will be in conformity with government policy in order to try to convince the electors of the necessity to grant to the Commonwealth certain additional powers which the people, in their wisdom, refused to grant last year.

Mr Sheehy:

– If another referendum is held, the result will be different.


– The initiative will come from the Government. The bill dealing with the rehabilitation of ex-servicemen empowered the Commonwealth Government to make any agreement it liked on housing or land settlement and imposed upon the Administration no obligation to have the agreement ratified by this Parliament. The Government will not operate its medical scheme satisfactorily unless it has the wholehearted co-operation of, first, the hospitals; secondly, the medical profession; and, thirdly, the dispensing chemists. From the correspondence which I have received, I am very doubtful whether the Government has the wholehearted co-operation of any one of the three. What will be the position of private hospitals under this legislation? Generally speaking, State hospitals are already subsidized. For example, in South Australia, rates are levied on each municipality for the maintenance of hospitals to which patients are sent from their respective districts. I am not an authority upon hospital administration, although I was a member of a hospital board for two years, and we had a fairly wild time.

Mr Harrison:

– It would be fairly wild.


– Four doctors were attending the hospital and were in two camps. Those in one camp did not speak to those in the other. In that set-up there were the elements of a wild time, and we had it. I have yet to learn that hospital management is a Commonwealth responsibility. One of the tendencies which I detect in Commonwealth legislation is for the Government to poke its nose into all sorts of things in which its constitutional authority is very doubtful. Section 51 of the Constitution specifies a number of important subjects upon which the Commonwealth has authority to legislate, but it has not attempted to use that power. The Commonwealth Government owns very few hospitals apart from repatriation institutions. I believe that if this legislation is put into operation it will be detrimental to private hospitals throughout the Commonwealth, and that the Commonwealth Government, and also the patients in hospitals, will be headed for serious trouble. The attitude of this Government is extraordinary, lt has constituted itself an authority for overhauling every institution and service in the country, irrespective of whether it has the constitutional power to do so. Many questionable provisions have been included in legislation passed this year on banking, aviation, soldier settlement, housing, hospital services and other matters, which reflect unusual political energy. Undoubtedly those provisions will be tested in the courts. If they should be held to be constitutional they will be unsatisfactory in operation. Even though any agreements that may be made have to be submitted to the Parliament for ratification we shall not avoid the difficulties that they create. Ratification will not rest entirely with this Parliament. I am quite sure that when the people returned this Government to office at the last general elections, they did not visualize the introduction of legislation, of the kind that we have had submitted to us on many occasions this year. Had they done so, I am sure that many constituencies would be represented by a different party to-day. I have a strong suspicion that after the next general elections there will be many changes in the membership of the Parliament. Some day the matters to which I have referred will have to be reconsidered, and the Government then on the treasury bench will need a good supply of brooms, shovels and wheelbarrows.

Amendment agreed to.

New schedule agreed to.


A bill for an act relating to hospital benefits.

Amendment (by Mr. Holloway) proposed -

That the following words be added to the title: - “and for other purposes”.


– I ask the Minister to explain the purpose of this amendment. We have every reason to be suspicious of the words “ and for other purposes “. Apparently as the result of second thoughts and the making of certain amendments to the bill the Minister considers it advisable to insert

Those very convenient words “ and for other purposes “. I should like to know what he has in mind in this regard.

Melbourne PortsMinister for Labour and National Service · ALP

– When this subject was being considered by the conference of Commonwealth and State Ministers for Health the State representatives expressed the opinion that the proposal was too narrow. It was desired that power should be provided to deal with the very question raised earlier by the honorable member for Wentworth (Mr. Harrison) concerning honorary medical service in hospitals. I have moved to amend the title as proposed in order to cover that point.

Mr Harrison:

– Is that the only reason ?


– Yes.

Amendment agreed to.

Title, as amended, agreed to.

Bill reported with amendments, and with an amended title; report - by leave - adopted.

Bill - by leave - read a third time.

page 6251


Second Reading

Debate resumed from the 13th September (vide page 5389), on motion by Mr. Dedman -

That the bill be now read a second time.

Leader of the Opposition · Kooyong

– The purpose of this bill, as explained by the Minister for Post-war Reconstruction (Mr. Dedman), is “ to authorize the execution by or on behalf of the Commonwealth of an agreement between the Commonwealth and the States in relation to housing, and for other purposes “. The terms of the agreement are set out in the schedule to the measure. The agreement envisages the State governments putting housing programmes into operation. The measure itself, however, deals primarily with the rent of houses to be erected. Two major points emerge. The first is that the rent is to be adjusted in accordance with what is conceived to be a minimum rent on the basis mentioned by the Minister; the second is that any losses resulting from the operation of the State schemes are to be shared in the proportion of three to five by the Commonwealth and two to five by the States. It is difficult to get to grips with a proposal which is still largely in the future. We do not know how many houses are to be built, or how the several authorities will build them. We do know that the measure gives a direct encouragement to the letting of houses to tenants at rents adjusted lo incomes. Up to that point there would not be much to quarrel about. An experiment is to be made by governments in the adjustment of rents to the incomes of the respective tenants, and it should prove to be very interesting. I make two comments upon it.

I ask, first, who is to be the landlord? It was interesting to hear the Minister’s statements about co-operative housing schemes. The honorable member for Reid (Mr. Morgan) has some knowledge of the operation of co-operative housing schemes in New South Wales, and I hope that he will be able to tell, us something about them. I invite honorable members to consider the risks that will arise in the collection of rents if the State is to be the landlord. Every honorable member has had some experience of the political influence that can be exerted by Crown tenants.

My second comment is that, if the State is the landlord, losses are likely to be greater without some intermediate authority with adequate power to enforce the rights of the States rand to take any necessary action to collect rents. We all are familiar with the difficulties that arise between the Government and its tenants in relation to the rents of country properties. If the States put this agreement into operation and take advantage of Commonwealth financial aid, I hone that they will display sufficient intelligence to have the work done through an independent body which will be able to enforce ordinary rights. Unless this is done confusion and political interference and greatly increased losses will be likely to result. The normal disposition of State governments to see that they get value for their expenditure on housing schemes will be diminished to some degree by reason of the fact that 60 per cent, of the losses will be met by th, Commonwealth. That provision may cause State authorities to be a little lax in supervision and a little careless as to costs. I make that statement without having in mind any particular State government. If some other party is to bear 60 per cent, of losses that may be incurred on a particular project, the inducement to be economical and careful is somewhat reduced. The force of that comment will be much greater if honorable members will turn their minds away for a moment from the agreement to the general subject of building. The Commonwealth Government may make fine offers to the State governments - I believe that it has approached the subject liberally - and the States may make a fine bargain with the Commonwealth; but, in the long run, the willingness of ordinary citizens to live in the houses that will be constructed will depend upon whether the cost and quality of the houses are such as they can afford. We too easily overlook the important fact that inflated building costs have to be borne, both as to capital and interest, for the entire life of the house. If a house costs £300 more than it should cost, thai amount is a permanent extra charge on the property and in the normal way it would be met by the tenant, but under this scheme it will fall upon the taxpayers.

I am dealing, at the moment, not with a high-sounding government scheme, or with fine general policy, but with the actual cost of houses. Under this scheme that cost will ultimately fall upon the people of Australia. The manufacturer who produces a shoddy article for a house, is writing an inflated cost into that house. The builder who, by careless supervision or by grasping for profit, increases the. cost of the house, increases indefinitely the burden on the occupant of that house. The man who produces building materials, if he can, at an exorbitant rate, may consider that in the short, run he is gaining more profit, but in the long run he is loading on to the people of this country an exorbitant home cost. Last, but not least, the man who, working on the construction of a house, fails to work with zeal and honesty, makes a real housing policy and programme to that degree more difficult of attainment. That is so true, though perhaps not frequently mentioned, that it comes as a shock when an ordinary citizen is confronted, as we have been in the last few weeks, with what is going on in the Building Trades Federation - or whatever it is called - the organization that is controlled by the famous Mr. Thompson. I do not know whether the Minister is aware of it, but some little time ago housing campaigns were being conducted in Victoria. In my own part of Melbourne, meetings were organized, and one of the prominent speakers was this same Mr. Thompson, who then urged the people that all pressure should be put on governments, forsooth, to get on with the housing programme. That is the very man who to-day is dragooning the men who belong to his organization into going slow on the job; in other words, into doing a dishonest day’s work; in other words, into inflating the cost of houses, so that the people who live in them will pay so many hundreds of pounds more for them, or so many more shillings a week for the privilege of living in them. There is no consistency there.

It cannot be too clearly understood in Australia that whatever may be done by Commonwealth or State Governments, by housing authorities, or by whatever committees may be established, in the long run the real cheapness and durability of homes will depend upon the honesty of those who co-operate for their construction. At least it ought to go out from all parties in this Parliament, that this movement towards going slow, and thus increasing the cost of homes, is a definite attempt to sabotage the achievement of what, from the point of view of the Minister and all of us, is one of the greatest reconstruction problems that has to be faced. I make that remark, not because this agreement specifically deals with the matter, but because - and I am sure that all honorable members will agree with this - the moment an agreement is made between governments which contemplates losses and their division, unless care be exercised the idea may easily be encouraged in the community, “It is quite all right; what does it matter if the building costs more than it should? The two governments will divide the loss between them “.

