House of Representatives
1 June 1960

23rd Parliament · 2nd Session

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

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Mr. GRIFFITHS presented a petition from certain citizens of Australia praying that the House will pass legislation to ease the means test and increase social service benefits payable to civilian widow pensioners and their dependent children.

Petition received.

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– My question, which is directed to the Acting Minister for External Affairs, relates to the alleged build-up of arms in West New Guinea by the Dutch, who claim that Indonesian forces are infiltrating that territory. Does the Minister know whether this matter has been dealt with, or is likely to be dealt with, by the United Nations organization? Does he think it would be a good proposition to place the whole of the territories of New Guinea and Papua under a United Nations trusteeship which would, I think, be the best means of developing them? If the Minister is of this opinion, could he have the matter placed on the United Nations’ agenda as, I believe, he will agree that neither Indonesia nor Holland has any right, in finality, to these territories, since they belong to the indigenous population?


– First, as to the remark about an alleged build-up of forces by the Dutch in New Guinea, there have, of course, been moves on both sides - by Indonesia and the Dutch - to reinforce certain of their forces. As to whether I would approve or think it a good idea that the whole of New Guinea should be placed under a trusteeship, I remind the honorable member that this is not a question which presently arises at all. The Dutch have sovereignty over their part of New Guinea and Australia has sovereignty with respect to Papua and has obligations under its trusteeship of New Guinea. So far as I am concerned, both the Netherlands and Australia are well able to live up to their international obligations with respect to the indigenous populations.

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– Will the PostmasterGeneral make available to a group of Sydney members facilities to inspect the remnants of the Sydney General Post Office tower and clock, and to consult with one of his officers about the cost and practicability of re-erecting it?

Postmaster-General · DAWSON, QUEENSLAND · CP

– Recently, I noticed an article in the press and I also received a letter from the secretary of the Town Planning Association of New South Wales again bringing up the question of the restoration of the clock and General Post Office tower in Sydney. I should say that my attitude and that of the department to this matter has not altered since I last answered a question in this House along similar lines. I think it would be very good if a party of members did have a look at the whole position and was able to obtain information from the departmental officials. Therefore, I shall be very glad to arrange for the inspection that the honorable member suggests. It would be helpful if he told me how many members are to go. It might save time if the honorable member himself contacted Mr. Hutchinson, the Director of Posts and Telegraphs in New South Wales, on the understanding that I shall get in touch with Mr. Hutchinson and tell him to make facilities available for the party to make the desired inspection.

Mr Calwell:

– Will the same facilities be available to the members of the Opposition?


– Of course. Why not?

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– I ask the Minister for Social Services: Are the Churches and charitable organizations taking full advantage of the Commonwealth Government’s £2 for £1 contribution for homes for the aged? Are such homes as have been established proving as successful as was expected when the legislation was introduced and passed in this House?

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

– The interest of the honorable member for Mallee in the provision of homes for the aged has been demonstrated in this House over a number of years, and no doubt his interest has been quickened by the fact that last Saturday I had the honour to open a very fine home for the aged in the town of Kerang, in Victoria. I am happy to reply to the honorable member to the effect that the enthusiasm created by the passing of the legislation known as the Aged Persons Homes Act is undiminished. According to the latest figures available to me, applications aggregating in value more than £7,150,000 have been approved. I am also happy to say that during the current financial year applications totalling more than £1,500,000 have been approved. In this way the Churches and charitable organizations are availing themselves of this opportunity to expand and to extend the accommodation available for elderly people.

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Mr J R Fraser:

– I ask the Minister for Defence: Will he have an examination made of the differences that now exist in pay and financial assistance available to members of the permanent forces and of the Citizen Military Forces who sustain injury while on duty and require extensive medical treatment and hospitalization? Does the Minister recognize that if a member of the Permanent Army and a member of the C.M.F. were injured in the same accident and required medical treatment and hospitalization, the member of the Permanent Army would receive full pay for the duration of the treatment, whereas the C.M.F. member, after, I think, 28 days, would receive only the payment that is available under the Commonwealth Employees’ Compensation Act? Will the Minister examine this matter to see whether this apparent injustice can be removed? In particular, will he examine the situation that arises when the injury leads to permanent disability?

