House of Representatives
16 April 1958

22nd Parliament · 3rd Session

Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.

page 899




– I desire to ask the Minister for External Affairs a question in relation to a recent analysis presented by a Mr. Bartholomew of the United States. This purported to be a factual account of the operations of bombers of the United States Strategic Air Command when armed with nuclear weapons and said to be engaged in military operations, the purpose of which could be to use nuclear bombs against Soviet Russia. The article described how, through error, the mission was abortive. According to the article, the only reason why the force of, I think, 500 bombers returned to base was because a signal was received. Will the Minister inform the House, or endeavour to find out, whether this is an accurate account, whether it has the authority of the atomic energy authorities in the United States and whether, therefore, it is a fact that the mere chance of receiving a recall signal prevented the dropping of nuclear bombs, as mentioned in the article?

Minister for External Affairs · LP

– Yes, I know of the article to which the right honorable gentleman has referred. I think I can say with truth that I was distressed and even dismayed by the story as it was published. I have no official information about this matter. There may be information in my department; if so, I will discover it, but I have not seen any official information about it. f do believe that there was a denial by the relevant official American source of some of the salient points alleged in the account. As I say, I was alarmed and dismayed by the report, and I just cannot bring myself to believe that the situation is anything like it is purported to be by the writer of the article. However, I will see whether we have any information of significance on the matter, and, if so, I will inform the right honorable gentleman.

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– My question, which is directed to the Minister for Health, refers to the anti-poliomyelitis campaign in this country. Has sufficient emphasis been given during the anti-poliomyelitis campaign to the need for adults to offer themselves for immunization, and have arrangements been made to deal with them? Will the department help in publicizing the necessity for a certain adult group to make use of the services available in order to increase the percentage of immunized adults in the community? Does the Minister not consider that the success achieved in spreading protection amongst children has led to a feeling of “ no urgency “ amongst a certain adult group?


– I think that there has been a fair amount of publicity about the necessity for the immunization of adults against poliomyelitis. In fact, in several States an adult immunization campaign has already started. The results have not been uniform. In Western Australia, South Australia, Tasmania and the Australian Capital Territory the response has been quite good; in Victoria it has been disappointing. New South Wales and Queensland are, I understand, about to commence their adult immunization campaigns.

I shall examine the matter raised by the honorable gentleman to see whether anything further can be done to impress on people generally the necessity for immunization against poliomyelitis of adults up to the age of about 40 years, because it is certainly the view of the Department of Health that this should be done. We might easily be lulled into a sense of false security if we had an extensive campaign for the immunization of children but did not follow it up with one for the immunization of adult groups up to the age of about 40. I point out to the honorable gentleman that I myself have, both in the House and through the press and radio services, made it plain on several occasions that this was the Government’s view. I am sure that the State authorities are doing their best to cooperate in promulgating this message to the people of the various States.

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– Is the Treasurer aware of the financial burdens placed on sporting bodies in the raising of the requisite funds to send Australian athletes to the Empire Games, which are to be held in Wales this year? I ask the right honorable gentleman to give favorable consideration to making a substantial grant in order to enable our chosen representatives to participate in the forthcoming games, as these young men and women are worthy representatives of this nation. Also, in view of the fact that the New Zealand Government and governments of other Commonwealth countries have assisted their teams in the manner that I propose, will the Treasurer make an early announcement which will hearten Australia’s sporting bodies, and thus assure full representation of our selected athletes at the Cardiff games?


– The honorable gentleman’s question is a bit belated. We have already donated £5,000 for this purpose.

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– My question to the Minister for Air arises from a statement made recently by the Commander-in-Chief of the Royal Air Force in the Far East when he was visiting Australia. Can the Minister inform the House when the new Australian squadrons are likely to go to Malaya?

Minister for Air · EVANS, NEW SOUTH WALES · LP

– I can give the honorable gentleman the information he seeks. The first bomber squadron - the Canberra squadron - to go to Butterworth will be operating at Butterworth on 1st July this year. The first of the two Sabre squadrons will be operating at Butterworth by 1st December this year, and the second Sabre squadron by 1st February next year. The first elements of the base squadron are already on their way, and the radar unit which is to go to Malaya will be there in September of this year.

The honorable gentleman has referred to the remarks of the Commander-in-Chief of the Far Eastern Air Force about our Sabre aircraft. The Commander-in-Chief said that he needed them and that he looked forward very much to their arrival. He expressed his admiration for their capabilities. This draws attention strikingly to an attitude which, I am sure, many honorable members will agree is much too prevalent in this country - the tendency to denigrate our own equipment and our own products.

But a distinguished air force authority of the Royal Air Force has come to Australia and told us the truth about these aircraft - a truth which has been very frequently expressed in the past by the Minister for Defence, by my predecessors as Minister for Air, and by many others. Yet we have listened to nothing but constant criticism - mistaken and ill-informed criticism - about these aircraft. I am sure that it will be of great satisfaction to the personnel of the fighter squadrons of the Royal Australian Air Force to hear from a high authority from abroad confirmation of the value of their aircraft and of their work.

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– Can the Minister for Social Services say whether the agreement which was entered into between the United Kingdom Government and the Austraiian Government to make residence in England a qualification for age pensions and other pensions in Australia, came into effect on the first of this month, as was stated would be the case? What is the position as to the granting of these pensions which are governed by legislation? Is it the intention of the Government to bring down legislation in the near future to ratify this agreement in the ordinary way by amending the Social Services Act?

Minister for Social Services · RIVERINA, NEW SOUTH WALES · CP

– There has been a reciprocal agreement between Australia and the United Kingdom on social services for some considerable time. That agreement was based on the qualification in the United Kingdom for social service benefits in that country being a qualification for social service benefits in this country. After some years of operation, certain weaknesses in the agreement were manifest and it was the Government’s intention, together with the Government of the United Kingdom, to correct those faults and frailties. Finally, an agreement was entered into which provided that residence in one country should be accepted for social service purposes as residence in the other country. That agreement was signed by the Prime Minister of Australia and the Prime Minister of the United Kingdom. As soon as regulations are prepared, and are approved by this House, the agreement will operate retrospectively from 1st April.

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– Will the Minister for Health state what success has been attained in the tick eradication campaign in northern New South Wales? Has there been any evidence of new infestation appearing both inside and outside the area which was placed under the eradication scheme? Do the very unlikely points at which fresh infestations have been found - some in areas which have never had ticks before - suggest that there has been some organized sabotage to make the scheme break down? If there is evidence or even suspicion of such sabotage, will the Commonwealth Government and the Government of New South Wales offer substantial reward for evidence which would prove complicity in such sabotage, in view of the far-reaching effects on the whole of the cattle industry of the spread of ticks into southern New South Wales?


– As the right honorable member knows, the tick eradication programme has been going on for a good many years and was making a certain amount of progress, in that areas were being progressively freed from tick infestation. Recently two things have occurred. In two areas we have had very disappointing results with ticks that were resistant not only to arsenic dips, but also to D.D.T. dipping. In addition to that, quite recently ticks have been discovered in a third area which for eighteen years had been a clean area in which no ticks had been discovered. It is very difficult to know how these ticks came to be there. The question of sabotage does, I think, arise, and I will take an opportunity of discussing this with the authorities in New South Wales to see what steps can be taken to investigate it and, if necessary, to follow up the investigation.

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– In view of the extreme difficulty encountered by local government authorities in raising essential loan requirements, even after they have been approved bv the Australian Loan Council, will the Treasurer consider allowing taxation concessions on interest received from such loans?


– There is no novelty about that question. The matter has been before the Loan Council time and time again, and the request has been rejected for very obvious reasons.

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– I ask the Minister for Health whether he can give the House any information about the progress of cancer research in Australia. Will the Minister give some consideration to the formation of a national body, comparable to the Australian Road Safety Council, for the reduction or, at least, the alleviation of this scourge of Australian health?


– The chief authority that advises the Commonwealth Government on questions of medical research is the National Health and Medical Research Council. We are guided by the advice that we receive from that body. Quite a large amount of research goes on in Australia into cell metabolism and cell reactions generally. It is probably in this sphere of cell growth and physiology that answers may be found to the problem of tumour growth. In addition, we have available in this country the results of very extensive research abroad. If the National Health and Medical Research Council were of the opinion that the Commonwealth should set up additional special research facilities, I have no doubt that it would advise us accordingly, but, so far, it has not considered that the resources of Australia are such as to justify this very extensive research nor, in fact, that the limitations on our obtaining knowledge from abroad are such as to necessitate it.

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– Can the Minister representing the Minister for Civil Aviation inform the House when the new airstrip, which is now under construction at Darwin aerodrome, will be completed? Is there likely to be a delay in the inauguration of a jet service by the British Overseas Airways Corporation and Qantas Empire Airways Limited to overseas airports, pending the completion of the strip?


– As the airstrip at Darwin is being built by the Airfield Construction Squadron of the Royal Australian Air Force it may be simplest if I answer the honorable member’s question. The first section of the new airstrip at Darwin should be open before the end of this year. I say “ should “ because a number of technicaldifficulties have been encountered in the construction of this airstrip and it is difficult to be precise about dates of completion. The first section of the strip will be 8,000 feet long and will be capable of meeting any civil aviation requirements that are likely to arise while the strip is confined to thai length. I cannot give the honorable member a precise date for the completion of the whole strip, which eventually will reach a length of 11,000 feet with over-runs of 1,000 feet at either end, but it should be completed within a year after the completion of the first section. It should be well within the programme of the Civil Aviation Department for the operation of jet aircraft.

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– In view of many conflicting reports that have been circulated, can the Prime Minister indicate whether the Government is reconsidering the previously announced decision in relation to the requirements of Ansett-Australian National Airways and Trans-Australia Airlines for Caravelle and Lockheed Electra aircraft?

Prime Minister · KOOYONG, VICTORIA · LP

– I understand from my colleague, the Minister for Civil Aviation, who is in another place, that he has had some oral communication-

Mr Ward:

– Horrible?


– Oral.

Mr Ward:

– I thought you said horrible.


– You naturally would. Everything that to me is oral is to you horrible. The Minister has had some oral communication with the head of the AnsettAustralian National Airways organization. Beyond that I can say nothing, except that I know that my colleague is awaiting some written submission and, after considering that submission, no doubt will take the matter up with me.

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– I ask the PostmasterGeneral: Will he consider connecting Queanbeyan telephone subscribers to the Canberra automatic exchange? This request is being put forward officially by the municipality of Queanbeyan. I ask the

Minister, when considering the request, to have regard to the fact that Queanbeyan and Canberra are now growing in parallel so rapidly as to be developing into almost one populated area. There are now nearly 8,000 people in Queanbeyan, which has a. growing commercial community. I hope the Minister will examine the question from the viewpoint that Queanbeyan residents require the most modern telephonic communication system.

Postmaster-General · DAWSON, QUEENSLAND · CP

– The question posed by the honorable member for Eden-Monaro raises a number of problems that are common to many areas throughout Australia. The department must have a common policy for dealing with such problems. The problem of the extension of unit fee areas is receiving the attention of the Postal Department at the present time. Any proposal put forward by the honorable member for Eden-Monaro will be considered in relation to the overall position. When I have anything further to tell the honorable member on this matter, I shall let him know.

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– My question, which is addressed to the Minister for Primary Industry, has reference to recent auction sales of tobacco. Is the Minister satisfied that prices so far realized have been satisfactory to producers and will constitute an incentive to further development? Is he also satisfied with the methods adopted at these sales for obtaining the best prices for tobacco-growers? By way of explanation, let me say that I understand that sales of the 1958 crop are now well advanced, and that the prices so far obtained could give a reliable guide to the average price for the whole crop. I also understand that buyers are now operating in sufficient numbers to provide keen competition for tobacco products.

Minister for Primary Industry · LOWE, NEW SOUTH WALES · LP

– There has been an excellent clearance of the North Queensland crop, which amounted to something like 980 tons. I think that there has been a 97 per cent, clearance and that the average price has been about 138d. per lb. This price should be an incentive to increase production in the future. I will not say that the present system represents the best selling method, but, as one who has worked consistently on this problem for two years, I can say that it is the best that can be achieved in the present circumstances. I think the honorable member will know that I am speaking only of the North Queensland crop, and not of the sales in South Queensland, Victoria or Western Australia. I hope that reasonably satisfactory prices will also be obtained at those sales.

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– I ask the Prime Minister whether it is a fact that a Victorian court recently awarded a Dutch immigrant £23,000 damages against the Commonwealth for shocking injuries sustained from contact with radio-active material. Is it a fact that the presiding judge took special pains to ensure that the jury was fully aware of the shocking nature of the injuries?

Mr Menzies:

– I rise to order. I understand that this matter is now under appeal, and is therefore sub judice.

Mr Pollard:

– I wanted to ascertain whether it was.


-Order! The matter is before a court. The question is therefore out of order.

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– I direct a question to the Minister for Primary Industry. In view of the chaotic condition of the market for butter and cheese in the United Kingdom, and the disastrous prices being received for Australia’s export dairy products, will the Minister consider promoting a conference between representatives of all the countries exporting dairy products to the United Kingdom and European markets, in order to obtain an agreement to regulate the quantities of these products supplied to those markets?


– Already, representatives of the Australian Dairy Produce Board, and the New Zealand Dairy Products Marketing Commission have met with the representatives of some other countries concerned in an attempt to resolve the problem of the regulation of supplies of dairy products on the United Kingdom market, but the problem has proved difficult of solution because of storage difficulties and the fact that non-traditional suppliers are now selling their butter on the United Kingdom market. The Australian Dairy Produce Board has recently arranged for its representatives and representatives of the New Zealand commission to meet in Sydney this month in order to discuss the problem further, and 1 shall be able to submit to the chairman of the Australian board that the problem posed by the honorable member be considered.

I might mention, too, that representatives of ten primary producers’ organizations from different countries have recently met and formulated proposals for rehabilitating the dairying industry in their own countries. They have put forward what I regard as constructive proposals, particularly in the light of the continuing increase in the sale of margarine in Continental countries. Those proposals will be considered by the Organization for European Economic Co-operation, I think to-day. I shall be able to inform the honorable gentleman more about the problem within the next couple of weeks, and I shall be happy to give him all the available information.

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– I address my question to the Minister for the Interior. On occasions, over the last couple of years, the Minister has mentioned that he has been considering alterations1 to the provisions of the Electoral Act. First, I am particularly interested in the provisions for postal voting with respect to people whose religious convictions prevent them from voting during the normal hours on polling day. That was one respect in which the Minister promised, on an earlier occasion, to consider whether the act could be amended. Secondly, has the Minister given any thought to trying to eliminate the possibility of such a large proportion of informal votes in Senate elections by showing the names of the parties against the names of the candidates, and by improving voting facilities, particularly in industrial areas, where large numbers of voters cause congestion at booths, at which the lighting is often poor and conditions generally bad? Will the Minister consider these matters and have them attended to before the next federal elections?

Minister for the Interior · PATERSON, NEW SOUTH WALES · LP

– I may tell the honorable gentleman something of which I am sure he is already aware: Very great difficulties are involved in the problem of Senate voting in particular, and one or two other matters have their own peculiar difficulties. The postal voting matter that the honorable member has mentioned is still under consideration.

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– I direct to the Minister for Primary Industry a question concerning the home consumption of dairy products. I preface my question by pointing out how alarmed the dairying industry is at the decline of butter prices, particularly on the United Kingdom market - a decline which, on a percentage basis, is equivalent to the worst fall in prices that occurred during the depression years, and which forces us to depend more on the home consumption price for our dairy products. I am aware that, in Victoria, there is a Dairy Industry Bureau, which is undertaking a sales promotion campaign in that State. Similarly, in New South Wales, there is the Dairy Produce Sales Committee, which has been directing its activities towards increasing the consumption of butter and cheese in that State. I ask the Minister: What are the prospects of establishing, with Commonwealth help, an organization to promote the sale of all dairy products on a national basis in order to increase the use of these products in Australia?


– I am sure the Government would agree with the suggestion of the honorable gentleman from Richmond that we must do all in our power to increase the consumption of butter in Australia. I might mention that already the Australian Agricultural Council has put an embargo on the increased production of table margarine, so that there cannot be a substitution of table margarine consumption for butter consumption. As to the extension of promotion and research services, recently the Dairy Industry Council submitted proposals to me, which were in turn submitted to the Australian Agricultural Council. I am still awaiting replies from some of the council members. I hope the outstanding replies will not be unduly delayed and certainly not on technical grounds. The proposals have not been considered by the Government. If those proposals are agreed to, it will mean that moneys will be available, not only for research but also for promotion activity. Might I say to the honorable gentleman - although this is not involved in the question - that there is no danger for the present of the interim return to producers of 41d. per lb. for commercial butter being reduced.

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– Is the Prime Minister aware that, when he visits the Hughes electorate next Friday for the opening of the Lucas Heights atomic reactor project, he will be close to Kurnell, the landing place of Captain Cook and the birthplace of Australia? Will the right honorable gentleman consider including in his itinerary a visit to Kurnell to see for himself the apparent need for a substantial Commonwealth grant to assist in the preservation and development of this historic place, which has suffered considerable neglect? Despite the failure of any Commonwealth government, including this Government, to so assist, I assure the Prime Minister of a cordial and safe reception if he accepts my invitation.


– I am very grateful to the honorable member for his invitation, and I will give thought to it.

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– I direct a question to the Minister for Health concerning the stock disease known as blue tongue. Can the Minister give the House the reasons why it recently became necessary to ban imports of all stock into this country? Why do these reasons suddenly arise now, rather than four or five years ago? Is the ban likely to be permanent? Has Australia any research officers examining this disease in South Africa or the United States, the two countries with the most experience of the disease? Is there any indication of what will be the long-term effects on the beef industry if this ban, for necessary reasons, remains permanent?


– For quite a considerable time there have been restrictions on the importation into Australia of ruminant animals from a great number of countries, including the United States. This ban has been extended recently because the disease has now appeared in other countries, notably countries in Europe, in which it was previously unknown.

Mr Buchanan:

– Is there any in England?


– There is none in England at the present time. I would not like to say whether or not the ban will be permanent. In my personal view, this depends on measures being discovered, either of a preventive or a curative nature, for the disease. I do not think that there are any Australian research officers abroad at present, but we are very well informed about the pathology of this disease which, of course, is the same in all countries and wherever it occurs. The question of the long-term effects on the beef industry has been considered and while, perhaps, there may be some difficulties in this regard, there can be no doubt whatever about the shortterm effects on the sheep industry and the wool industry if the disease were introduced into Australia.

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– Is the Minister for Primary Industry aware that 1,500 sheep were recently shipped from Australia to Israel for the specific purpose of establishing a wool industry in that country? Does this contravene the ban placed on the export of sheep from this country? As the honorable gentleman is aware, the reason for the ban is to prevent the establishment of industries that would be rivals to the Australian wool industry, which represents twothirds of our export trade, and which is the backbone of our national economy. Will the Minister explain why these sheep were permitted to leave Australia?


– The ban on the export of sheep applies only to merino sheep. It does not apply to certain other types. The 1,500 sheep exported were not merinos. They were a different kind of sheep such as Romney Marsh and Corriedale. It is not thought that their export would in any way prejudice the future of the Australian merino wool industry.

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– I ask the Minister for Primary Industry a question without notice. I refer to the announcement by the Government of a reduction of 5s. a ton as from 1st January, and 2s. 6d. as from 1st March, on the freight on wheat brought from Western Australia and South Australia to the eastern States. I also refer to the announcement that £500,000 has been given to New South Wales. Can the Minister inform me, or has he been advised by the New South Wales Government, how these benefits are being passed on to the farmers who use stock feed wheat?


– I do not think the reduction in freights agreed to by the Australian Shipping Board has been passed on to the buyers of stock feed in New South Wales. As to the £500,000 that was specially allotted because New South Wales was one of the two States most severely hit by drought, I have not received any direct information from the New South Wales Government. I did read a report in one of the newspapers as to the allocation by New South Wales of the total funds made available by the Commonwealth. As I understand the position, none of the money was made available to the poultry industry of New South Wales.

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– I ask the Minister for the Navy: Have some vessels of the Royal Australian Navy been declared surplus? If they have, will the Minister inform the House to what countries those vessels have been made available? Will he also state why the vessels were declared surplus?


– I speak from memory when I say that, some little time ago, four small ships were made available for disposal by sale or otherwise because they had become obsolete and were of no further value to the Navy. They were stripped of all equipment which could be of any value, and were offered for sale. I am not sure of the destination of all of them, but I know that some of these vessels were purchased by Japan.

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– May I make my annual request to the Treasurer for the removal of sales tax from ice cream, which is a recognized food and is of great benefit to the health of consumers - it is even prescribed by certain doctors and hospitals? I point out that there can be no justification for classing ice cream as a luxury in the same way as chocolates are classed. Why is it that ice cream is the only dairy product to carry this burden, when the removal of the tax would be a great stimulus to an industry that at present is feeling the adverse effects of heavy costs and falling prices?


– In reply to the honorable member’s annual question, as he himself described it, the matter is obviously one that receives annual consideration, as do many other requests for taxation exemptions, alleviations or reductions. It will be considered in due course.

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– By way of supplementary question I desire to ask the Minister for the Navy whether he will make sure of the particulars of his answer regarding the sale of naval vessels to Japan and other countries. I ask the Minister to make certain that only four such vessels have been sold in this way. Will the Minister indicate what price was paid to the Government for each of the vessels sold?


– The number I quoted - four - is correct. As I have said, the vessels had been stripped of all equipment. They were not in steaming condition when they were sold. I believe they had to be towed away. I do not think there is any other information to be given on the matter.

Dr Evatt:

– Was any money received?


– The ships were paid for, but I have not the price for the information of the right honorable gentleman.

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– Has the Minister for External Affairs become acquainted with Robert Guillain’s book “The Blue Ants” dealing with Communist China? As the author, with his factual descriptions, succeeds in presenting a challenging case to socialists and left-wing thinkers that Chinese communism is basically just as ruthless and dictatorial as its Russian counterpart, will the right honorable gentleman endorse those views and give them wide publicity, particularly among our Asian neighbours?


– The book “The Blue Ants “ is among a considerable number of others on my table at this moment. I do not know very much about it except that

I believe the author is well spoken of. I will certainly move the book from the middle or the bottom of the pile to the top, and will read it in the course of the next week. I shall certainly give consideration to the honorable member’s request.

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– I wish to direct a question to the Minister for the Navy supplementary to that asked by the honorable member for Bass. Was the cruiser “ Hobart “ among the ships that were sold, as has been stated in print?


– The answer is “ No “.

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– Is the

Postmaster-General aware that in six months’ time Canada will have a coasttocoast network of 139 towers which will give complete communications for teletype, telephoto, telemetering, telephone and television circuits? Why do we not adopt the same system of microwave for giving television to country areas and effecting an overall improvement in our communications system, or is this the reason why tenders were recently called by the PostmasterGeneral’s Department for 79 steel towers? In view of the Canadian action, why was the department’s reply to my previous question on this matter so negative? The department did not know whether the microwave method would be either desirable or necessary.


– I am aware of the development that has taken place in Canada in the provision of television services. An officer of the Australian Broadcasting Control Board recently visited Canada and has brought back a considerable amount of information as to the practices which are being followed in that country. The honorable gentleman has asked why the microwave system should not be adopted in Australia for the transmission of television to country areas. There are no engineering or technical problems, because officers of the Postmaster-General’s Department and officials and engineers of the Australian Broadcasting Commission have all the information and all the technical know-how to enable the system to be introduced when the Government has decided that we shall proceed with the next phase of television distribution in Australia. As I stated recently, the Government is planning for the orderly development of television throughout Australia. The next phase of that development will be to extend television to country areas. When that phase develops, the use of microwave or coaxial cable, or the other booster systems which are available, and which are well known in the department, will be adopted for that purpose. As to the steel towers to which the honorable gentleman referred, as I have pointed out before, the microwave systems are being developed not only for the purposes of television - and this also applies to coaxial cable developments - but also for telecommunications, for which they are of greater value, and will be used for that purpose as well as in the development of television.

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Motion (by Dr. Evatt) agreed to -

That leave of absence for one month be given to the honorable member for Hunter (Mr. James) and the honorable member for Newcastle (Mr. Watkins) on the ground of ill health.

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Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message):

Motion (by Sir Arthur Fadden) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant financial assistance to the State of Western Australia in relation to the development of the northern part of that State.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Sir Arthur Fadden and Mr. Downer do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Sir Arthur Fadden, and read a first time.

Second Reading

McPhersonTreasurer · CP

– I move -

That the bill be now read a second time.

The purpose of this bill is to give effect to a Government decision which was announced to the House by the Prime Minister (Mr. Menzies) in November last. On that occasion the Prime Minister informed the House that during the present session the Government proposed to introduce legislation to authorize making available to the Government of Western Australia over the next five years a total grant of £2,500,000 to assist in promoting the development of the area of that State north of the twentieth parallel of latitude.

In considering this matter, the Government had before it the views of the State Government, an all-party delegation from the Western Australian Parliament and of Western Australian members and senators in this Parliament. These representations drew attention to the special difficulties involved in the development of the northern area of Western Australia, and in particular to the financial problems involved for the State Government. The Commonwealth Government concluded that the development of the area presented special financial problems for the State Government and that, if this development were to proceed at a faster rate, some direct Commonwealth assistance was necessary. We therefore decided that the Commonwealth should provide special financial assistance to the State for the purpose, and the bill now before the House embodies proposals to that end.

The bill provides for the making of payments to the State by the Commonwealth, not exceeding in the aggregate £2,500,000, in respect of expenditure by the State during the period of five years commencing 1st July, 1958, in relation to approved developmental projects. The timing of individual payments will be determined by tha Treasurer on the basis of certificates by the State Auditor-General as to expenditure by the State in connexion with approved projects. Approved developmental projects for the purposes of the scheme as defined in the bill are projects, submitted by the State to the Commonwealth, which the Treasurer is satisfied will contribute to the development of the northern area of Western Australia, and could not reasonably be expected to be carried out during the five-year period without the grant of special financial assistance by the Commonwealth.

These provisions are’ designed to give effect to the principle, which was explained by the Prime Minister in his statement of last November and which is regarded by the Commonwealth Government as being of fundamental importance, that prime responsibility for the development of the area should continue to rest with the State Government, lt will still be the State’s function to attend to the planning and execution of developmental projects in the area. The Commonwealth’s role will be restricted to ensuring that the assistance provided under the scheme results in new and additional development and not merely in a substitution of Commonwealth for State expenditure on projects which the State would have undertaken in the normal course of events.

In the belief that the proposals in the bill will do much to promote the development of a remote area of Australia the development of which gives rise to problems of a special and peculiar kind, I commend the bill to the House.

Debate (on motion by Mr. Webb) adjourned.

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Motion (by Mr. Davidson) - by leave - agreed to -

That leave be given to bring in a bill for an act to amend the Broadcasting and Television Act 1942-1956.

Bill presented, and read a first time.

Second Reading

PostmasterGeneral · Dawson · CP

– by leave - I move -

That the bill be now read a second time.

This bill deals with amendments to the Broadcasting and Television Act 1942-1956 and aims to clarify certain features of that legislation and to bring some of its provisions into line with those already incorporated in other acts. The bill is, therefore, almost wholly of a machinery nature.

The initial group of alterations relates to the commissioners of the Australian Broadcasting Commission and the members of the Australian Broadcasting Control Board. Clause 2 provides for the insertion in section 4 of the act of a definition of an “ Acting Commissioner “. The term “ Acting Commissioner “ now appears in section 37 of the act but is not mentioned in other sections, namely 34 (2) and 35, where provision is made for the appointment by the Governor-General of a person in an acting capacity.

Clause 3 relates to the vacation of office by members of the Australian Broadcasting Control Board. Insofar as it relates to the reasons for vacating office no change is contemplated. The purpose of the clause is to provide for a procedure under which the Governor-General, in specific circumstances, may declare by notice in the “ Gazette “ that an office is vacant, and that thereupon the office shall be deemed to be vacant. This practice is already observed in regard to the Australian Coastal Shipping Commission, for example, and it is necessary to avoid any legal doubts as to vacancies.

Clause 3 also provides that the resignation of a member of the board shall not be effective until it has been accepted by the Governor-General.

At this stage, Mr. Speaker, I should add that appropriate amendments similar in principle to those proposed in clause 3 in regard to the Australian Broadcasting Control Board are proposed for the Australian Broadcasting Commission, which operates entirely on a part-time basis and would be covered by new sections 37 and 38 of the act. In addition, under clause 7, the proposed new section 38 provides for the notification by a commissioner of any interest he may have in a contract made or proposed to be made by the commission, and for his exclusion from any deliberation or decision of the commission with respect to that contract.

The desirability of effecting these amendments is, in the Government’s view, quite clear. It is to the benefit of the community that the position of members of statutory bodies should be precisely defined. The amendments proposed by the bill are also designed to bring the Broadcasting and Television Act in conformity with current practice in regard to other statutory authorities.

Clauses 4 and 6 contemplate amendments to sections 16 and 28 of the act, which are closely related and may be dealt with together, as they refer to the functions of the Australian Broadcasting Control Board and the Postmaster-General’s Department in connexion with interference with the transmission or reception of the programmes of broadcasting stations and television stations. Section 134 of the act already empowers the Governor-General to make regulations for the prevention of such interference, and for some years the obligation in the broadcasting field, and subsequent remedial action, were assumed by the Postal Department.

With the establishment of the Australian Broadcasting Control Board in March, 1949, the responsibility for the overall planning of the national broadcasting and television services, the determination of standards and practices for technical equipment, and the operation of services, devolved on that body. Implicit in this responsibility is the planning of the necessary measures for the prevention of interference to reception of broadcasting and television programmes and the supply of advice and assistance to listeners and viewers who are troubled by interference. It is now proposed to amend section 16 of the act, which sets out the powers and functions of the board, to provide a clear charter for the board to discharge these functions relating to interference. At the same time, by the addition of a new section 28a, the power would be given for the Postmaster-General, at the request and expense of the Australian Broadcasting Control Board, to provide any facilities and services that may be required by it to carry out these functions. The amendments are, therefore, intended to clarify the position and also authorize the board to incur the expenditure involved in carrying out this important work.