Therefore, the Governments of the Commonwealth and the States ought jointly to make it clear to the public that an honest effort by employer and employee, by manufacturer, by merchant, by all of those concerned in building, is essential to the putting of the people of this country into good, durable, and cheap homes.


.- Introducing this measure, the Minister (Mr. Holloway) said that it is an important piece of social legislation which will provide means whereby a full-scale attack can be made on one of the worst of our social evils - the bad housing of the Australian people. He went on to say -

The soldier and his family need decent housing; thousands of workers need housing far in advance of what they have put up with in recent years. More and better houses should help us induce a higher natural increase than in the decade before the war. We must be able to house the migrants we seek from overseas.

He pointed out that the Commonwealth Constitution restricts the activities of the Commonwealth in this regard ; nevertheless, it could assist financially, encourage States to undertake certain activities, conduct research in regard to newer and better methods of housing, and lay down general principles. I pay tribute to the work of the Commonwealth Housing Commission, appointed by the Government on the 19th April, 1943, and constituted of Mr. Leo Patrick O’Connor, A.I.C.A., chairman; Mr. John Stevens Gawler, F.R.A.I.A., Mr. Charles Vincent Howard, A.R.A.I.A., Mrs. Mary Margaret Ryan, J.P., and Mr. Albert Victor Thompson, M.H.A., members; Mr. Walter Ralston Bunning, executive officer; and Mrs. Mary Willmott Phillips, secretary. The commission presented its first interim report on the 31st October, 1943, another report on the 31st March, 1944, and the final report of 323 pages on the 25th August, 1945. A perusal of the last report shows that the commission made a complete survey of the housing position in Australia, and formed an estimate of requirements for the next ten years. It mentioned a lag of 300,000 houses, and stated that the total requirements during the next ten years will be 750.000 houses. The commission travelled thousands of miles, and obviously did a tre- mendous job with energy and sincerity. The scope of its work is revealed by the synopsis on page 11 of the report - present position; future requirements; total housing required; annual programmes; Government finance and private building; national, regional and town planning ; control that will be necessary; land that will be needed; materials that will be required; labour; construction; organization of the building industry; finance; and administration. In it3 introduction, the commission commented -

We consider that a dwelling of good standard and equipment is not only the need but the right of every citizen - whether the dwelling is to be rented or purchased, no tenant or purchaser should be exploited by excessive profit . . .

The overwhelming impression obtained from our inquiries is one of widespread deficiencies in quantity and quality of pre-war housing and the acuteness of the present shortage. We feel strongly that action should be taken immediately .to alleviate this shortage. . . . We are impressed with the danger of inadequate preparations being made now, so that when labour and materials are available they will be unemployed and unused while sites are found and prepared and plans are drawn up. Throughout the writing of this report the need for immediate action has been in mind, and the recommendations have been drawn up largely as a basis for .this action.

This is one body which has faithfully and energetically discharged the responsibility placed on it. The bill deals with housing of a particular type, not with the whole scope of housing. Provision is made mainly for housing on a rental basis for those urgently in need of it - persons who have been dispossessed of houses, members of the fighting services, workers in industry, and others in like case. Consideration has been given to the fact that costs are unduly high at the present time, due to the shortage of man-power and materials. In such circumstances, it is realized, it would not be fair to expect people to pay high rents or purchase prices. In addition, many persons have not become settled in a community because of the uncertainty as to the occupation in which they will be engaged in the post-war period.

I wish to comment on one or two of the aspects of the agreement that has been made between the States and the Commonwealth. The scheme is fair and equitable, particularly in the provision that the tenant will have to pay it maximum of one-fifth of his weekly income. That is one of the finest reforms that has been introduced in any country^ and I commend the Government for its foresight. I understand that finance is to be provided, by way of public loans and losses made up through the National Welfare Fund, by means of taxation. If there is any project that should be financed by national credit through the agency of the Commonwealth Bank, it is housing. The Government of New South Wales, by a mere stroke of the pen, guaranteed financial institutions which financed co-operative building: societies, up to £20,000,000. That transaction did not cost the Government one penny. The administrative costs of the societies have been proved to be no more than a quarter of one per cent. In consequence of action taken by the present Commonwealth ‘Government, the rate of interest is now down to 3f per centArrangements are being made to providefinancial facilities through the Commonwealth Bank, and to assist the Statesin connexion with provision for homepurchase. The home ownership plan isthe better proposition. The period of” amortization, 53 years, is very long. In. a case- that came to my notice recently,, the tenant of a government home, provided under the arrangement between, the Commonwealth and the State, undertook to pay a rent of 39s. a week fora period of 53 years. He will neverhave any equity in the home, but will merely pay rent to the State housingauthority during the whole of the period. I compare that with the payment covering principal and interest to a cooperative building society on an advancefor a total purchase price of £1,210. Over a period of 22§ years, the weeklypayment would be £1 12s. 7d. - approximately the same as the paymentmade by the tenant under the Statehousing scheme. Over a period of 30 years, the payment would be approximately £1 8s. a week, or 4s. less, and the purchaser would have nothing’ further to pay at the end of that period. I commend the Government for its effortsto encourage home ownership.. The man who owns his own home becomes a better citizen-, and. home, ownership. promotes social stability. During the time that the honorable member for Parramatta (Sir Frederick Stewart) was chairman of the Social Security Committee, evidence was given regarding a family which, for more than five years, had been paying £1 5s. a week for a house and at the end of that time had no equity in it. They then entered into a home-purchase contract with the State housing authority, under which only 14s. 5d. a week was paid in interest and the reduction of principal, and they would own it entirely in 21 years. Every man has an instinctive desire to own his own home, and this instinct should he fostered in the interests of the nation.

Under this agreement the Commonwealth is to provide all the finance and 60 per cent. of the loss for home building, but there is no provision for any measure of Commonwealth control, except that accounts are to be examined at the end of twelve months, which is tantamount to locking the stable door after the horse has escaped. I recognize that the agreement cannot be varied now, but there is provision for revising it at the end of twelve months, and it should then be provided that the Commonwealth shall have some say in the supervision of the scheme. The State housing scheme in New South Wales is well run, but the Commonwealth should take steps to ensure that extravagance and waste shall be rendered impossible. This is a national housing scheme and it should be so described, seeing that the Commonwealth is accepting responsibility for the major part of the expenditure.

New England

. -I recognize that there is a grave shortage of houses in Australia, but there are some features of this hill which do not appeal to me. Clause 3 of the schedule states - (1.) Each State shall ensure that adequate legislation exists in the State to enable it at all times to control throughout the State - (a) rental housing projects under this agreement;

  1. slum clearance; and
  2. town planning.

I desire to sound a note of warning regarding slum clearance at a time when there is such an acute shortage of houses.

In England, some years ago, a slum clearance scheme was undertaken at Stockton-on-Tees. About 1,300 new houses were built, and families were shifted from slum dwellings, which were then destroyed. After a time it was found that the incidence of diseases, such as rickets, &c, in children was higher among families in their new homes than it had been when they were in the slum houses. The reason, it was discovered, was that families had to pay a higher rent in the new houses and there was less money to spend on food.

Mr Dedman:

– This bill makes that impossible. The rent will be in accordance with the family income.


– A careful balance must be preserved in order to ensure that families shall not be turned out of slum houses faster than new ones are provided for them and for those already waiting. Clause 5 of the agreement reads -

Each State shall allocate dwellings between metropolitan and country areas in such manner as shall from time to time be agreed upon between the Treasurer of the Commonwealth and the Treasurer of the State.

There should be provision that a specific percentage of the houses are to be built in rural areas and in country towns and villages. Some of the worst slum dwellings are in rural areas, but State housing projects have been mostly restricted to the cities, because the preponderance of voting power is there. Sub-clause 2 of clause 6 of the agreement provides -

The State shall repay to the Commonwealth the amount of each advance made to the State together with interest thereon by equal annual instalments of principal and interest, so that the whole of the amount of the advance and interest will be repaid over a period of fifty-three years computed from the date the advance was made, except that where in any case the Treasurer of the Commonwealth and the Treasurer of the State agree that any advance should be repaid over a period shorter than fifty-three years, the amount of that advance and interest thereon shall be repaid by equal annual instalments over that shorter period.

The amortization period fixed by the South Australian Housing Trust, which should be a model for the whole of Australia, is 30 years, which is regarded as the normal life of a brick house. Therefore, I cannot understand why 53 years should have been fixed in this agreement.

Clause 11 provides that the rent of a dwelling shall fluctuate according to the income of the householder. Here again, I cannot see why the Government has abandoned the principle established by the South Australian Housing Trust.

Mr Dedman:

– The Premier of South Australia did not object to the proposal when it was discussed at the conference of Commonwealth and State Ministers.


– I am speaking of the practice followed by the South Australian Housing Trust, with the approval of the Premier of South Australia. In that State, only those earning the basic wage, or with a family income computed in relation to the basic wage, are allowed to occupy State houses, and the rent for each type of house is distinct, and does not, fluctuate, even though the family income should vary. Thus, the family is encouraged to increase its income, and the extra earnings can bc saved for investment or put to any other use which the members of the family think proper. It mav be that the extra earnings are devoted to the building of a better home, in which case the State house becomes available for occupation by some one else. Under the present scheme, however, families occupying exactly the same kind of houses will be paying different rents for them. I suggest that the South Australian method should he followed. Sub-clause 3 of clause 11 states - (3.) No rebate of rent shall be granted in respect of- any dwelling except upon application by the tenant and after a proper investigation of the family income of the tenant. *«

Mr Holloway:

– That meets the honorable member’s objection.