Minister for Defence · DENISON, TASMANIA · LP

– Yes, I shall be very pleased to look into the matter that the honorable member has raised. In fact, we are at present examining all the processes that he has mentioned. They became rather tangled during the war years and have never been completely straightened out since then. Any matter in relation to the Commonwealth Employees’ Compensation Act comes within the jurisdiction and administration of my colleague, the Treasurer, and I undertake to talk over the matter with him.

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– I address my question to the Minister for Supply. Is it a fact, as stated by the Leader of the Opposition in the House last night, that a substantial number of employees at the government ordnance factory at Bendigo are being dismissed? Is there any probability of substantial dismissals in the future? .

Minister for Supply · PETRIE, QUEENSLAND · LP

– Most honorable members will appreciate that it is not always easy to maintain a high level of employment in munitions factories. Most certainly, it is not possible to maintain the same level of employment in peace-time as in time of war. I think that this matter was referred to by the Acting Prime Minister a couple of weeks ago. Since I have been Minister for Supply, my aim - I think it was the aim also of previous Ministers who administered this portfolio - has been to maintain at these various factories a level of production which will give a stable level of employment.

Mr Calwell:

– For how many?


– At the Bendigo factory, for between 800 and 900 people. It is inevitable, in any organization which employs that number of people, that from time to time adjustments in staff are necessary. It may be a question, as in my own department, of transfers from one factory to another. There is no present intention to dismiss or retrench any one except in the case of an adjustment of the kind to which I have referred, and this should not involve more than fifteen or twenty people in the next twelve months.

Mr Calwell:

– You are closing down four shops.


– Apparently the Leader of the Opposition knows more about this than the person who is responsible for administering the department. I quite appreciate that current circumstances in Bendigo make the honorable gentleman a little touchy in relation to these matters.

Mr Calwell:

– I shall give you the facts during the adjournment debate to-night and bring you up to date.


– Thank you.

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– Has the attention of the Minister for Air been directed to the fact that students at the Hawkesbury Agricultural College have accepted full responsibility for painting hammer and sickle symbols on Royal Australian Air Force airCraft based at Richmond? If so, what action, if any, has the Minister taken to ascertain whether there was any sabotage at the same time? Is it a fact that both the Acting Prime Minister and the Treasurer used V.I.P. Dakota aircraft for electioneering purposes during the recent campaign in Queensland? If so, were these aircraft later discovered to be carrying the symbol of the Soviet air force?

Minister for Air · EVANS, NEW SOUTH WALES · LP

– The events at Richmond, to which the honorable member for Grayndler referred, took place on the night of Commonwealth Day or, as I believe it is known below a certain age level, on cracker night. It might be said, in military terms, that a reconnaissance in force was carried out. The attacking forces withdrew; there were no casualties. Intelligence has since identified the intruders as one or more students from Hawkesbury College. Any reprisals, I think, may safely be left to the principal of that institution. I point out to the honorable member that the perimeter of the Richmond base is some 5 to 7 miles in length, and the man-power required to guard it around the whole distance would be disproportionately great in the present circumstances. The aircraft are guarded by a roving guard. An investigation is now taking place into the reasons why the student or students were not discovered, and that matter might be said to be sub judice. But I am sure that the fact that a student was able to penetrate will be duly considered by the authorities at Richmond, and I feel confident that the guard will be carried out effectively in the future.

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– . My question is addressed to the Acting Prime Minister. Has the attention of the right honorable gentleman been drawn to a letter written by the chairman of the Literature Censorship Board and appearing in the “ Sydney Morning Herald “, dated 30th May, in which he concludes, in effect, that the board is just as much aware of the difficulties and weaknesses in the censorship system as are its critics, and that these are accentuated by the present provisions of the relevant Federal and State legislation? In view of this authoritative expression of opinion, will the Government consider placing the question of censorship on the agenda of the next Premiers’ Conference with a view to the appointment jointly by the Commonwealth and the States of a committee of eminent Australians to report to the respective parliaments on possible improvements in the law and administration relating to this matter, bearing in mind the fact that important amendments to the previously existing laws were made in the United Kingdom last year, and the further fact that a sufficient number of distinguished jurists and others, with uncommitted views, are available in this country - men who would be particularly well qualified to consider the legal, literary and public implications involved and the bearing of our federal political structure upon this problem?