The amendments to section 46 of the act, proposed in clause 8, are designed to include a provision that where, as part of a general review of the salaries of the whole or part of the service of the Australian Broadcasting Commission, the latter body reclassifies an office which is the only office having the particular designation and classification, it may also have power to give notice preventing such office being declared vacant. As honorable members will appreciate, this is purely a machinery device to eliminate in these special cases executive and other action which normally follows the declaration of an office as vacant. Provisions on the same general lines already appear in the Public Service Act.

Finally, Mr. Speaker, an amendment to section 128 of the act is proposed by clause 9, which involves the replacement of subsection 3 (c). This particular section provides at present that a broadcast listener’s licence, or a television viewer’s licence, may be issued and renewed at reduced fees to a pensioner who lives alone, lives with another pensioner, or lives with any person or persons if the income of each such other person does not exceed the maximum amount of income and pension allowed under the Social Services Consolidation Act or the Repatriation Act.

Amendments made to the Social Services Act in 1956 provide for higher maximum pension payments to pensioners in charge of two or more children than those made to ordinary age, invalid or widowed pensioners. Thus, in existing circumstances, unless the number of children a pensioner may have under his or her charge is known, the maximum pension is not ascertainable in terms of the present legislation. A further alteration is also desirable to subsection 3 (c) of section 128, to cover the recent alteration to the Social Services Act, which excepts a permanently blind person from a reduction of age or invalid pension.

The amendment proposed, therefore, includes, as a qualification in regard to a pensioner who lives with another person, a reference to the maximum amount of income and pension such other person may receive, unless that person is a permanently blind person or a person who has the custody, care and control of two or more children. Should the other person receive a greater income than that specified, then the pensioner does not qualify for reduced licence fees under the Broadcasting and Television Act. In addition, it is proposed to omit reference to section 87 of the Repatriation Act, which is unnecessary because the amount of income is fixed with reference to the provisions of the Social Services Act.

Here again, as honorable members will realize, the amendment put forward is a technical one and serves only to clarify the grant of concessions to pensioners without affecting in any way their scope and extent. As I have already pointed out, Mr. Speaker, all the amendments contained in the bill are more or less related to the mechanics of implementation of the existing legislation, and break little new ground. Therefore, I do not consider that it is necessary to elaborate them further, and I commend the bill to the House.

Debate (on motion by Mr. Ward) adjourned.

page 910


Second Reading

Debate resumed from 15th April (vide page 867), on motion by Sir Arthur Fadden -

That the bill be now read a second time.


.- The first comment I want to make in connexion with this important measure is that the Opposition does not oppose it in any way. I also want to take this opportunity to make it perfectly clear at once that the Opposition’s quarrel with the Government is over the inadequacy of the amount to be allocated to the States under the measure.

This is the last of three measures placed before the Parliament, during the current financial year, concerned with the granting of assistance in one form or another to the States. The first was the machinery measure to give effect to the tax reimbursement formula. I shall refer to that measure in detail later. The second measure dealt with a special loan to be made to the States, to which I shall also refer later in detail.

This third measure arises out of the decision of the Australian Loan Council last February that an additional amount of £5,000,000 should be made available to the six States- £4,000,000 to be distributed among the States in accordance with the tax reimbursement formula, and £1,000,000 as a special grant to New South Wales and Queensland. I wish to state at once that the Opposition believes that the amounts to be made available as a result of that decision of the Australian Loan Council are completely inadequate, particularly in view of the fact that the Treasurer (Sir Arthur Fadden) made it perfectly clear at the meeting that the amount so made available was to be used to assist in relieving the serious unemployment that had arisen in every State.

I also want to make it clear that, of the £4,000,000 to be distributed among the States under the tax reimbursement formula, Tasmania’s share will be £142,000. I want to say at once that, so far as this measure is concerned, I intend to be parochial and I hope that no one will have any quarrel with me because I take that attitude. I believe that £142,000 is completely inadequate for Tasmania, if it is to be spent for the purposes suggested by the Treasurer (Sir Arthur Fadden), that is, to relieve the serious unemployment which has arisen not only in that State but also in every other State. Surely, the Treasurer does not suggest that the £142,000 made available to the Government of Tasmania will be sufficient to relieve the serious unemployment that has arisen there, and which I described to the House only a few nights ago. It is certainly higher now than it has been during the last fourteen or fifteen years. It is true that only a few days ago the Minister for Labour and National Service (Mr. Harold Holt) released figures which indicate that there has been a slight reduction in the number of persons in receipt of unemployment benefits throughout the Commonwealth, but I intend to deal with that matter in greater detail in a few moments.

The allocation of £142,000 to the State of Tasmania is completely fantastic. If it is to be used to relieve the unemployment situation, then I ought to make it perfectly clear that this sum might provide 25 additional homes or it might be used to build a further four or five miles of firstclass highway in that State. Surely, it is not expected that such a small amount as £142,000 would do more than provide immediate relief for only a few persons now in receipt of unemployment benefits. But in any case, because of the financial position which prevails in Tasmania at this moment, this sum will have to be used for the purpose of reducing the deficit that has been budgeted for by the State government for this financial year.

Mr Duthie:

– It will not provide employment for one more man.


– As the honorable member points out, it will not relieve the unemployment situation. It must be applied to reduce the deficit in that State which, this financial year, will be £1,000,000. The Commonwealth Government has allocated a further £5,000,000 to the States at a time when the Treasurer has acknowledged that the revenues of the Commonwealth have never been more buoyant. If he is inclined to dispute that assertion, I refer him to his own Budget statement made in this Parliament in 1957. Referring to the Estimates for the financial year 1957-58, he pointed out that revenue from income tax collections would be increased by £71,300,000 in the current financial year. The increase from company taxation would be £6,400,000, customs revenue would swell the Commonwealth income by £11,600,000 and miscellaneous revenue would add a further £34,600,000. It was expected that Post Office revenue would increase by £6,300,000 and that broadcasting and television services would add a further £1,250,000. The total of this revenue increase for the financial year 1957-58 was estimated by the Treasurer at £107,000,000. However, although the national revenue this financial year is expected to increase by that amount, Tasmania is to receive only £142,000 extra under the measure we are now debating. I suggest at once that a comparison of the figures I have just read with the amount made available to the States at the last meeting of the Australian Loan Council indicates the lengths to which this Government is prepared to go to ensure that the States are embarrassed financially.

Yesterday, the honorable member for Stirling (Mr. Webb) referred to the fact that this year every State is budgeting for a deficit. I believe that I am correct in making that statement, but I am open to correction. Tasmania has budgeted for a deficit of £1,000,000. It had to do the same last year and it seems pretty certain that it will be in a similar position in the financial year 1958-59. Yet, at a time when Commonwealth revenues have never been more buoyant the States are finding it extremely difficult to secure finance in any form from this Government.

We all know the procedure followed at meetings of the Australian Loan Council. It was intended to be a body to discuss the financial requirements of the States each financial year; but we know that the Commonwealth Government has long since adopted the attitude that before its representative attends a meeting of the council, it decides the level of expenditure that shall be imposed on the States for the current financial year. It does not matter what arguments are presented to the council by the various State Premiers. I want to make it clear at this point that not all of the Premiers share the politics advocated by members of this Opposition. Some of them share the political views held by the Treasurer and his colleagues. It is well known that before the representatives of the States attend a meeting of the Loan Council, and irrespective of the arguments they may present, the Treasurer has already determined the amount that will be made available to them under council arrangements.

Mr Duthie:

– The States can take it or leave it.


– The honorable member for Wilmot quite rightly points out that the attitude of the Treasurer, as well as that of those who support him in the Cabinet - and, I have no doubt, that of honorable members generally on the Government side - has always been that the Commonwealth has collected the revenue and the States can either accept or leave what it gives them. That is the procedure that has prevailed, and I wish to make an emphatic protest against it. I strongly suggest that a new system should be substituted for that under which the council, in spite of the buoyancy of Commonwealth revenue, can decide that £5,000,000 is sufficient to relieve all the States of their problems, irrespective of the level of unemployment which exists at the moment.

The inadequacy of the revenue made available to the States has rendered impossible the erection of more public utilities, such as hospitals and schools, or the provision of further transport facilities. During the period that this Government has been in office finance for these purposes has been reduced in every State. I need only to point to the position of hospitals to indicate that in recent years there has been no extension of medical services because of the limited number of new hospitals, either public or private, which have been erected throughout Australia. I need only refer to the figures provided by the Minister for Labour and National Service at the last Premiers conference to indicate what has been done by way of extensions to hospitals. There has been very little increase in the amount of revenue made available to the States in recent years compared with the tremendous increase that has taken place in costs. During that time the cost of making extensions to hospitals or of building new hospitals has increased tremendously. Undoubtedly, the higher cost of building has had a detrimental effect on the hospital building programmes of the various States. This matter has been referred to at the Premiers conference by the Premiers themselves. I suggest that honorable members secure the record of the evidence made available at the various conferences of Premiers. They will then see the arguments that have been submitted by the Premiers in respect of these matters. AH the Premiers have referred to the fact that they have had insufficient finance in the first instance to provide additions to schools as well as to build new schools and, secondly, to provide urgently required hospital extensions and amenities.

I want to refer again to the fact that the Treasurer made it perfectly clear to the Australian Loan Council that the sum of £4,000,000 which would be made available under the tax reimbursement formula was for the specific purpose of relieving areas which had been seriously affected by unemployment. He also referred in detail to the fact that he hoped that some of the money would be made available for the purpose of assisting the home-building programme. Surely the Treasurer does not believe that the small amount which is being made available to Tasmania will be sufficient to relieve the serious unemployment situation which exists in that State at this moment!

Yesterday, the honorable member for Corangamite (Mr. Mackinnon) suggested that, after all, unemployment in Australia was not very serious because it was less than 2 per cent, of the total work force. He compared that figure with unemployment in the United States of America and the United Kingdom, which amounted to approximately 10 per cent, of the work forces in those countries. Of course, that was an important point, but the honorable member for Corangamite did not carry the matter further. He did not stress that we should ensure that unemployment in Australia does not increase to the extent that it has reached in the United States of America and the United Kingdom. After all. there must have been a period in the United States of America and in the United Kingdom when the unemployed represented less than 2 per cent, of the work force, and although the unemployed number less than 2 per cent, of the work force in this country at the moment, if present policies are pursued by this Government, the figure could easily be 10 per cent., as it is in the United Kingdom and the United States of America.

In order to illustrate what I mean, let me refer to the unemployment figures. In June, 1955, only 2,679 persons were registered with the various offices of the Department of Labour and National Service as unemployed and as in receipt of unemployment benefit. By June of 1956, the figure had risen to 7,000. By June of 1957, the number was approximately 18,000. By February, 1958, it had increased to 29,856. So, there has been a substantial increase in every year in the number of persons in receipt of unemployment benefit in this country. I have referred only to those who are registered as unemployed and are in receipt of unemployment benefits. We know that there are, at this moment, about 60,000 persons registered with the department who, because of the vicious means test, are not in receipt of that benefit.

The point that I want to make and which I believe to be extremely important is that there has been a substantial increase, in recent years, in the number of unemployed in this country. Although they may represent only 2 per cent, of the work force to-day, in my opinion, they could quite conceivably represent 10 per cent, of the total work force in a few years’ time if this Government is not prepared to accept its responsibility in that respect. It is not sufficient for the Government to argue that, because the unemployed in the United Kingdom number 10 per cent, of the work force, it is quite satisfactory for them to number 2 per cent, of the work force in this country. That is not the correct attitude for the Government to adopt. If there are 70,000 persons unemployed in Australia, the Government’s policy should be directed towards relieving that serious situation. I return to this point to indicate that £5,000,000 will do nothing to relieve the serious unemployment that exists in Australia.

Of course, it can be said, in fairness to the Government, that the Australian Loan Council agreed that local government instrumentalities should be permitted to raise an additional £3,000,000 in order to assist with their public works programme. But the Treasurer knows perfectly well that it is not possible for those instrumentalities to raise £3,000,000. From time to time, since I have been a member of the Federal Parliament, I have received representations from various municipalities, not only in my own electorate but in other electorates in the State of Tasmania, requesting me to intercede on their behalf to secure additional funds for the purpose to which the Treasurer referred at the meeting of the Loan Council. It has not been possible for State instrumentalities to raise more money on the loan market nor has it been possible for them to secure money through the private banks or the Commonwealth Bank of Australia.

So, although the Treasurer has said to the States, “ Local government authorities may raise an additional £3,000,000 “, he knows perfectly well that most of them are not in a position to raise that additional finance. He knows perfectly well that the Commonwealth Government has dealt a staggering blow, during its period of office, at the loan market. He knows that, because of the manipulation of interest rales, people have lost confidence in the loan market. He knows perfectly well that in recent months loans floated by semi-governmental instrumentalities and, to a certain extent, by this Government have been under-subscribed.

Sir Arthur Fadden:

– They have been over-subscribed.


– Some of them have been over-subscribed. But the honorable member for Stirling (Mr. Webb) has indicated in this debate that, in recent months, loans have been under-subscribed in Western Australia at least. The loans which arc at present being floated by semi-governmental instrumentalities are not being filled so they are having to abandon the loan market. The Treasurer knows the reason for that. He knows that interest rates have soared to such an extent that people in this country have lost confidence in the loan market. It is all very well for the Treasurer to say to the States, “ You have the opportunity of raising an additional £3,000,000 for semigovernmental instrumentalities and that will assist their programmes “. I agree that it was i good suggestion. There are many semigovernmental instrumentalities in Tasmania which need to raise additional funds to undertake essential works, but the Treasurerknows perfectly well that they are not in a position to secure the funds.

Again, even if the Government, because of its manipulation of interest rates, had not dealt a staggering blow at the loan market, the Treasurer knows perfectly well that he has applied severe credit restrictions. So, when the semi-governmental instrumentalities approach the Commonwealth. Bank or, for that matter, the private banks, they are told that, because of the restriction of credit, funds cannot be made available. The Treasurer knows that to be true because he has received representations through me to the Commonwealth Bank asking that loans be made available to semi-governmental instrumentalities.

I pass now to the matter of the special grant to which the Treasurer referred in his second-reading speech, and I shall refer to the amounts made available to the three claimant States. Western Australia, South Australia, and Tasmania, by the Commonwealth Grants Commission. Before the Grants Commission carried out its annual investigation of the affairs of the States, it received a submission from South Australia asking that £5,300,000 be made available to that State for the 1957-58 financial year, for reasons specified in the submission. Western Australia asked for £12,500,000 and Tasmania for £5,500,000. It is interesting to consider the amounts that were actually made available to those States on the recommendation of the Grants Commission. South Australia received £5,700,000. which is £400,000 more than the amount requested. Western Australia, which had asked for £12,500,000, received only £10,200,000. Tasmania received £3,600,000, having asked for £5,500,000.

Tasmania was penalized by the Grants Commission because it spent more than any other State on, first, education; secondly, health, hospitals and charities; and thirdly, law, order and public safety. The net expenditure per capita on education was 222s. 2d. in the case of Tasmania, the State with the next highest expenditure being New South Wales, the figure in that case being 193s. 8d. On health, hospitals and charities Tasmania spent - again on a per capita basis - 158s. 6d. The State with the next highest expenditure in this direction was Western Australia, the per capita expenditure in that case being 152s. 3d. On law, order and public safety Tasmania spent 60s. 5d. per capita. The next highest figure was 57s. 4d., for Queensland. These figures have been supplied by the Commonwealth Grants Commission and, can, therefore, be accepted as factual.

The point I make is that although Tasmania asked for £5,500,000, the Grants Commission recommended only £3,600,000, which amount was approved by this Parliament. The amount requested had been reduced by the commission because of alleged overspending on the social services to which I have referred. The position is, therefore, that Tasmania has been granted, under the tax reimbursement formula, only £142,000 of the additional £5,000,000 that will be made available to the States, and it has also been penalized because the Grants Commission considered that it had spent more money than necessary on education, health and other services.

In the short time that is left to me, I wish to refer to the request that has been made by the honorable member for Wilmot (Mr. Duthie), by myself and by the Premier of Tasmania for a special loan to that State to assist in the provision of some of the services to which I have referred. When the honorable member for Wilmot asked a question on the subject in this House a few weeks ago, the Treasurer said that he was not prepared to condone a usurpation of the authority of the Premier, and that he considered it was the Premier’s prerogative to make such a request. The fact is, however, that the Premier did make the request. The suggestion originated in the Upper House of the Tasmanian Parliament, and that House is controlled by a nonLabour party. The request was made for an additional £1,000,000 to be made available to Tasmania. The honorable member for Wilmot supported the State’s request, and 1 also supported it. The Treasurer, however, suggested that in making such a request we had usurped the authority of the Premier of Tasmania.

There is a pressing need for this loan to be made available to Tasmania, and it can be made available on the same basis as amounts have been made available to Western Australia. I point out to the House that in the last 40 years Tasmania has expended, from loan moneys and special grants, £81.000,000 on hydroelectric undertakings. During the last six or seven years the Commonwealth Government has provided no less than £81,000,000 for the Snowy Mountains Hydro-Electric Authority, and all of that money has come from taxation revenue and is interest-free. There is the comparison. On the one hand we have the case of Tasmania, providing its own hydro-electric services out of loan funds.

Mr. Lawrence

– Order! The honorable member’s time has expired.


.- Let me direct the attention of the House to the fact that the measure before us is not one dealing with loan moneys at all; it is a bill seeking the approval of this Parliament for the payment of £5,000,000 from the Commonwealth Treasury to the various States. Of that amount, £315,000 is to be allocated to Western Australia. Like every one else, and like Oliver Twist, I could join in the cry of “ More “ ! After all, I come from Moore.

Mr Turnbull:

– And you want more!


– And I want more. If I can get more, I will ask for more. I believe that Western Australia has a case for further financial assistance from the Commonwealth. But when we are dealing with a measure of this kind it is wrong for Opposition members to introduce matters that have nothing whatsoever to do with the subject under discussion, and to handle the question - I was going to say in an untruthful way, but perhaps, Mr. Acting Deputy Speaker, you would not allow me to use that word. Instead, I will say that it is wrong for Opposition supporters to misrepresent the circumstances.

The honorable member for Bass (Mr. Barnard) has talked about the way in which Tasmania has been penalized. He has told us that Tasmania has been penalized by having the amounts that it has requested reduced by the Commonwealth Grants Commission because, as the honorable member said, Tasmania spent too much money on the provision of certain facilities.

Mr Barnard:

– Read the report of the commission!


– I have read the report. If any State wishes to live beyond ite means, it must pay the penalty. It is not always pertinent to consider the amount of money that has been spent. That is not the question at issue. A State may spend millions and millions of pounds and still have nothing to show for it. As I am reminded by one of my colleagues from New South Wales, that is the situation in his State. The important point is whether the money has been spent in the right direction, and whether the State has received value for it. We should consider whether the money received by a State is being wisely and justly spent in the light of the economic circumstances of that State. It is not a question merely of saying, “ We have spent so many million pounds on education, and therefore we desire to be reimbursed to that amount by the Commonwealth Treasury or the Commonwealth Grants Commission “.

Many facets of this problem have to be considered, and it is futile for a State to say that it is penalized for spending a certain amount of money. To take an analogy, it would be foolish for a housewife to go to her husband’s employer and say, “ I have spent more on groceries, meat and bread in this fortnight than I usually spend. You must increase my husband’s wages so that I can pay my bills “. That is analogous to what Tasmania suggests should be done.

The honorable member for Bass and other Labour supporters who have discussed this matter have referred constantly to the Australian Loan Council. The honorable member for Bass, in particular, made a strong plea for further loan funds for Tasmania. I am not aware whether that little dot down in the south is really in needy economic circumstances, and I do not propose to say whether or not it deserves more loan funds.

Mr Duthie:

– Big-hearted Leslie!


– I am always known to be big-hearted - the man who wants more. It is unforgivable for Opposition members to use these arguments in criticism of the Australian Loan Council, especially when they so well know how it functions.

Mr Barnard:

– We know, all right.


– Of course. Opposition members know very well that the Commonwealth is in the position of being a guiding hand to the members of the Australian Loan Council.

Mr Luchetti:

– Take it or leave it!


– “Take it or leave it”, my foot! The Commonwealth points out the possibilities and its financial responsibilities. Opposition members fail to acknowledge - and they will never acknowledge this, because it is not in their nature to do so - that the Commonwealth Treasurer generously says to the State Treasurers, “ This is the limit of the possible borrowings in the coming financial year, but, because we know your needs, and want to assist you, we are prepared to augment the estimated limit of loan raisings by taxing the people in order to provide you with money for your loan programmes, over which the Commonwealth has no control “. The Commonwealth Government then has to carry the burden of the unpopularity that it incurs by imposing taxes in order to meet the needs of the States. This is a result of its generous attitude in guaranteeing the States the amount that the Commonwealth considers is the minimum needed by the States for their programme of capital works financed out of loan funds. Supporters of the Australian Labour party, however, imply that the Commonwealth says to the States, “This is all you can have”, and that that is the end of the matter. If the Commonwealth were to do the right thing, and say to the States, “ This is our estimate of the yield of the loan market, and that is all you are going to get “-

Mr Brimblecombe:

– That is what Mr. Chifley said.


– As my honorable friend says, that is what Mr. Chifley said. I presume that, if the Commonwealth did that, there would be no squeal from the Australian Labour party or the States. But the present Commonwealth Government goes beyond that and even earns unpopularity for itself because of the way in which it assists the States. It finds, for its trouble, that the State governments misrepresent the position to the Austraiian people.

I ask Opposition members - and particularly my friend, the honorable member for Stirling (Mr. Webb) - whether Labour suggests that we should return to the situation that existed in earlier years, when the States competed with one another in the loan market for whatever money was available. Do Opposition members consider that that would be better than the present system, under which the Australian Loan

Council functions with the guidance of competent advisers from the Commonwealth Treasury, co-ordinating the loan programmes of the States and avoiding competition in this field? Do Opposition members want us to return to those earlier days when competition between the States raised interest rates to fabulous heights? Some States were prepared to offer up to 8 per cent, and more in order to get money for their developmental works- The more populous and more highly industrialized States which could be made to yield more taxation revenue without too great a burden being imposed on the individual taxpayer were able to get the available loan money. States in the infancy of their industrial development found that their lack of immediate potential meant that, in order to obtain loan money at the exorbitant interest rates that prevailed, the taxpayers of such States would have to carry too great a millstone round their necks. As a result, those States were severely handicapped. The Australian Loan Council was formed in order to overcome that problem, and it has functioned very efficiently and effectively. I think that the right honorable member for Cowper (Sir Earle Page) was largely responsible for the genesis of the council in order to prevent the shocking competition between the States that handicapped the States individually and Australia as a whole.

The honorable member for Bass talked about the manipulation of interest rates. I am not sure just what the Australian Labour party wants. Opposition members, in one breath, condemn the Government because interest rates are too low, and, in the next breath, condemn it because interest rates are too high. They say that we cannot get loan money because we do not offer a sufficiently high rate of interest, and, in the next breath, they say that we should not increase interest rates in order to obtain more loan funds. If we could get a clear line on something definite in Labour’s approach to this matter - something indicating that Labour has definite ideas - we could at least discuss the problem with the Opposition on a reasonable basis. But we cannot get anything definite from Opposition members. At one minute. they are ploughing along one rut, and. at the next minute, they have crossed over the mud and begun to plough along another rut. They vacillate between ruts, and go round in circles. I should like to find out just what are their aims and objectives.

I have a charge to make against Australian Labour party supporters in this place and in other places of equal responsibility. What have they, as responsible citizens of this country, done to assist in promoting public confidence in the loan market and to encourage the Australian people to invest their money in it?

Mr Dean:

– Nothing.


– Of course they have done nothing. They have, on the contrary, gone to extreme lengths to create confusion in the public mind and undermine confidence in the loan market. That is a shocking thing to be said, but that is the position. My mind goes back, Mr. Acting Deputy Speaker, to the days when Mr. Chifley and Mr. Curtin appealed to the Australian people to support the loan market in order that the government of the day might obtain its financial requirements. Members of all parties in all the Australian parliaments supported those appeals. There was no question of party differences or of awaiting an opportunity to condemn the Commonwealth Government and cry stinking fish in condemnation of its proposals with respect to loan funds, or to suggest that the people should not put their money into government loans and that, as the honorable member for Melbourne (Mr. Calwell) said in Adelaide, people with money to invest would be better advised to spend their money as quickly as they could. Nor were attempts made in other ways to d.scourage the people from investing in loans. Members of the present Government parlies, who were then in opposition, adopted an approach very different from that of those who are now in opposition. Members of the present Government parties, in all parts of Australia, realizing their responsibilities as citizens and representatives of the nation, supported the government of the day, regardless of party affiliations, because they were concerned with the national welfare. That is the sort of approach that we need from those who are at present in opposition. That need should be impressed on their minds, even if we cannot impress it on their hearts.

The attitude of honorable members opposite is a crying shame. It would not be quite so bad if they remained silent on this question of the people’s confidence in the future prosperity of this country, but instead they take advantage of every possible opportunity to discourage confidence and to preach a gospel of destruction and chaos. That is a shocking thing to have to say, but every member of the Opposition who professes to be an Australian with the welfare of this country at heart should feel very ashamed of himself. 1 hope that in discussion of this bill there will be a cessation of the utterly false propaganda disseminated by members of the Australian Labour party in relation to the operations of the Loan Council. They know very well that the only control that the Commonwealth exercises over the Loan Council is in the submission to the council of advice by the Commonwealth Treasury. Irrespective of how much the Premiers may cry about their needs, what happens? Ultimately, as men of responsibility - for a brief period anyhow - they accept the advice given and the decisions made. Nevertheless, they and so many of their colleagues on the Labour side of the House lose sight of what the Commonwealth Government has told them about the financial position of the country and the expectations in regard to the loan market. The Commonwealth tells the Premiers that it will add to loan raisings so many millions of pounds which it raises by taxation, and so it earns the displeasure of the people. When we go to the electors, we have to face that issue.

I agree heartily with all that the honorable member for Stirling said regarding the requirements of Western Australia. I wonder whether he will agree with me when I say that the greatest need in Western Australia to-day is for a change of government! There should be some reciprocity in agreement between us. I agree with him that our need is great and that there is justification for additional money being found by the Commonwealth to meet the peculiar circumstances of Western Australia. I hope that he agrees with me that the time has come, if it is not already long past, for a change of government in that State in order that we may make better progress and have some of the money that is made available - a lamentably small amount in relation to our actual needs - spent more wisely than it is spent to-day.

Mr Crean:

– Do you agree with him on the need for a change of government here?


– That might be a debatable point. This Government has been generous. The government which was in office before made no special grants to the States and guaranteed them no additional money from the loan market. This Government has done these things and it has assisted the States.

Mr Thompson:

– At that time the States were able to get sufficient money for themselves.


– The honorable member for Port Adelaide may not have heard me when I said that the Labour government got loan money, but with the assistance and co-operation of the people as a whole, who supported the government in the national interest. The people who would normally have opposed the government were persuaded to stay their party-political hands.

This Government, I consider, could well be more generous to Western Australia, but in view of its overall generosity, I am sure the honorable member for Melbourne Ports (Mr. Crean) will understand why I am extremely reluctant to see a change of government in this place, and why I dread the day that it will occur. My attitude is based on historical events. I was interested in the honorable member’s remarks about the contents of the twenty-fourth annual report of the Commonwealth Grants Commission, and his reference to the Treasury’s action in submitting suggestions to the commission as to what it should and should not do. I do not know that I am very happy about the Treasury entering into discussions with the commission. I do not know how long it has done so. I have gone through all the commission’s reports. In the earlier reports no mention is made of Treasury submissions. I am not prepared to join with the honorable member in condemning the Treasury in this connexion. It is in order in drawing to the notice of the present commission the fundamentals which were laid down by a commission of earlier days. The Treasury, as shown by the passages quoted by the honorable member, did submit some points of view based on fundamentals stated by the commission in its third report. I believe that third report to be one of the most valuable reports ever issued by the commission, because it then laid down certain fundamental bases on which, in its opinion, it should operate.

I do not think that the Treasury was quite correct in the manner in which it presented its quotations relating to standards in various States. The Treasury extracted quotations from the third report of the Commonwealth Grants Commission and, in the middle of two quotations interpolated its own statement, to make it appear to be something quoted from the commission’s report. That was a very wrong thing to do. My complaint is factual, although the Treasury people are quite likely to suggest that I am wrong. The commission, in its third report, said -

  1. . special grants should enable the weaker States to function at a minimum standard based on the standards normal to the union as a whole.

The Treasury quoted this statement, and then continued -

In other words, there has existed from the very inception of the Commission the concept that it was the function of special grants . . .

The Treasury’s interpolation goes on, and finally there is a quotation from the commission’s report. This makes the Treasury’s statement appear to be a quotation from the report. More important than that, the Treasury failed to mention vital points that the Commonwealth Grants Commission made in its third report. The Treasury omitted to point out that the commission said -

For this purpose it is necessary to ascertain by a suitable system of measurement the relative financial position of the States in the Commonwealth. Such relative position should not, however, be the absolute basis of the grants.

That referred to whether the Commonwealth was compelled to raise standards in the claimant States to the same level as those in the non-claimant States.

I do not deny the Treasury’s right to lay down fundamental principles if it adheres to them and applies them properly. In dealing with the extent to which the claimant States had a claim with regard to costs incurred in development, the Treasury referred to the twenty-fourth report of the commission. It quoted the commission correctly, but failed to point out that the commission, at page 19 of its report, dealt very effectively with the submissions made by the Treasury.

The Treasury is quite in order in directing the attention of the commission to factors that were considered fundamental in those early stages, but I do not know how long it is since the Treasury introduced this practice of approaching the commission with a view to influencing it in its allocation of funds to the States. I concede that the Treasury has a right to do that, but I say that it should keep religiously to the facts, and not depart from them when it is making suggestions.