– It does not, because it provides for the application of a means test, not only when a person seeks to obtain the tenancy of a house, but also when he is required to disclose his income to some public authority in order to obtain a reduction of rent. I suggest that it would be better to fix a reasonably low rent in the first place, the Commonwealth subsidizing the State in order to make up any losses.

Clause 14 of the agreement provides for the sale of dwellings to tenants, and stipulates that if ‘there are losses, they shall be borne in the proportion of threefifths by the Commonwealth and two- fifths by the State. That seems to be quite fair. The Leader of the Opposition (Mr. Menzies) touched on a matter of importance when he pointed out that the cost of the dwellings might be unreasonably high because bricklayers, in Victoria, at any rate, were going slow.. As a member of the original Man Power Committee I inspected cottages erected by the South Australian Housing Trust. One great advantage of that scheme was that costs were reduced because of the fact that all of the houses were erected by the one contractor to five standard designs. The timber was mass-cut. Under this scheme it would appear that costs will be relatively high. Therefore, I suggest that the Government should entrust the handling of the scheme to trusts to be set up in the States. As the Leader of the Opposition has pointed out, the Government as a landlord will always be subject to political pressure, whereas a trust can be made completely independent and free from political pressure.

Mr Dedman:

– Is that not a matter for the States to decide for themselves?


– The Minister reminds me of Pontius Pilate, who washed his hands of the blood of an innocent man. I am now suggesting a firstclass scheme for the benefit of the people as opposed to one which will primarily benefit politicians. It would be infinitely better to place this scheme under the control of housing trusts to be set up in the States ; and the Commonwealth, because it will provide a large amount of the necessary funds which will be in effect, grants to the States, will have a perfect right to lay down the terms under which the money shall be handled for the benefit of people who will occupy the homes.


– I regret that, owing, apparently, to constitutional limitations upon the Commonwealth, the States and the Commonwealth when reviewing this problem have not ta,ken a wider view of the effect of housing upon our national economic structure as a whole. The Commonwealth and the States have merely reviewed this proposition in the terms of providing coverage for participants, but have made no attempt to deal with the problem in its broadest aspects. I believe that the fact that during the last 30 years the purchasing power of tha basic wage, instead of increasing, has been decreasing, is finally penetrating the heads of our people, and even the heads of the capitalists in this country. Until we are prepared to recognize that fundamental fact, we shall not see this proposition in its broadest aspects. Because the purchasing power of the basic wage is decreasing, a great many things are happening in our social life. Properly, a housing scheme must first be considered in relation to not only coverage but also the problems of increasing our population, increasing the consuming power of our people, and the provision of effective old-age pensions by enabling recipients to own their own homes. By increasing the consumption of goods we shall provide new avenues for the expansion of trade, and new fields of taxation. In consequence of the decreasing purchasing power of the basic wage the consumption of the community is diminishing, production is diminishing and, as the result, adequate taxes can be raised only by increasing tax rates. I believe that housing offers one means of solving this problem. Industry reaches a point when it cannot economically pay an increasing basic wage.

The history of the basic wage in Australia has been, that so long as it is an imposition upon industry, industry reacts to it by increasing the prices of commodities, thus raising the cost of living. It is unmistakably clear that as the cost of production - the basic wage - increases, the cost of living increases at a corresponding rate. The cost of living has increased as the result of the provision of additional education facilities in the community as a whole, and the consequent increased demands of the workers. Our people have a right to these wider needs. If it were possible to stabilize house rents at a .figure within the means of the average wageearner, the purchasing power of the basic wage would automatically be increased without involving any additional burden upon industry. If it were possible to raise money at a rate of interest of 2^ per cent. - and I believe it is, because the other night administrative costs in respect of a scheme of this kind were shown to average only per cent. - and if the cost of maintenance and other expenses incidental to the ownership of a house could be limited to 1 per cent., it should be possible to make available houses at a flat rental of £40 whereas to-day the annual rental is £75. If it were possible by that means to reduce the standard rental from £75 to £40 we should immediately raise the purchasing power of the basic wage by £35 a year. Spreading that benefit over 1,000,000 workers, an additional £35,000,000 would be made available for the purchase of goods. This would result in a corresponding increase of production, and that would provide an additional field for income tax. That is my first point. Of course, provision must be made to amortize the debt on the houses. Let me examine that point. If we could reduce the standard rental from £75 to £40, the reduction of £35 a year would be equal to child endowment payable in respect of two children. I suggest that the child endowment payable in respect of families of three children could be paid into an amortization fund. Honorable members, perhaps, may be surprised to know that nearly £700 is paid in child endowment in respect of three endowable children by the time the youngest reaches the age of sixteen years. Under my scheme, however, a start would be made right at the beginning. A man who does not accept any family responsibility would be charged an amortization rate after a given period. When he is prepared to accept family responsibilities he would be paid child endowment in respect of two children by reason of the fact that his rental had been reduced from £75 to £40, and the reduction of £39 representing childendowment contribution would be paid into a fund in order to amortize the debt remaining on his home. In this way, a man with three children could redeem £700 of the debt owing on his home by the time his third child reached the age of sixteen years. In this way we would make the average worker a capitalist; and that is our only solution to communism in this country. If the scheme now before us has any weakness at all it is its failure to enable the occupant to become the owner of his home. Under my plan, when family responsibilities diminish, a man will be able to afford to pay off. the remainder of his debt because by that time he will have reared his family. And when he becomes a pensioner his pension will he of real value to him because he will then own his home. I am now entering the realm of finance, and I do so with some trepidation. God save me from economists ! As soon as one commences to discuss finance the economists trot out terms that panic honorable members on both sides of the chamber. They talk about inflation. What does that mean? I have been informed that if a country has more money in circulation than is required to purchase the goods produced in that country inflation will result; but that could only happen on the assumption that every one in the country, except bank managers and economists, is a lunatic. I shall not admit that any sensible person would pay £20 for a suit of clothes which he knew to be worth only £10. Should he be asked to do so, he would prefer to wear his old suit a little longer. The war has shown us how to rectify these problems.

For many years we have been pegging wages in this country with periodical reviews. We have always pegged wages, but only in this war for the first time in our history have we attempted to peg prices. Price fixation has been a benefit to the community. We must first peg prices and then deal with housing schemes on the basis I have outlined, that is, on the basis of fixing rents at a rate which will enable occupants to own their own homes. Having regard to the facts that under the Constitution the Commonwealth has not power to build houses, that finance is largely centralized in the Commonwealth Bank, and that we have so many conflicting authorities existing in the different States, the scheme out-: lined in the bill, possibly, is the best that could be evolved in the circumstances. Capitalism as represented by the business community in this country should review . schemes of this kind in the realization that industry is paying as high a basic wage as it can afford, yet that wage is still inadequate. Housing schemes offer the possibility of increasing the basic wage without adding to the burden of industry. It is time that we approached the problem from that aspect. I am concerned with only one aspect of this bill. Clause 12 of the agreement provides -

  1. The family income of a tenant of a dwelling shall for the purposes of clause 11 comprise the total of the following: -

    1. the whole of the weekly income of that one of the followingpersons as is the highest weekly income, namely, the tenant, the spouse of the tenant, and any person resident in the dwelling who is related to the tenant or the spouse of the tenant;
    2. two-thirds of the weekly income of that one of the persons mentioned in paragraph (a) of this sub-clause as is the next highest weekly income ;
    3. one-third of the weekly income of every other person such as is mentioned in paragraph (a) of this sub-clause.

I am wondering whether the effect of that provision may not be that when people find out that the second and third members of their families are prejudicial to their rents the second and third members will make themselves scarce. That seems to be one possibility. Apart from that, I support in its entirety the agreement as it stands. I sincerely hope that the time is not far distant when we shall launch in this country a bold and practical scheme of housing based upon private ownership for the purpose of enabling people to acquire their own homes. We must stabilize our social and economic life, with a higher basic wage. Increased consumption and production will increase the field of taxation and therefore the amount of revenues raised. I hope that by the time a man has reared his own family and reached the age of entitlement to the old-age pension, which I hope will be called superannuation by that time, he will own his own home and get real and material value out of his superannuation in the remaining days of his life. I think all that can be worked out if we have courage and goodwill, but it will need a good deal of investigation on our part. I am perfectly certain that as long as we attempt to push up the basic wage under present conditions with no pegging of prices, the cost of living will ascend. The whole history of the basic wage in this country over the last 30 years, having regard to our increased needs and our increased educational opportunities, has had two effects, first ; that men will hot accept family responsibility for the ultimate development of this country, and, secondly, that the effective value of the basic wage has gone down instead of up.


.- I do not feel anything like the same enthusiasm for this measure as has been exhibited by some honorable members opposite.

Mr Conelan:

– Naturally the honorable member would not.