Minister for Trade · MURRAY, VICTORIA · CP

– I concede immediately that censorship has been historically a difficult, complex and controversial subject. In this country there is some division in the exercise of authority between the Commonwealth in respect of its import powers and the States in respect of their residual powers. I am not prepared at the moment to say that I believe this matter ought to b* raised at the Premiers’ Conference, but on the note that was struck by the honorable member I am happy to give him an assurance that I will see that what he has proposed receives very mature consideration.

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– My question is addressed to the Acting Prime Minister. Is he aware of the substantial unemployment that now exists in the Cessnock area of the northern coalfields? Is he also aware that a further 50 miners have had notice of termination of their employment at the Aberdare colliery on Friday next? In view of the financial inability of the State Government to meet the situation, will he state what action is proposed on a federal level to provide alternative work, in accordance with the Commonwealth Government’s declared policy of full employment? As the position is acute, will he treat the matter as urgent?


– I have no detailed knowledge of the matter, although I have heard something - I think from the honorable member himself in this House, as well as from other sources - about the displacement of people from employment due to the closing of some coal mines. However, I think that the Government of New South Wales has been extending some other coal mines. I concede, immediately, that the Commonwealth Government pursues a policy of full employment, and it has been successful in that policy; but the declaration of a policy of full employment does not involve the Government in an obligation to employ every unemployed person at the particular point at which he lives and may wish to have employment. That becomes a matter of detail in which the Commonwealth Government could not accept an unqualified responsibility. I know that on earlier occasions when there has been unemployment in the coal-fields area not only has my colleague, the Minister for Labour and National Service, constructively concerned himself with that problem, but I myself have heard representations that touched on the possibility of establishing some new industry in the area. The fibre glass industry is one that comes to my mind. To the extent that the Commonwealth Government can, within its normal functional responsibilities, contribute to the easing of the present situation, I assure the honorable gentleman that it will do so. On the other hand, I think that the general circumstances of the coal industry in the Newcastle area are understood to be principally within the purview of the New South Wales State Labour Government.

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– My question is directed to the Acting Prime Minister in his capacity of Minister for Trade. In view of the depressed prices at present being received by producers of Australian honey, due to the unloading by Communist China of 4,000 tons of that commodity on the market in Western Germany - and that country is Australia’s best customer - at uneconomic prices, and the obvious responsibility of Western Germany, because of its political affiliations, to support the Western bloc, will the Minister try to obtain some preference for Australian honey producers?


– The honorable member mentioned to me some little time ago the matter dealt with in part of his question, because he is consistently concerning himself with the well-being of the honey industry in his own electorate. In consequence of his mentioning it to me I have already asked the Trade Commissioner Service in Bonn to ascertain whether honey arriving from Communist China is, in fact, technically being dumped. If it be proved that it is being dumped, technically, there are certain courses that we can, and would, follow in endeavouring to protect our own trade interests in Western Germany, which is a very important market for Australian honey. It is not our most important market, but it is second only to that in the United Kingdom. My information is that severe competition has been encountered in that market as the result of the importation of honey from both North America and South America, and I am in consultation with the people in my department, both at home and overseas, who may be best able to act for the protection of our trade interests in this commodity or to offer advice on the matter. I assure the honorable member, and apiarists generally, that we will follow the best course.

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– I ask the Acting Prime Minister in his capacity of Minister for Trade: In the interests of Australian plywood manufacturers and employees - with special emphasis on the Somerset plywood mills near Burnie, in my electorate - will the Minister urgently consider restricting the importation of plywood from low wage countries like Japan to the level at which it was being imported in the twelve months ended on 31st March, 1960, until the Tariff Board has submitted its report to the Government?


– As the honorable member implied in his question, the circumstances of the plywood industry were referred by me to the Tariff Board some time ago. It is the policy of the Government that the long-term protection of this industry, as well as of other Australian industries, shall be determined as the outcome of recommendations made by the Tariff Board. On the other hand, we have made it clear that in special circumstances we will take special action to protect an Australian industry, pending a finding of the Tariff Board. Indeed, I announced such action 24 hours or so ago in respect of the smaller air-cooled internal combustion engines. We have studied the position of the plywood industry and my advice at the moment is that it is not suffering seriously nor is it at present under threat of serious damage. If it can be established that it is suffering, I assure the honorable member that the policies of the Government will permit us to take action.