Coming back to the bill before the House, I want to refer to the second-reading speech of the Treasurer (Sir Arthur Fadden), in which he said that in making this grant the Commonwealth also had in mind that the grant could assist the States to take measures that would stimulate home-building activities. I do not know whether that was intended to cover the whole of Australia’s needs, but Western Australia’s need for home building is nowhere near as great as that of other States. Owing to wise management, and sound plans laid by a LiberalCountry party government in the first place, and carried on by a subsequent Labour government, Western Australia has largely solved its housing problem. So the need for funds to stimulate home building is not as great in Western Australia as it is in other parts of Australia, but there is a great need to stimulate industrial expansion in Western Australia. If industrial expansion is to take place in Western Australia, there must be adequate State expenditure on developmental works. I believe it is the responsibility of the Commonwealth to provide for industrial expansion, and the Commonwealth has accepted its responsibility in that connexion. I am not referring to this Government in particular - I am referring to past governments. They have accepted their responsibility to undertake developmental works that will expedite and facilitate industrial expansion. I cite as an example the Snowy Mountains scheme. But, unfortunately, all the provision in this regard has been on the eastern side of the continent. Western Australia has certainly obtained £2,500,000 for the development of its north-western sector, but that is a small amount. Western Australia’s need, not only for industrial expansion, but for other forms of development also, is so great that it has a right to claim that the Commonwealth should take a greater interest in the State than it has in the past. In par- ticular, I refer to water supply. During the week-end, when I was in a country town in my electorate, I discovered that the hotel there was paying £5 10s. for 1,000 gallons of water. Where on the eastern side of the continent is there any place that is called upon to pay so much for water for domestic purposes?

Mr. ACTING DEPUTY SPEAKER (Mr. Bowden). - Order! The honorable member’s time has expired.


.- The honorable member for Moore (Mr. Leslie) is a soapbox orator, and a soapbox orator in the Australian Country party is a rare phenomenon. In his quieter moments he says much that is sensible and practical. It is only when he gets his teeth into political discrimination, or when he has to contend with interjections, that he takes off like a frightened terrier, yapping and barking for some considerable time. But when he keeps away from these political controversies, and when he is left alone by interjectors, I find that he says much that is sensible and practical.

I want to refer to some of the points made by the honorable member for Moore. One example of the sort of thing he says is the allegation that at one moment the Labour party is condemning the Government by saying that interest rates are too low, and the next moment it is condemning the Government by saying that its interest rates are too high. Never at any time has the honorable member heard a member of the Labour party, in this House or elsewhere, say that interest rates are too low. Quite the reverse! I remind the honorable member, and other honorable members, of Labour’s policy with regard to interest rates. Our policy is that interest rates in general should be low; that the basic interest rate should be low. Manipulation of interest rates by the banks, or by the Government, is an unsatisfactory way of trying to obtain a proper allocation of loan funds. Therefore, when the Government last year increased interest rates by its refusal to support the loan market adequately, and by allowing the trading banks to increase interest rates as the beginning of a process through which rates have since risen to fantastic heights, the Labour party criticized and attacked the Government.

In his second point of this type, the honorable member for Moore asked what the Labour party had done to establish confidence and when the Labour party had supported the present Government in its loan campaigns. I remind the honorable member that anything the Opposition or the Government might do to appeal to the people to put money into Commonwealth loans has very little effect. What is likely to have effect is the relative returns that the people will receive from their investment. If the return from Commonwealth loans is low compared with other returns that borrowers can obtain - which, in itself, is an outcome of the fundamental economic policy practised by the Government - it is quite impracticable and ridiculous to believe that any word spoken by the Treasurer, or by members of the Opposition, will have the slightest effect in rectifying the situation. The honorable member for Moore also said that Opposition members had misrepresented every point they had raised in submitting claims for more money from the Commonwealth for different States. The honorable member seems to be quite satisfied that Western Australia needs more money, but I can find nothing in his speech to support that claim except that he is a member of Parliament for a Western Australian electorate. It would be difficult to discover a less adequate reason for granting assistance.

According to honorable members who have spoken in this debate, every State requires more money. I suppose it is possible to obtain evidence to justify completely such a claim on behalf of every State. However, I do believe that the honorable member for Moore was moving in the right direction when he suggested that we should be concerned with the criterion upon which we can determine whether a State should have more money. It is not enough to have honorable members in this House, and other persons elsewhere representing their States, saying, mainly for that reason, that their State should have more money. It is not enough for the State Premiers to submit, however clearly, that just because more money has been spent on education or on something else in their State, they in turn should have more money from the Commonwealth. We need some sort of independent criterion and some method to apply that criterion. That is something that I should like to add to the statement made by the honorable member for Moore.

I submit that the present method is totally unsatisfactory. I shall have something to say about uniform taxation in a few moments, but I should like to say first that the procedure at the Premiers conferences - and at meetings of the Australian Loan Council, too, for that matter - by which an allocation of Commonwealth and other funds is made between the States for various purposes is a totally unsatisfactory way of trying to solve the problem. We must direct our attention to the question that has been raised by the honorable member for Moore and which has been implicit in practically everything that has been said in this debate. All I can say upon that question at the moment is that, to my mind, there has been only one example in the history of Australia of a reasonable and satisfactory way of trying to establish a criterion for grants to the States and a method of applying it. That is the present Commonwealth Grants Commission. The reports of the commission - and particularly its third report, to which the honorable member for Moore referred - provide the most adequate statistics and principles needed to answer this question and solve the problem. Those statistics are to be found at the back of each of the commission’s reports. The criterion that has been established by the commission in relation to the claims of the States is the nearest to a reasonable and sensible way of solving the problem of a criterion and the method of applying it that we have reached so far.

Three main types of payment are made by the Commonwealth to the States under present circumstances. The first are the formula grants under the uniform taxation arrangements which, from now on, will be on an adjusted population basis. Secondly, there are the grants made by the Commonwealth Grants Commission to claimant States; that is, to the States which, for particular reasons, are regarded as being behind the others in development. Finally, there are the additional assistance payments or special grants made under bills such as that before the House. These are over and above the formula grants which are made under the uniform taxation arrangements. They are provided for what can be called special reasons.

In respect of the structure for collecting revenue and making grants there are several points which should be made now. The first point seems to be clearly established. It was made by the honorable member for Melbourne Ports (Mr. Crean) yesterday when he said that we must remember that since this matter was last debated in this House, the High Court, towards the end of 1957, substantially rejected the attempt of the States to upset the uniform taxation structure. For this reason, and for another that I shall mention, it seems to me that we must take it for granted that something like the present system of uniform taxation will be a permanent arrangement in Australia. The submissions made to the courts and to parliaments by various political parties other than the Australian Labour party on this matter are simply beating the air. There is a reason for that belief apart from the High Court decision. That is that it is completely impracticable to abolish the system of uniform tax re-imbursement payments which is in operation to-day. We would still have the fundamental problem of dividing between the States and the Commonwealth the revenue that is collected in the Commonwealth, irrespective of who collects the revenue or how it is collected.

To understand that point we need only refer to the way in which the proportion of revenue which goes to the States and the Commonwealth has taken on a definite form. I need go back only to 1950 for my purpose. I direct the attention of honorable members to the following figures: -

Something like that sort of division has to take place irrespective of whether we have the present or some other form of uniform taxation, so let us put aside the purely political aspect - and I can see no other aspect associated with this argument about uniform taxation - and face up to the practical problem that we have to solve. That problem is the actual division of revenue between the Commonwealth and the States.

I direct the attention of honorable members to the views that were expressed by the honorable member for Mitchell (Mr. Wheeler) who has the reputation of being a financial expert, at least in the opinion of the trading banks and the “ Sydney Morning Herald “, which is the mouthpiece of the Bank of New South Wales in Sydney. I think that we can look to the honorable member for Mitchell for the sort of ideas that we might find influencing the Government in financial matters in the future, not because he has put them forward, but because he is associated with a particular source of importance.

The honorable member for Mitchell said that he supports a position in which the Public Accounts Committee of this Parliament will be given the task of checking the actual expenditure of money granted to the States by this Parliament. This is quite a remarkable development. If we couple it to the position taken by the right honorable member for Cowper (Sir Earle Page) in his submissions to this Parliament and to the conference of the Australian Country party that what is needed in expenditure is an established system of priorities and agreed priorities, then we will see how far members of the Government parties are coming towards the position taken up for years and years by the Australian Labour party in this matter.

The important consideration is not who collects taxation or how it is collected, but how it is spent and upon what it is spent. The submissions of the honorable member for Mitchell and the right honorable member for Cowper come right round to the Labour party position, and I suggest that anybody who understands the purely technical questions of financial administration that are involved in this problem must agree with the honorable member for Mitchell and the right honorable member for Cowper. I am sure that the Treasurer (Sir Arthur Fadden) does and that, if he were at an earlier stage in his career, he would look at the problem as a challenge to him to solve. However, this problem remains unsolved. Until we stop talking about giving the States back their taxing powers or those taxing powers being retained by the Commonwealth, and until we set down to the problems raised now by the honorable member for Mitchell and the right honorable member for Cowper, and continuously by the Labour party, we will make no real progress in solving this never-ending dispute.

One other comment that may be made in passing - it cannot be avoided, really - is that over the years the Commonwealth has retained for itself a diminishing proportion of the revenue it has collected in taxation, lt has paid an increasing proportion to the States. That is not a compliment to the Treasurer’s generosity or to the political generosity of this Government; it is a clear indication of the rising importance of the work that the State governments have to do. Apart from social services, which are of great importance, the State governments really do the work which has to be done by governments in this country. By that 1 mean that the State governments are very largely responsible for education, hospitals, health and, in one way or another, for roads and streets and for the provision of essentia) services such as water supply and sewerage. These matters are the essential work of government and are performed by the States. The fact that the Treasurer can rightfully point to a record which shows that the Commonwealth has increasingly supported the States - I am not concerned with one State as against another - is a reflection of fundamental economic importance and not of the generosity of the Treasurer. We know his generosity in personal matters, but that has nothing to do with this point.

The existing situation has several striking features to which we should pay attention at this stage. Apart from the question I have just mentioned, a striking feature is the enormous and rising deficits that State governments are facing to-day. In 1955-56, the combined deficits of all States totalled £14,948,000- nearly £15,000,000. In 1954-55, their deficits totalled only £3,500,000. 7n 1953-54, there was a surplus of £2,900,000. In 1952-53, the deficits totalled £262,000. It would seem that the total deficit in 1955-56 of nearly £15,000,000 will be equalled in 1956-57. This deficit of £15,000,000 is almost four times as great as any deficit that has ever occurred, and we must go back to 1938-39 for an aggregate deficit which approaches even a quarter of this amount. The deficit in that year was just over £3,500,000, These rising State deficits are a problem which must be met. They are a problem which must be met by a Commonwealth government that faces in the coming twelve months and the following year a problem of debt conversion that will test its financial resources and its financial ability to the very end.

These State deficits are again a reflection of a number of factors. State non-capital expenditure has risen at a rate which is at least as great as the increase in population and the increase in prices would suggest it should be. The figures published in the twenty-fourth report of the Commonwealth Grants Commission show that to be a fact. Non-capital expenditure by State governments on matters such as education, hospitals and the maintenance of law and order has risen at a rate which is at least satisfactory when compared with population and price increases, again considered as an aggregate and not comparing one State with another. What has gone wrong in recent years is that capital expenditure has not nearly kept pace with requirements. I shall take public works as an example. In money terms, expenditure on public works by the Commonwealth and States as a whole since 1950-51 has increased by only 58 per cent. That is not a real increase at all; it is probably a real decrease. I have not figures to make a comparison at the moment between States, but I think it is beyond doubt that capital expenditure by the States themselves has risen at a much lower rate than has expenditure by the Commonwealth- Therefore, we can be fairly well satisfied that capital expenditure by the States is far less satisfactory than is such expenditure by the Commonwealth.

The other striking aspect of this subject is the need for an even more rapid increase in State expenditure. In order to try to overcome this, the States are being forced, with the passage of time, more and more into their own small independent tax fields. These fields are generally regressive. Taxes imposed in this way apply to people without regard to their capacity to pay and generally not consistently with capacity to pay. The States are being forced by these conditions into fields of regressive taxation. We need look at only a few figures to see that that is so. The figures on page 95 of the report of the Commonwealth Grants

Commission to which I have referred show that State taxation per capita in 1950-51 was £6 14s. Id. and in 1955-56 wa3 £11 2s. 5d. The increase in the regressive taxation field was 65 per cent. In the Commonwealth field, the amount of reimbursement paid to the States in 1950-51 was £10 18s. and had risen to £16 18s. 9d. in 1955-56 - an increase of only 55 per cent. That means, broadly speaking, that the rate of increase of regressive taxation is more rapid than the increase of other taxation. That seems an inequitable situation, and one to which we should pay attention.

Another striking feature of the present situation is that there are two important economic imbalances, as they have been called by the Commonwealth Grants Commission. The first is, I think, the more important. That is, that the relatively low profit from public works means that the capacity to raise the money for such undertakings is considerably reduced in relation to the higher profit opportunities that have been made more and more available by the economic policy and conditioning of this Government. The honorable member for Stirling (Mr. Webb) made this point yesterday, and in the course of the debate to-day some speakers on this side of the House who raised the question were asked for evidence. Surely we do not need to supply much evidence of this. The honorable member for Stirling quoted from the National Bank of Australasia review of 14th March as follows: -

Results of two loans announced during the month revealed little improvement in the support for semi-governmental issues.

That is the general situation. Support for governmental and semi-governmental issues over the course of the last two years has been totally unsatisfactory, and most of these loans have closed with only an unsatisfactory proportion subscribed. The quotation used by the honorable member for Stirling continued -

The State Electricity Commission of Victoria’s £2,600,000 loan closed with £985,250 undersubscribed, and the underwriters were left with £168,000 of the State Electricity Commission of Queensland’s loan for £800,000.

That is true in every State, and surely honorable members on the Government side will no longer ask for evidence.

That is the first significant imbalance which affects the financial measures covered in this bill. There is a distortion in the economy at present which could be corrected by appropriate Government policy. As long as this distortion continues, the attempt to correct it by additional grants of this sort will not even touch the surface of the problem. You cannot solve that problem by any programme of additional or special grants of this kind. You can solve it only by coming to grips with the fundamental economic distortion, which depends on economic policy. It would not be appropriate at this stage to outline what that policy is, but it has been outlined from this side of the House on numerous occasions, both in submissions during debate and in the form of questions. Time after time, the Treasurer, as the chief spokesman of the Government in this matter, has turned a deaf ear, and has ignored altogether the steps necessary to allocate properly loan and other expenditure, stating that he is attached to the principle of freedom of enterprise, and that no directions or advice will be given to the trading banks or other institutional lenders about the way in which they shall operate, but instead he will rely upon interest rate manipulation. I submit that if this situation is to continue the handing out of a few miserable millions of pounds, as this bill proposes, will not rectify a situation which your own unsound economic policy is creating.

The second feature to which the Commonwealth Grants Commission applies the term “ economic imbalance “ is that mentioned yesterday by the honorable member for Melbourne Ports (Mr. Crean). This is the kind of financial problem that this Parliament and the State parliaments are wrestling with. The honorable member for Melbourne Ports quoted the following statement from the commission’s twenty-second report in answer to the commission’s own hypothetical question about why the need for special grants persists so strongly: -

In general terms, the reason is that costs of expansion of State services, of development of undertakings such as railways and water supply, and of general administration are relatively heavy in the States of smaller populations.

The Commonwealth Grants Commission is the only instrument we have to deal with the situation. The commission’s report went on to say -

At the same time benefits to revenue arising from economic expansion do not flow directly to the State governments.

Why is this the case? First of all, revenue does normally rise proportionately to economic expansion, and the need for expenditure also rises proportionately to economic expansion. But the Commonwealth Government comes in between those two conditions by collecting that kind of revenue which rises proportionately to economic expansion. It collects income tax, company tax, customs duties and so on, which are the kind of revenue which does rise proportionately to economic expansion, and to which the States do not, and cannot in the circumstances, get direct access. Institutions will have to be developed in this country in order to solve that problem. It is quite useless to talk about abolishing uniform taxation, about returning certain taxing powers to the States. The fundamental problem will continue to exist. That problem is: How much of the taxing power is to be returned to the States and how much retained by the Commonwealth? Under the present structure, something like 75 per cent, or 80 per cent, of the taxing power must always be retained by the Commonwealth, because of the greater need for revenue that attaches to the Commonwealth’s activities.

There are several conclusions that we might be able to consider in relation to this matter. The first concerns the general pattern of taxation in this country, which is fundamental to a bill of this sort which deals with the expenditure of £5,000,000. That general pattern should be reviewed, and I believe that we need a royal commission to investigate and report on the Commonwealth and State tax structures.

Mr. ACTING DEPUTY SPEAKEROrder! The honorable member’s time has expired.


.- I should like to comment, first, on some of the statements made by the honorable member for Yarra (Mr. Cairns). He spoke of the need for establishing a system of priorities in relation to the public works programmes of the States, and said that that was Labour policy. Well, it is a policy that I wish he would persuade some of his colleagues in the State governments to adopt and put into practice, because for years the Treasurer (Sir Arthur Fadden) who is now at the table, has been pleading with the State governments to establish priority lists in respect of their works programmes. So, far from this suggestion being new, that has been this Government’s established policy all along, a policy which it has been trying to persuade the State governments to adopt.

Secondly, the honorable member mentioned proposals to abolish uniform taxation, quite rightly pointing to the difficulties inherent therein. I should like to tell the honorable member that, basically, I support the idea of returning taxing powers to the States - and for one very good reason. That reason is that we believe that by giving the States the responsibility of raising their own taxation they will spend the revenue so raised with far greater responsibility and to better purpose than they do at present.

This bill seeks the approval of the Parliament for the payment of an additional £5,000,000 to the States for the current financial year. The Treasurer pointed out in his second-reading speech that the amount of tax reimbursement to be distributed to the States was fixed by the Australian Loan Council last June at £200,000,000. The semi-government and local authority borrowings programme approved was £89,000,000 for the current year. The Commonwealth undertook at that time to make monthly advances to the States at the annual rate of £200,000,000 pending a review of the position to be made in the new year. As we now know, at the last Loan Council meeting the Commonwealth proposed that an additional amount of £5,000,000 should be allocated to the States. This £5,000,000 was to be divided in two ways. A sum of £4,000,000 was to be distributed among the States according to the tax reimbursement formula, and £1,000,000 was to be divided equally between New South Wales and Queensland because those States had been most seriously affected by the drought.

Before going on to that matter, I wish to say something, very briefly, regarding the background to Commonwealth and State financial relations. It is true to say that because of World War II., and especially events in the post-war period, there has been a substantial expansion in the total financial requirements of both the States and the Commonwealth. As a result of this situation, there has been an enor mous increase in the financial transfers from the Commonwealth to the States. 1 have figures here which show that by 1956-57 financial transfers from the Commonwealth to the States had risen to just over £350,000,000. The stage has now been reached at which the Commonwealth is providing in annual transfers to the States the maximum amount of finance which the Commonwealth Budget will justify. It is not unreasonable, therefore, to find that the Commonwealth is disposed to the view that the States should abide by the annual determinations and not look to it for additional finance from time to time during a financial year unless some altogether exceptional circumstances arise. Of course, as we know, in this particular case the exceptional circumstances arose mainly because of the drought and the problems that flowed therefrom, which affected to such an extent the eastern States, and Queensland and New South Wales in particular.

I refer now to the second-reading speech of the Treasurer (Sir Arthur Fadden). When mentioning this additional £5,000,000, he said that the amount was being distributed to those two States which were so severely affected by the drought and in which the recent increase in numbers of unemployed had mainly occurred. In offering to make this additional £5,000,000 available, the Commonwealth was concerned that it should be used to give most help in those areas which had been most affected by adverse conditions. The Commonwealth had in mind also that the grant would assist the States to take measures to stimulate home-building activity.

I agree with those members who have said that the present financial arrangements between the Commonwealth and the States are most unsatisfactory. To-day, I asked the Minister for Primary Industry (Mr. McMahon) a question regarding benefits which were recently made available by the Commonwealth to the States. I wanted to know in what way those benefits had been passed on to the farmer in relation to added wheat costs. It is well known to honorable members that New South Wales for several reasons has had to import wheat from other States not only for human consumption but also for stock feed purposes. Stock feed consumers in New South Wales, as a result of an act passed by the Government of that

State, are now paying 4s. (Hd. a bushel more for their wheat than their competitors in other States. This is affecting the livelihood of many people in New South Wales, a number of whom are in the area in which I live. The Minister, in his reply to me to-day, said that he was certain that the reduction in shipping freights of 2s. 6d. a ton on wheat, announced on 1st March last, and 5s. a ton, which applied from 1st January last, had not, in any way, been passed on to the consumers. He went on to say that he knew of no suggestion or plan that the Government of New South Wales had made to pass on the benefits arising from the £500,000 which the Commonwealth is making available to that State.

I know very well that except in the case of special grants, in respect of which complementary legislation is required to be passed by a State parliament, the Commonwealth Government cannot direct a State as to how it shall spend money. But surely, in a case like this, where a special grant is being made and the Commonwealth has quite clearly shown the reasons it had in mind for making this extra money available, one would think that the State Government would pass on the benefits it thereby derived to those people who have been most affected by these exceptional circumstances. But in no way do we find this happening. To my mind, the New South Wales Government has no intention of passing on these benefits. It has shown no concern whatsoever for the particular problems facing people for whom it has a responsibility, just the same as the Commonwealth has- I will give an illustration in respect of one of the industries which are dependent to such a great degree on supplies of stock feed wheat. I refer to the poultry industry. I visited one valley in my area last Sunday where, at this time last year, there were seven poultry-farmers whose farms were good economic propositions and they were providing for their families. In that area to-day there is only one poultry farm. The rest of those farmers have had to seek employment in the city. They are separated from their families and this circumstance is having a bad effect on their wives and children, to say nothing of the sadness of their economic plight.

The question of providing help has been put to the New South Wales Government on quite a number of occasions, and only as late as last Monday the New South Wales Minister for Agriculture, Mr. Roger Nott, was asked whether he would assist this industry in some way. The following report was published in one of the Sydney newspapers: -

The State Government would not subsidise the egg and poultry industry in New Sou;h Wales, the Stale Minister for Agriculture (Mr. Roger Nott, said to-day.

Mr. Nott was commenting on an article in Truth yesterday by the former Chairman oi the Egg Board (Mr. W. H. Bruce).

Mr. Bruce said the poultry industry in this Stale was going through an economic crisis and producers were going out of business “ by the dozen “.

Mr. Nott said the Australian Agricultural Council had discussed a Government subsidy but had decided the increased costs incurred by poultry farmers did not justify it.

I find that a most remarkable statement in the light of one factor which I have pointed out - that the people of New South Wales are paying 4s. O½d. a bushel more for their wheat than people in other States are paying at the present time.


– Why does not the Commonwealth Government subsidize the poultry industry as it does the butter industry?


– The honorable member knows the answer to that question. The poultry farmers have not asked for a Commonwealthwide subsidy for the industry. In fact, they have said they do not want the industry to be subsidized. What they do want is some assistance to reduce the cost of production in their industry, which is so high. Because of the actions of the New South Wales Government the cost of production in the poultry industry in that State is much higher than it is in any other State. As the honorable member for Werriwa (Mr. Whitlam) will no doubt know, because he takes a personal interest in this industry as I do, the Victorian poultry industry is now threatening to dump eggs on the New South Wales market because the farmers in Victoria can produce eggs much more cheaply than New South Welsh farmers can. I have used that illustration as an example.

Another example, well in the public mind, is the need for funds for education purposes. It has been reported in the press that the Leader of the Opposition (Dr. Evatt) intends to present a petition to this Parliament within the next few weeks, asking for special Commonwealth aid for education. The members of the New South Wales Teachers Federation have been most constant in their plea in this matter, but the New South Wales Minister for Education, Mr. Heffron, has pointed out that there is no lack of accommodation for the children who have entered the schools this year, that the New South Wales Government is training more teachers than ever before, and that more classrooms are available in New South Wales than ever before.

So where does the truth lie in this matter? The answer, once again, is that the Commonwealth Government has given assistance by direct grants, by the reimbursement of moneys gathered from taxation, and by completely vacating the loan market and so making all available loan money available to the States for their purposes. Indeed, it has done better than that. It has underwritten Commonwealth wide loans to a figure higher than the amount expected to be raised. For example, it was estimated that in the current financial year the loan market would yield approximately £180,000,000 but the Commonwealth has underwritten loans to the extent of £200,000,000.

Finally, I want to say this: I agree withthose members who have pleaded for an investigation and amendment of the entire financial relationships between the Commonwealth and the States. I believe that the States should be given more taxation powers. For the reasons that I have already given, uniform taxation, as a whole, should not be retained by the Commonwealth. I believe that it is most unsatisfactory from a national point of view for our citizens and those outside Australia to see this continual wrangling that goes on between the Commonwealth and the States each year when State grants and the allocation of loan funds are being discussed in relation to the amount of money that the Commonwealth will make available. Therefore, I support the plea made during this debate for an investigation into new Commonwealth and State financial relationships. I agree with the honorable member for Yarra (Mr. Cairns) that this debate is not the time to go into the proposals in detail. I think the main thing we should do on this occasion is to stress the complete necessity for a review.


.- The honorable member for Robertson (Mr. Dean) drew attention to the statement which the Treasurer (Sir Arthur Fadden) made during his speech to the effect that special additional aid had been given to Queensland and New South Wales because those States had been affected by the drought. However, the Treasurer said more than that. His words were -

  1. . these being the States that were most severely effected by the drought and in which the recent increase in the numbers of unemployed had mainly occurred.

I am glad that the Commonwealth Government recognizes two things, although I do not think that it has done so sufficiently frequently. The first is that there has been a rise in unemployment. The second is that the Commonwealth has responsibility for unemployment in the sense that it can give to the State governments the additional funds which will pick up the unemployed and employ them. I think we ought to recognize the existence of what some economists have called the “ multiplier “. I think that the Treasurer did so in his speech because he expressed the wish, or suggested the possibility, that some of this additional amount of £5,000,000 would be spent on housing. Expenditure on housing is a form of expenditure which runs right through the economy in the sense that it is capital expenditure and that wages which pass into the hands of people engaged in the building trade are an additional amount of purchasing power with which to purchase goods already in existence. That money then runs right through the economy and it has a greater effect in picking up unemployment than the mere additional employment given to men in the building trade.

Of course, there are many forms of expenditure that have a similar effect. They include expenditure on arms and expenditure in all sorts of other directions. Whilst this is a States grants bill, I hope the Government itself will consider its own forms of expenditure in the States which are justifiable forms of expenditure and which would have an equal effect in picking up unemployment. It is true that it is a good thing for the State governments to build houses. In Western Australia, for instance, which will receive £315,000 from this grant, even if the whole amount were spent on houses it would build only 120. This would not have a tremendous effect on the State’s economy, although it would be useful. I recognize, of course, that this is an additional grant and not the whole amount granted to Western Australia, but even an additional 120 houses is not a very considerable number.

The unemployment situation in Western Australia, I think, could be picked up through the building trade in other directions - by the Commonwealth Government’s own works, especially the building of exchanges and new post office buildings. Some time ago, I had the honour to be invited by the Postmaster-General (Mr. Davidson) to open a new post office at Applecross, in my constituency. The figures that were supplied to me by the Postal Department as a background to whatever I was to say on that occasion showed that in 1939 the area served by the post office had 600 people residing within it whereas late in 1956, 13,000 people were residing in the area. There has been astonishing development in a number of areas in Western Australia. This has transformed land values. One can now see whole new suburbs. The demand for postal facilities is expanding. Even within my own constituency, I have made representations for all sorts of new areas which have no post office whatever. I think that Commonwealth expenditure of that kind in Western Australia would have a very good effect, running as a “ multiplier “ through the economy and picking up the unemployed in Western Australia.

The Chamber of Commerce in Western Australia has expressed the view that in view of the current unemployment situation in that State the Commonwealth Government should consider completing the standardization of the railway between Kalgoorlie and Fremantle as has been suggested several times in such documents as the report of Sir Harold Clapp. That view was expressed in a letter which I received from the Chamber of Commerce in Western Australia this week. I understand that the Commonwealth Government, with the respect for State governments that it ought to have, may not always wish to push in with its public works which it considers to have a high priority in opposition to a State government which may wish to proceed with some other public work. But when there are several thousand unemployed in a State, quite clearly the level of public works is not absorbing all the available labour force. On this issue, the Premier of Western Australia has said that he would not mind if the Commonwealth Government were to come in and run its own particular public works project if it were the completion of the standardized railway between Kalgoorlie and Fremantle. So I put that suggestion to the Treasurer (Sir Arthur Fadden). While I welcome the thought that if the whole extra grant to Western Australia were spent on housing, that State might build 120 new houses, the Minister for National Development (Senator Spooner), who is the responsible Commonwealth Minister in the housing sphere, had something to say on this question when opening the annual convention of the Federation of Co-operative Housing Societies at Warburton late last year. The Minister did not speak merely of immediate issues. He spoke about the housing situation in Australia over the next five years. This matter must be considered when we are discussing the grants that are given to the States or the amounts that are spent directly by the Commonwealth in housing projects, in view of the fact that the Government has long-term plans about immigration and has obviously, from the Minister’s statement, made a study of our internal population trends. The newspaper report of the Minister’s statement reads -

He (Senator Spooner) said trading banks were making fewer loans for housing and life assurance companies were also giving less support to the building of homes.

The decline in the number of houses built in the past 12 months was causing the Federal Government concern.

In 1954-55, 82,110 houses and flats had been completed. In 1955-56 the figure dropped to 78,504 and in 1956-57 to 68,437.