– Naturally I would examine the bill, which is more than can be said of a number of honorable gentlemen opposite who endorse it blindly just because their Government produced it. No one can be blind to the urgent need for the provision of houses on a wide scale. I accept the criticisms that have come from different sections of the House that much more could have been done in the years before the war. I note that the Minister for Post-war Reconstruction (Mr. Dedman) said that he made no apology for the fact that little building has occurred in the last five years. He justified that statement on the ground that to have done more in the way of building would have been to do less in more urgent war requirements. That may be largely true, but I have expressed my own views before on what the Government might have done, not by way of a building programme, but by way of preserving in a state of health those key industries on which the building must depend. I do not want to repeat what I said then, but I do believe that the Government is experiencing serious production shortages in the very industries in which prudence and forethought should have enabled the Government to avoid such conditions. The Minister has reminded us of the extent of this problem. He says that the soldier and his family need a suitable house and that thousands of workers require housing. We know that those who have made a close study of this matter, various State housing authorities, and the Commonwealth Housing Commission itself have made disconcertingly large estimates of the houses required by the people of the Commonwealth. I direct my attention to-night to some aspects of the scheme before us and some phases of government policy, or the absence of government policy, on matters in the industrial field that directly affect this housing programme.

There will be a general measure of agreement amongst all honorable members as to the stabilizing influence in the life of a community that adequate housing provides. The honorable member for Denison (Dr. Gaha) has stressed that point. It is something that we all support. If our people can be comfortably and hygienically housed, we shall solve at its root much of the social evil that otherwise can afflict a community. A great deal of crime could be avoided by better housing, and much personal discontent and family disruption could have been avoided if the families concerned had been properly housed. One would need to speak in extreme terms to exaggerate the beneficial effects on the life of the nation of a properly housed people. But if we are to have housing within the means of the workers, particularly those in the lower ranges of income, there are certain fundamental requirements that ‘must be met. In the first place, the finance to be provided for the construction of the home must be provided at a cheap rate. It is true that that can be done most satisfactorily by the provision of government finance, that is to say, making the actual capital available for building construction purposes.

Mr Sheehy:

– Through the Commonwealth Bank?


– That is one agency, and the likelihood is that the Commonwealth could raise and provide finance at a cheaper rate than could a private institution. There cannot be much argument about that. The second point is that the materials which go into the construction of the home should be provided at the cheapest possible rate, and should be of the best quality that can be obtained for the money paid for them. That is the end of the useful sphere in which the Government can enter, because if we provide the materials and components at cheap rates, the more competition there is for the demands of the intending building the more likelihood there is of those materials and components being provided at the cheapest rates, and being of the best quality. Thirdly, and perhaps even more important than the two other phases, is that the home must he constructed in the quickest possible time, and at the lowest possible cost. I shall direct attention to the weaknesses in this scheme. In the first place, we are not likely, while present conditions last, to provide homes cheaply. We all know how building costs have risen in the last few years, and interesting confirmation is contained in facts supplied to honorable members by the Master Builders Association.

Mr Conelan:

– What did the association say about big “ rings “ ?


– Honorable members opposite have yet to convince me that the facts contained in that publication are incorrect. They confirm the information which has reached me from other quarters, and until they are proved wrong, I am prepared to accept them as an authoritative statement from a responsible organization experienced in this class of work. The association mentioned that in the period 1933-44, the cost of constructing a medium-sized five-roomed dwelling rose as follows: - 1934, for a timber-framed dwelling, £730, compared with £1,035 in 1944. 1934, for a brick-veneered dwelling, £864, compared with £1,250 in1944. 1934, for a brick dwelling,£960, compared with £1,365 in 1944.

Although the prices of building materials have increased, the significant increase - a very large increase - has taken place in labour costs. If honorable members analyse the cost of the brick house to which I referred, they will find that of the amount of £960 in 1934, the cost of labour was £240 and of materials £720 ; but of the cost of £1,365 in 1944, the cost of labour had jumped from £240 to £546, whereas the cost of the materials increased from £720 to £819. There we have striking confirmation of the fact that an unduly high increase has occurred in the labour factor. The Master Builders’ Association made the following comment : -

To account for the difference in the cost of building between the ruling figure to-day with that of pre-war, consideration should be given to the extremely low output per man compared with the pre-war production figure.

The association refers to bricklaying. I encountered some sceptical criticism from honorable members opposite last week when I cited bricklaying figures to-day compared with those of a few years ago. I took my figures, not from the information supplied by this association, but from a New South Wales publication, and the experience of the Master Builders Association corresponds with what I previously stated to the House. The association remarked -

From records available we ascertained the average bricklayer in pre-war times laid 700 to 1,000 bricks per man per day of eight hours on medium-sized villa work. Of recent years, an average of only 400 per man and in some instances as low as 350 would be the total for a present-day’s work - an average drop of 50 per cent. in productive effort.

Since those facts were published some little time ago, we have noticed that a deliberate go-slow policy is being fostered in Victoria by those who claim to be interested in the welfare of the working man and to speak for a large section of the working population. The purpose is to apply industrial pressure in order to obtain improved conditions and higher wages. Last week, I spoke in very strong terms of this policy, but I was dismayed to hear the Minister for Labour and National Service (Mr. Holloway) state to-day, when I asked him about the latest developments, that 4,000 to 5,000 members of the Building Trades Federation were to hold a stop-work meeting tomorrow in order to discuss the go-slow policy. The press report suggested that some 7,000 workers would attend the stopwork meeting, and, naturally, to the extent that the building programme in Victoria will be held up while the meeting takes place, construction in that State will be interrupted. But when I pressed the Minister to state the Government’s policy regarding this matter, he waved his hand and said that he hoped that at to-morrow’s meeting, the men would decide not to go slow.

It is utterly futile for any Government to introduce a bill of this description, and try to put into operation a programme which the Commonwealth Housing Commission has recommended and which this bill implies, if it allows this drift in the building industry to take place without applying effective means to remedy it. How can we hope tobuild homes at a cost within the reach of the lower-paid workers if that go-slow policy is allowed to continue? How can the Government hope to maintain a scheme, such as is contemplated by this agreement with the States, if building costs are to be maintained at a figure 50 per cent, higher than the pre-war level ? This increase is due primarily to the failure of the employees to give the same fair day’s work that they gave before the war. Even before the war, complaints were made that the output per man in building construction was declining. Yet what was regarded as a poor performance then has now declined by approximately 50 per cent. It is not merely a breach of the industrial law of this country; it is a crime against their fellow-workers. It is an attitude of mind, and an industrial policy which no self-respecting Government would tolerate for a moment. Therefore, I question the usefulness of this measure.

The bill has certain flaws. It purports to adopt the policy of the Commonwealth Housing Commission, and I noticed that the commission’s report, which has only just been presented to this Parliament, was dated the 25th August, 1944. The introduction emphasizes that immediate action should be taken to alleviate the housing shortage. I point out that, although the commission recommended that under the rebate scheme, only onesixth of a man’s weekly wage should be paid in rent, the Government has decided that it will require one-fifth of the weekly wage. To that extent, therefore, the Government has departed from the com m iission’s recommend at on.

There are two serious blemishes upon the scheme: First, the rebate plan is to apply only to houses constructed by a government housing authority. The Government purports to deal with the problem of the rent-payer who is in receipt of a low wage, yet under the terms of this measure, the only tenants who will receive any benefit are those who will be fortunate enough to occupy houses constructed by a Government bousing authority. That means that, for the next few years at least, a very small proportion of the population will receive direct benefit under the scheme. Tenants of houses constructed by private industry and controlled by private landlords will not receive any benefit. This is an extraordinary discrimination which the Government has not sought to justify, so far as I can understand the Minister’s’ speech. The second blemish on this scheme is that the rental payment itself does not make any automatic provision that I can discover, for homes to be purchased by the tenants.

Mr Morgan:

– That is provided for in the agreement. The State authority can resell homes.


– I realize that, but with the exception of the provision for amortization over a period of 53 years, and another provision that a house shall nol be sold for less than the capital cost of the building, without the consent of the Commonwealth, I do not see any reference to the purchase of homes. Presumably, that will he made under the housing schemes which each State will inaugurate.

Mr Morgan:

– Yes, when the cost becomes stabilized.


– That is something which does not appear very clearly from the Minister’s speech; but we have this rather extraordinary development: If a man, by improving his position, receives a higher wage, the rebate on hi3 rent will be reduced accordingly. To that degree, therefore, whatever incentive there may be for him to secure promotion will be reduced. I should have appreciated a fuller explanation by. the Government of the reason for its decision to introduce a rental rebate scheme rather than a scheme for encouraging home ownership. Surely that would be a far more satisfactory approach to this problem. A scheme providing for portion of the rebate of rent to be devoted to the building up of an equity in a dwelling would have been more preferable than the present proposal. I am not suggesting now what proportion of the rent should be applied for that purpose, but if we wish to give a man a stake in the country, and an interest in his home - a principle with which the honorable member for Denison (Dr. Gaha) has expressed his full agreement - surely, it would be sounder policy to have portion of the rebate applied to the purchase of the home.


-Some workers do not want to purchase their homes.


– That may he so, but they would be building up an equity upon which they could realize should they decide to change their abode. At present, they are just pouring money down the sink.

Mr Conelan:

– They are pouring money down the sink now by paying extortionate rents to private landlords.


– That is the situation we are trying to meet, and that is what I have in mind. If the object be to assist people who are occupying homes and paying rents beyond their means, the scheme that I visualize would provide that a portion of the rent should be applied to the purchase of the homes. The tenants would still be at liberty to transfer their homes, and be compensated for their equity, or to sell their premises back to the Government for an appropriate sum. Far better care would be taken of homes if the occupants had a growing equity in them.