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– My question is directed to the Acting Minister for External Affairs. Is it a fact that the Indonesian Foreign Minister has publicly stated that he intends to find out whether the call of the Netherlands aircraft carrier “ Karel Doorman “ at Fremantle means a change in Australia’s attitude on Dutch New Guinea? If so, will the Government assure the Indonesian Government that Australia offers, under international law, refuelling and provisioning facilities to any nation that sends a warship here and that this should not be interpreted as meaning that Australia is responsible for, or necessarily in sympathy with, the movements of the warships of that foreign nation? In fact, H.M.A.S. “ Melbourne “ is paying an official visit to Djakarta. Will the Government state that Australia’s policy on West New Guinea has not changed?


– May I say in answer to the honorable member that the policy of this country in relation to Indonesia has not changed. Let me state it very simply: We respect the existing Dutch sovereignty in West New Guinea. We also welcome and accept the Indonesian assurance that it will not seek to gain West New Guinea by force of arms, and we have said that we will accept any change in that sovereignty which comes about lawfully by peaceful means.

Mr Calwell:

– We do not agree with you.


– I do not ask you to agree.

Mr Calwell:

– No, but we represent the Australian point of view; you do not.


– This Government represents it at the moment. It is quite true that the “ Karel Doorman “ will come into Fremantle between 11th and 15th July on what, in the language of the appropriate protocol, is an unofficial visit in the course of her transit from the Netherlands to Hollandia and ports beyond. It will be passing, as the Netherlands Government has already announced, around the south and east of Australia in making its way to Hollandia. The Australian Government was informed that the ship wished to call at Fremantle, in company with other ships, and the Australian Government intimated that it would afford the routine courtesies customarily extended to a ship in similar circumstances. The ship will come in for fuel and for water. In discussions here with Indonesian representatives and in discussions between our representatives and Indonesian representatives in Djakarta, at a time when we were not sure that the Netherlands Government would ask that the ship be allowed to call at a port in Australia, we intimated that, if we did afford these routine facilities, they would certainly not be made available by way of special favour to the Netherlands or by way of an unfriendly gesture towards Indonesia. If any further affirmation of that is necessary, we will certainly make it

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– I ask the Minister for Supply whether or not the policy of reorganization of the Bendigo ordnance factory involves the closing down of No. 7 shop - the painting shop - and No. 9 shop - the machine shop - with a transfer of the machines of both those shops to the No. 10 shop. Does the scheme of re-organization also involve the closing down of No. 31 shop - the gear shop - the machinery of which is among the best in the southern hemisphere for the cutting of gears and such work? Does not the Minister’s scheme of re-organization involve the dismissal of at least ISO people who are at present employed at Bendigo?


– The answer to the last part of the question is emphatically, “ No “. The answer to the other parts of the question is that there is no plan of re-organization.

Mr Calwell:

– The Minister has just said that there was such a plan.


– I did not say anything of the sort.

Mr Calwell:

– What did you say?


– There is no plan for a re-organization. What I said earlier was that it has been my aim, as it was that of previous Ministers, to create, shall we say, stability in the output of the ordnance factory in order to permit us to maintain a stable number of people in employment. Surely that does not mean re-organization. So the answer to the earlier parts of the question also is, “ No “.

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– My question is directed to the Postmaster-General. Has the Minister heard of a suggestion made by the Honorable H. E. Bolte, the Victorian Premier, who has urged the introduction of a uniform emergency telephone number in each centre for calls to police, ambulance, fire brigades and the like? As the adoption of this suggestion would reduce delay in summoning aid in an emergency, will the Postmaster-General consider the proposal?


– This suggestion has been put up on a number of occasions and has been considered. Obviously, means of summoning aid quickly are very desirable, and we realize the advantages of a common emergency telephone number for the various emergency services so that a subscriber will not be in difficulties if he has not immediate access to a directory. But the solution of this problem is not easy in Australia, because our services are widely spread and many of the numbers which would be usable in one State are not available in other States. In an effort to deal with the situation partly, we have provided on the first page of the directories in the various

States lists of the numbers to be called for these emergency services. The numbers of these services are displayed, also, in places such as public telephone call-boxes. Current developments as a result of the extension of the automatic services, the introduction of the new numeral system of dialling, and the preparation of new directories, present opportunities for further study of the suggestion posed by the honorable member, and the matter is now being considered again.