These figures show a decrease, over two years, of 14,000 houses. The Minister then said that United Kingdom building societies might extend their activities to Australia, and that if they did so the whole housing movement would be strengthened. Obviously there is a clear case for the investment of overseas funds in a country for the manufacture of articles that that country cannot produce. We need dollars for massive earth-moving equipment, because we could not very well build the factories to make such equipment without becoming involved in colossal capital expenditure. In any case, the machinery would be needed before it could be manufactured here. But there is no honest case that could be advanced for building houses with overseas investment, when we have all the materials here and it is merely a question of domestic financial policy and mobilization of the materials and labour that we already have. We often hear ignorant opposition to foreign investment, based on the assumption that it is possible for us to make everything under the sun in this country, but there is no case for overseas investment in activities that we could very well carry out ourselves. I suggest that we would follow a policy of extreme despair if we relied on overseas funds for home construction.

Senator Spooner released a statement to the press early last year in which he spoke about our opportunities during the next five years in connexion with housing. He said -

A survey of the housing situation in Australia has been released by the Department of National Development. . . .

The survey shows that Australia’s great opportunity to overcome the present housing shortage will occur in the next five years. In this period the needs for new housing are expected to be at a relatively low level because of an expected falling off in the marriage rate, reflecting the low birth rates experienced during the period 1930-34.

In other words, people born during that period are now reaching marriageable age, but there are fewer of them, because of the low birth rate at that time. For this reason the demand for houses will be reduced. This statement was made in February, 1957, and at the end of 1957 the Minister said that the number of houses constructed in that year was 14,000 less than had been constructed two years previously. It is quite clear, therefore, that we are not using the great opportunity of the next five years, which was mentioned by the Minister, to tackle the housing question. If it is conceded that the State is to be the housing constructing authority, we should then consider these grants in the light of the need to seize the opportunity mentioned by Senator Spooner and not to allow our housing construction rate to decline. On that basis, an additional grant that will enable a State like Western Australia to build another 120 houses, while it is extremely welcome, is not exactly the kind of provision that could be regarded as a means of seizing the opportunity to solve our housing problem.

Mr Leslie:

– But the housing problem is not so great in Western Australia as in the other States-


– I quite agree with the honorable member, but I think he will also agree that in Western Australia there is a problem not only of building new houses but of clearing away many sub-standard houses. I believe also that there has been some foolish housing construction in Western Australia which has been shown to be unjustified. For instance, in the area around Medina, where the population is not as stable as it was thought to be, there are now quite a few empty houses. A similar situation exists in other areas. Nevertheless, there are still many people in need of homes. I believe that every member of Parliament in Western Australia, including myself, is approached almost every day in the week by a constituent who is unable to secure a home.

I am grateful to the honorable member for Robertson (Mr. Dean) for making some remarks on the subject of education. He said that the Government of New South Wales, in contra-distinction to the teachers’ union, was apparently satisfied with the education situation in that State. New South Wales Government spokesmen had said that the Government was providing the means of training more teachers, and would soon be able to catch up with the shortage of teachers and even of school buildings. I hope the Commonwealth Government will look with a critical eye on any such statement as that. Our school problem is not confined merely to the number of teachers, the sizes of classes or the nature of school buildings. A good many of our school buildings should have been bulldozed long ago, but the new ones are very fine structures, as can be seen in the Australian Capital Territory. One of our greatest problems in the educational field is the provision of equipment in our schools. Another is what we must now regard as our defective form of education, affecting national policy and industrial development.

In his recent book, “ Inside Russia “, John Gunther gave some attention to education. He claims that in Soviet schools five times as much time is spent on mathematics and science as is the case in schools in the United States of America. We have had tremendous development in this country through organizations such as the New Education Fellowship, which have done good work in humanizing education, but which have also acted sentimentally in making the task of the student a softer one. After all, one of the functions of education should surely be to develop intellectual discipline and the ability to tackle a job, but in very few statements on education or in our educational thinking in recent years has much attention been given to this matter.

Quite apart from the philosophy of softness, however, there are many forms of education in this country that have become tremendously backward. There is a private school of marine engineering in Fremantle which is doing excellent work. Although it is a very small establishment, it has done good work in training people in engineering. But in many fields, not so much at the professional level as at what might be called the technical school level, the standards of education in this country are laughably deficient. In technical schools there is a very great lack of equipment and machines necessary for giving practical training. It is all very well to put up a technical school, but a technical school will be able to train its students only if it has sufficient equipment. It would be better to have a tin shed with equipment that people can use than to have a fine building without the equipment. It would be better to be in a tin shed with a thoroughly qualified teacher, perhaps brought from overseas, than in a fine building with a teacher who has had the kind of technical education that has been available in this country during the last 20 or 30 years.

It is not merely the physical trappings of education that need to be looked at; the whole content of education should also be considered. The Commonwealth has done a magnificent job in its survey of universities, and I believe it would be well advised to have a survey made of the education available, not only for the 5 per cent, of students who will enter universities, but also for the 95 per cent, who will not. We should investigate the educational facilities available for students of the age of fifteen-plus who have not the intellectual approach to fit them for universities, but who have skills the development of which is of great importance to Australia. We should try to improve the facilities available for any kind of education, commercial or technical, for persons of this age, realizing that the facilities at present are most deficient. The honorable member for Robertson has suggested to the Treasurer that the Government should take another look at grants such as the one we are now considering, which are designed to back the programmes of the States, and if his suggestion bears fruit it will be a very good thing for the country.

Ssr WILFRID KENT HUGHES (Chisholm) [5.36]. - I do not propose to speak on this bill at great length, but I do want to raise once again the problem of Commonwealth and State financial relations, which is something more than a hardy annual. It is almost a perennial, which goes on blooming every year. Yet we never seem to be able to develop the plant in the way that many people have suggested it should be developed. I want to make another plea to the Commonwealth Government to consider giving to the State governments wider control over their finances. We went part of the way when we abolished the federal land tax and the federal entertainments tax. The removal of those two taxes gave the States a very small degree of elasticity in their own taxation fields. But I think it is obvious to all of us that, in .State finances, we have long ago reached a stage at which the State governments have exploited to the limit, in almost every case, the fields of taxation open to exploitation by them. I am not talking about the theoretical argument that they can still levy their own income taxes, because they canno*. Unless the States are (?iven more elasticity in their financial affairs, the State governments will continue as puppets of the Federal Government under the federal system. I do not think it is the right and proper point at which to leave, the matter so long as we have State governments.

On 26th November, 1957, I asked the Treasurer (Sir Arthur Fadden) a question about the formula on which tax reimbursements were based. It is the most delightfully complicated mathematical problem that I have ever seen. Briefly, the adjusted population of each State in any year is calculated by multiplying by four the number of children aged from five to fifteen. The figure so obtained is added to the population of the State, and another percentage addition for density is made. In other words, allowance is made for the number of children of school age and for the density of the population. But many other very important factors have come into the field since that formula was introduced in the middle 1940’s. I suppose that the biggest of these factors is immigration. The States which are taking the greatest proportion of immigrants are being hardest hit under the formula. It is not only the natural increase of the population that is involved. It is a question of big influxes of immigrants each year, which add considerably to the costs incurred by the State on education, hospitals, and other social services, and, with the rate of increase from immigration being so much greater than the natural increase, additional strain is imposed on roads and transport services. I do not speak merely as a Victorian, but one has only to take Victoria as an example. That State is taking about 47 per cent, or 50 per cent, of the immigrants coming to Australia at the present time, and I think I am’ right in saying that the Victorian budget deficit is very considerable. I do not think that it is quite as high as that of New South Wales.

As the honorable member for Yarra (Mr. Cairns) has pointed out, there must be something wrong with a system in which State deficits are becoming larger every year. The budgetary position of the States has deteriorated so much since the financial year 1953-54, when there was a total surplus, that, last financial year, there was a total deficit of, I think, approximately £15,000,000; and there will probably be another total deficit in the current financial year of about the same amount. We all know the difficulties of the situation. I do not want to go into the question of whether one State has to build houses or another State has to build roads, or anything of that kind, but I do want once more to urge the Government to endeavour to tackle the problem and obtain some result from an investigation of the whole question of State and Federal taxation. I am not one of those who believe that uniform taxation of income can be done away with, but I think that a comparison of our system of State and Federal financial arrangements with that which operates in Canada will indicate that, indisputably, the Canadian provinces have a very much larger field of taxation, very much more elasticity in their financial arrangements, and more financial responsibility in relation to their own administrative programmes, than the Australian States have.

There have been several investigations of State and Federal finances in this country. I have before me a report on financial relations between State and Federal governments in Canada and in Australia, prepared by Mr. K. J. Binns. I know that it is now almost ten years old - it was prepared in July, 1948 - but it is well worth studying it and even conducting further investigations in order to bring it up to date. We have seen, recently, that an attempt has been made, in the constitution of the new African federation of Southern Rhodesia, Northern Rhodesia, and Nyasaland, to prevent the sort of Dutch auction, as they call it, that we have in Australia every time a meeting of the Australian Loan Council or a Premiers conference considers the division of tax reimbursements. The constitution of the new African federation lays down certain proportions in which tax revenues are to be distributed. Loans are raised by the central authority, in the same way that they are raised here, but provision is made for the constitution to be amended by meetings of the parliaments of the three areas - I suppose that means meetings of representatives of the three parliaments - and conventions may be appointed every seven to ten years to review the constitution. In other words, every one is endeavouring, under a federal system of government, to overcome difficulties of the kind that we have been facing at least since World War II.

As I have said, I want to suggest to the Treasurer, therefore, that the problem of elasticity is the most important question that can be discussed by this House. It is said, of course, that customs duties and excise must be imposed by the federal authority, and that the State governments cannot impose sales taxes. I am not quite sure of the constitutionality of that claim. For instance, there is no reason why the

States should not be given, as in Canada, the right to levy excise on liquor, which amounts now to a very large sum. It would have to be collected by the federal authorities, but there is no reason why the rate of excise in each State should not be determined by agreement between the State and the Federal authority and the latter acts as the collector of the tax. If that sort of thing happened, income tax reimbursements would have to be reduced but, in my estimation, it is more advisable and desirable that the States should take on their own shoulders a larger share of the responsibility for levying taxes, than all the time be told, when they come to federal conferences, just exactly what they are to get, because this leads to irresponsibility.

One other point I should like to discuss is how liberal we really are to the State governments. The tax reimbursement formula was laid down when uniform taxation was introduced. We now say to ourselves, “ We are very good fellows. Over and above that, we give you a supplementary grant “. I think last year this supplementary grant amounted to £19,000,000 and it is about £23,000,000 this year. On the other hand, because of increasing development, the incidence of pay-roll tax on State instrumentalities has been materially increasing. I think that now £15,000,000 or more is paid by the States and municipalities to the Federal Government in pay-roll tax. In other words, almost one-third, if not more, of the payroll tax which is collected by the Federal Government comes from the State governments and municipalities. In effect, this is returned, with a little extra, in the supplementary grants which the Treasurer says amount to £23,000,000 this year. If we deduct what the States themselves are paying, the extra payment is not more than £6,000,000 or £7,000,000.

Under this bill, which is a sort of mixed grill, we are to give the States another £5,000,000, of which £4,000,000 is to be distributed under the formula. An amount of £1,000,000 is to be divided between New South Wales and Queensland because of drought hardship. I do not know what the Government will do now with Victoria, as the dairying industry will be hit by the low price of butter overseas. Local government authorities are to have relief to the extent of £3,000,000 in extra loan money, if they can raise it. So far so good, and 1 have no objections. But I suggest that in the next Budget the Government might consider very seriously the elimination of payroll tax. It would not mean a reduction of £50,000,000 in revenue. We must first consider what is paid by the States and municipalities. So far as the States are concerned, the reduction could be offset by not giving them so much in supplementary grants. As I have said, a large proportion of these grants is at present returned to the Commonwealth in pay-roll tax. I cannot go into a long discussion of this matter, because this is not the right bill on which to do it, but I think that abolition of payroll tax would have a very good effect in other ways on the general cost of living. The States are paying a very high proportion of the pay-roll tax collections. That can be re-adjusted, and this makes it all the easier to abolish the tax.

The other matter to which I refer is, I think, the really important one. Although the Commonwealth has vacated the land tax and entertainments tax fields I ask the Government to consider whether probate duties should not all be levied by the Commonwealth and not the States. In other words, I think we could ask the States to give up probate duties, which should be collected by the Federal Government.

Sir Arthur Fadden:

– They want the change to be in the opposite direction. They want to take over the estate duties.


– Yes, I know. As I have said, two fields of taxation have been given back to the States. A third, probate duty, would be far better confined to the Federal Government. I have suggested that the States should determine the rates of sales tax and/or excise, and even if the Commonwealth collected these taxes it could pay them to the States. The same course might be followed, as in Canada, in regard to taxes on motor vehicles and petrol tax, or a certain proportion of the petrol tax. We should aim at allowing the States considerable elasticity to enable them to get away from this rule of thumb system which is made almost complete by the Commonwealth Grants Commission. The sole aim of the commission is to bring all the States up or down to one level. The interaction of the

Grants Commission and tax reimbursements really results in every State being placed on the one level with regard to social services and practically all other forms of administration. If we review these various fields of taxation and give some elasticity to the States, the State governments will be able to carry out much more of their party policies, which is what government is for. They will be able to get away from this uniformity and, finally, they will also have added financial responsibility, which I am certain will improve government in all State spheres.

It is for that reason only that I have had these few words to say on this bill. As long as we continue under the present system, we are strangling the States and not carrying out the federal system. By the tight hold we have over the financial resources, we are establishing a unified system, with which I do not agree, although of course the Opposition does. I hope that the suggestions I have made will be given some attention from the point of view of progressive development in the States.


.- Mr. Speaker, do you not think that this would be an appropriate time to suspend the sitting?

Mr SPEAKER (Hon John McLeay:

The honorable member will proceed.


– I was only considering those people who will be here to-night and would undoubtedly like to hear the early remarks I am about to make. As has been indicated already in the course of this debate, whilst the Opposition does not oppose the bill, we disagree entirely with the miserly amounts to be provided to the States in additional grants. The Treasurer (Sir Arthur Fadden), in the course of his speech on 20th March, said that the bill provided for the grant of £5,000,000 to the States for what might be termed additional assistance. He went on to claim that this was a munificent amount. He said -

It will be recalled that in the Budget for this year provision was made for tax reimbursements and supplementary grants to the States of £190,000,000, which was approximately £16,000,000 greater than the comparable payments in 1956-57. Notwithstanding this large increase in the grants, most of the States budgeted for deficits in 1957-58; in the aggregate, their estimated deficits exceeded £9,000,000.

The point I make is this: When the Parliament is considering the Estimates and other financial proposals put before it by the Treasurer as spokesman for the Government, a comparison is made of the amounts provided with what was given a few years ago. Government supporters never take into consideration the decreased purchasing power of the amounts they are providing. Although the assistance given to the States this year represents an increase of £16,000,000, there is no doubt whatever that the grants have less purchasing power now than they have had at any time before in the economic history of this country. The mere figures are not a true reflection of what is actually given. If the States were to be given increases proportionate to the increased cost of living since this Government came into office, the present amounts would have to be magnified many, many times.

Why should the States not budget for deficits? They have no alternative whatever under this Government’s financial policy. On each occasion the Treasurer’s approach to the Loan Council is: “ Take it or leave it “. The Treasurer has one vote, and the Commonwealth has two votes and a casting vote. If anybody can win a ballot with the chairman in that position, he is really achieving something. The Treasurer is on record as saying that if the States vote for more money they will not get it because he will not advance beyond his offer. The Loan Council has been reduced to impotence. That is why these statements about additional amounts should always be judged against the background of the decreased purchasing power of money and the mandatory way in which the Government, through the Treasurer, has said to the States: “ You must take what we are giving, because there will be no increase “.

This year the Government, through the Treasurer, is budgeting for a surplus of over £100,000,000, yet it allocates a miserly £5,000,000 to the States at a time when just on 100,000 people are unemployed and seeking work. Is it not a scandalous state of affairs that with a budget that provides for such a surplus, the Government refuses to give more to the States?

Mr Leslie:

– It is not a surplus.


– The honorable member for Moore could not convince the

Treasurer of that, because that right honorable gentleman boasted in the Parliament about the huge surplus that he would have on this occasion. With just on 100,000 people unemployed - that is the official figure, completely disregarding the unofficial figure - the Government is only giving the States £5,000,000. Recently, in this House, the honorable member for Stirling (Mr. Webb) quoted the statements of the various Premiers when this amount was agreed upon. Be they Liberal or Labour, not one of them agreed with the allocation. They all said that it was a pittance, considering the unemployment in their particular areas and the need to take up the slack in government and public works. This Government is running away from its responsibilities. On several occasions, the honorable member for Chisholm (Sir Wilfrid Kent Hughes) has shown how the States have been reduced to the status of vassals. They have not been given enough money with which to carry on. Those States that support the political policies of this Government are given financial assistance at the expense of the other States. That is why the Government, when it says that it is giving £5,000,000 to the States, might as well give 5d., for all it means to the man in the street. With a surplus of £100,000,000 the Government could have given £50,000,000. Local government authorities have been permitted to raise £3,000,000 on the loan market, but there is very little chance of raising that amount owing to the very low rate of interest that the local government bodies can offer compared to the interest rates offered by hire-purchase companies. Why does not the Government control interest rates offered by hire-purchase companies, and in that way encourage the investment of money in more worth-while avenues? While the profiteers and exploiters can invest at high rates of interest, local government bodies cannot be expected to fill their loans.

Sitting suspended from 5.59 to 8 p.m.


– When the sitting was suspended, I was speaking of the paltry allocation of £5,000,000 that is to be allowed to the States as additional assistance in accordance with the terms of the bill that is under discussion. At this stage, I wish to say a few words about the comments that were made in the course of his con- tribution to this debate by the honorable member for Mitchell (Mr. Wheeler). The honorable member is one of those strange members of this Parliament. He has a rather peculiar arrangement with the Government. He can say what he likes outside the Parliament so long as he votes for the Government inside; so we constantly hear him criticizing all and sundry in this House. Sometimes he criticizes the Government and sometimes he attacks the State Labour governments, but he diligently lines up to vote for the policies of this Government although they contradict the statements he makes outside.

I listened with interest to his speech because he does say something unusual. Among other things, the honorable member for Mitchell is recognized in this Parliament, with some other honorable members, as a representative of the private banking and financial institutions. Therefore, on matters such as that before the House now, we can expect him to put forward a point of view which represents the thoughts of the wealthy and influential section of the community who care little for the needs of the great majority and seek to serve the small percentage of the electors who put them into office. The Minister for Primary Industry (Mr. McMahon), who is now at the table, would be in the same category.

The honorable member for Mitchell expressed very strong criticism of the New South Wales Government and its expenditure. He said that if the Commonwealth Government had to give money to the States, it should supervise the expenditure of such money. Is not this the Government which believes in the rights and privileges of the individual and the independence of private enterprise? We may expect this Government next to take over the people, body and soul, just as it has taken over the various State governments of the day. The honorable member for Mitchell criticized State expenditure on public works in New South Wales. What does the Liberal party in New South Wales want to do with the £5,000,000 that is to be given to the States as a special grant? It has sent people travelling up and down the country inspecting the prisons and trying to do something better for the criminals who are in the gaols. If a Liberal government was in office in New South Wales, it would allocate its portion of this special grant, which is required for housing, to make conditions better for the murderers and criminals who have been put behind stone walls to keep them out of the way in the interests of the public. That is the type of honorable member who is sponsoring these propositions. The only contribution that his colleagues in other jurisdictions can make is to endeavour to improve the lot of those persons at the expense of thousands who require homes.

What is wrong with the Administration in New South Wales? The Labour Government there has been in office for seventeen years. It has been returned again and again overwhelmingly against Liberal party opposition. The present Premier, Mr. Cahill, has occupied that position for a record time, and it seems that he will go on indefinitely, judging by the collection of has-beens and no-hopers who have been lined up by the Liberal party to oppose him. This Government seeks to criticize the Cahill Government because it has given social service benefits to the people. The honorable member for Mitchell is seeking to restrict what the Cahill Government has given to aged pensioners in the way of various allowances. The honorable member wants to whittle down the privileges that are offered to pensioners in New South Wales by a progressive Labour government following the actions of its Labour predecessors. That is why the honorable member wants power for the Commonwealth to supervise State expenditure. He would like to put the people of New South Wales in the same category as those in South Australia who live under a Liberal tory government with an outlook which is so out of date that it is living in the era of 1900. Other State governments which represent the tories are in a similar category.

The honorable member for Mitchell criticized public works activities in New South Wales. In no other State have so many public works been instituted with the limited funds that are made available by this Commonwealth Government. The people know that in the construction of roads, dams and other developmental projects the Cahill Government has been most active with the miserly amounts it has been able to squeeze out of this Government at the point of the economic gun. The honor- able member for Mitchell ‘glossed over those achievements. He has been talking in similar strain to the electors of New South Wales for the last -six years or so but they have not taken much notice of him, judging by the record of the Labour Government in New South Wales. Honorable members in this Parliament will not take much notice of him either. The honorable member should learn the lesson of Canada. In that country, unemployment was growing as a result of a trade agreement with Japan and the restriction of public works. When the Government went before the people, one collection of tories sponsored proposals similar to those advocated by the honorable member for Mitchell, but after the election that party retained only 46 seats out of 113. Similarly, the programme that has been espoused by the honorable member for Mitchell will spell political doom for him and others who support such policies.

Why is not this Government making some of its £100,000,000 surplus available to States like New South Wales to provide work and employment for all? Why is it not making money available for the welfare of school children .and for education generally? We have a growing immigration programme and our population is increasing daily, but limited funds are restricting State governments in the provision of schools and health and other facilities. This country has a magnificent future; that is, of course, if it has an efficient national government. Instead of making some of its huge surpluses available, the Commonwealth doles out miserly amounts to the States. We must not forget that when the Government decided to hand out this £5,000,000, it really believed that it was letting its head go at a time when there are 100,000 unemployed. How would the States have fared if they had gone to the Government for money and there were no unemployed in the community? In that event, the Cahill Government and others would have received a pittance in the real sense of the word. Probably, they would have been sent away with £250,000 instead of £5,000,000.

Supporters of the Government claim that there are not 100,000 unemployed. The official figures indicate that there are between 60,000 and 70,000 registered for employment. Everybody knows that that is only about 50 per cent, of the actual number of unemployed in the community to-day. It is useless to beg the question. Even the daily press, which constantly supports this Government, has stated that there are too many unemployed in Australia. State governments cannot take up the slack in employment, if they are to be curtailed continually for want of money by a government which builds up huge surpluses and, at the same time, refuses to make money available for the benefit of the people.

Let us examine the Commonwealth Government’s approach to expenditure. The honorable member for Mitchell said that the Commonwealth .must supervise the expenditure of the States. Why does he not have a look at what the Government he supports is doing? Why is not the Public Accounts Committee inquiring into the St. Mary’s project and the wastage of public money there? That committee is not allowed to -do that; but the honorable member wants the same committee to supervise the accounts of the Cahill Government. Expenditure is growing in every Commonwealth department. Lack of supervision is exemplified by Budgets which require the people to make sacrifices but allow unlimited expenditure at the Commonwealth level.

Mr Duthie:

– The Government should resign.


– As the honorable member for Wilmot has said, the Government could very well resign in the interests of the people. The point I emphasize particularly is that instead of criticizing the administration of competent State Labour governments, supporters of this Government should look at their own backyard and put into effect some of the suggestions that they have directed to the New South Wales Government, which has had the confidence of its people for seventeen years. The honorable member for Mitchell should direct the attention of his colleagues to these matters.

The Commonwealth is constantly criticizing the States in respect of their expenditure. As far back as 1945-46, the Prime Minister (Mr. Menzies), who was then Leader of the Opposition, stated that education was a Commonwealth responsibility and that the Commonwealth Government should accept full responsibility for h. But when he became Prime Minister with power to take over education, with the consent of the people, he did not even appeal to them. Now, he restricts the States financially.

Education is also to be assisted to an extent by this grant of £5,000,000, but we find that in New South Wales by 1960 an additional 40,000 children will be seeking education in that State. To provide for these children, 67 more schools, at a cost of £250,000 each, will be required. Thi* Government expects the New South Wales Government, and probably the governments of other States, to implement a policy which will adequately educate these children on the miserly amounts granted by this Government. I could continue to speak about education at length, but the fact remains that this Government is shirking its responsibility and is neglecting possibly the most important aspect of national life - the adequate education of children.

The Government deserves severe criticism for its approach to these problems generally. The honorable member for Mitchell said that the New South Wales Government had squandered or misappropriated the money granted for drought relief. That statement is completely wrong. The honorable member knows that the Ministers in the New South Wales Government have accounted for their actions and have shown how the money has been spent to relieve distress caused by drought conditions, as was stipulated when the money was granted. It is all very well for the honorable member and others to make these airy-fairy statements. However, he makes these statements in an effort to put himself on side with his own party, because he is considerably at variance with it from time to time. After having had a good look at the Government’s policy, I am in complete agreement with him. It is time for a complete change.

The honorable member made his speech. I do not mind him interjecting, but my time is limited. I listened to him in silence. That was a big effort because it is hard enough to listen to him at all. However, I could not let pass his comments which were irrelevant, incorrect and completely misleading, and a charge against an administration that has given great service to thy1. 1 people of New South Wales. ‘

Let us look at another aspect of the Government’s policy in regard to grants to the States. 1 raise the question of housing. Only two people out of a population of 9,000,000 or 10,000,000 believe that there are enough houses for the people - the Prime Minister and Senator Spooner. After they had stated that there was no housing shortage, one could not find them for three weeks; they had to hide, so great was the indignation of the people. The Treasurer (Sir Arthur Fadden) is also labouring under a similar delusion. He says that plenty of houses are available, but the State governments, be they Liberal or Labour, know that there are not enough homes for the simple reason that to-day they have not enough money to provide homes. They are restricted in their efforts to provide homes in every possible way by this Tory administration.

An amount of £5,000,000 has been allocated, but that is merely a fraction of the amount that the Premiers, when they came here, said was necessary to relieve unemployment and to provide homes. What does the Government expect State administrations to do in order to provide houses, when they receive a miserable pittance although vast amounts of money are needed? Those who are suffering because of the housing shortage should never forget that the responsibility for providing the money for homes devolves upon the Commonwealth Government. The Government has failed in its responsibility to the people, and that is exemplified in the legislation now before us. The true situation can be seen in the country districts of New South Wales and in other areas. I shall be delighted to hear honorable members who sit in the corner as the so-called representatives of the Australian Country party tell us that not more than £5,000,000, for the whole of Australia, is needed to assist the development of the country districts in which they reside and which they mis-represent in this Parliament. No doubt they will say that this is enough to provide highways and to develop country districts.

Are they satisfied with an Australian Country party Treasurer who gives a miserable pittance to all the State governments and expects them to provide the amenities that are so necessary and desirable in a developing country such as this is? Of course, they know that this grant is too small, but the honorable member for Mallee (Mr. Turnbull) and others, because the Treasurer has pulled the strings, will dance accordingly and say that this amount should be satisfactory. They should get away from the horse-and-buggy outlook that they had when they came here as Australian Country party men. They should get away from the policies which were all right 30, 40 or 50 years ago for the people who put them into the Parliament and realize that to-day there are young settlers in the country districts, that young people have taken up properties and that people in the country districts not only want to develop Australia but also want to enjoy worth-while conditions. The miserable pittance given by the Government will not allow that development to take place.

Mr. Speaker, as you have probably judged from my remarks, I am a long way from satisfied with the Government’s actions. I should like to see, for instance, considerable improvements made in my own electorate and in other constituencies. I should like to see adequate housing, more hospitals, greater educational facilities, many shortages overcome and a better way of life provided for the people. While agreeing with the honorable member for Stirling (Mr. Webb) that we on this side do not oppose the bill, we certainly have strong criticism to level at the Government. We say this is a complete let down at a time when the economy needs bolstering and when public works should be increased tremendously in order to take up the slack in employment and to develop the country.

I know that the Government will be happy to hear me say that I have very little more to add. 1 am sorry that time does not permit me to speak at greater length. However, I say quite sincerely that this Government may well learn from what is taking place in other countries. The Government’s financial policy is out of date. It has completely destroyed stability and, far from taking up the slack in employment, has increased unemployment. The Government should learn that this country is worthy of further money for developmental purposes and that those matters which are the responsibility of State governments depend entirely for success on an administration at Canberra that will make sufficient money available. This Government has failed to do so. It deserves to be condemned. It is certainly out of touch completely with the realities of the situation and needs a good awakening. It was given that at Parramatta, and a continuance of this policy will mean that it will get it throughout the length and breadth of the country - and it richly deserves it!


.- It is always refreshing to speak after the honorable member for Grayndler (Mr. Daly) because one does not really want many notes to follow up his arguments. However, he said that he would like to see better housing, more hospitals, more schools and the lot of the people in New South Wales improved. Yet the whole tenor of his speech implied that New South Wales was being very well governed. How does he reconcile the fact that he wants all these matters with his defence of the New South Wales Government? It is incongruous to hear Labour members supporting the States. It is common knowledge that, in their philosophy, the States are to be destroyed and the whole government unified in Canberra - the centralized control of the socialists. They are like the old “ Commos “; they attack the things they want to bring into effect. Here they are defending the States that they want to slaughter. That seems to me to be quite wrong, but it is a method of propaganda that is constantly being used against this Government. Honorable members opposite accuse the Government of starving the States. Goebbels had much to learn from these people!