Mr Ward:

– A person will always look after the home that he occupies.


– Whilst that is true of most tenants, it is not true of all of them, as private landlords will agree.

The Minister said that although the scheme looks complicated, in actual practice it will work out. It ‘certainly seems complicated, and it is difficult to see how it can work out in practice, with adjustments from time to time according to any change in the income of tenants, unless there is a large administrative staff making a regular check on incomes. No doubt the incomes of a substantial proportion of the population do not vary from year to year, but in many industries, frequent adjustments are made according to increases or decreases of the cost of living. Some firms, too, make a practice of granting half-yearly increases of salary. How can these increases be ascertained by officials charged with the administration of the housing scheme? Will tenants be required to make regular returns of the income they are receiving? Will officers be employed to police incomes? I foresee a maze of administrative detail being required under this scheme, which I believe to be fundamentally unsatisfactory and unsound. As I have said it can apply only to a small section of the population, namely occupiers of government-built homes. Therefore, if this measure is an attempt to overcome a social weakness existing at present, it can succeed only to that very limited degree. Those are all criticisms which I believe can fairly be levelled at the measure. I do not think we shall see very much of the fruit of the scheme in the immediate future, aud in the interim period, of course, the Government will have an opportunity to revise its views on the matter ; but quite apart from that, the Government cannot bring to fruition any scheme and have it function on a satisfactory basis, unless it first grapples with the industrial problem which is underlying the whole construction programme’ at present. I stressed earlier, and I repeat, that if houses are built more slowly than they should be, if their components are more costly than they need be, and if the construction output per man is reduced, with the result that costs are forced up to an uneconomic level, the best scheme on paper which any government can devise will be frustrated. I shall not have any confidence in any scheme propounded by the Government, however high-sounding it may ring, or however complete on paper it may appear, if the Government burks the first real issue with which it is faced in connexion with its construction programme, namely, the reduction of construction costs to an economic level by ensuring a fair day’s output by those who are engaged in the industry.


.- This bill authorizes the execution of an agreement between the Commonwealth and the States in relation to housing, and for other purposes. The reason for its introduction is that the Commonwealth was denied, at a referendum, the power to embark upon a housing programme.

The Leader of the Opposition (Mr. Menzies) said “that every one should do a fair day’s work and give a fair deal, so that homes might be built at a cost that . would be. within the capacity of purchasers or prospective tenants. As wages have been pegged, they cannot be regarded as having increased the cost of homebuilding. I can readily recall the existence of what were known as timber and brick “ rings “. On occasions, some timber merchants would fall out of the “ ring thus enabling builders to obtain supplies of timber at a lower price, but before long they were forced back into the “ ring “. A friend of mine who had a large order for joinery invited various timber merchants to submit quotations for a specified quantity of timber. Having obtained their quotations, he visited Melbourne, whence he imported to South Australia a little more than he had been inclined to purchase from the local timber mills. When their representatives went round to see whether they could clinch an order, he again asked what the price was, and upon learning that it was exactly what it had been previously, asked them how many thousand feet they would care to purchase from him at 2s. per 100 super. feet below the price that they were asking. If costs of production are to be reduced, those handling materials must give a just deal.

I line up somewhat with the honorable member for Fawkner (Mr. Holt) in sincerely believing that financial provision should be made at a cheap rate. It could be provided by the Commonwealth Bank at no more than the cost of administration. A returned soldier obtained a loan of £700 at an interest rate of 4 per cent., with monthly repayments of £3 2s. He did not miss a payment from 1920 to 1945, when he had paid £900. Having received a small legacy, andwishing to clear off the balance of the loan on his home, he inquired from the bank as to what amount was owing, and was informed that he had still £500 to pay. Therefore, I am completely in accord with the idea that money should be provided at a cheap rate, in order that purchasers of homes should be able to discharge their liabilities during their lifetime. The price of timber has risen considerably. In 1930-31, the price of

Oregon was about 26s. per 100 super feet. Prior to that, it was 32s. To-day it is 105s. Oregon is used extensively in home building. If we intend to embark on housing schemes, we must enable the people to purchase homes, or to rent them from the Government, which would then he forced to ensure their continuous employment. I have received quite a number of letters asking me to explain the increase of building costs. It is most difficult to calculate. The Master Builders Association of Victoria has quoted various prices for a five-roomed house. It is all very well to talk about a five-roomed house. The cost depends upon the interior fittings and other features. I commend the Commonwealth Housing Commission for the good work it has done.

Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research · Corio · ALP

. -in reply - The speeches on the bill show that it has the support of members on both sides of the House.

Mr Archie Cameron:

– They do not show anything of the sort.


– The criticisms of honorable members opposite show that their conception of this housing programme is confined to details of administration. The Leader of the Opposition (Mr. Menzies), early in his remarks, mentioned the target for this year, the inference being that whilst the plan was a very fine one from the point of view of providing housing at a low cost for the people, it would not amount to very much if the houses were not built. I first want to make it clear that the target of 24,000 houses for this year is fairly high in comparison with the number of houses built during the war period. It was anticipated that about one-half of them would be built under permits issued by my department while it was administering the permit system,which is now being administered by the Department of Works and Housing, and that the remaining 12,000 houses would be governmentsponsored projects. In the first two months of this financial year, 4,000 houses have been begun - exactly onesixth of the programme for the year. Therefore, according to present indications, the target of 24,000 houseswill at least be met and in all probability will he exceeded. The Leader of the Opposition also referred to the high cost of houses and said that this was to beavoided. All honorable members will agree that that is the position. But the right honorable gentleman inferred that wages was the only important item in the high cost. There arc, of course, aspects other than that of wages, and some attention should be paid to the reduction of the other costs. There are, for instance, interest rates and the profits being made by those “who build houses. Those costs should be reduced equally with all others. I agree with the Leader of the Opposition that it is undesirable that such high costs should arise in the construction of houses, and that they should be avoided, if it is at all possible to do so.

The right honorable gentleman went on to refer to the allegations being made about the workers in the building industry in Victoria. He said that their policy was such as to lead to high costs of production. I am not aware of all of the facts relating to this particular matter, but the whole plan of the Government rests on the necessity for providing houses for the workers at rentals which they can afford to pay. No section of wage-earners would deliberately sabotage a scheme designed to assist the workers generally, unless it had strong reasons for doing so. The conditions prevailing in the building industry ought to have engaged the attention of governments long before the war, because those conditions have always been bad. Honorable members opposite are continually claiming that the Commonwealth Government should interfere in industrial matters, irrespective of whether the disputes concern that Government or the governments of the States. In fact, the majority of the awards in the building industry fall within the jurisdiction of the States. “Whilst honorable gentlemen opposite are constantly urging the Prime Minister (Mr. Chifley) and other Ministers to interfere in this or that industrial dispute, they never think of appealing for action by State governments which are of the same political colour as themselves. Does the Leader of the Opposition suggest that the Government of Victoria, which, fortunately, has just gone out of office, should nave taken action with regard to industrial disputes in the building industry? No. Whenever industrial troubles arise, members of the Opposition immediately ask the Commonwealth Government to take action regarding them. In the case of Victoria, they have re- cently been, under the control of a government composed of political parties opposed to the Labour party.

The honorable member for Reid (Mr. Morgan) referred to the provision of finance for the Government’s building programme. The honorable gentleman was under a misapprehension as to the source of the funds to be raised for these projects. Clause 4 states -

Payments by the Commonwealth to a State in pursuance of sub-clause ( 1. ) of clause fifteen of the agreement referred to in the last preceding section shall bc made out of the trust account established under the Nacional Welfare Fund Act 1D43-45 and known as the National Welfare Fund.

Therefore the money will be paid from revenue derived from taxation, but that provision refers only to losses. The provision of funds for the projects themselves will be met by the Commonwealth Government, and the moneys will be advanced to the States. Those losses are to be incurred only because the Government will pay a subsidy towards the rents. I do not believe that the honorable member intended that subsidies should be paid with money raised by Commonwealth credit. He meant, no doubt, that subsidies of that nature at least should be met by taxation, and that is the intention in the bill. As to the money required for the actual building programme, it may be provided by the creation of Commonwealth credit.

During the war the Government arranged financial matters in such a way that so much of the expenditure on a given project should be met by taxation and so much by loan, the gap being covered by the use of Commonwealth credit. In the same way the moneys will be provided to cover the whole of the works programme in the post-war years. Possibly some of the money will be obtained by the creation of Commonwealth credit, in order to bridge a gap, but many claims will be made for that, portion of the money raised by credit. It may be argued that all of the money needed for the settlement of exservicemen and for the national works programme could be provided in that way, but I maintain that only a proportion of the money required by the Commonwealth Government in the post-war years could be provided from that source.

Whilst it is important to reduce interest rates as far as possible, it would be wrong to apply to a particular undertaking a reduced interest rate which was not applicable over the whole field of finance. I am strongly in favour of reducing the general interest rate, but it is entirely wrong to say that we should provide the money needed for Commonwealth projects at a reduced rate of interest. Immediately we did that with regard to a particular project, we should be met with similar claims in respect of other works. I am very strongly in favour of a reduction of the general interest rate, and if honorable members opposite will support an attempt in that direction the Government will be pleased.