At the present time, an extraordinarily misleading statement on this very question is being circulated in New South Wales by the Minister for Transport, Mr. Enticknap. In every country paper, one can see the heading, “ Canberra makes it hard for the States “. Then he goes on to say that £400,000,000 - a questionable figure - is raised in taxes in New South Wales and that New South Wales gets only £84,000,000 back from the Commonwealth. He says that that is only 4s. in the £1 and asks, “ Is not that a shame? How can the State exist? “ lt is very easy to swallow that kind of propaganda when you do not know the truth. But truth is a thing that the Labour party does not like to have exposed to tin public view. A close examination rf the facts shows that most of the money that the Commonwealth collects in taxes in the States is spent in the States. In the last financial year the States received from the Commonwealth £266,000,000 in tax reimbursements. That is the figure from which Mr. Enticknap gets his 4s. in the £1. But the States get a great deal more from the Commonwealth than the amount they receive directly in tax reimbursements. For instance, they receive £240,000,000 from Commonwealth revenue in the form of social services provided for State residents. Does the New South Wales Government think that revenue raised in Victoria should be used to pay pensions in New South Wales? In the last financial year, £243,000,000 went to the States in the form of expenditure on social services, of which amount New South Wales received £87,000,000. So the expenditure on social services in New South Wales brings Mr. Enticknap’s figure of 4s. in the £1 up to more than 8s. in the £1.

But that is not the end of it. When the Government’s opponents are talking about what the States receive from the Commonwealth, they deliberately omit any mention of expenditure on war and repatriation services. Is that an expenditure that benefits the Commonwealth, or is it an expenditure made in the interests of the States? Do not almost all of the war pensioners live in the States? War and repatriation services account for a Commonwealth expenditure of £120,000,000, financed from Commonwealth revenue, giving New South Wales another 3s. in the £1 which, with the previous amount I have mentioned, brings Mr. Enticknap’s figure of 4s. in the £1 .up to lis. in the £1.

As we go along it is easy to see bow .discreditable is the sort of propaganda used against the Commonwealth by people in the States. They do not take into account payments by the Commonwealth to the National Debt Sinking Fund, payment of charges on international loans, such as the Swiss loan, the International Bank loan and the Canadian loan, which have been raised in recent years. Every loan that the present Government has raised on the foreign market, against the opposition of the honorable member for East Sydney (Mr. Ward), who is very critical about the bringing of foreign money to Australia, has been devoted entirely to financing imports for the States.

But Mr. Enticknap did not allow that kind of Commonwealth expenditure to have any part in his figure of 4s. in the £1, although he imported for his department millions of pounds worth of equipment.

Then there is Commonwealth expenditure on bounties and subsidies, the benefit of which goes to New South Wales and the other States. That accounts for another £21,000,000. Loan consolidation takes another £119,000,000, an expenditure arising from loans whose proceeds are used by the States. So roughly £950,000,000 of the Commonwealth annual revenue from taxes goes directly to the States. Yet State politicians complain that the Commonwealth is treating the States badly.

But that is not all. Now we have the honorable member for Grayndler asking why the Commonwealth does not use for the benefit of the States its surplus revenue of £100,000,000 that was derived from taxation. Where does he think a considerable part of the loan money available to the States comes from? Are not borrowing deficiencies made up from surplus revenue? But the honorable member for Grayndler would not worry about that, because he has not bothered to acquaint himself with the facts. The main aim of our opponents is to deceive the people. They follow the old military maxim that attack is the best means of defence. It is because the Labour party follows this maxim that we have a Minister of the Crown in the New South Wales Government claiming that New South Wales gets back only 4s. in the £1 from the Commonwealth, relative to taxes collected in New South Wales when, in fact, the figure, as I have already shown without going into all of the details, is at least 12s. and is perhaps 13s. in the £1. Even then I have not taken into account the value df the services given to State residents by Commonwealth business undertakings such as the Postmaster-General’s Department, which supplies post offices, telephone services and so on to the States.

The interesting thing is that if it were true that the Commonwealth dealt with the States in the parsimonious fashion of Mother Hubbard, why is it that not one State has asked for a review of the formula under which tax revenue is distributed to the States?

Mr Peters:

– Victoria did.


– “ Victoria “, says he! Victoria has not asked for a review of the tax reimbursement formula. Are the States happy or unhappy? Have you ever noticed the States being backward about approaching the Commonwealth when they want more money? Do not honorable members think that if the States really thought they were being treated badly, and were entitled to a better deal under a new formula, they would ask for a new formula? But they do not ask for a new formula. Yet members of the Opposition in this Parliament, and members of the Labour party outside, who are committed, under the Labour party’s announced policy, to the destruction of the States, try to make political propaganda out of a lot of rubbish about the distribution of tax revenues. They are just passing the buck. We know that Mr. Cahill is notorious, when any shortcoming in New South Wales is brought to light, for passing the buck to the Commonwealth. It is only because people do not understand how the States get their money that Mr. Cahill gets away with it. Anybody who studies the relevant figures will see that this Government has given the States a fair deal.

The other source from which the States get money is the Australian Loan Council, on which the States have a majority of the votes. The honorable member for Yarra (Mr. Cairns) said he wanted a better system for the Loan Council. He said, in effect, “ What sort of system is it when the Commonwealth comes to the Loan Council and presents it with a fait accompli? “ He says that the Commonwealth attends Loan Council meetings with its mind already made up to permit a certain amount of loan money to be raised, and not a penny more. But the States have six votes on the Loan Council against the Commonwealth’s two votes.

Mr Chambers:

– What the honorable member for Yarra said is true.


– So it is true, is it? When we get down to a closer study of this subterfuge by which the Labour party is trying to deceive the public we find the truth. What is the Loan Council supposed to do? It is supposed to rationalize the borrowings of the States and the Commonwealth so that there will be no overlapping or competition for money in short supply.

If the States are dissatisfied with the decision of the Loan Council why do they not use their majority of votes accordingly? Why do they not decide to raise £400,000,000 or £500,000,000 from loans so that they will have plenty of money? The simple reason is that the States know that the loan market cannot supply more than £100,000,000 a year. They know that, in fact, the loan market has never, over the last seven or eight years, supplied more than £100,000,000 to meet the demands of the States for £200,000,000 or £300,000,000. But the States do not use their six votes on the Loan Council in an effort to raise £200,000,000 or £300,000,000 because they know very well that they have to rely .on the Commonwealth to supply the amount by which the loan market fails to meet the Loan Council’s target. The extent of the Commonwealth’s help in that direction is £100,000,000 a year, supplied from taxes for the raising of which the Commonwealth bears the odium, and for this service the Commonwealth receives no thanks from the States. Rather than thanks, the Commonwealth gets from the States continual complaints about how unfairly it is treating them. I say that the Commonwealth has treated the States very generously, because although the Commonwealth is entitled to 20 per cent, of the loan raisings it has vacated the loan market entirely in favour of the States and has supplied, on an average, £90,000,000 from its own resources to meet borrowing deficiencies each year.

Mr Thompson:

– From the .people’s taxes.


– Yes, and so from the Commonwealth’s own sources of revenue. It pays that amount from its surplus revenue from taxation, and it is the victim of any unpopularity connected with the collection of taxes.

I was rather surprised at the way in which the honorable member for Yarra calmly discussed these matters as though money were quite easy to find. He asked why the money should not be raised. But there are other aspects that he neglected. When the Commonwealth Treasurer attends a meeting of the Loan Council he comes with a firm plan in his mind, not something that has been just plucked out of the air. When the Treasurer assesses the borrowing programme at £190,000,000, for instance, he does so after considering the financial position, and the supply of man-power and materials. The result of supplying an enormous amount of money for works when there is an insufficiency of labour and materials is inflation. Inflationary effects have to be watched, and the capacity of the nation for public works has to be judged accurately so as not to create unnecessary pressures on the economy. Inflation is the greatest danger that we in Australia have to face. The United States of America, which is facing a recession at the moment is more frightened of inflationary effects than it is of depression. It is more afraid of inflation starting again than it is about the number of unemployed recorded to-day. The honorable member for Grayndler rather ignorantly said that the States are forced to budget for a deficit because of the parsimony of the Commonwealth Government. But do not people know that deficit budgeting is a very dangerous thing? It is a highly inflationary method of financing. The ultimate responsibility for controlling inflation is always placed squarely on the Commonwealth Government; but we have the situation of the States demanding more money, and if they cannot get it they go in for deficit budgeting and thus create further pressures on our economy.

Besides these problems that have to be faced by the Commonwealth, there is also the problem of enormously large loans raised during the war falling due. This year I think the total loans that fall due amount to £200,000,000 or £300,000,000. Either they have to be converted to new loans or fresh money must be obtained with which to pay off the investors. These are all problems for which the Commonwealth Government is responsible when it comes to the Australian Loan Council table. But according to the honorable member for Yarra (Mr. Cairns) these problems can be solved by a simple rule of thumb method. He suggests that all that has to be done is to get a few percentages, and divide the money on that basis. That is nonsense. This Government has been able to produce stability in this country, despite the criticism of honorable members opposite and others. This position has been achieved only by sound and courageous financing. The honorable member for Melbourne Ports (Mr. Crean) criticized the Government and referred to the achievements of the Chifley Government which, he said, was able to raise loans at rates of interest of 3± per cent., 3i per cent, or 3i per cent, whereas the present Government offers a rate of 5 per cent. The honorable member forgets that the conditions which obtained in the days of the Chifley Government were vastly different from those existing to-day. In those days there was capital issues control, and there was no other source of investment available to the public than Commonwealth loans.

Mr Crean:

– The public had confidence in the Chifley Government.


– It is not a question of confidence. Does the honorable member think for a moment that if his party was elected to office at the next elections it could raise loans at a rate of 31 per cent.?

Mr Crean:

– Of course, we could not. We would have to undo the damage this Government has done.


– It is nonsense for the honorable member to think that his party could raise loans at a rate of 3i per cent. It would not get any money at all. The fact is that no country in the world to-day is attracting more foreign capital than Australia is. The honorable member for East Sydney (Mr. Ward) and other radicals have often criticized the Government for borrowing money from overseas. But the Australian Labour party always speaks with two voices. To-day, we have the spectacle of the socialist Premier of New South Wales, Mr. Cahill, going to capitalist America to borrow money for investment in that State. We do not hear the honorable member for East Sydney or his colleagues saying that it is a shame to bring this foreign capital into Australia. Everybody should know that the world is short of capital and that it is impossible for any country to expand unless it can attract capital. We have to expand on borrowed capital and on the savings of our own people.

Honorable members opposite are always attacking the big business monopolies and shipping combines whom they regard as capitalists. Who are these big capitalists? They consist of tens of thousands of small, thrifty investors. Honorable members opposite do not like to hear that, but it is the truth. The great investor is not the big businessman but the small thrifty man. He is the fellow who, although he is damned by the socialists as a capitalist, denies himself something so that he might invest his money. A small man might deny himself a new suit and a big man in business might deny himself a yacht; but the capital which is invested in these big enterprises all comes from the self-denial of the men who are investors and who are willing to risk their capital even if they do not always make a profit. They are the greatest benefactors of this country. No labour force can work without tools of production, and the tools of production are bought with the savings of men and women. But we cannot rely only on our own savings; we must augment them with savings from overseas.

On the subject of public works, I often get very hot under the collar when I read articles in the press by financial editors attacking the amount of development work represented in the Government sector. They complain that too much money is being spent on public works. But has any one ever seen these carping critics of the press, these know-alls saying, “We do not want that job done”, or “This project is not necessary “. They do not say, “ We do not want schools, or power houses or dams to be built “. Yet, they say there is soo much money being spent on public works. Maybe a great deal of money is being spent, but they should remember that Australia is expanding at an abnormally fast rate. We have to populate this country, and in order to supply the needs of an increased population we have to expand our public works. If the critics say that we are spending too much in the public sector what works would they like to see abandoned? Such a thing is never mentioned by them.

Before I leave the question of public works, I should like to comment on the claim by the honorable member for Grayndler as to the wonderful things the New South Wales Government has done by way of public works. He accused the honorable member for Mitchell of misleading the public. The fact is that New South Wales is littered with uncompleted public works Not one public works project outside of Sydney has been completed. Look at the many dams which should be completed and storing water, which is the life-blood of the country. I refer to Burrendong, Glenbawn, Keepit and Warragamba dams. Not one of those has been completed. They have been started in various parts of the State purely for political purposes. The honorablemember for Grayndler talked about the need for schools, and said that it was a shame that these were not being built because the Commonwealth Government, out of its resources, was not supplying the requisite money to the States. I ask thu honorable member how many schools could be built for £2,000,000. He must agree that quite a number could be financed with that amount. I, therefore, ask him why the Government of New South Wales saw fit to spend £2,000,000 in the purchase of two coal mines. These mines will not produce any more coal under government management than if they were operated under private enterprise; and the £2,000,000 spent by the New South Wales Government in buying them could have been utilized in the building of new schools. That is the sort of thing which the honorable member for Mitchell had in mind when he spoke about keeping a check on the purse-strings of the States.

I ask the honorable member for Grayndler to consider the cost of the Circular Quay railway. Which would be more important - that railway or the Keepit Dam? Which would produce more goods for export? The Circular Quay railway and the Eastern Suburbs railway and other similar expensive public works in the Sydney metropolitan area have absorbed money that would be far better spent on public works projects in the country. Once we are rid of the present financial octopus in Sydney, it may be possible to go ahead with much-needed country works. On that basis, the honorable member for Mitchell pointed the bone at the Cahill Government, and rightly so. The only point on which I cannot quite agree with that honorable member is that I believe in sovereign States. In my opinion there should be not a Commonwealth Public Accounts Committee, but a State public accounts committee doing work in the State sphere similar to that now being done by the Commonwealth committee in this Parliament. The work of our committee has led to a great improvement in the control of departmental expenditure. 1 listened with interest to the honorable member for Stirling (Mr. Webb;, who opened this debate for the Opposition. He spoke in a gay, irresponsible manner. He said that there is unemployment in this country and that work could be provided for the unemployed on the construction of a uniform gauge railway from Broken Hill to Port Pirie, from Port Pirie to Adelaide and from Kalgoorlie to Perth. Of course, those lines could be built but such work would absorb millions of pounds. The Australian economy has just about reached a point of full employment and a right balance, but now the honorable member wants to upset it. He says that there are too many unemployed in Australia. The actual number of unemployed is much smaller than honorable members opposite are prepared to admit. They have distorted the unemployment figures not only for Australia but for America also. An increase of 500,000 in unemployment figures in one month does not mean that 500,000 have been thrown out of employment. It means that bread winners have lost their jobs and that their families are looking for workSo, the figures do not give the true story at all. It will be found that America will recover very quickly.

It is necessary to have a balanced programme of public works. In reply to Opposition members who keep on saying that there are many marvellous public works that we could undertake, I say, “ Of course we could. But if inflation - the greatest threat to an economic stability - grows rampant again, we shall have serious trouble”. At the present time it appears that a better season is coming. Unemployment has been largely due to drought conditions and I believe that our economy will recover during the year. The people will then look to the Government to continue in office for several elections yet to come.

The honorable member for Yarra spoke about the need for priorities in public works. Intentionally or otherwise he misinterpreted the policy advocated by the right honorable member for Cowper (Sir Earle Page). Ever since this Government came to office it has been imploring the States to establish some system of priority for their public works. The right honorable member for Cowper spoke strongly on that point. But the honorable member for Yarra used the right honorable gentleman’s argument, not as the right, honorable member for Cowper used it, but rather to support his own idea of unification. He said that Government supporters including the honorable member for Mitchell and the right honorable member for Cowper’ had said that the States should establish an order of priority. He- said that surely the best way to handle that problem was through a unified control. Nothing- is further from the- truth. The idea of the right honorable member for Cowper was to have an effective method of coordinating State and Federal works through a council such as the Australian Agricultural Council, but not as the honorable member for Yarra recommended, through unification. Honorable members on this side of the House are entirely federalists. We believe in federation and in the sovereign States; but we also believe in good State government.

I believe that taxing powers should be given back to the States. I believe that until that is done there will always be the bickering and buck-passing that have been, occurring ever since this Government came to office. That disputation did not exist previously, because under Labour the States were never given anything to. bicker about. But this Government has been more generous. That is why I support very strongly the. return of taxing powers to the States, if it can be done. I know that there are very considerable constitutional difficulties in the way of it.

We are debating the States Grants (Additional Assistance) Bill which provides for the granting by the Commonwealth of an additional £5,000,000 to the States in order to assist them in connexion with a temporary condition of unemployment. It was said by the honorable member’ for Grayndler (Mr. Daly) that £5,000,000 was a miserable amount to give. Well; it is only intended to cover a period of three months until June. Included, in it is an amount of £1,000:000 to help two States, New South Wales and Queensland, because they were- hardest hit by the drought; We are told that the provision made in the bill is miserable; but if the Government is to give more and more money, surely the result will be inflation.. Is there any rule, ofthumb for determining a reasonable amount? Are not the people, in America, more afraid of having too much too soon than too little too late? Surely the time, to give money and the amount to be given are matters of judgment. This Government has shown responsibility throughout its management of the country’s economy. It has never pandered, to popularity. It has gone the hard way and has. proved that the Australian economy is the most stable in the world. That is a fact. Yet our opponents say that the Government has not been able to govern this country! I think, that the country will judge, that for itself again this year. .


.- The House can always rely on the honorable member for Hume (Mr. Anderson) to give a speech that leaves very little to be answered. But he raised a couple of points on which I should like to touch although they have nothing whatever to do with the measure before the House. At the eleventh hour, the honorable member told, the House what the bill purported to do but even then he did not debate the measure. Therefore, I feel that I am entitled to make some comment on the earlier points that he raised. The honorable member said that the States had nothing to complain about if they did. not get an adequate allocation of moneys from the Loan Council because they had six votes and the Commonwealth had only two at council meetings. On the surface of this argument it would appear that all that was necessary was for the State Premiers to be in a majority and the Loan Council would be automatically committed to their decision. That must be the. inference to be drawn from the statement of the honorable member.

Accordingly, I take his mind and the minds of honorable- members back to 1956 when, by five votes to three, I understand, the Loan Council voted for an allocation of £215,000,000 to the States. But the Premiers were told in quick time that they would get £190,000,000 and no more. How can the argument of the honorable member- for Hume that the States have six votes and the Commonwealth two be effective in those circumstances? When the States want more than the Commonwealth is prepared to give them, they do not get it. The fact of the matter is that no matter what the States want, they get only what the Commonwealth Government is prepared to give them. It would not matter if the States had 150 votes and the Commonwealth had only two; they would still not get any more than the Commonwealth was prepared to give them. So, in 1956, although the States resolved, by a majority of five to three, that their allocation would be £215,000,000, they were told in no uncertain manner that the most that they would get would be £190,000,000, and £190,000,000 they got. That dispels all the arguments that have been submitted in that regard by the honorable member for Hume.

The honorable member for Hume also asked what was the good of allocating money to solve unemployment when there was a shortage of labour and a shortage of material. Will any honest member in this Parliament argue that there is a shortage of labour or a shortage of materials? There is no shortage of labour and no shortage of materials. And I suggest to the chamber that there is no shortage of money except that the Commonwealth will not let it go. It is futile for the honorable member to put this argument forward.

The honorable member for Grayndler (Mr. Daly) made several references to the speech that was made yesterday by the honorable member for Mitchell (Mr. Wheeler) to whom I listened with great interest. I make only one comment on the speech of the honorable member for Mitchell. I do not believe that he was really sincere when he made the suggestion that before moneys are made available by the Commonwealth to the States, the Public Accounts Committee should investigate the manner in which those moneys are to be expended. I put it to you, Mr. Speaker, that the only investigations of that kind that the honorable member for Mitchell would support would be with relation to the Labour States.

Mr Joske:

– The irresponsible States.


– Apparently the only irresponsible States are those that have Labour governments. That brings me to an interesting aspect of the comments that I wish to make to-night. During all the years in which I have been in this Parliament and have debated matters affecting Queensland, I have had to answer the most vicious and violent charges against the Queensland. Government made by Government supporters from Queensland. On this occasion, however, there is a. deathly silence on. the other side of the House when the situation in Queensland is mentioned, because the last State election resulted in a LiberalCountry party government coming to power.

Let me now return to the measure before the House, which is a bill designed to provide a special grant of £5,000,000 for the States. The amount of £5,000,000 is to be allocated in the following way: -

Because the Labour party believes that half a loaf is better than no bread, we support the measure. I suggest in all sincerity, however, that the Government’s decision to allocate £5,000,000 in this way was made at a time when the Minister for Labour and National Service (Mr. Harold Holt) was making repeated public statements to the effect that the unemployment situation in Australia was not serious enough to worry about. Despite those statements, the Government allocated’ £5,000,000 for the relief of unemployment.

At the time when this grant was decided upon there was a high level of unemployment. I know that the Minister for Labour and National Service has submitted figures to this House showing numbers of unemployed’, but those figures are not acceptable to me, and I believe that they are also not acceptable to many honorable members on both sides of this. House. I believe that the figures given by the Minister represented about one-half the actual number of unemployed in this country.

Mr Freeth:

– That is only the honorable member’s guess.


– It is not a guess atall. Government supporters have told us that the number of unemployed at the time was about 60,000 or 70,000. In this connexion I shall rely on figures given by the Country party Premier of Queensland, and I shall endeavour to show that the amount of £5,000,000 that has been allocated is. grossly inadequate to achieve the purpose for which it is granted. If the. Governmentwere making a grant for some particular public works, perhaps £5,000,000, or some other amount - greater or less - would be sufficient, but this grant was made for the express purpose of relieving unemployment. The Prime Minister (Mr. Menzies) is my authority for that statement.

Let us accept the figures given by Government supporters and say that there were at the time 70,000 unemployed in Australia. How far would £5,000,000 go to relieve the situation? The Country party Premier of Queensland - it is a long time since we have been able to refer to a Country party Premier of that State - finds himself in no better position than his predecessors were as regards allocations of moneys by the Commonwealth. He has said that the £1,125,000 that Queensland will receive under the measure before us will enable 3,500 men to be put back into employment. I do not know that the position has become any better since he made that statement. At that time it was admitted that there were about 26,000 unemployed in Queensland. If the Queensland Premier’s own statement is to be accepted - and I accept it as an honest statement by Mr. Nicklin - and only 3,500 men will be put back to work as a result of the grant of £1,125,000, I want to know what is to happen to the other 22,500 unemployed.

Mr Brimblecombe:

– They will be automatically taken up by private enterprise.


– The honorable member for Maranoa says that they will be automatically taken up by private enterprise. I wish to God I could accept that as being a factual statement, but nobody knows better than the honorable member that if we cannot relieve the unemployment situation by public works, private enterprise will not assist.

The Government has boasted - this may be getting slightly away from the matter before us, but we have been talking about general allocations of loan moneys and tax reimbursements - and will continue to boast that it has made available to the States more than was granted by the governments that preceded it in office. The Government never mentions the fact, however, that it would necessarily have to allocate a good deal more than was granted previously because of the decline in the value of money. What is the position of the £1 to-day compared with its position under the Chifley Government? To what extent has the value of the £1 decreased? The Government has no reason to boast that it is now allocating twice or three times as much to the States as was granted by previous governments. If Government supporters are honest, they should consider what the States can do with the money they receive - what they can purchase with it and what services they can pay for. The claims of the Government in this regard, therefore, are, I suggest, dishonest and should be disregarded.

I wish now to deal briefly with an aspect of the unemployment situation in Queensland that affects not only my own electorate but many other parts of the State. I refer to the position of seasonal workers. At the outset let me say that I heard the Minister for Labour and National Service make a statement at one time that a seasonal worker who is not working at a certain time should not be considered as unemployed. He said that if a man is able to return to employment in a sugar mill, a shearing shed, or a meat works, after three, four, or five months, he cannot be considered to be unemployed. I want to put the situation as it exists in Queensland at the present time, and I take it that seasonal work, with its disadvantages, occurs in other States as well as in Queensland. From about the beginning of World War II. until some two years ago, seasonal workers had no worries about being unemployed for part of the year. This was due largely to the great expansion of the sugar mills. In the sugar industry, there were increased peaks, increased assignments, and increased production, and the sugar mills had to expand in order to crush the cane available and produce the sugar required. Per medium of automation, we have now reached a stage at which the sugar mills have attained the limit of their capacity for expansion, and sugar workers can no longer expect to find work in the slack season. In the main, after the end of the crushing season, they are now unemployed.

Mr Brand:

– They always have been.


– Knowing very well what I am saying, I acknowledge that the honorable member is a great man in the sugar industry. I put it to him quite plainly that, in the old days, before World War II., mill workers and cane-cutters could expect to find work only in the crushing season, and they were unemployed after the end of the season; but from about the beginning of the last war until two seasons ago, that was not the case, and the mills pleaded for men. They went even further, and introduced immigrant labour in the slack season in order to expand the mills and increase their crushing capacity. No ons knows better than does the honorable member for Wide Bay (Mr. Brand) that that expansion ceased two years ago. What applies to the sugar mills applies also to the meat works and the pastoral industry, and to all industries that are based largely on seasonal activity. Those who were not able to find work in the sugar mills or the meat works in the slack season could always find it on public works, because money was always available to the States to undertake public works during the slack season. In Queensland, large public works were never undertaken in the cane crushing season because there was always a risk of a shortage of labour at that time of the year It was the custom to wait until the seasonal workers finished their seasonal employment, and then they were employed on public works immediately the wet season ended. But the failure of the present Commonwealth Government to provide the States with adequate finances has denied seasonal workers these opportunities for employment.

Much as I dislike stating it in this House, the fact is that, to-day - and there seems to be no prospect of improvement - thousands of workers in Queensland can expect to obtain work for no more than six months of the year. This Government and other governments, irrespective of their political persuasion, have never attempted to provide for seasonal workers. After the war, as I have said, those workers were spoilt, because they were able to accept the fact that the mills would employ them in the slack season in expanding crushing capacity. Much the same thing was happening in the meat works. As a consequence, there was no unemployment in the slack season. No one can deny that the situation in Queensland is very much different to-day. Proof of this can be found very easily by obtaining honest figures from North Queensland, which will substantiate what I am saying. I remember pointing out to the Minister for Labour and National Service on one occasion that the most that we could offer to the immigrants that we were bringing into the sugar industry was six months’ work a year.

It should be remembered that, when a cane-cutter is put out of employment at the end of the season, he is put out of a home also, because he depends on accommodation in barracks on the farm on which he is employed during the crushing season - barracks that are provided under the terms of the award. However, he throws himself on the generosity of the cane-farmer if he wishes to remain in the barracks during the slack season. If the farmer does not want him to remain in the barracks, he is not only out of employment, but also out of a home. In addition to looking for work, he must look also for accommodation.

Mr Brand:

– It is not fair to canegrowers to say that.


– I am not saying that all cane-growers put them out, or that any cane-grower puts them out. I am sincere in this matter, and I want to be honest. I do not want to take a party-political line. What I am saying is that the moment a cane-cutter completes his contract with a farmer, or group of farmers, he not only is out of work, but also could be without accommodation, because, if the farmer does not want him to remain in the barracks, he must leave.

What is the overall effect of the present situation, Mr. Speaker? When Mr. Nicklin said that £1,125,000 would provide employment for 3,500 men, he said that the Queensland Forestry Department would absorb most of them. But that would still leave 22,500 workers in need of employment in Queensland. Some of them would have every justification for believing that if they obtained employment, they would be employed indefinitely. But a seasonal worker can look forward to employment only until the end of the season. I know that this is a big problem and that it presents a dilemma with which governments will always be confronted unless there is another war or something of the kind. T am sure that the honorable member for Wide Bay, with his great knowledge of the sugar industry, will agree with me that, for the most part, the sugar mills have reached the limit to which they can expand their crushing capacity unless something extraordinary is done to obtain more markets overseas for our sugar. As things stand at present, thousands of workers are not required by the sugar mills any longer in the slack season, and the lack of funds prevents the State Government from providing alternative employment. In this situation, the most that these seasonal workers can hope for is the payment of the unemployment benefit during the period for which they are unemployed.

Mr Brand:

– Will the honorable member, in fairness to the present Queensland Government, admit that it is working under the Budget brought down by the Gair Labour Government?


– 1 am afraid that the honorable member mistakes my meaning, Mr. Speaker. I do not accuse the present Queensland Government of anything. I sympathize with it, because it will be in exactly the same position that the Labour government that preceded it was in, and that the tory governments in Victoria and South Australia are in. Mr. Nicklin, Mr. Morris, or Mr. Hiley, may come to Canberra and record a vote at a meeting of the Australian Loan Council, but will obtain not one penny more. I do not attack the present Queensland Government for anything. What I am saying is that the national Government, sooner or later, must face up to the fact that the people must be kept in employment if the economy is to be stable. If we have full employment, we need not worry about stability in the economy. If we want a stable economy, there is only one thing for us to do - provide the funds that the States need in order to discharge the functions for which they are responsible.

I began by saying that my case was simple but, nevertheless, sincere. I am putting a case for people who are destined to be unemployed for approximately half the year. There are not one, two, ten, or 100 such people in the Australian community; there are thousands of them. I do not suggest that they are confined to Queensland alone, because other States also have seasonal industries. I put it to the Government that whatever solution it thinks might meet the case, the Government must face up to the fact that it cannot keep thousands of men in this country indefinitely on half wages each year. What I said about new Australians applies also to many old Australians, The only reason T mentioned new Australians was that this Government takes such pride in the great work it is doing in assimilating new Australians into our community. Old Australians may have better opportunities because they know their way about better than do new Australians. In hundreds of cases the most that the Government is offering immigrants that it puts in my electorate is six months’ work a year, and they have to battle for themselves for the rest of the year.

No doubt, when I have finished my address, somebody will say, “ The honorable member did not offer any solution “. I am not attempting to offer a solution. The case I am putting to this Government I put also to the Government that I supported. Something must be done sooner or later. Among the great numbers of unemployed to-day are people whom the Government will not accept as unemployed because it says they have at least six months’ work a year. The Government says, “ They have the mill, the meatworks, the shearing shed, or somewhere else to go to in May or June “. Those persons are just as much unemployed as the men who are out of work for twelve months. If the Prime Minister or any supporter of the Government says that these men are not unemployed, let him say so to the wives and families who know that no pay is coming in each Friday or alternate Friday. I appeal to the Government to give the most serious, sympathetic, and urgent consideration to this very alarming aspect of seasonal unemployment in this community.


.- The simulated indignation of the honorable member for Herbert (Mr. Edmonds) about the size of the grant now under discussion, is characteristic of the whole spirit of the debate as evidenced so far by members of the Opposition. It has always struck me as being peculiar that, when a measure of this nature is presented to the House and is being debated, it is greeted with derisive terms such as “ half a loaf of bread “ - a term used by my friend the honorable member for Herbert - “ miserable “, “ contemptible “, “ grossly inadequate “, and others that cannot be described as being terms of praise. The truth of the matter is to be found in the opening remarks of the Treasurer (Sir Arthur Fadden) in presenting this bill, when he declared -

The purpose of this bill is to seek approval of Parliament for the payment of an additional £5,000,000 to the States in the financial year 1957-58.

To describe this bill as being miserable, contemptible, and grossly inadequate, strikes me as displaying a rather odd attitude of mind. This is an additional grant, and we would do well to remind ourselves that for this year, 1957-58, the supplementary grants to the States total £24,145,000, while the formula grants total £165,855,000. Apparently we have now reached a point where amounts of money of this size are simply to be described in terms of “ Cahill-ism “, if I may use the expression. We have become lottery-minded, and millions of pounds are simply dismissed in an offhand and rather childish fashion.

The honorable member for Herbert adverted to a number of matters concerning the State of Queensland. I share something with the honorable gentleman in that we both come from the Queen State of the Commonwealth. I thought he was being a little unfair when, to my mind, he criticized the Queensland Government, but he suddenly corrected himself and said, “ I am not criticizing the Queensland Government”. If he was not criticizing the Queensland Government, I may be permitted to say that he was giving it some rather warmhearted pats on the head. He mentioned the issue of unemployment. I said in this House a few weeks ago that I was not one who could look at statistics relating to unemployment without trying to grasp and understand the misery that the figures really meant to many thousands of people. I also stated on that occasion, and I reiterate sincerely and warmly this evening, that if the attitude of the Australian Labour party in this House is that unemployment is an issue to be used in a political fashion, that is a contemptible attitude to adopt.

I carry out what I suppose may be regarded as a rather odd political practice. I report publicly to the electors of my electorate once a month. When this unemployment hoo-ha was at its peak, I invited all the unemployed in the Moreton electorate to come to one of my regular reporttotheelectors meetings. I will be quite open and honest in saying that I anticipated

I would get 300 or 400 people. That anticipation was founded on the one hand on the figures presented by the Minister for Labour and National Service (Mr. Harold Holt), and conditioned on the other hand, no doubt, by the many wild stories circulating about the actual figures. I arranged for some half a dozen of my friends and supporters to come along, equipped with tables, chairs, pens, ink and forms with provision for such particulars as name, address, where previously employed, age and so forth. Expecting 300 or 400, I got seven! My invitation was not based on a promise that I would find employment for the people concerned, but that I would endeavour to do so. In passing, I may say that I was successful in that particular enterprise. That reveals the whole psychology of the Australian Labour party’s thinking on this issue. If honorable members opposite persist, they will arrive at a circumstance and time when there will be mass unemployment, and it will not do their political cause any good at all.

I return to one or two of the other fascinating points made by the honorable member for Herbert. He mentioned seasonal workers, and I suppose that they present a great problem, but I asked the honorable gentleman what he proposes should be done. What does he suggest? I think that I can find the answer in his own speech. He said that he had no suggestion or no proposal to make. I turn briefly to the pastoral industry. Shearers earn approximately £7 for shearing 100 sheep. A merely average shearer will turn out 120 sheep a day. If he is shearing ewes or two-tooth sheep, that figure will certainly rise. If shearing heavy wethers, the figure may be down as low as 110. If shearing rams the number would fall, but on the average a shearer would get through 120 or 130 sheep in a day. On that basis a shearer would earn £10 or £1 1 a day - £55 to £60 a week. That is what many of these seasonal workers earn. I do not know precisely the present position in the shearing industry, but I recall that a few years ago the great majority of shearers had little difficulty in finding constant employment. They do, of course, have to go from shed to shed, but how utterly impractical it is to suggest that by some manoeuvre, scheme, or enterprise, constant employment can be obtained for workers in the pastoral industry. Many vagaries and factors must be taken into consideration, and I imagine that precisely the same facts and circumstances apply to the sugar industry. The honorable member for Herbert was on unsteady ground when he referred to the difficulties of seasonal workers, lt is a condition that does not present any easy solution, if indeed it presents a solution at all.

I should like to refer to the honorable member’s criticism of the Loan Council. This Government is the first in the history of Federation to underwrite the loan programmes of the States. That fact should not be tossed into the ash can as being unimportant.

I return now to the point I was dealing with earlier. This debate has shown how deep-rooted in the Opposition is a spirit of political irresponsibility. The genesis of this political irresponsibility is to be found in the fact that Australia to-day has a system of uniform taxation. I do not propose to canvass the issue of uniform taxation, but I do say that as long as uniform taxation is maintained we are mocking the whole federal system. The States to-day are not partners with the Commonwealth in any enterprise at all. The State governments have become noisy and rather belligerent beggars. On every occasion that a grant is made by the Commonwealth, some Premier or spokesman for a State government says: “ It is not enough “. Every form of activity throughout the country is exposed to the cry: “ Ask the Commonwealth for more money “. It does not matter what form of activity it may be - education, housing, or local government.

I believe that there is an urgent need for the whole Commonwealth-State financial relationship to be reviewed. Some honorable members may say that the Constitution Review Committee is currently examining the problem - indeed, it may have concluded its examinations by now. I do not want to criticize the members of that committee, but I have no faith in the committee in general. I know that that statement may perturb some honorable members, but I have no community of interest on constitutional matters with members of the Labour party. On minor points I may have, but on major points I certainly have not. The honorable member for Lalor (Mr. Pollard) reflects Labour’s point of view. He is a centralist, a unificationist, and, as my friend, the honorable member for Bruce (Mr. Snedden), reminds me, a socialist. He believes in destroying all State legislative power. He believes in having all power centralized in Canberra. Honorable members on this side of the House are federalists. We are not unificationists. We are decentralists, not centralists. While the system of uniform taxation is maintained, with its mocking of the whole federalist system, we must realize that the whole process of federal government in Australia is being grievously centralized and undermined. The States are becoming glorified local government authorities. They are not exercising sovereign powers. The whole system of federalism in Australia will be, I fear, destroyed within ten years unless uniform taxation is brought to a halt.

The measure under discussion also provides for the payment of £1,000,000 to New South Wales and Queensland for drought relief on a fifty-fifty basis. I hope that at some time in the future we will reach the stage when the term “ drought relief “ will no longer be used. I suppose there are few countries in the world of which it can be said that their economies are virtually poised on a rainfall gauge, as is the case with Australia. Australia’s economic health can, in a sense, be revealed, by looking at weather maps. We have seen in Queensland in the course of the last twelve months the two violent extremes of nature - drought and flood. Queensland indeed presents an example of the ravages of nature. In my brief experience I have seen stock in the far west of Queensland living on wind-falls. At other times I have seen stock being cleared from flooded Channel country. I have seen the western rivers of Queensland - the Barcoo. the Balonne, the Warrego, and others - a chain of water-holes, and worse. At other times I have seen these rivers miles wide. I have seen dust inches thick; gilgai holes completely dry. At times I have seen trees along billabongs dying for want of water, and shortly after I have helped to pull stock out of mud and bogs, and when that could not be done I have seen the stock destroyed because they were so weak. It is very difficult to assess what these losses have meant, not only to the economy of Queensland, but to the economy of Australia. The losses have been not merely terrific; they have been criminal, and the fault lies with the governments. I say that not in any spirit of criticism, but, I hope, in a spirit of objectivity. The past indolence and indifference to drought and flood of State and Commonwealth governments can no longer be tolerated. It is said that this country cannot afford to implement schemes to correct these extremes of nature. I believe that we have arrived at a stage when it can fairly be said that we cannot afford not to implement them.

I hope that I will not be accused of being parochial or provincial in my outlook when I suggest that the Bradfield scheme for Queensland should be re-examined. In years gone by that scheme received scant and imperfect examination. The time has arrived for it to be reviewed. Briefly the scheme was to impound the waters in the range-

Mr. ACTING DEPUTY SPEAKER (Mr. Freeth). - Order! The honorable member is getting rather wide of the bill before the House.


– I am referring to the question of drought relief, and I suggest, Mr. Acting Deputy Speaker, that the Bradfield scheme is closely related to drought relief, I shall not needlessly go beyond your ruling, Mr. Acting Deputy Speaker, but I should like to say that the scheme provided for the impounding of water in the far north of Queensland. The water was then to be taken by tunnels and aqueducts through the Great Dividing Range and emptied into the inland rivers flowing towards South Australia. There may be some who believe that the late Dr. Bradfield was a dreamer, and that he was a vague and rather misty visionary. I often wonder if we are not the dreamers when I consider that we have done nothing about the implementation of the Bradfield scheme or others which are akin to it. Perhaps, I might give the House some idea of the terrific extent of the flooding in Queensland.


– Order! I must ask the honorable member to relate his remarks to the subject of grants to the States.


– I put it to you, Sir, that this legislation would be completely unnecessary for the purposes of drought relief if schemes of that kind had been implemented by governments in the past. I simply say that a review of the Bradfield scheme should be made. There would be merit in re-examining it because, in the last ten or fifteen years, engineering techniques have developed, and I suggest that an all-party committee of this Parliament might well review the Bradfield scheme. This is not a partisan matter. It is an issue which transcends all StateCommonwealth jealousies and conflicts. The call of our day in connexion with drought and the ravages of floods is for co-operation. The call is for bigger thinking and enterprise and action but, above all, for action.

As I said earlier when I mentioned drought relief, I hope the time will come in Australia when those words will not longer be found in our legislation, but that Australia by acting energetically and realistically, will ensure that the two extremes of nature will not inflict themselves in such devastating fashion as they have done in the past. A few months ago, we called for drought relief in Queensland; the call now is for flood relief. The circumstances are beyond human control, but nevertheless we see to-day at Bowen in Queensland, many persons who are victims of the ravages of massive floods. I put it to the Government to consider seriously the appointment of an all-party committee to re-examine the Bradfield scheme and find out whether it is practicable. If it is not practicable, we should ascertain whether any other schemes, such as the Reid irrigation scheme, are practicable and desirable. Our aim must be to ensure that the term “drought relief” shall no longer be found in Commonwealth legislation.

Port Adelaide

– It has been an interesting experience to listen to the debate on this bill. One could say that it has been related to many matters outside the bill itself. You, Mr. Acting Deputy Speaker, endeavoured to curtail the honorable member for Moreton (Mr. Killen) from spreading his remarks over other subjects; but I understood from the beginning of the debate that Mr. Speaker would allow honorable members to refer to unemployment and related matters.

As the debate has progressed, the philosophies, of different political parties have revealed themselves. The honorable member for Moreton referred to the sovereign powers of the States. He said that he was a federalist and that he was opposed to unification; but yesterday the honorable member for Mitchell- (Mr. Wheeler) said that he wanted the Commonwealth Parliament to have power to dictate to the States how they should, expend their revenue.

Those are the divergent views of Government supporters. Whilst one of them wants Commonwealth dictation to the States in the expenditure of their money, another supports sovereign powers for the States. Another supporter of the Government, the honorable member for Hume (Mr. Anderson), referred to inflation and- its evils. He said that the people of the United States of America were more afraid of inflation than of the growing number of unemployed in that country. I believe I have quoted fairly what he intended to convey. Yet, we remember that this Government has told, the people over the last few years that Australia has been enjoying the. greatest prosperity in its history since this Government was elected to office. The Government took over the reins in 1949 and by the end of 1955, according to Government supporters, the country was flourishing and more prosperous than ever before. Yet, in that time we suffered the greatest inflation we have ever known. How can the Government have it both ways?’ How can it claim to be responsible for great national prosperity when, under its guidance, the value of money has fallen by half?

Mr Ian Allan:

– But there is a lot more of it-


– The honorable member for Gwydir says that there is a lot more money about. What is the sense in saying that when another member says that inflation is more dangerous than unemployment? I have listened with interest to supporters of the Government, particularly as I realize that they are falling into line with the philosophies that Labour governments have espoused over the years.

They have referred to the late Mr. J. B.. Chifley. The honorable member for Moore. (Mr. Leslie) said that the Labour government did not give the States any money..

The policy of the Australian Labour party, which I support, is a cessation of borrowing except for- reproductive public works. We are told by this Government that the people are not putting enough of their earnings into capital expenditure, the expansion of industries and public works. We have been told that we are not saving enough. We have been told that we spend too much of our earnings and do not put enough money into projects of the future. The policy of the Labour government was to refrain, from borrowing for works that were not reproductive.

I ask honorable members to consider the activities of the Australian Labour Council. I admit that 1 do not always see eye to eye with all my colleagues- on this side of the chamber. We know very well how the Loan Council operates. The delegates meet and say how much they want for public works during the year. The Government tells them that if they want so much and the people will not lend it to them, the Commonwealth, will guarantee a certain amount. I believe that on the last occasion, the Government said it would guarantee up to £215,000,000. If it could not get that amount on loan market, it would, make up the difference.

It ali boils down to this: If the people are not prepared to lend their money to the Government willingly for public works, the Government will take it away from them. It will tax them and’ will lend some of that money to- the States for public works. That is what the Government is doing. The Government- is- coming round’ to what we advocated years ago - that the production of the country does not belong to the individual who is. able to obtain large sums of money.

When I was a young man in the Labour movement, we were considering progressive income tax. Our view was that the more a man had the more tax he should pay. When I first entered’ the South Australian Parliament in the early thirties, we had a Labour government. We did not have the uniform taxation that honorable members growl about and that the honorable member for Moreton seems to think is so obnoxious and dreadful. We had State taxation. In some States* including South Australia, there is a lower House and an upper House. The lower House may introduce; legislation, but it has to be passed by the upper House. In 1930 or 1931, under South Australian taxation law a poor man getting just a little more than the exemption allowed paid taxation at the rate of ls. 2d. in the fi. A man with an income of £30,000 or £40,000 a year also paid ls. 2d. in the £1. The philosophy of Labour was that, with thousands of people unemployed and with a need for public works, those who had the money should pay a fair portion of it into the public coffers so that the Government could start the necessary public works. The honorable member for Lalor (Mr. Pollard) is nodding in agreement. He knows that that view was the backbone of Labour’s financial policy. However, Labour was unable to have that view adopted.

To-day we have uniform taxation, but what does the Treasurer (Sir Arthur Fadden) do? Yesterday, during questiontime, he was asked, when preparing the next Budget, to consider reducing the petrol tax and the sales tax on motor vehicles. What did the Treasurer say? He replied that those suggestions would be considered with the dozens of other suggestions that had been put to the- Government. The Treasurer apparently holds the same view on taxation as that’ held by Labour through the years, although he has not been brought up in the Labour school. No matter what honorable members opposite may say about uniform taxation, they will not convince the Government that the taxing powers should be returned to the States. Five or six years ago we were told by the Prime Minister (Mr. Menzies) that within a year or two the States would have to take back their taxing powers. I prophesied then that in two years or in five years the position with uniform taxation would still be the Same because no government would be willing to return to the old style of the States imposing income tax. That prophecy has been borne out by events. When talking about uniform taxation, the honorable member for Moreton is almost a lone voice in the wilderness.

The honorable member for Mitchell suggested that the Public Accounts Committee should inquire into the expenditure by the States of amounts granted by the Commonwealth. He told us about the terrible things being done by the New South Wales Government. Just before the last election, Liberal supporters said that they would defeat the Cahill Government. However, one thing stood in their way. The Liberal party and the Australian Country party in New South Wales could not agree on a policy. If members of the Liberal party and the Australian Country party in New South Wales cannot agree on a common policy as opposed to Labour’s policy, how can they expect the people of New South Wales to elect them as the government?

Mr Turnbull:

– That is something like the Federal Labour party, is it not?


– The honorable member says that that is something like the Federal Labour party. We have had our vicissitudes, and we have had to suffer for them. Unfortunately, the people have had to suffer, too. Because of our vicissitudes, the people have returned the Government to office, but they have had to pay a very heavy penalty. However,, the people recognize the heavy penalty that they are paying for having returned this Government. When returning to Canberra this week, I stopped at Bendigo. There I met a business representative for a big firm which is interested in live-stock and other matters. This man travels around New South Wales. I do not recall his name now. He had no time at all for the Government. He was not an ordinary working man, such as a labourer or a tradesman; he was a businessman. He did not like this Government.

Mr Turnbull:

– He was the exception.


– No, he was not. He said he would not vote for the Government, but he did not know what to- do about Labour, either. The point is that, if he thought the present Government was no good, then he cannot be regarded as a man who looks upon this Government as an asset and as acting in the best interests of the country.

The honorable member for Mitchell referred to loan money. Loan money is allocated by the Australian Loan Council. The Premiers attend the meeting of the council and say how much they need for the works that they want to do. The council finally decides what is to be done. Amounts are allocated to the various States for housing. One- Premier may be told that he is asking for too much for housing when his- request is compared with the requests of other Premiers. Jealousies exist between the States, and some Premiers do not want others to get more than they do.

Mr Jeff Bate:

– The competition is all right.


– Of course competition is all right, if it does not interfere with your ideas. If competition is against your ideas, then you do not believe in it. Public works may be done by the Government itself using day labour, or tenders may be called. That policy is the same, whether the government is a Labour government or a Liberal government. I shall speak again about these philosophies because I believe that the fundamentals of any party policy determine the future of the country. I believe in the fundamentals of Labour policy. We are asked what is our policy and where is our unity, and we are told that we do not have any. Then when it suits our opponents, they turn to the Labour party’s rule book and platform and read out to us Labour’s policy. They will take a report of the proceedings of the Labour party conference at Brisbane or Hobart and say to us, “ There is your policy. You cannot get away from it. That is what you stand for “. I really cannot follow a lot of their arguments. Those who use them seem only to want to jump from one thing to another as it suits them. What I do is to get down to the fundamentals of any political party or of any society - belief in the freedom and rights of our country.

I mentioned how the honorable member for Mitchell had decried the New South Wales Government. The honorable member for Hume (Mr. Anderson) later in the debate said that no big public works projected in New South Wales by the State Labour Government was finished. He talked about unfinished dams. I saw a picture recently of a big dam in New South Wales which is filling up now. I remind the honorable member that most great public works take a long time to finish. Honorable members here may talk about unfinished State works, but how long ago is it since the Commonwealth started work on the Snowy Mountains scheme?

Mr Osborne:

– What about the Adaminaby dam?


– That dam was built, in a comparatively short period by contractors, but it is only one dam in the Snowy scheme.

Mr Osborne:

– lt is the one you are talking about.


– 1 am speaking of t heSnowy scheme. The Adaminaby dam is only one dam in that scheme. The point 1 am making is that honorable members opposite reproach the New South Wales Government about unfinished works in New South Wales. I say that practically all these dams are enabling us to use, before the work on them is completed, a great deal of water that would not be used otherwise. The same applies to the unfinished Snowy scheme. Now that work on the Adaminaby dam has almost finished, a great volume of water is being stored behind it. It is said that it will take seven years to fill the reservoir, but I do not know whether that is correct.

Three or four years ago, I think, a new township of Jindabyne was built. When I visited the existing township of Jindabyne some time ago I was told that it would be submerged, and that a new township was to be built near by. When I visited the site, I saw houses already erected there. I do not know how many years will pass before the Jindabyne dam is built, but it will be a considerable number of years. Why condemn the New South Wales Government for starting works that will take years to complete when at the same time, in the Snowy scheme, we are building houses years in advance of their being required? I know that that must be done, but if we admit that such a policy must be followed in relation to a federal work for the conservation of water, why do honorable members opposite decry the New South Wales Government’s following the same policy?

The States are criticized for lack of effort. There is one big work of tremendous benefit to South Australia which was done by the South Australian Government - that is, the extension of electric power supply in that State. During the Chifley Government’s regime the South Australian Government decided that as a lack of coal from New South Wales for power generation was making electricity restrictions necessary, the State would begin exploiting the coal deposits at Leigh Creek. Did South Australia open up these deposit* without help? No! The Chifley Government came to its assistance. I think that the first grant it made to help South Australia to exploit the Leigh Creek deposits amounted to £50,000.

That brings me to a re-statement of Labour’s philosophy, which is that public utilities should not be run by monopolies at the expense of the people, but should be publicly owned. At the time when South Australia decided to exploit the Leigh Creek coa! deposits that State had a conservative government in office. In the upper house there were fifteen government supporters and five Labour supporters, and in the lower House the Government also had a good majority. The Premier, Sir Thomas Playford, who at that time had not been knighted, was not satisfied with a proposal of the Adelaide Electric Supply Company to issue more shares, those taken up by existing shareholders to be made available to them at a favorable rate. The Premier did not think that was fair, and he brought the matter before the State Parliament, which decided to appoint a commission to inquire into it. The advice of that commission was that the Government should take over the company, and the Premier introduced the necesary legislation, which provided that the shareholders should he paid the value of their shares. Naturally, the shareholders were not in favour of the Government’s move. They wanted to have the benefit of the increased value of the company’s property, reflected in an inflated prices for their shares. Ultimately the bill went through the lower house. The only members of that house who opposed it were those strongly opposed to the philosophy of the Labour party, but their opposition did not defeat the bill in the lower house.

What happened when the bill reached the Legislative Council? Two of the Liberal members of the council were away, leaving eighteen members present, one of whom occupied the Chair. There were two Ministers in the council and five Labour members the remainder of the ordinary members being Liberals. When the vote on the second reading of the bill was taken, the two Ministers, the five Labour men and one rank-and-file Government supporter voted for it - a total of eight in favour. The other nine Liberal members of the council present voted against the bill, so it was thrown out.

The Premier was not satisfied with that. He waited for a time.” He is a persuasive man, and he managed to swing one of the Liberal members of the council to voting for the bill. The bill again came before the council, and on the second occasion two Government supporters, two Ministers and the five Labour members voted for it, while the remaining eight Liberal members voted against it.

Mr Jeff Bate:

– Quite right.


– The honorable member says “ Quite right “. Honorable members on his side of the House give the kudos to Sir Thomas Playford, but what Sir Thomas Playford has done for South Australia as Premier he could not have done without the Labour party’s philosophy. Sydney, which lies near sources of good coal, has had blackouts and electricity restrictions, whereas for years Adelaide has been free of them. Why? Because the South Australian Premier was game enough to use Labour policy and Labour philosophy.

The bill before us provides for the granting to the States of £5,000,000 - an amount which many of us contend is not sufficient. I submit that the decision to bring in this measure is further evidence of the application of Labour’s philosophy. The Government has been forced to realize that the States are not getting enough loan moneys, and so is granting them an additional £5,000,000 from taxes. I think it was the honorable member for Hume who claimed that the Commonwealth is finding the money from its own resources. I say that the money is not coming from the Commonwealth’s resources, but from taxes collected in the States by the Commonwealth. I agree with that policy. I say again that if the Government, when the Loan Council meets later this year, has to announce that its advice is that there is no likelihood of the people lending sufficient money for public works, it will have to do as it has done in the past, and make up the deficiency in borrowings, which may amount to £90,000,000 or £120,000,000. Why will the Government have to do that? Again, we come back to Labour policy and Labour philosophy. Labour believes in the control of interest rates and in the control of capital issues. When we were in power we exercised those controls. When this

Government came into office it said, in effect, “ Wipe that out, it is no good. We are going to take this right away from government control. We do not believe in government control, we believe in the right of the individual to make what he likes “.

If a person wants to lend money to-day, what does he do? Recently, I telephoned a sharebroker to inquire about investment in a unit trust. The brokers advise people to put their money into these trusts and they buy shares everywhere. Over the past year investments of this kind have yielded 6i per cent. Does any one think that the ordinary man in the street has such a great sense of loyalty to his country that he will invest money at 4 per cent, or 4i per cent, in a government loan when he can get 6i per cent, by investing in private business? This Government will not do anything to curtail that sort of investment. As to hire-purchase finance, it says that the States can control that. I point out that under the Commonwealth banking legislation the Government could exercise control over the rate of interest charged on hire-purchase transactions. If people found that they might run a risk of losing their money if they invested with financial institutions which operate hire-purchase business even at 7 per cent, or 8 per cent., they would be more willing to invest in government loans at 5 per cent. While investors are allowed to invest their money at rates of interest so much above what the Government is prepared to pay there will be nothing like the amount of money invested in loans for public works that should be forthcoming.

The Government proposes to distribute this grant of £5,000,000 by allocating £4,000,000 among the States on the basis of the tax reimbursement formula, and an extra £500,000 each to Queensland and New South Wales. I think the honorable member for Moreton (Mr. Killen) said tonight that if the States are not satisfied with the formula because they are not receiving enough out of taxation revenue, they should ask to have the formula altered. I am quite certain that the States are not satisfied with the formula and that they would like a different method of allocation. When it is all boiled down, the State governments are like individuals; they want to get the best they can for their respective States. If the State governments can get more from taxation revenue that is all to the good for them, but honorable members on the government side say that that would not be fair to the Commonwealth Government because it would have to bear the opprobrium of levying heavier taxes to enable it to provide larger amounts for the States. I would not mind having to bear opprobrium’ for that reason. As I said before, in South Australia the tax for the man on the big income as well as for the man on the lower income was at the rate of ls. 2d. in the £1. If the right to impose income tax were returned to the States, I am certain that the Government of South Australia, particularly with the Legislative Council now in existence on the State would not tax heavily persons with higher incomes. It would soon get back to the old system of a flat rate of income tax, or something approaching it.

In the Labour party we have another philosophy which I have not mentioned. It is an Australian philosophy, as distinct from a State philosophy. We regard Australia as a whole.

Mr. ACTING DEPUTY SPEAKER (Mr. Webb).- Order! The honorable member’s time has expired.


.- The honorable member for Port Adelaide (Mr. Thompson) defended the Government of New South Wales, and in doing so talked about a Labour philosophy. I suggest that he used the term erroneously. “ Philosophy “ means knowledge that has been well thought out and which is inherently good; the objective of the Labour party is not good. It is the last resort of the tired, the dull, the timid and the inefficient; and that is what is called socialism. To call such an objective “ philosophy “ is to give it tremendous dignity. If the honorable member for Port Adelaide looks around and sees the condition of people who are supposed to follow this alleged philosophy, and recalls the advocates of it who sat in this Parliament, two or three of whom I remember, he will realize how that dull and drab policy which he calls a philosophy has failed.

In reply to the honorable member’s defence of the Government of New South Wales, I invite him and his colleagues to examine what Labour’s philosophy has achieved in that State. Australia is a country with a magnificent future, and it has already achieved great things. Its progress has been retarded only by the New South Wales Government. That is an important fact because that State forms such a large part of Australia and contains coal deposits and steel works which are of immense value. The honorable member referred to what the Government of New South Wales had done in building dams in that State. The Warragamba Dam was commenced in the pre-war years and was estimated, to cost £10,000,000. At the end of the war- its cost was re-estimated at £20,000,000, and according to the latest figures it will cost £35,000,000. It has not yet been completed. If the honorable member would do me the honour of accompanying me to that project, which is in my electorate, he would’ be told by the engineers, faced with a day labour problem under a socialist government, that if a job takes too long it becomes too expensive. During the rather disastrous drought last year, no water was impounded in the Warragamba Dam because the job was not finished. Yet, it was started before the war.

If that example is not sufficiently convincing, let us look at some of the other dams that have been started by the New South Wales Government. The Burrendong Dam was started and £1,000,000 was poured into its construction, but not a shilling’s worth of benefit has yet come out of it. The Glenbawn Dam on the Hunter River was started at an estimated cost of £1,500,000. Some years later it was redesigned and was estimated to cost £2,500,000; the latest estimate is £1 5,000,000. Tt will be finished shortly, but when the work is done and the water impounded the problem will be what to do with it, because it will continue its flow in the same watercourse as no provision has been made for reticulation or to use the water for irrigation purposes. Those are examples of achievements under the Labour philosophy of the Government of New South Wales, which the honorable member has sought, for lack of something else to do, to defend.

I suggest to the honorable member that if those projects had been undertaken under the contract system or the negotiated price system, which has come into vogue lately, all of them would have been finished and would now be in use. But none of them has yet been finished.

Mr Thompson:

– Why has the New South Wales Government continued in office?


– Because it has told a good story; but that is now fading out. That government has remained in office because the Premier of New South Wales has had a couple of electoral redistributions made. He also has had a pretty good team of organizers to look after electorates in the Sydney area which are important. The Premier himself paid special attention to four seats and as a result of such efforts was returned to office but with only a narrow majority. If he went to the people now, it would be a different story.

The honorable member stated that the Premier of South Australia was forced to take over the Adelaide Electricity Supply Company because of some failure on the part of the company. I invite the honorable member to recall what happened in New South Wales where electric power is now under the control of the Department of Public Works. The Government of that State went out of its way to use the funds of the taxpayers to buy the Balmain Electric Light and Power Company at a time when it was operating successfully. The part of the city which it supplied was the only area that was free from blackouts. Figures show that the cost of industrial electric power in New South Wales is from 20 per cent, to 40 per cent, higher than that of industrial power in Victoria. It is three times as costly as industrial power in. the United States of America and twice as costly as similar power in the United Kingdom. In the United States of America 90 per cent, of electric power is generated by private enterprise. Those are some answers to Labour’s alleged philosophy. The socialization of power which we heard lauded by the honorable member from South Australia means the subsidizing of inefficiency.

Mr Daly:

– I rise to order. The honorable member for Macarthur is speaking about electricity and other matters. Are we not entitled to know whether or not he made up the figures that he has cited?


The honorable member for Macarthur may cite figures, but if he wishes he can please himself whether he accepts responsibility for them.