The honorable member forReid suggested that the Government should exercise a greater measure of supervision over the scheme. That point is covered in clause 4 of the agreement, which states -

  1. – (1.) Each State shall establish and shall advise the Treasurer of the Commonwealth of minimum and maximum standards to be observed in the carrying out of its housing projects in respect of the following matters: -

    1. allotments or sites;
    2. accommodation;
    3. c ) construction ;
    4. equipment; and
    5. services.

Seeing that the scheme is operated only in agreement with the States, it would he impracticable for the Commonwealth to have officers on the site of an undertaking to see that the agreement was being carried out in detail.

The honorable member for New England (Mr. Abbott) developed a curious argument. He said, in effect, that he was disturbed lest new houses might he erected to take the place of slum dwellings, and he suggested that some kind of balance should be preserved between the number of new houses erected and the number of slum houses destroyed. Actually, he was suggesting delaying as long as possible the destruction of slum dwellings, which have been a blot on our cities for a great many years. In any case, this bill has nothing whatever to do with the destruction of slum dwellings. It is a bill to provide for the construction of houses. Just as the Commonwealth Governmenthas no power in regard to the construction of houses in a State, and can act only by agreement with a State, so it has no jurisdiction over the destruction of slum dwellings. Whether or not a State government orders the destruction of slum houses faster than new dwellings can be built, remains a matter for the State government concerned. I am sure that the State governments can be relied upon to watch the situation closely.

The honorable member for Denison (Dr. Gaha) suggested that, instead of augmenting the family income by the. payment of child endowment, we should provide for the sale of houses at lower prices and that it should he possible to use the money now paid in child endowment to amortize the cost of such an undertaking. He said that in this way we would make the average worker a capitalist. That is too big a problem for me to discuss in detail to-night, but there is one argument which I would put forward : The Commonwealth Government is concerned to provide adequate and good housing for the workers; it is not concerned with making the workers into little capitalists.

Mr Anthony:

– In other words, it is not concerned with making them homeowners?


– If there is any criticism which may he directed against the policies of past governments supported by the present Opposition, it is this : Too much of their legislative programmes was deliberately designed to place the workers in a position in which they would have a vested interest in the continuance of capitalism. That is a policy which will not have my support, at any rate. The honorable member for Fawkner (Mr. Holt) quite frankly admitted that much more could have been done by pre-war governments to provide better housing in Australia.

Mr Holt:

– I said by governments of all parties.


– For most of the relevant time anti-Labour governments were in office.

Mr Holt:

– According to the Minister’s own admission, the Commonwealth Government has no power in regard to housing.


– Previous governments could at least have attempted to make agreements with the States, but they did not do so. The honorable member made a statement which indicated that he was gifted with remarkable hindsight when he said that the Government could have set aside more man-power and resources for the building of houses than it actually did.

Mr Holt:

– I said for the manufacture of materials.


– Man-power and resources would have been required for the manufacture of building materials. It is all very well to say now that some of the resources which were used for the defence of the country could have been used for the manufacture of building materials. Notwithstanding some detailed criticism of the measure the House in general accepts it. Under this legislation houses will be provided at rentals which the workers of this country can afford to pay. It is true that next year it will cover only about 12,000 families, which i3 only a small proportion of the total number of workers who require houses, but as the- years pass an increasing number of workers will be able to obtain houses at reasonable rentals.

Question resolved in the affirmative.

Bill read a second time.

In committee:-

The bill.

Barker · ALP

– The first schedule contains the following statement -

The economic rent of any dwelling shall foe calculated by the housing authority according to the following formula: -

Annual amortization allowance to provide for payment of interest (at the appropriate rate payable by the State to the Commonwealth) on the capital cost of the dwelling over 53 years.

Does the Minister intend that that amortization provision shall apply to houses constructed of timber, or of timber and fibro cement? I have a strong suspicion that many such houses will not last 53 years. In South Australia most dwellings are constructed of brick, or stone, or of cement bricks, but in Victoria, Queensland and parts of New South Wales there are many houses of wooden construction. Unless there is to be a different provision for stone or brick houses, it stands to reason that wooden houses will represent a heavy responsi bility in the future. The fixing of an economic rental introduces an entirely new principle in legislation. In plain English it means that the rental of a house is to be fixed, not on the true rental value of the property, but in accordance with the income of the person renting it. Once that principle is accepted, it would he interesting to know to what degree it is to operate and to what classes of houses it is to apply. We are told that the Commonwealth is not to lose money under this system. Does that mean that where two men are occupying houses, and the rental of one is below its true rental value, the other man will have to pay more than the true rental value of his house in order that there shall be no less? If so, it will cause resentment in the community. It may be good political propaganda to tell one section of the community that people in certain income groups will be able to obtain homes at less than their true rental value, but when other sections pf the community learn that they will have to pay more than the true value there will be trouble. The committee should not agree to the schedule until this point has been clarified.


– I propose to move an amendment to the schedule. The Minister for Post-war Reconstruction (Mr. Dedman) said that legislation to enable workers to own their own home would create a lot of little capitalists and would retard the onward march of socialism. That was a most extraordinary statement. Does it mean that the policy of the present Government is to discourage home ownership? The Minister’s statement conflicts with the view expressed by the honorable member for Denison (Dr. Gaha) who said that the Government ought to make it easier for workers and others to own their homes, if only to counteract communism. What is the policy of the Government? Does it propose to enable people to purchase their homes on easy terms? I intend to test the feeling of the committee on this matter. I shall move an amendment which will test the real intention of the Government. Clause 14 of the schedule provides that under certain conditions a dwelling may be sold by the State; but those conditions are such, that should the cost of a home, due to go-slow methods in construction, or bad supervision under the day-labour system, be far in excess of its true market value, the tenant will have no opportunity to become the owner of the dwelling, because the schedule also provides that in assessing the purchase price the housing authority shall take into consideration all of the factors associated with the cost, such as the cost of administration, land, &c. The cost of everything down to the last nail must be taken into account in assessing the purchase price. Should a five-roomed cottage under this scheme cost 50 per cent. more than the cost under the contract system, the dwelling must be offered at that price ; and, of course, at such a. price the home would be of little value to a purchaser. Therefore, I move -

That the Schedule he amended by inserting in clause 14 the following new sub-clause: - “ (1a.) That notwithstanding anything contained in this Agreement a tenant, who has satisfactorily fulfilled his conditions of tenancy for three years, may be granted the option of purchasing his home at such price as may be determined by approved valuers, and on such rental purchase terms as are practicable to the ability of the tenant, and as may be agreed and approved between the tenant and the Housing Authority.”

The amendment means that the housing authority may agree with the tenant to sell at the value determined, for example, by the delegate of the Treasurer. At the present time, the delegate of the Treasurer when approached for a permit to buy, grants the permit on the basis of the real value of the property, and not on some hypothetioal or inflated value. I repeat that the Minister’s statement will come as a great surprise to many thousands of people of limited means, who have the ambition to own their own homes. They will be discouraged and disappointed by his statement that assistance to such people to purchase their own homes will tend to create little capitalists, and that the furtherance of such a policy would prove a barrier to the onward march of socialism.

Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research · Corio · ALP

.- The Government cannot accept the amendment moved by the honorable member for

Richmond (Mr. Anthony). The bill embodies an agreement which hasbeen arrived at after long and exhaustive discussions between the representatives of the Commonwealth and State Governments. The acceptance of the amendment would mean that the whole agreement and the bill must again be thrown into the melting pot. The agreement would have to be referred back to the States. Possibly it would have to await reconsideration at another conference of Premiers. The effect of the amendment is to delay, if not to destroy, the measure.

Wednesday3, October 1945.


.The statement by the Minister for Postwar Reconstruction (Mr. Dedman) is most extraordinary. The amendment does not involve a fundamental alteration of the agreement. Indeed,’ it does not affect the housing project at all. It simply proposes that a satisfactory tenant shall be given the opportunity to buy the house he occupies. Can there be any objection to that? Is it likely that any State government would object to a tenant being enabled to purchase a house on terms which, as prescribed in the amendment, must be satisfactory to the housing authority? The honorable member for Richmond has surely been provoked to bring forward his amendment by the extraordinary statement by the Minister, in which he described as “ little capitalists “ those good Australians who aspire to own their own homes. I agree with the honorable member that the Minister’s statement is an extraordinary announcement of policy. It is a devastating revelation that an Australian Government should regard as something wrong the aspirations of good Australians to own the homes in which they live, and that such persons should he described in terms which invariably are used by honorable members opposite as terms of contempt.

Mr Dedman:

– I did not say any such thing.


– The Minister used the phrase “little capitalists”. Does he deny that?

Mr Dedman:

– I said that I was concerned with providing decent housing for the workers, and that is the objective of the measure.


– The Minister used the phrase “ little capitalists “ in referring, quite clearly, to home-owners, or those who aspire to own their own homes. Those terms are used in almost every speech made by honorable members sitting to the right of the Minister as terms of opprobrium. Those honorable members describe contemptuously as capitalists persons who own property. When the Government condemns the system of capitalism, and quite clearly indicates that it would prefer socialism, or communism, it voices a politial creed which it is entitled to propound; but we have never before had the matter put so clearly by a Minister in a Labour government that the aspiration of a good Australian to own his own home is to be condemned. Following the Minister’s announcement, the amendment moved by the honorable member for Richmond is justified, because the honorable member seeks to establish the right of Australian workmen to purchase their homes from the Government through the housing authority. I hope that the Government will reconsider its attitude on this matter and that it will not continue to say that to dare to suggest to the State governments that there should be written into this housing legislation, for which thousands of Australians have waited so long, that they shall have the right to buy their own homes -would mean that the State governments would not, approve the legislation. The Government is attempting to terrify us by saying that the acceptance of the amendment would lead to shelving the whole legislation and that it would be necessary to await a further Premiers Conference before proceeding.

Mr Chifley:

– Whether the honorable member believes it or not it is true; it would mean shelving the legislation.


– Does that mean that in a schedule attached to any act-

Mr Sheehy:

– Agreed to by the States, yes.


– I am loth to dispute the Prime Minister’s words. He ought to know and no doubt he does know better than I do. All I can say is that bills passed by State parliaments have condemned schedules like the agreement in this bill. Does that mean that when amended legislation is passed the State legislation will be inoperative? It must cut both ways. If the terms of State legislation are in some respects inconsistent with the wording of Common°wealth legislation-

Mr Chifley:

– What State has passed this legislation?


– I am not referring to this bill.

Mr Dedman:

– To what bill is the honorable member referring?


– The bill dealing with soldier settlement.

Mr Dedman:

– No State has yet ratified the agreement.


– The Minister for Post-war Reconstruction has said in recent weeks that there is no reason why a State government should not introduce its legislation and have it passed.

Mr Dedman:

– That is perfectly true.


– Well, we are getting to the point raised by the Prime Minister, that it is possible for a State government to introduce and pass through a State Parliament legislation designed to meet the conditions laid down in a schedule to this bill. If it transpires that it is in some technical degree inconsistent with this legislation it will be null and void. I am not a lawyer so I do not know whether that is right or not. It is a curious state of affairs if it is right. But leaving legal technicalities and quibbles aside I regard it as outrageous, that it should be improper in this Parliament to suggest that an Australian workman, if he is able to show that he can meet rent-purchase terms, should be entitled by amendment of the law to own his own home.

Progress reported.

page 6268


Re-establishment and Employment : Preference to Ex-service PERSONNEl - Commonwealth Disposals Commission.

Motion (by Mr. Chifley) proposed -

That the House do now adjourn.

Mi MENZIES (Kooyong- Leader of the Opposition) [12.10 a.m.]. - I desire to raise for the consideration of the Prime Minister (Mr. Chifley) and the Minister for Post-war Reconstruction (Mr. Dedman) a small matter that I have already discussed to some extent with the Minister for Post-war Reconstruction. It concerns the question of preference under the Re-establishment and Employment Act. A rather curious case has come to my notice. A professional man is about to seek a certain public appointment to fulfil certain professional duties for a public body. His late partner, who recently died, held that office and the general office of the firm has attended to the business of that public authority for some years. The applicant, who is a member of the firm, served with the British Forces in the last war. He is Australian-born and was educated here. He was in England at the outbreak of the 1914-18 war, enlisted in that country and served with the British Army. It now appears that under the definition of “.members of the forces “ in the Reestablishment and Employment Act he is not regarded as an ex-serviceman. That seems a strange anomaly. If he applies for the post and some other person equally qualified applies and that person was in the Australian Military Forces in the 1914-18 war, he is entitled to preference and the gentleman about whom I am speaking is disqualified from preference because his war service was in the British Army.


– I -am discussing our law because this is the position as I summarize it. The preference provisions of the Re-establishment and Employment Act grant preference to persons domiciled in Australia who served in other Dominions or with the British Forces during the 1939-45 war; but, in respect of the 1914-18 war, preference is confined to those who served in the Australian Forces.

Mr Chifley:

– That is taken from the State acts.


– That may be so, but I am not concerned with the anomalies in the State law. I submit to the Prime Minister that this is an anomaly. “We included in the definition of “members of the forces “ those who, being Australians or domiciled in Australia, have served in the British Army and, when we turn to the question of preference as distinct from re-establishment, we have granted preference to three groups of people; first, those who served in the Australian Forces, in the 1939-45 war; secondly, those who served in other British forces in that war, and, thirdly, those who served in the Australian forces in the 1914-1S war, and we have not included those who served with other British Forces in that war. It does seem to me to be very odd that if two persons apply for this particular post - and it is not likely to be applied for by many ex-servicemen of this war, it is a senior post - and they have both had service in the last war, the one with service in the British Army is disqualified. He is regarded as a non-returned soldier. I am not asking for kerbstone judgment on this matter, but I do urge that the Prime Minister should have a look at the matter. I realize that it involves Cabinet policy. That is why I am raising it in the presence of the right honorable gentleman. He should consult with the Crown Law officers to see whether they agree with the view of the statute which I put - I happen to have some reason to believe that they do - and if he agrees with me that in substance this is an anomaly, he should consider introducing a short amending bill to rectify it.

Leader of the Australian Country party · Darling Downs

– Because of the gravity of information which I have received regarding the dumping and destruction of material by the Army authorities in the Atherton Tableland area, I consider the whole of the facts, as placed before me, should be ventilated in the Parliament. The chief allegations are that Army authorities have set fire to dumped material as well as burying it in trenches and then covering it with earth. Let me emphasize at the outset that I, personally, am not making these charges. The facts are that, having received information regarding disposal of certain army material, including motor cycles, I arranged for a responsible person, well known to me for several years past, to pay a special visit to the Atherton Tableland to obtain a first-hand knowledge of what was occurring. The matter of disposals was dealt with adequately by me in the House last week, when the Minister for the Army (Mr. Forde) undertook to institute a thorough inquiry and to take prompt and decisive action against any person found guilty. The revelations contained in the reports received from the man who made these special investigations at my request are such as to demand the most searching investigation. The report is divided into two sections: First, army dumping, and, secondly, destruction of army blankets.

Regarding the dumping of army material, the investigator, in a preliminary report, stated that on the Atherton Tableland, the Army had been putting large quantities of material into dumps and had then set fire to it or covered it with earth. He went on to say that the value of some of the material dumped and destroyed was colossal. He proceeded -

I will, therefore, make a statement and give you some disclosures that can be verified, but you will have to act quickly as already some of the dumps that contain thousands of pounds of valuable materials are being placed out of bounds to civilians, and the Army is covering up the traces with bulldozers.

In his report of the 23rd September, the investigator, after stating that so many people informed him of the destruction of useful articles at certain dumps, a military dump at Rocky Creek, about 4 miles from Tolga, was visited. He stated that he was informed that all useful material had been removed from the dump - an old excavation - that all that remained was junk, and that people from various parts of the tableland had been removing useful articles for more than three months. However, several people were searching for articles thrown away by the Army as useless. The report then states -

An investigation disclosed that many of the discarded articles had been wantonly destroyed before being dumped. There was an abundance of evidence to show that those statements were not exaggerated.

People informed me that many Army dixies and other cooking utensils had been tied into lots of three and more and a crowbar or other sharp instrument driven through them to make them unserviceable.

A recent fire in dump had destroyed the tinning of buckets and dixies. The evidence was almost destroyed, but I was able to find many utensils which had a value but showed definite evidence of having been punctured.

Several soldiers were picking out articles including large quantities of nickel-plated bullets which were strewn all over the ground.

One soldier asked if I wanted any springs for my car and showed me where many thousands of carburettor springs were dumped.

As in the main these were in good condition, I asked why had they been dumped. A soldier replied, he did not know but someone had picked up two cases a short time previously and estimated that each case contained many thousands.

One of the soldiers then showed me a bucket containing nearly one thousand of these carburettor springs.

On the side of the dump were from one hundred to two hundred stoves and when they were first dumped were direct from local camps.

Since dumping, these have been fired by the Army.

I also noticed several pieces of piping In a case. These were in excellent condition. They were about four feet long and two inches in diameter, one end being fitted with a turned brass ferrule and the other machined and tapered, the tapered end being covered with thick grease.

Each would have a definite value of fi or more as they had been machined with a precision tool at each end.

Citizens of Kairi and Danbulla will tell you that after the departure of troops from that area trenches were dug and huge quantities of foodstuffs burned.

They state that residents in the area visiting the dump, found sides of bacon, thousands of tins of M and V., bully beef, tinned fruits, jams, curry powder, dehydrated potatoes and large quantities of rice.

Witnesses can be found who will swear that in the dump they found many useful parts of motor cars requiring only a few shillings to put them in order.

I saw at least three generators from Chevrolet cars which only required some minor repair to make them serviceable.

Responsible citizens will be able to provide evidence that would lead to the exposure of the burning of large quantities of jungle boots, the only defect in which was they had long spikes.

Further, I examined two one-quarter-pound cakes of chocolate. Others opened were not first-class, but were palatable and edible.

My correspondent states that if the Government is prepared to give an undertaking that any person giving evidence regarding the matter will not be subjected to prosecution solely because of his evidence, there would be forthcoming statements of unpardonable waste that would stagger the people of Australia. Ho adds:

I have seen waste and mismanagement after the last war but never in my life have I seen such shocking waste and complete disregard for the taxpayers’ money as is taking place on the Atherton Tableland.

The waste is a public scandal and the people are shocked that it is allowed to continue.