– We are debating legislation which confirms what the Australian Loan Council did a few months ago. I think that this was the first time for many years that the Loan Council had been forced to meet in the middle of the financial year. Its meeting was due principally to difficulties which had arisen from drought and to some fall in rural prices. This measure has been brought before this Parliament to validate the act of the Loan Council which consists of the six State Premiers and two Commonwealth Ministers. I regret to say that Loan Council meetings to-day are a political Donnybrook in which representatives of all States and all political parties participate. The representatives of each State strive to get good newspaper headlines. When they have done that, two or three public servants come in and quietly but ruthlessly-

Mr Whitlam:

– I rise to order. The honorable member for Macarthur is referring to the proceedings and decisions of the Australian Loan Council. His account of those proceedings and decisions may be quite interesting but they are quite irrelevant to the bill under discussion which is the States Grants (Additional Assistance) Bill. It is a bill to effectuate the decisions, not of the Loan Council, but of the Premiers conference. The proceedings of the Loan Council are secret. They do not relate to this bill. This bill deals with the proceedings of the Premiers conference which are published, which are available to honorable members, and which obviously have not been read by the honorable member who is contributing so irrelevantly to this debate.


When this debate first started the point was raised that assistance to the States was a very broad subject which could not be so defined as to limit the debate. Provided the remarks of honorable members deal with assistance to the States they are in order.


– May I say that the matter raised by the honorable member for Werriwa (Mr. Whitlam) was not a point of order?


The point of order has been disposed of. Please continue the debate.


– The Treasurer (Sir Arthur Fadden) alluded very fully to the proceedings of the Loan Council in his speech. He stated that, at a meeting of the Loan Council in February, the States had sought to have the total borrowing programme for 1957-58 increased. We have come to know the Loan Council and the Premiers’ Conference, which has been referred to by the honorable member for Werriwa, as one and the same body, and they are, of course, the same body. The Premiers meet and, after a political Donnybrook - a wrangle which is not very dignified - two or three public servants come in and quietly and ruthlessly decide how much money will be available and how it is to be cut up. On this occasion £5,000,000 was allocated, £4,000,000 to be divided between all States on the basis of the formula, and £1,000,000 to be shared equally by New South Wales and Queensland for drought relief.

I am most interested to learn how New South Wales has spent the additional sura of £500,000 granted to it as drought relief. The drought fell more heavily on the users of wheat in New South Wales because whereas in most of the other States purchasers had to pay only the price set by the Australian Wheat Board, in New South Wales farmers were forced to pay an additional 4s. 7d. a bushel for wheat for stock feed. In the course of his speech on this bill the Treasurer stated -

In offering to make this additional £5,000,000 available, the Commonwealth was concerned that it should be used to give most help in those areas which had been affected by adverse conditions.

No people were affected more adversely than the poultry-farmers in New South Wales, including many of the constituents of the honorable member for Werriwa. Those men suffered, first of all, a disastrous fall in prices which began in August, 1956. The price of eggs on the English market fell in the following twelve months by 16 per cent. In addition, there was a very bad drought and tremendous heat in November, which affected the poultry flocks. The New South Wales Cabinet, which has -beer defended very faintly by the honorable member for Port Adelaide (Mr. Thompson), made a very bad forecast of the wheat crop. The estimate of the yield was as high as 30,000,000 bushels. A few weeks later, however, it was realized that the yield would be almost nothing. Then the New South Wales Government sent a couple of peremptory wires to the Commonwealth Government. It handled the matter very badly. On 1st December, it put up the price of wheat by about 32 per cent. The poultry-farmers were forced to carry that impost although they had lost so much by the fall of 16 per cent, in the price of eggs in England. There was a big fall in their returns from the Egg Marketing Board and from other methods of disposing of their eggs.

It might be thought that the State Government would have been a little bit less callous when it imposed the slug of a higher wheat price upon the poultry-farmers of New South Wales. It could have done a number of things. It could have paid the freight on the wheat itself. It could have got some undertaking from the Commonwealth; but it did not bother. It merely put up the price of wheat, raised the price of bread, and dealt a crippling blow to the poultry-farmers including many of its own supporters. I believe that 93 per cent, of the poultry-farmers in New South Wales and throughout Australia are men of small means who have other jobs and who have endeavoured to get a small competency by investing in a poultry farm. Those men go out to their jobs in the day time and then work to improve their poultry farms at night or at the week-ends. They have been saving and investing and trying to get, a stake in the community. A great many of them will go out of business because there has been a fall of 16 per cent, in the price of eggs and a rise of 32 per cent, in the price of the things that they buy. Nobody can take that. It meant tremendous suffering for poultry-farmers.

As we heard from the Minister for Primary Industry (Mr. McMahon) to-day, 5s. a ton was taken off the freight on wheat, and a further 2s. 6d. a ton has been taken off. In addition, £500,000 has been given to New South Wales as drought relief. In these circumstances, one would have thought that the slug imposed by the State Government would have been reduced. The first freight reduction of 5s. a ton could have meant 2d. a bushel, and the second reduction of 2s. 6d. a ton could have meant one penny a bushel. The special grant of £500,000 could have meant lOd. or ls. a bushel. But the New South Wales Government was ruthless. It said, “We have received an additional grant. What shall we do with it? “ Do honorable members know what the New South Wales Government did with its additional grant, which it had been asked to use for the relief of those who had most felt the effects of the drought? It spent £1,000,000 on its housing programme. The State Minister responponsible for highways was allocated £300,000. State public works were allocated £200,000 and the State Minister of Health was given £500,000. Those amounts totalled £2,000,000. The total additional grant received by New South Wales from the Commonwealth Government amounted to £1,989,000. New South Wales itself put in £11,000. That is how New South Wales spent the money. That money has been misappropriated. It was a dishonest act by the New South Wales Government.

I pay a tribute to my distinguished colleague, the honorable member for Mitchell (Mr. Wheeler), who raised this matter so ably the other day. The practice now being followed means that the system of financial relationships between the Commonwealth and the States is breaking down. We cannot condone a situation in which money is granted for a special purpose and is not passed on to the people for whom it was intended. These two reductions in freight costs, first, of 5s. and secondly of 2s. 6d. a ton, represent a reduction of about 3d. a bushel in the price of wheat. The amount of £500,000 that was originally granted would have more than paid the freight costs for the first month.

I have given the House the facts as to where this money went. It was not used for drought relief, although that, of course, was the purpose for which it was granted. There is a certain procedure usually followed in matters which are classified as national calamities. I think the State may have used that expression when it approached the Commonwealth. In such cases, if the Commonwealth grants a certain amount at the request of the State, the usual procedure is for the State to give an equal amount for the same purpose. In this case, if the State had matched the amount given by the Commonwealth as a preliminary grant, freight would have been paid for several months - or at least part of the freight would have been paid for several months. This would have lessened the load on those people who needed help so badly.

As the honorable member for Mitchell has said, this procedure in New South Wales must lead to financial chaos. A system under which those who spend money do not bear the onus or the odium of raising it is, of course, contrary to all accepted principles of government spending. We realize, of course, that the Victorian Government has seen the fallacy and the hopelessness of the system and has led an attack upon it. As honorable members know, last August, Victoria and New South Wales - when the latter State joined Victoria, somewhat half-heartedly, I should say - had a small victory when section 221 (1) (A) of the Income Tax and Social Services Contribution Act was declared invalid. That section, as honorable members know, is the one which provides that taxes imposed by a State shall not be paid until Commonwealth taxes have been paid. That provision was invalidated, but the decision in fact made no difference to the States. Some States, particularly South Australia, refused to return to the system of taxing for their own purposes. The States can do this at any time they wish. New South Wales could do so if it wished, simply by saying, “ We will raise our own taxes “. But, of course, the States are loath to do this, because they are in the wonderful position of receiving amounts from the Commonwealth, the allocation being on the basis of a set formula, and then when they find that they cannot finance a particular undertaking they blame the Commonwealth.

As the honorable member for Mitchell has very properly said, the situation is unworkable and impossible. It results in money being wasted over and over again. This is most obvious in cases in which the States are unable to let firm contracts for works because they do not know from one year to another how much money they will receive from the Australian Loan Council. The New South Wales Government has failed in many directions, notably as a result of its policies with regard to day labour and socialism, but one of its greatest failures springs from its inability to be able to let a firm contract, say to the contractor, “When you have finished the job you will be fully paid immediately “. It cannot do this, because under the system which requires the States to approach the Loan Council for handouts, it does not know whetherits allocation will be increased or reduced. The system leads to waste and inefficiency.

Finally, may I say that there is yet time for the New South Wales Government to be honest about the drought relief assistance that it received after the Australian Loan Council meeting in February. It can still make amends for the wrong it has done to poultry farmers. It can still do something about the price of bread, the increase of which was authorized by the New South Wales Government. Does the New South Wales Government intend to leave the price of bread at its present high level, after having received financial assistance designed, amongst other things, to keep down that price?

Debate (on motion by Mr. Bird) adjourned.

page 958


Repatriation Hospitals - American Air Force Personnel in Australia - Friendly Societies’ Dispensary - Historic Memorials - Naturalization Ceremonies - Department of Immigration Brochure.

Motion (by Mr. Davidson) proposed -

That the House do now adjourn.

East Sydney

– I wish to put one or two cases before the Government, so that some action may be taken to remedy the situation. It has always been my opinion that repatriation hospitals should be available to exservicemen, no matter whether the disability for which they require treatment is an accepted war disability or not.

Mr Whitlam:

– As is the case In America, under the Veterans’ Administration.


– Yes, as is the case in America. It appears to me that a shocking situation is revealed when one considers how these cases are handled by the repatriation authorities. I do not blame those authorities, because the decisions they make are no doubt based on Government policy. I think, however, that it is about time this policy was changed. It will not constitute an answer if the Minister or any other Government supporter says that this has been the practice ever since we have had repatriation hospitals. Whether such cases as these occurred when other governments were in control is beside the point. If the practice in years gone by was an undesirable one, it is wrong to allow it to be continued now, and I want some action by this Government.

I wish, first, to mention the case of an ex-serviceman who, although not a resident of my electorate, brought the matter to my notice. I have endeavoured to assist himHe is suffering from a number of warcaused disabilities and, in fact, is a totally and permanently incapacitated exserviceman. Surely a t.p.i. pensioner should be able to obtain treatment in a repatriation hospital whenever he needs it. It appears, however, that in this case, after he received treatment for a certain period in a repatriation hospital, he was discharged because it was considered that his condition no longer warranted further in-patient treatment at that stage. This was intimated to me in a letter from the Repatriation Department. Without mentioning the man’s name, I can say that the letter reads as follows: -

Following discharge, Mr.- was admitted to Glamis Convalescent Home, and payment of his fees at the home is, of course, his own responsibility.

This is a man receiving a war pension, suffering severely from war injuries. It is not suggested by the Repatriation Department that there was no need for him to receive further treatment in the convalescent hospital. He was discharged by the Repatriation Department from its institution and was obliged to go into a convalescent hospital, but, according to the Repatriation Department and the Minister, he is now responsible for the payment of his fees.

I suggest that this is a scandalous state of affairs. The man concerned is 68 years of age and, I repeat, is a t.p.i. pensioner. Surely any person who is classified as a totally and permanently incapacitated pensioner should be entitled to treatment in a repatriation hospital whenever he requires it. I repeat what I said at the beginning: Men who have seen active service - I make that stipulation - should be entitled to treatment in a repatriation hospital, without any cost to themselves, for any condition from which they suffer later in life.

Let me turn now to another matter. We have often heard it said in this Parliament that the Government is anxious to maintain friendly relations with the United States of America, and one would assume that it would seize every available opportunity to promote goodwill and friendly understanding between Australia and the United States, and that, in order to do that, the Government would treat most considerately all United States servicemen called upon to serve in Australia on exchange duty. There is an arrangement for an exchange of air force personnel between the two countries in order to give the service in each country experience of its counterpart in the other country. Some United States air force men bring their own motor cars to Australia for their period of two years’ service here. When they do so, the vehicles are non-dutiable on entry, and the owner gives an undertaking that the car will not be disposed of for a period of three years. If it is disposed of within that period, he is liable to the payment of full customs duty. However, as I have pointed out, these men remain in Australia for only two years. When they have completed their term here, they have to take their motor cars back to the United States if they do not wish to pay duty on them. As some of them have put it to me, the vehicles are usually second-hand when they are brought to Australia, and, after two years of use here, it is not worth-while paying the freight for their return to the United States, which, in many instances, is equivalent to the cost of a new car in that country.

Some of these air force men from America have put it to me that, since their period of service in Australia is only two years, they should be .permitted, on its expiry, to dispose of the vehicles that they have brought into Australia without being called upon to pay customs duty on them. The Government would not lose much revenue if it agreed to this suggestion. In fact, American air force men on exchange duty in Australia are not usually anxious to sell their cars here before they return to the United States, because they can get very little for them here. The Minister for Customs and Excise (Senator Henty) has adamantly refused to budge from the usual stereotyped reply stating the practice in the Department of Customs and Excise. Surely there is some discretion in cases such as this. If we want to promote goodwill towards Australia in the United States, here is a chance to do so at very little cost to the Australian community. These ordinary Americans serving here in the armed forces would go back to their own country as good ambassadors for Australia if they were given the small measure of consideration involved in this proposal, whereas, now, they return to the United States under the impression that the country in which they have served for two years shows no gratitude for the service that they have rendered. I hope that the Government will reconsider this matter.

I turn now to a local matter. The Government has introduced a tax on sales turnover, which is applicable to dispensaries of friendly societies. It is perfectly true that such dispensaries do not serve only members of friendly societies, and that many of them make sales to the public. The business of Macquarie Pharmacies has approached me about this matter. The tax to which I refer is, I emphasize, a tax on sales turnover and not on profits. The business to which I refer would not mind paying a tax levied on profits, because it considers that if it makes profits it is obliged to pay whatever tax is applicable to such profits. But this business has been operating at a loss for a number of years, the losses being met by contributions paid by the constituent friendly societies which are members of the organization concerned. Although the business makes losses, it has to pay this tax on sales turnover. This is a scandalous state of affairs, and I have appealed to the Treasurer (Sir Arthur Fadden), and the Taxation Branch of the Department of the Treasury, to do something about it. They have refused to do anything, and they maintain that the taxation of sales turnover is an equitable method of taxing organizations such as this.

We have often heard Government supporters in this Parliament talk about the great good that is done by friendly societies. The entire membership of the organization of which I am speaking is made up of friendly societies, which contribute in order to meet the losses of this business and enable it to continue to serve the community. Friendly societies have been very hard hit in many ways by certain legislation enacted by the Commonwealth Parliament. They have found it very difficult to continue their operations, but they are still doing a great deal of good work, and they should not be specially taxed in this way when they are operating at a loss. I hope that the Government will take action to remedy the situation.

Mr SPEAKER (Hon John McLeay:

Order! The honorable member’s time has expired.


.- The honorable member for East Sydney (Mr. Ward), who, at the outset of his remarks, discussed the treatment of ex-servicemen in repatriation hospitals, stated that every exserviceman with the qualification of overseas service should be treated in a repatriation hospital for any disability from which he may suffer, and that suggestion would be accepted by most ex-servicemen as a very good idea.

Mr Whitlam:

– Hear, hear!


– Opposition members should look at this matter in a logical way before they say, “ Hear, hear! “ In the first place, those who hold the qualification of service overseas vary from men who have spent two hours in some place overseas to those who have spent four or five years serving under the most rigorous conditions, particularly those who were prisoners of war in Japanese hands. The first result of the suggestion made by the honorable member for East Sydney would probably be thai men entitled to treatment in repatriation hospitals under the conditions at present laid down would probably be penalized. I do not think that any Australian exserviceman who served his country overseas in time of war would really expect the Government to accept responsibility for treating him in a repatriation hospital for some sickness from which he suffered 30 or 40 years after the war and which had no connexion with his service. The average ex-serviceman enlisted, not under compulsion, but because he felt the call to serve his country in time of war, and he expected to be given for his service only the ordinary repatriation and re-establishment rights.

If the gates of the repatriation hospitals are thrown open to all ex-servicemen with active service for the treatment of any disability, there is an immediate risk of penalizing those who have war-caused disabilities, because, in some States, the repatriation hospitals are full. In some

States, there are empty beds, and in others, there are empty wards. I think that the Public Accounts Committee, at its last investigation into the administration of the Repatriation Commission, found that an average of 14 per cent, of the beds in repatriation hospitals throughout Australia were empty. It might be a sound idea for the Government to consider, first, filling those empty beds by making them available to those in the greatest need. In most States, hospital accommodation is difficult to obtain because there is a terrific strain on the public hospitals.

I suggest that the first people accepted for treatment in repatriation hospitals regardless of their disabilities should perhaps be women who served as nurses in World War I. I am quite certain that they did more towards victory than was done by many men who served under normal service conditions. I remember Field Marshal Montgomery saying that his one object in relation to general hospitals was to move them up as close to the line as possible, so that any man who was admitted to hospital saw the nurses there and imagined that he was quite safe. He said that it was an added risk for the nurses, but one that he was sure they were prepared to take because of the influence on the morale of the troops generally.

Therefore, if we are talking about opening the repatriation hosiptals we should not consider throwing a blanket over everybody, but should apply the rule to those who are most entitled to it. I am certain that the number of nurses from World War I. still alive and in need of treatment would not fill the 14 per cent, of unoccupied beds. Perhaps we could then move down to the elderly ex-serviceman, who is completely dependent on his own resources and up against difficult times. But all the time we would have to be conscious of the fact that we could not risk penalizing the man who has a disability accepted by the repatriation authorities as being war-caused.

I do not know the full facts of the case cited by the honorable member for East Sydney. No one case establishes a principle. I do not think any one in this country could accuse this Government of being unaware of its responsibilities to those who suffered in war-time. One section of exservicemen who are extremely well treated comprises totally and permanently incapacitated persons. I think that they would be the first to admit it.

Mr Daly:

– So they ought to be.


– That is understandable, but let us not try to establish a principle on what has happened to one man. All these matters are taken into account. No man is discharged from a repatriation hospital by the order of the Repatriation Department. He is discharged from hospital on the best medical advice available to the department. One cannot criticize the administration of the Minister or of the department on the basis that a man has been discharged too soon. That criticism would be based merely on an opinion opposed to the best medical advice available. I do not think that any exserviceman admitted to a repatriation hospital could ever complain about ‘the type of medical advice available to him. The best specialists available in any State are consultants at those hospitals. A million people served in the services in war-time. Their service ranged from a few days in an active service area to four or five years under the most rigorous conditions. It is impossible to throw a blanket oyer them in regard to acceptance by repatriation hospitals. The move would be a most dangerous one, regardless of how popular it might be to the ordinary person in the street.


.- Unfortunately, I did not hear the remarks of the honorable member for East Sydney (Mr. Ward), but as I understand the situation, they related to the case of a totally and permanently incapacitated exserviceman who received treatment, free of cost, in a repatriation hospital. Subsequent to his leaving hospital, it was found necessary for him to receive treatment at, or to become an inmate of, a convalescent home. Without full knowledge of the facts, I assume that the necessity to enter the convalescent home was consequent upon the trouble for which he was accepted for repatriation treatment. Naturally, he would not enter a convalescent home for fun. Any totally and permanently incapacitated man prefers to remain outside an institution of any sort, if he is able to do so. I think that the honorable member for Perth (Mr. Chaney) would accept that, because if we can discriminate between ex-servicemen, the totally and permanently incapacitated men are the most genuine and deserving. In those circumstances, it seems to me that the honorable member for East Sydney established a very good case for an investigation of this matter and more generous treatment by the repatriation authorities.

I do not know that I can elaborate on that matter, but the mere mention of the sugestion that all exservicemen should be accepted into hospitals free of cost, whatever their medical problems, brings one to the general concept of the needs of the whole population of this Commonwealth. I ask honorable members to bear with me while I point out that here we have a most anomalous state of affairs. We engage in a war, and the returned serviceman who suffers a wound or some physical ill, irrespective of his Service or private means, is accepted for treatment at a repatriation hospital. The same principle should be carried right through into civilian life. While he remains in the services, he has free treatment so: that he will be cured and returned to. the firing line to carry on the battle for his country. A civilian is cured in order to return to industry or commerce. Is it not true that in the community in which we live men and women who become ill are just as important national assets in time of peace as they are in time of war? This country must eventually approach the situation wherein every citizen irrespective of his means, income, or source of income, is accepted freely in the nation’s hospitals and has the benefit of the very best surgical and other treatment that he may require. Until such time as the Commonwealth and the States - preferably the Commonwealth in conference with the States - accept that state of affairs, we shall lack a good deal that we ought to acquire more rapidly.

Only this week an age pensioner came to me. She had been on holiday with her daughter and had the misfortune to be ordered into a bush nursing hospital. She has no income other than her pension. She does not own the house in which she lives, and she has no other resources. She received a bill from the bush nursing hospital for £26, which she has not got. Not being able to pay, she received a summons. I was rung last week by a citizen who informed me that a neighbour suffering from an’ incurable complaint cannot be accepted in a hospital and cannot obtain admission to an institution for incurables. My influence was sought. These things should not happen in this country. At the Preston and Northcote Community Hospital, because of lack of funds no work was done for three years. Are we living in a civilized community, or are we bereft of our senses? I mention this matter because it occurred to me that if the nation saw fit to provide, free of a means test, the medical services and nursing attention required to make a man a useful fighter or to return him from the services to civilian life, it is equally essential that the ordinary citizen in a civilized community, irrespective of his means, should have access to the same kind of treatment.

The time has arrived for us to be more liberal than we have been in the past to ex-servicemen. After all, ex-servicemen from World War I. are, for the most part, over 60 years of age and are victims of all sorts of complaints. Theirs is a special case, but the need for rehabilitation exists throughout the community and it should be met.


.- I wish to speak on a matter which concerns Canberra. I am afraid that we members from other States are guilty, perhaps, of not taking as much interest in the development of this city as we should take.

Mr Hulme:

– You come from a side of guilty men.


– Cheer up, Cheerful! I had a. great opportunity during- the Queen Mother’s visit-

Mr Hulme:

– Now, you cheer up!


– I think I will out-laugh you any day. I had the privilege of looking round this city during the Queen Mother’s visit and in the following week. I have often realized that there is one great lack in the honouring of men who have taken part in the development of Canberra and I wish to mention that matter to-night. The suburbs of Canberra are named after men who played a big part, in the development, not of Canberra, but of the nation. However, one man, who had the most to do with the establishment of Canberra is not honoured in this way at all. I make a plea to-night that in the naming of new suburbs still to be built and some which are in the process of building but perhaps, are not named, this man’s name should be honoured and memorialized. I refer to King O’Malley. I am amazed that so far he has not been honoured. He lived from 1856 to 1954, and died at the age of 98.

I am quite sincere in pleading that he be recognized. Something is lacking in the development of this city when King O’Malley is not honoured by having a suburb named after him. He was Minister for Home Affairs in the Andrew Fisher Government from 1910 to 1913 - a time when he did most to get this city started. The Commonwealth Parliament met in Melbourne up to 1927, when it came to Canberra. The Constitution made it imperative that a new capital be established not within 100 miles of Sydney. That was the only way to get New South Wales into the federation. A commission was appointed not long after 1901 to search for a site. Eventually what is now Canberra was chosen - this plateau where there was, I think, only one sheep station in those days. From- the beginning King O’Malley was opposed to Canberra. He ridiculed the suggestion and said that Melbourne would do for him, as it would do for all Victorians who- did not want to travel to Canberra. He was human in his opposition to the establishment of this city.

But, ironically, when he- became Minister for Home Affairs, the responsibility to get Canberra started fell on him. To his everlasting credit, he fought like a tiger to get the National Capital under way. Red tape almost strangled him. He was questioned unmercifully in the House week after week about what was being done to get Canberra started. He organized a competition to name the capital and he helped to pick the name. He travelled to Canberra from Goulburn in a buggy with Mr. Catts, M.P., to inspect the site. He drank billy tea along the Molonglo River. He finally laid the commemoration stone on Capital Hill in March, 1913.

Some- weeks ago- honorable members had the opportunity to see a film of the historic occasion when three stones were laid - one by Lord Denman, the Governor-General;: one by the Prime Minister, Andrew Fisher; and one by King O’Malley. King O’Malley was responsible for organizing that event. He had the warriors here on their horses; he had the band; and he had a movie camera. I was amazed at the quality of the film when I saw it recently.

King O’Malley had to change his attitude towards the National Capital, and when he did so he fought for it, but he has notbeen honoured. He was an American. He became the member for Darwin, in Tasmania, in 1901. He was one of the members of the first Commonwealth Parliament, so he was a pioneer in that respect. He wasa picturesque figure by any standard, with a great sense of humour, tremendous energy and, I may add, great faith in himself. He remained the member for Darwinfor seventeen years, when he was defeated’ on the conscription issue in 1917. He was against conscription, but his electorate was for it, and he was defeated. It was assimple as that. He never stood for Parliament again. He had private means; he was an estate agent in Melbourne for many years. He was a great friend to many members of this Parliament. He died in Melbourne on 23rd December, 1954, at the age of 98.

This pioneer of Canberra, of the Commonwealth Bank and of the Royal Australian Navy deserves recognition in the’ capital that he helped to establish. I hope that the Minister for the Interior (Mr. Fairhall) will read my speech and that in it he will find something to inspire him to name a future suburb of this city after King O’Malley. There is a suburb of Canberra called O’Connor. I do not know what O’Connor did in this city - I cannot remember. We have Billy O’Connor in the Parliament, and the suburb may have been named’ after one of his ancestors. Everybody in this country knows the name O’Malley. If a suburb can be named O’Connor, T can see no reason why thereshould not be one named O’Malley.


– I agree with what the honorable member for Wilmot (Mr. Duthie) has said. Australia owes a- memorial to King O’Malley. He left his mark on this country. He was a most colourful” figure in every way. I knew him personally. From his own lips I have heard the story of the foundation of Canberra and the foundation of the Commonwealth Bank. Those were stirring days and a memorial is due to King O’Malley.

A memorial is also due - and overdue - to another Australian. It is true that most people who have occupied the post of Prime Minister in this Parliament have a memorial. The John Curtin School of Medical Research was recently opened in Canberra. An electorate is named after Mr. Scullin, a former Prime Minister. Proposals have been made, and I have no doubt that they will come to fruition, that there should be some memorial to Mr. Chifley, who held office as Prime Minister of this country. But we have no memorial to a man who preceded both Mr. Chifley and Mr. Curtin and who deserves a memorial perhaps as much as either of them. I refer to Joseph Lyons, who died while holding office as Prime Minister, having during his life done a number of things that Australia should always remember with gratitude. It was Joseph Lyons who pulled the nation together when it was collapsing during the depression. His services have not been recognized by a memorial. Whilst I agree entirely with what has been said with regard to King O’Malley, let us also give to Joseph Lyons the tribute that is his due, remembering what he did for the country, remembering how he pulled us together when we were in a state of collapse, and remembering also that he did not spare himself but died in office.


.- Now that we are in an historical frame of mind, I should like to add a few words about people who deserve recognition for their services to Australia. I agree with all that has been said about the late Mr. King O’Malley. I knew him very well. I remember him telling me more than 30 years ago that he had seen the funeral of Abraham Lincoln. I saw him a month before he died. He was not 98, as an honorable member has said, but was over 100 years old, because I remember him telling me that he was born in 1853. a year before the very distinguished gentleman whom I succeeded in this Parliament.

I asked Mr. O’Malley just before he died whether he had been born in 1853 or 1854. I told him what he had said to me previously, and repeated his statement that he had seen the funeral of Abraham Lincoln. I asked him to confirm what he had said so many years earlier, and he did so. He told me that he remembered when he was a clerk in his uncle’s bank in New York and that he recalled a young woman named Jennie Jerome. He said that she was a lovely woman and had called him “ sonny “. Then, as though it had been only yesterday, he said, “ She became the mother of Winston Churchill”. I should like to see King O’Malley recognized for the great work he did for Canberra and for the even greater work he did in establishing the Commonwealth Bank.

Now, I wish to refer to the suggestion that has been made by the honorable member for Mackellar (Mr. Wentworth). I would not have risen but for his proposal that we should do something to recognize the memory of the late Joseph Aloysius Lyons. I do not agree with him that Mr. Lyons pulled Australia out of the depression; I think he pushed Australia further into it. But that is a matter of opinion. It was in the hands of the present Government to honour Mr. Lyons if it had wanted to do so. I remember when we enlarged the Parliament and gave the name of Dorothea Mackellar to the electorate which the honorable member now represents. We also gave the name of Caroline Chisholm to the electorate which is now represented by the former Minister for the Interior. I was responsible for that, because I believe that women as well as men who have done something for Australian history deserve to be remembered.

The honorable member for Mackellar said to me at the time, “Why did you not do something to honor Mr. Lyons?Sir Eric Harrison, the former member for Wentworth, said from the Opposition side at the time that we should have put the name of Mr. Lyons to some electorate in Australia. I told him that there was no new electorate in Tasmania to which we could apply the name of Lyons and, by custom, we did not put the name of a Prime Minister to an electorate outside the State in which he served. Since that time, this Government has changed the name of the electorate of Darwin in Tasmania to Braddon. It could have named that electorate “ Lyons “, if it had wanted to do so. When the change was made, not one honorable member on the Government side thought of applying the name of the late honorable member for Wilmot to that electorate as a memorial to him. Mr. Lyons was formerly Prime Minister of Australia and Premier of Tasmania. While I am in a reminiscing mood, I should like to remind honorable members that only three Prime Ministers of Australia were Premiers of their States. They were Joseph Lyons, George Reid and Alfred Deakin.

I wish to make some reference to the late Mr. J. B. Chifley. We wanted the name of Chifley to be given to one of the electorates that was constituted in the recent redistribution in New South Wales. The name of Hughes was given to an electorate, and when I proposed to the Leader of the House at that time that the name of Chifley should also be given to an electorate in that State, there was an objection to the request. In our day the name of Macrossan was suggested for an electorate in Queensland. Perhaps, we should have remembered Macrossan. I agree that those who have given great service to Australia should be remembered through memorials.

Recently, a head gardener retired in Canberra. He was one of the little people, but he was a great friend of many honorable members in this Parliament from all States over many years. I refer to Mr. Charles May. I pay tribute to him on behalf of honorable members for his services to this Parliament.