The second matter to which I refer is the destruction of Army blankets. On the 6th September, I asked the Minister for the Army whether it was a fact that at the 13th Australian Army Ordnance Depot, 40,000 blankets were allowed to become slightly mildewed through having been placed on the ground in bundles without adequate protection. In the Parliament, the Minister for the Army, replied that at the 13th Australian Advance Ordnance Depot during the period the 1st January, 1944, to the 19th June, 1945, 29,000 blankets deteriorated in storage. Of that number, continued the Minister, 15,000 were recovered and the remainder were found to be of no further use and were destroyed. That means that 14,000 blankets were destroyed. Yet, in a letter to me on the same day, the Minister for the Army stated that approximately 25,000 blankets were condemned and burnt in the Atherton area. The Minister added that these blankets had deteriorated badly owing to climatic conditions, storage difficulties and contamination by flies, were classified as unserviceable by the Ordnance Service, and were subsequently destroyed on the advice ‘of the medical authorities. The investigator who made first-hand inquiries on the Atherton Tableland reports regarding the destruction of blankets at Tolga -

The real story, and this can be definitely proved, was that the blankets were stacked in bales in a big marquee, and in a very heavy storm the water washed through the marquee in the early stage, and soaked through the bales.

Later, a heavy wind blew the marquee down and the blankets were completely saturated. They could still have been saved with a little initiative, but they preferred to let .them rot, rather than take any action.

Last Friday, the Minister for the Army undertook that an inquiry would be made into my allegations regarding Army disposals. However, in view of these fresh allegations and as more than one Commonwealth department is concerned in the matter of disposals, the investigation should not be confined to the activities of one department alone. Therefore, I respectfully submit to him that the terms of reference in regard to that particular inquiry should be extended to include the matters which I have brought before the House this morning, and I assure him that every facility will be made available to obtain the requisite evidence to prove that these allegations are well founded. Obviously, I shall not disclose any names at this juncture, but I shall supply the right honorable gentleman with all the necessary information provided no prosecution or persecutions will follow.

Minister for the Army · Capricornia · ALP

– I assure the Leader of the Australian Country party (Mr. Fadden) that a searching investigation will he made of his allegations, and that those who have furnished him with the information which he has disclosed to-night will have ample opportunity to prove their charges. The Government is totally opposed to waste or extravagance of any kind, and if it can be proved that what the Leader of the Australian Country party has said did, in fact, occur, suitable disciplinary action will be taken against those responsible.

Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research · Corio · ALP

– There is a great deal that could be said upon the matter raised by the Leader of the Opposition (Mr. Menzies), namely, the application of returned soldier preference to Australians who served with the British forces during the war of 1914-18, but I do not propose to go into detail at this hour. I shall discuss the matter with the Prime Minister (Mr. Chifley), and later I shall furnish theLeader of the Opposition with a reply.

Question resolved in the affirmative.

page 6271


The following papers were presented : -

Customs Act - Regulations - Statutory Rules 1945, No. 149.

Designs Act - Regulations - Statutory Rules 1945, No. 143.

Norfolk Island Act - Regulations - 1945 -

No. 2 (Public Service Ordinance).

Wool Use Promotion Act - Regulations -

Statutory Rules 1945, No. 150.

House adjourned at 12.26’ a.m. (Wednesday)-

page 6272


The following answers to questions were circulated: -

Meat Industry : Exports of Frozen Mutton to United Kingdom

  1. Is it a fact that carcasses of large numbers of sheep cannot be shipped to Great Britain because regulations designed to maintain the quality of export in normal times are still in force?
  2. If so, in view of the need to provide Britain with an urgently needed supply of mutton, will the Government arrange for suspension of the regulations debarring the import of great weights of Australian mutton into the United Kingdom so that carcasses up to the standard which Australian meat authorities have been releasing for consumption within Australia would be passed for export?
  1. The regulations in question are imposed by the British Ministry of Health and refer to infection of the lymphatic glands in carcasses of mutton with caseous lymphademitis. The regulations are still in force but their continued application has not affected the volume of frozen mutton exports to the United Kingdom because carcasses of first and second grade quality rejected from export on account of the regulations have been absorbed by the various services, Eastern trade, and the civilian trade. The lower grades of mutton affected by caseous lymphademitis have been used for canning and dehydration.
  2. The suspension of these regulations is a matter for the British Ministry of Health. It has been raised by the Commonwealth Government with the Government of the United Kingdom in recent months, but action to modify or remove the regulations has not been . taken.


  1. Did a cargo of sorghum seed reach Sydney recently from overseas?
  2. Was the cargo seriously infested with mites?
  3. Have precautions been taken to prevent infestation of Australian-grown sorghum by these parasites? If so, what is the nature of such precautions?
  4. If none has yet been taken, will the Minister, in view of the great importance of this industry to Australia, ensure that immediate preventative action is taken, and furnish the House with a report on the matter?
  1. Yes.
  2. No. Some mite was discovered in the grain sorghum, but as this family of mite is common to Australia and is very widely spread, no particular significance can be attached to the slight incidence of infestation.
  3. This cargo was examined by quarantine and passed for discharge in Australia. The insect present feeds only on debris; it does not attack grain crops and, consequently, no precaution of a specific character is necessary and it represents no threat to Australian-grown sorghum.
  4. All imported grain sorghum is being ground before being distributed in the form of sorghum meal and it is thought that this provides adequate basic protection.

Japanese Funds in Australia.

  1. Is it a fact that funds of aliens in Australia were frozen at some period during the war?
  2. If so, when is it intended to release them to the persons to whom they belong?
  1. The funds of aliens in Australia, as a class, were not frozen at any time during the war except that funds of Japanese were frozen in August, 1941, under arrangements that applied throughout the sterling area and the United States of America.
  2. To the extent to which any such funds have not already been released, applications from parties concerned for release of funds will be given full consideration by the Commonwealth Bank.

The War: Japanese Surrender at Koepang.

I now advise the honorable member that the procedure adopted with local surrenders by Japanese forces conformed to international practice, under which it was not normal for more than one commander to sign. The Tokyo capitulation was a general surrender to the representatives of all nations which had been engaged in war against Japan. For this reason all the allied representatives signed the instrument of surrender on direction from their government. All other surrenders were those of a defeated enemy in the field and were military instruments. As supreme commander of the Allied Forces, General MacArthur had designated who were to take the surrenders. In the case of Timor, the Commander-in-Chief, Australian . Military Forces, delegated this responsibility to Brigadier Dyke. The Commander of the Dutch Forces, Lieutenant-General van Oyen, had been invited to attend the surrender ceremony at Morotai, and was represented by his Chief of Staff, Major-General van Straten. At Dutch Timor, an officer nominated by General van Oyen was present at the ceremony. No request was received from the Dutch authorities to sign the surrender at either Morotai or Koepang.

Defence Committee

Who are the members of the Defence Committee?

The Chief of the General Staff (Chairman;, the Chief of the Naval Staff, the Chief of the Air Staff, and the Secretary, Department of Defence. The Controller-General of Munitions Supply is co-opted as a member when matters relating to munitions are being considered. In the unavoidable absence of members, provision exists for delegates to act for them.

Australian Army Education Service

  1. Is the Australian Army Education Service still in existence?
  2. If so, what is the total staff of this department, and what are the names, ranks, pay and/or allowances, of each member of the staff?
  3. Is it intended to abolish this organization? If so, when?
  1. Yes.
  2. The total war establishment of the Australian Army Education Service provides for 903 personnel, consisting of 210 officers and 753 other ranks. The staff is distributed throughout the whole of the Australian Military Forces in the South-West Pacific Area and Australia, a large proportion of the members of the service being employed overseas. It is not considered practicable in the circumstances for the names, ranks, pay and/or allowances of each member of the service to be furnished in the form of a reply to a question in Parliament, but I shall be pleased to make available in a reasonably abbreviated form any additional information the honorable member may require.
  3. In view of the very great importance attached to the work of the Australian Army Education Service during the period of demobilization, it is not intended to abolish the organization, and it will continue until such time as the Army is demobilized and the need for it no longer exists.

Egg Production

The answer to the honorable member’s question is as follows : -

Contrary to opinion expressed, egg production in Queensland at present is greater than at this time last year by 50 per cent. This indicates substantial increases in flocks.

It is true that the board is experiencing difficulties in maintaining supply of cases to producers for the following reasons: -

1 ) Difficulty in handling increased pro duction owing to labour and space problems.

Strike of ease manufacturers;

Transfer of surplus production to New South Wales for drying at Riverstone, where strike has stopped processing, necessitating cold storage of eggs in cases which cannot be returned until strike settled.

It is a fact that Exhibition Building, Brisbane, is being used as an emergency floor to handle eggs and all cases as emptied are being promptly distributed to producers.

The Queensland Egg Board is doing everything possible to relieve the position under extreme difficulties.

A departmental expert has been sent to Brisbane to assist the State Egg Board in this matter.

Housing : War Housing Trust Hostels

  1. How many hostels have been built under the authority of his department or of the Commonwealth War Housing Trust?
  2. Where are they situated?
  3. What was (a) the estimated cost and (b) the completed cost in each instance?
  4. For whose use was each erected?
  5. Who is using each hostel at the present time ?
  6. If any hostels are not now being used, what is the Government’s intention regarding their future?
  1. Fifteen. 2, 3, 4, 5 and6. See schedule attached.


Cite as: Australia, House of Representatives, Debates, 2 October 1945, viewed 22 October 2017, <>.