.- 1 desire to join with other honorable members in asking that consideration be given to memorials to the public service of former Prime Ministers. Happily enough, I also support the comment that was made by the Deputy Leader of the Opposition (Mr. Calwell) in suggesting that the name of one who has been in charge of the Parliamentary parks and gardens might be honoured and remembered gratefully. When we consider the names of those who have served, I wish to thank the honorable member for Wilmot (Mr. Duthie) for bringing to the attention of the Parliament the claims of the late King O’Malley. Whether the Parliament eventually agrees to a memorial or not is beside the point, because King O’Malley’s name will be remembered in Australian history for his part in the creation of the Commonwealth Bank. Whatever might be said about the Prime Minister of the time, everybody will admit that King O’Malley was the person responsible for the drive and impetus that gave to the people of Australia the Commonwealth Bank, which has served us so faithfully over the years.

I make a plea, as other honorable members have done, that my illustrious predecessor’s name should be remembered. I attended the opening of the John Curtin School of Medicine and I express my appreciation of the action of the former Labour government in remembering John Curtin in such a tangible and humane way. What was done for John Curtin ought to be done also for the late Ben Chifley. If there is no electorate which might be named Chifley, at least there are developments taking place in this Commonwealth and its territories which might be called Chifley in remembrance of one who served Australia in peace and war and gave it inspiring leadership when it was so urgently needed.

But in making this appeal for my predecessor who represented the electorate of Macquarie, I wish to go beyond the remarks that have been made by the Deputy Leader of the Opposition. I want to make an appeal to the Minister for Immigration (Mr. Downer). In recent times, I have attended many naturalization ceremonies. At those functions we hear leading citizens, such as the mayor or the shire president and other well-meaning persons, express various sentiments, but I feel that we miss something when we fail to give to our new citizens the story of the Australian people.

The Minister for Immigration, who is in the chamber now, has come to his office with new ideas and fresh thoughts. He is keen to render service, and I suggest that he might acept my suggestion that a brochure telling the story of Australia should be given to those who are newly naturalized. The story should concern not so much individuals of outstanding character, such as the Macarthurs and the Blighs and others, but should be the story of the Australian people from 1788 to the present day. It should tell of those who have pioneered Australia, built the towns and wharfs, tilled the soil, built the railways, made the roads, constructed the factories, and all those who, by serving the country have made it so prominent in world affairs in 170 years. We should tell our new citizens that in addition to physical things we have led the world in social services, and in the institution of the secret ballot, arbitration and conciliation and the right of women to vote at elections. While we think of those who have gone through the ranks to the top of the tree and become Prime Minister, never let us forget the small people who have served this country with great distinction, quality and loyalty. Their work should be remembered in some way, and 1 think that a simple story of the Australian people should be given to every new settler in this country when he becomes naturalized.

Minister for Immigration · Angas · LP

– I do not wish to detain the House very long because the hour is late. I was most interested in what the honorable member for Macquarie (Mr. Luchetti) said. Because I think my remarks will interest my friend, I rise to say that only quite recently I approved of the issue of a brochure, which will, I hope, be attractively presented and which will be handed out at naturalization ceremonies. I think this will go a long way towards meeting what the honorable member has been urging to-night.

Mr Ward:

– I hope you will not spoil it by putting your photograph in it.


– As the honorable member who interjects realizes, Ministers are transient objects, whatever they may think of themselves, and this, I hope, will be of more permanent form, as I am sure the honorable member for Macquarie will agree it should be. I do not know whether the brochure will give a great deal of the history of the country; but the object of it is to set out the kind of place Australia is, theobligations of citizenship, an outline of the background of Australia, and generally to provide not only a memento of the important occasion for new Australians being naturalized, but also a reminder of their obligations of citizenship and some notion of what their opportunities and potentialities will be. It will be attractively presented. It is certainly well written and, when it is produced, which I hope will be quite soon, I am sure that it will satisfy the constructive, discriminating and exacting mind of my honorable friend.


.- I should like to clear up some of the misconception that exists over the naming of the electorate of Braddon, which I represent at present. It is very difficult to say that the electorate should be named O’Malley or Lyons without giving some reason for the change of the name to Braddon. At the time the name was changed to Braddon, honorable members opposite agreed completely that that was a very good name for the electorate. I will not go through the reasons for that. There was some doubt as to whether the name Lyons would cause confusion with the electorate of Lyne. Those two names have a similar sound and could be most confusing. However, the name Lyons should be used and I believe that an opportunity for this will arise when another electorate is created in Tasmania. It may take a few years before Tasmania has a sixth electorate.

Mr Buchanan:

– It will be a long time.


– Even if it takes a long time, it will be worth while. The sixth electorate in Tasmania could be named Lyons. The State electoral boundaries in Tasmania coincide exactly with the federal boundaries. At present, one of the members for the State electorate of Braddon is Speaker in the House of Assembly in Tasmania. He is a son of the late Prime Minister, Mr. Lyons. When the name of the electorate was changed, it was difficult to name it Lyons when one of the sitting members for that electorate bore the name Lyons.

Question resolved in the affirmative.

House adjourned at 11.14 p.m.

page 967


The following answers to questions were circulated: -

Commonwealth Motor Vehicles.

Export Payments Insurance Corporation

Mr Ward:

d asked the Minister for Trade, upon notice -

What are the trading details of the Export Payments Insurance Corporation since it commenced operations?

Mr McEwen:
Minister for Trade · MURRAY, VICTORIA · CP

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

The Export Payments Insurance Corporation issued its first guarantees in the quarter ending 30th September, 1957. Details of guarantees issued by the corporation to the 31st December, 1957, are given below on a quarterly basis.

The figure for “ Corporation’s Maximum Liability “ given above relates to liability at any given time. It is derived from the actual figures of cover for capital goods guarantees and an estimate of what part of total turnover will actually be risked at any one time for comprehensive guarantees. Such guarantees cover the business an exporter expects to do in the period of twelve months ahead or more. The total figure for maximum liability therefore does not reflect the proportion of the risk assumed by the corporation under all the transactions covered.

Imports of Printed Textiles


n asked the Minister for Trade, upon notice -

  1. What was the Quantity of printed textiles imported during the twelve months prior to the date of the recent ban on this class of import?
  2. What portion of this amount has been sold to clothing manufacturers or used by importers for clothing manufacture?
  3. Who is holding the balance of stocks?
  4. What is themargin of profit now being charged by importers compared with that charged prior to the ban?
Mr McEwen:

– The answers to the honorable member’s questions are as follows: -

  1. Imports of cotton printed textiles of the type referred to by the honorable member were 50,200,000 square yards between February, 1957, and January, 1958. 2 and 3. This information is not obtainable as importers and manufacturers’ records are not kept so as to provide details of this type in any specific period.
  2. The margins of profit charged by importers on cotton piece goods vary considerably, depending on the type of transaction involved. I understand that on the average these margins have not altered following the temporary ban on the issue of licences.

Industrial Accidents

Mr Webb:

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

  1. Has the rate of industrial accidents in Australia been reduced?
  2. How does the rate now compare with that in the United States of America, Canada and Great Britain?
  3. Is the time lost through industrial accidents still greater than that lost through industrial disputes?

– The answer to the honorable member’s questions is as follows: - 1 to 3. I regret that, for the reasons previously given in answerto earlier similar questions by the honorable member, it is impossible to provide precise answers to the current questions. All I can add is that while action is being pressed forward vigorously towards improving the range and quality of Australian industrial accident statistics, it is inevitable that some time will elapse before useful Australian figures become available. Despite the incompleteness of Australian industrial accident figures, there could be no doubt that the time lost on account of industrial accidents in 1957 was much greater than that loston account of industrial disputes.

Private Savings Banks

Mr Crean:

n asked the Treasurer, upon notice -

  1. What was (he amount of deposits at the 31st December, 1956, and the 31st December, 1957, severally and totally, with the private savings banks?
  2. What assets were held against these deposits at the same dates?
  3. What amounts had been advanced for the purpose of housing at these dates?
Sir Arthur Fadden:

– The answer to the honorable member’s questions is as follows: - 1, 2 and 3. Figures comparing deposits and assets of individual private savings banks at the dates shown have not been published by the Commonwealth Statistician. However, the following details have been published in the annual balancesheets of the banks concerned: -

Banks and Housing Finance

Mr Whitlam:

m asked the Treasurer, upon notice -

  1. What (a) amount and (b) proportion of their deposits has been advanced for housing by (i) the Commonwealth Savings Bank and (ii) each of the private savings banks?
  2. What (a) amount and (b) proportion of their toatl advances has been advanced for housing by (i) the Commonwealth Trading Bank and (ii) each of the private trading banks?
Sir Arthur Fadden:

– The answers to the honorable member’s questions are as follows: -

  1. The Commonwealth Savings Bank and the private savings banks include amounts outstanding for housing under the heading “ Loans and Advances “ in their balance-sheets. While a dissection of this item is not available, it is understood that the amounts included in the item mainly comprise loans and advances for housing purposes. At the last available date the figures for “ Loans and Advances “ were: -

It is important to realize that these figures represent only loans and advances actually drawn and thus do not reflect the full extent to which the savings banks are currently providing finance for housing purposes. The total amount of loans and advances approved, but not yet drawn, would be substantial. 2.The amounts classified as advanced within Australia to building and housing societies and to individuals for building or purchasing their own homes, by the major trading banks at the end of December. 1957, were as follows: -

The total of these classifications represents approximately 13 per cent. of total advances at that date. Figures for individual banks are not available. In addition to these classifications, an amount of £21.2 million is shown as advanced at that date by the major trading banks under the classification “ Building and Construction “.

Taxation Deductions for School Uniforms

Mr Webb:

b asked the Treasurer, upon notice -

  1. Has a Commonwealth Taxation Board of Review ruled that only the cost of compulsory school uniforms can be claimed as a deduction for income tax purposes?
  2. If so. is the result that only parents whose children attend a college, or church or grammar school, can claim for clothes and that parents whose children attend State primary, secondary high, or technical schools, where a uniform is the accepted standard if not the rule, cannot?
  3. Will he review this matter and allow atax deduction on proof of purchase of all school clothing, including uniforms?
  4. Will he make a statement of the exact position in this matter?
Sir Arthur Fadden:

– The answer to the honorable member’s question is as follows: - 1 to 4. The Commonwealth Taxation Board of Review No. 3 was recently called upon to review a decision of a Deputy Commissioner of Taxation disallowing a claim by a taxpayer for deduction under Section 82J of expenditure incurred by him in purchasing clothing for his dependent children. The clothing concerned was in no way distinctive from ordinary every day clothing. The school attended by the children did not require its pupils to wear either uniform or distinctive clothing. The Board of Review rejected the claim of the taxpayer and unanimously upheld the decision of the Deputy Commissioner of Taxation. The case was heard in camera and the secrecy provisions of the income tax law apply to prevent disclosure of the affairs of the taxpayer concerned.

It would appear that the taxpayer has made public the written reasons of the Chairman of the Board for his decision rejecting the taxpayer’s claim. It would appear also that in these reasons the Chairman stated that expenditure on school clothing would be an allowable deduction under Section 82J only if the school insists on the wearing of a particular uniform. It wouldappear that he also stated that where a personal choice is exercised in respect of children’s clothing the expenditure could not be regarded as necessarily incurred within the meaning of those words as used in Section 82J. Inferences have been drawn from these remarks of the Chairman that deduction is restricted so far as school uniforms are concerned to those schools which make the wearing of their uniform compulsory. Wide publicity has been given to this interpretation of the Chairman’s statements and confusion has resulted in the minds of many taxpayers.It is necessary to repeat that the question before the Board of Review had no relationship to school uniforms compulsory or otherwise. It related to ordinary everyday clothing- worn by children attending a school which had no recognized uniform. Therefore, the decision of the Board is not relevant to any expenditure incurred in connexion with expenditure for school uniforms.

It may be recalled that, prior to 1952, no deduction whatever was allowed to parents for the cost of educating their children. When the allowance was first introduced by the present Government, it applied only to amounts paid direct to the school, college, university or tutor and was limited to £50 per annum for each child. In 1953, however, the Government increased the maximum to £75 and, at the same time, extended the deduction to all expenditure necessarily incurred in connexion with the full-time education of the child, whether the payments were made to the educational establishment or otherwise. Since then the maximum deduction has again been raised, so that it now stands al £100 per annum for each child. The Commissioner of Taxation has informed me that, ever since Section 82J was expanded by the Government in 1953, the provision has been regarded as permitting deduction for expenditure rendered especially necessary by the attendance of a dependent child at a school or college and in that interpretation of the law claims for expenditure on distinctive uniforms recognized by schools as their uniform, whether compulsory or otherwise, have been admitted in hundreds of thousands of cases. The commissioner believes this is the proper interpretation of the law and sees nothing in the language of the Chairman of the Board in the particular case which came before it to cause him to alter this administrative practice. It can be stated categorically, therefore, that expenditure which is incurred by a parent to provide uniforms for his children attending school to enable them to conform to the established rules or practices of their school whether or not compliance is made strictly compulsory, will qualify as education expenses for purposes of Section 82J and deduction will be allowed, provided the other conditions governing the allowance apply.

Taxation Deductions for Medical Expenses

Mr Ward:

d asked the Treasurer, upon notice -

In view of the widespread public disquiet caused by reported decisions of taxation authorities in regard to the allowance as a deduction for income tax purposes of medical expenses paid to a doctor who is a member of a registered company, will he make a statement setting out in precise terms the exact position in this matter?

Sir Arthur Fadden:

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

In recent days there have been requests that the official attitude towards claims by taxpayers for medical expenses where the medical practitioner is a member of an incorporated company should be stated. Although statements to the contrary have appeared, no official ruling whatsoever has been given cn this issue for the clear reason that, so far as is known, there has been no claim for the deduction of medical expenses paid to a company as distinct from the medical practitioner who is a member of the company. Neither has any adjustment been made in any assessment on this account. The relevant provision of the Assessment Act (Section 82f) authorizes the deduction of amounts paid by the taxpayer as medical expenses to a duly qualified medical practitioner. It is known, of course, that in New South Wales in the last year or two more than 100 companies have been incorporated by medical practitioners. The structure of incorporation varies greatly as between companies. Before any comprehensive statement on the deductibility or otherwise of expenses paid to doctors interested in companies may be made, it will be necessary to examine each of the cases critically in order to determine whether the relationship of patient and medical practitioner has been so altered as to take the medical expenses outside the compass of section 82f. So far no claim has been disallowed on the score that the expenses have been paid to a company. Official examination of the subject is proceeding but that examination at this stage has not disclosed any instance where the receipt for medical expenses has not been issued in the name of the individual medical practitioner who has given treatment to his patient. It is expected that some time may elapse before the examination is complete. Whatever the outcome of the examination may be, taxpayers will not be denied deductions for bona fide medical expenses paid by them and, if necessary, amending legislation will be introduced to ensure this result.

New Guinea Passion Fruit Industry. Mr. Griffiths asked the Minister for Territories, upon notice -

  1. Is the firm trading as Cottee’s Passiona Limited New Guinea registered as a company in Papua or New Guinea?
  2. Are the profits derived by Cottee’s Passiona Limited in New Guinea distributed in New Guinea?
  3. Are the profits taxable, and do the company’s employees in New Guinea pay income tax?
  4. What is the number of the company’s employees in the Territory?
  5. How many are (a) natives and (b) white employees?
  6. How many miles of roadway have been constructed since 1950 in the area containing passion fruit-growing stands?
  7. What authority built the roads, and what was the total cost of construction?
  8. What community benefits have the natives obtained from passion fruit-growing activities since the company was established in the Territory?
  9. Are natives paid in cash for their product; if not, how are they paid?
Mr Hasluck:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

k. - The answers to the honorable member’s questions are as follows: -

  1. Cottee’s Passiona (New Guinea) Limited is registered as a company in Papua and New Guinea.
  2. The company has not published this information.
  3. There is no income tax in Papua and New Guinea. Therefore, the company’s profits are not taxable there and company employees pay no income tax. Profits distributed to residents of Australia are subject to Australian income tax.
  4. See answer to 5. 5. (a) Twelve during the production season; two or three during the off season. (b) Five.
  5. About 500 miles.
  6. The Administration. The work was done mainly by the indigenous people under the supervision of Native Affairs field officers and was part of the planned opening of the area for administrative purposes (law and order, health, agricultural extension work, &c). Direct costs such as the purchase of picks and spades, the operating costs of machinery and the cost of materials for bridge construction were approximately £50,000. The value of the effort of the native people on their own behalf is not assessable.
  7. Before their passionfruit-growing activities commenced manyof the natives of the area had no means of obtaining money. The establishment of the processing factory enabled these natives for the first time to obtain cash for a commodity they produced. This cash income gives the native communities the means of purchasing some Australian manufactured products and consumer goods and the benefits obtained from the use of them.
  8. Yes.
Mr Griffiths:

asked the Minister for Territories, upon notice -

  1. How many bushels of passion fruit were produced and sold to Cottee’s Passiona Limited, in Papua and New Guinea in each of the last three years?
  2. How many gallons of fruit juice and pulp are obtained from the total production of passion fruit in the Territory, and what is their value?
  3. Is all the passion fruit produced, sold as fresh fruit?
  4. What is the price per bushel of fruit received by the natives?
  5. How many bushels of fruit are required to produce one gallon of juice and pulp?
  6. By what means does the fruit reach the processing plants?
  7. By what means is the fruit juice conveyed to the point of shipment to Australia?
  8. Is processing machinery and equipment admitted to New Guinea free of duty?
Mr Hasluck:

k. - The answers to the honorable member’s questions are as follows -

  1. There are no accurate statistics of the production of passion fruit in Papua and New Guinea. Local producers negotiate direct with Cottee’s Passiona Limited for sales to that company. The company does not publish figures of the quantities sold to the company.
  2. There are no statistics available of the number of gallons and the value of fruit juice and pulp obtained from the total production of passion fruit in the Territory. The quantity and value (as declared for export) of passion fruit juice and pulp exported from Papua and New Guinea during the ear ended 30th June, 1957, were as follows: -
  1. Yes. 4. (a) In the Goroka district - At the factory, 3d. per lb.; at the roadside, lid. per lb. (b) In the Wahgi Valley area, in the Hagen district and in other centres where the fruit has to be transported long distances by air, by road, or by a combination of air and road - At the buying depot, lid. per lb.; at the roadside,1d. per lb.
  2. The quantity varies according to the value of the fruit. Averages are: Juice - Goroka, 0.82; Mr Hagen, 1.18. Pulp- Goroka, . 62; Mr Hagen, 6.
  3. By road vehicles, light aircraft and native porterage.
  4. By aircraft.
  5. Under the customs tariff of Papua and New Guinea processing machinery and equipment is subject to duty at the rate of 10 per cent. ad valorem. The Administrator-in-Council may exempt certain classes of goods from duties and this power was used to admit certain plant for Cottee’s Passiona duty free in June, 1953, as an encouragement to the establishment of an industry.

Eyre Highway

Mr Cleaver:

r asked the Minister represent ing the Minister for Shipping and Transport, upon notice -

  1. What responsibility rests upon the Governments of Western Australia and South Australia with respect to the Eyre Highway?
  2. What are the current allocations from Commonwealth Aid roads funds to these States?
  3. What amounts have been contributed by the Commonwealth during the last five years for the maintenance of the Eyre Highway?
  4. If the South Australian and Western Australian Governments substantially increased allweather sealing of the Eyre Highway within their respective areas, is there any bar to the Commonwealth contributing funds for the completion of the bitumen sealing on account of the strategic importance of the highway?
Mr Townley:
Minister for Supply · DENISON, TASMANIA · LP

– The Minister for Shipping and Transport has furnished the following reply: -

  1. In common with other roads in the States of Western Australia and South Australia, the principal responsibility for the financing and undertaking of road construction and maintenance works on the Eyre Highway within their respective borders rests with these State Governments. The Commonwealth’s role is limited to a measureof financial assistance to ensure that the highway is adequately maintained for Commonwealth purposes. (See Question 3 hereunder.)
  2. Amounts paid to the States from Commonwealth Aid Road Funds for general roads purposes during 1956-57 were: - Western Australia. £5,997,000; South Australia, £3,447,000. The estimated payments for 1957-58 are: - Western Australia, £6,453,000; South Australia, £3,709,000.
  3. Amounts contributed by the Commonwealth during the last five years including 1957-58 have been towards ihe maintenance of the Eyre Highway between Norseman, Western Australia, and Penong, South Australia, and totalled Western Australia £62,500, South Australia £52,500 for the five years.
  4. As indicated in answer 1, the entire highway is a State responsibility and up to the present the responsible State authorities have not considered that the civil utilization of the highway justifies allweather sealing. The defence view is that transport projects must be decided on the basis of economic and civil requirements rather than on defence needs. The condition of the highway as at present maintained is adequate for Commonwealth purposes.

Australia-United Kingdom Meat Agreement

Mr Clark:

k asked the Minister for Primary Industry, upon notice -

  1. What was the total amount of equalization payment under the meat agreement made to the Australian Government by the United Kingdom Government in each of the past two years?
  2. Was any payment from this fund made directly to producers, or were payments made only to exporters?
  3. To whom, and in what total amounts in each case, were payments made in each of the past two years?
Mr McMahon:

– The answers to the honorable member’s questions are as follows: -

  1. The amounts received from the United Kingdom Government by the Australian Government as deficiency payments under the fifteen years meat agreement for the 1955-56 and 1956-57 meat years were £3,250,000 and £5,930,000 respectively.
  2. The moneys distributed by the Australian Meat Board from the funds so provided are paid by way of bounty directly to meat exporters. It is quite impracticable to make payments in relation to meat exports directly to cattle producers. There are safeguards to ensure that the benefit of the payments is reflected in the prices paid to producers by meat exporters for cattle.
  3. The amounts paid by the Meat Board to exporters as bounty in the past two years have totalled respectively £784,000,000 and £3,080,000. All payments by the Board to exporters are subject to check by the Commonwealth Audit office. I do not consider that the amount paid to an exporting company which reflects the volume of its exports to the United Kingdom should be disclosed to competitor interests.

Wiley Park Post Office

Mr Stewart:

t asked the PostmasterGeneral, upon notice -

  1. Has land been acquired at Wiley Park for the purpose of building an official post office?
  2. If so, when is it proposed to commence construction?
Mr Davidson:

– The answers to the honorable member’s questions are as follows: -

  1. No.
  2. The volume of postal business transacted at Wiley Park is appreciably below the minimum necessary to justify the provision of an official Post Office, and the present indications are that one will not be warranted in the near future.

Postal Department

Mr Stewart:

t asked the PostmasterGeneral, upon notice -

  1. When is it intended to provide an official post office at Clemton Park?
  2. Has land been acquired for this purpose?
Mr Davidson:

– The answers to the honorable member’s questions are as follows: -

  1. The provision of an official post office at Clemton Park is not contemplated at present. The volume of business handled is relatively small and is not likely to increase sufficiently in the near future to justify an official office.
  2. No.

Parcels Post Services

Mr Morgan:

n asked the PostmasterGeneral, upon notice -

Will he give consideration to introducing a better system for distribution of inward parcels from overseas in order to eliminate delays and inconvenience to recipients attending the central receiving depot at Sydney and provide for delivery through local post offices?

Mr Davidson:

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

All parcels received from overseas countries must be passed by an officer of the Department of Customs and Excise before delivery. In certain cases an addressee may be requested to be present at (he customs examination of a parcel which, as a general rule, is carried out at the Chief Parcels Office. When an addressee attends for this purpose some waiting time may be involved while the parcel is being opened, the contents inspected and the duty assessed. Provision exists, however, for an addressee to authorize the Supervisor, Parcels Post, to act as his agent. In these cases he need not attend at the Chief Parcels Office and, after customs examination, the article is forwarded to the local post office of address where the addressee may collect it on payment of any customs charges raised. It is considered that the present system is satisfactory and few complaints of delay occurring are received. Should, however, the honorable member have in mind any particular cases of delay and inconvenience to recipients, I will be happy to arrange for the circumstances to be investigated if he will kindly supply me with the details.

Services Canteens Trust Fund

Mr Webb:

b asked the Minister for the Army, upon notice -

  1. Do regional committees determine what relief shall be provided to ex-service men and women and their dependants from the Services Canteens Trust Fund?
  2. Is it a fact that there is no set means test and each case is treated on its merits?
  3. Would a fixed means test enable assistance to be provided uniformly and also allow persons to determine for themselves whether or not they are eligible; if so will he consider its adoption?
Mr Cramer:
Minister for the Army · BENNELONG, NEW SOUTH WALES · LP

– The answers to the honorable member’s questions are as follows: -

  1. Yes, within the authority delegated to them by the trustees.
  2. There is a means test for educational assistance, but not for welfare relief. The means test for educational assistance is as under: -

The basis of the means test is the adjusted family income. The adjusted family income is determined by taking the gross income of the family and deducting 10- per cent, for each dependant up to a gross income of £1,200 and £120 for each dependant if the gross income exceeds £1,200. If the adjusted family income does not exceed £800 in the case of orphans and children taking tertiary courses and £700 in other cases the child will be eligible for an education award.

  1. It is assumed that this question relates to welfare relief. It is considered that a means test would not enable assistance to be provided uniformly because welfare relief is granted to relieve “ needy circumstances “ and needy circumstances may arise from so many causes quite apart from the family income that a means test would be no measure of the need of the applicant and could well result in people in dire need being deprived of relief from the fund or on the other hand of people in no real need of assistance being granted relief. It has been found that all applications for welfare relief are essentially different and no common measuring stick could be applied to determine whether relief should or should not be granted. It is considered that the use of a means test would not be practicable in the case of welfare relief.

Royal Australian Air Force

Mr Ward:

d asked the Minister for Air, upon notice -

What procedure is followed by the Royal Australian Air Force in disposing of aircraft which are declared to be of no further use for its purposes?

Mr Osborne:

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

When aircraft are no longer required by the Royal Australian Air Force, they are, with the approval of the Minister, declared for disposal to the Department of Supply (Disposals Division) in the nearest capital city. The Department of Supply (Disposals Division) is responsible for inviting tenders or arranging for the auction of the aircraft.

Australian Atomic Energy Commission


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

  1. How many meetings have been held by the Australian Atomic Energy Commission since its inception?
  2. What was the date of each meeting?
  3. How many members of the commission attended at each meeting?
  4. What salaries and allowances are paid to the chairman and the other two members of the commission?
Mr Townley:

– The Minister for National Development has furnished the following reply: -

  1. The Australian Atomic Energy Commission has held 34 meetings in formal session since it was statutorily constituted in April, 1953.
  2. The meetings of the commission were held on 1st May, 29th May, 14th July, 19th August, 4th November and 17th December during 1953, on 26th January, 17th March, 7th May, 14th June, 13th July, 27th October and 16th December during 1954, on 24th February, 20th April, 1st June, 12th July, 8th September, 28th November during 1955, on 18th January, 6th and 7th March, 30th April, 3rd July, 21st August, 30th October and 14th December during 1956, on 20th February, 15th April, 7th June, 19th July, 27th August, 30th August and 19th November during 1957 and on 18th February during 1958.
  3. Ail members of the commission were present at all meetings except on live occasions; on four of these occasions the one member absent was away overseas.
  4. The chairman of the commission is remunerated at the rate of £1,500 per annum. The deputy chairman, who is a permanent head of a Commonwealth department, receives no remuneration in respect of his membership of the commission, and the third member is remunerated at the rate of £1,000 per annum. The three members, when travelling on the business of the commission, are paid travelling allowance at the rate prescribed for permanent heads of departments, but otherwise receive no allowances in respect of their membership of the commission.


Mr Ward:

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

  1. What is the annual productive capacity of the Australian Aluminium Production Commission’s works?
  2. Is the commission producing a full capacity at present?
  3. What has been the commission’s production in each year since it commenced operations?
  4. What proportion of the commission’s production in each year has been (a) marketed in Australia, (b) sold overseas and (c) put in store?
  5. How does the price of the local product on the Australian market compare with that of the imported material?
  6. Have sales of the Australian-produced metal been made overseas; if so, in what quantities and to what countries, and have these sales been made at a profitable price?
  7. What proportion of the Australain need is represented by the production of the Australian industry?
  8. Would it be in the interests of Australia if action were taken to limit importation of the metal to the amount by which the Australian productive capacity to meet our needs is deficient?
Mr Townley:

– The Minister for National Development has replied as follows: -

  1. The productive capacity of the Australian Aluminium Production Commission’s works at Bell Bay is between 12,000 and 12,600 long tons per annum.
  2. The commission is not producing at full capacity at present, but it is expected that it will be near full capacity shortly.
  3. The commission’s production since it commenced operations has been as follows: - 1955-56, 5,519 tons; 1956-57, 9,999 tons.
  4. The following proportion of the commission’s production has been -

    1. Marketed in Australia- 1955-56, 4,500 tons; 1956-57, 9,395 tons.
    2. Sold overseas- 1955-56, nil; 1956-57, 690 tons.
    3. Held by Commission- 1955-56, 1,019 tons; 1956-57, 933 tons.
  5. The landed cost of imported Canadian ingot aluminium is 8.8 per cent. less than the price of the commission’s product.
  6. Yes. Six hundred and ninety tons of aluminium were sold in 1956-57, practically all of which was exported to Japan. As is to be expected in non-ferrous metals markets, there was a temporary fall in the Australian demand for refined aluminium and it became desirable to export some local production in order to mitigate the costs involved in undue accumulation of unsold stocks. Although these overseas transactions could not be regarded as being profitable, the overall results on the year’s operations were profitable. For a productive enterprise of this nature engaged in commercial trading, the overall financial return is considered to be the proper indicator of results achieved.
  7. Approximately 60 per cent. of the Australian need for aluminium is represented by the production of the Australian industry.
  8. Current policy is to issue import licences only to the extent that imports of aluminium are necessary to meet a shortfall in local production compared with estimated future demand.

Cite as: Australia, House of Representatives, Debates, 16 April 1958, viewed 22 October 2017, <>.