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– I ask the Treasurer a question. Since it is desirable to have a reliable measure of productivity in Australia, and since most industrial countries already produce productivity indexes, can the right honorable gentleman say whether the Commonwealth Statistician has made progress in the preparation of such an index in Australia, and, if so, when we can expect it to make its appearance?


– I agree with the Deputy Leader of the Opposition that it would be very desirable to have a reliable index of productivity in Australia, and a good deal of work has been done towards that end. There may be other countries which claim to have indexes of productivity, but I question whether their accuracy would be accepted in Australia for the kind of definitive purposes that we would have in mind should such an index be available to us. Attempts to produce such an index have been made here, but so far we have not surmounted the problems associated with the production of an index which would be regarded as being sufficiently reliable for the assessment, for example, of wages or of similar factors. If the Commonwealth Statistician has carried out any further work which would supplement what I have already indicated to the honorable gentleman, I shall gladly supply him with the details.

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– I direct a question to the Acting Minister for Territories. Can the honorable gentleman tell the House whether it is a fact that it is estimated now that the current Budget provision for the Territory of Papua and New Guinea will be underspent by £273,000? Is it a fact that the Administration claims that the underspending will result because the Commonwealth Department of Works was unable to achieve its target for the year? Can the Minister also inform the House whether it is a fact that the revenue from taxation in the Territory under the recently introduced legislation is expected to exceed the estimate by more than £500,000? As the latest Commonwealth estimate was made as recently as the end of last year, can the Minister explain to the House why there is such a wide difference between the estimate and the official figures given in the past few months?


– I think the honorable member is referring to suggestions made in Port Moresby recently that the level of taxation under the new system is higher than it need be. The receipts from taxation under the new system have substantially exceeded the estimates that were made when the new income tax laws were introduced last year. It was pointed out then that the main purpose in introducing the new tax was not to gain further revenue, but to raise the required revenue by more reasonable and equitable means, and to enable the former export and import taxes to be abolished. The estimates of receipts from the new income tax were necessarily inexact because there was no past experience to work on, but the reason that the receipts have been higher than estimated lies in the increased prosperity of the Territory during the past year. It was due particularly to higher prices for primary products which were exported, especially copra, and to higher personal incomes due to the rise in wage levels during the year. A calculation has been made of the increase in the amount that would have been raised under the old system due to the increase in the value of primary produce exported. It has been calculated that no less than £600,000 more than last year would have been raised by taxation under the old system if it had been still in operation as a result of the higher value of primary produce exported.

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– I preface a question to the Minister for Immigration by reminding him that about twelve months ago I asked him a question concerning restrictions in

South Australia on the purchase of building sites by immigrants who were not naturalized. Does the Minister recall informing me that he would take the matter up with the South Australian Government? Has he taken the matter up with that Government, and has any decision been reached?

Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

– 1 think that the honorable member for Kingston knows that I think so well of him that, naturally, I would always remember things that he said to me. So I do remember what the honorable gentleman said a year ago in this respect. During my absence abroad, about a year ago, the Acting Prime Minister raised this question officially with the South Australian Government. Only lately, the South Australian Government has brought in, as I understand it, amending legislation to the South Australia Real Property Act the effect of which is to remove virtually all the disabilities upon immigrants in South Australia of the kind about which the honorable member has complained. By the removal of restrictions on European settlers this legislation achieves quite a considerable measure of uniformity throughout Australia. I think, Mr. Speaker, that the action of the South Australian Government should be welcomed by this House. Personally, I applaud it and I hope my honorable friend opposite does, too.

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– Is the Minister for Primary Industry in a position to comment on the establishment of a wool futures market in Sydney recently? Can he state the reaction of the various wool industry organizations to its establishment in the light of hs effect on the price of wool generally?

Minister for Primary Industry · FISHER, QUEENSLAND · CP

– I think it would be premature to comment on the operations of the wool futures market except to say that I do not think it affects the price paid for wool at auction. That price is determined by the bidders at the sales. If the honorable member will wait for a period I shall be able to give him a more comprehensive report on the operations of the wool futures market.

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– I preface a question to the Acting Prime Minister by reminding the right honorable gentleman that when the Australian Tariff Board considered the timber industry it suggested that the Government should examine the cost of shipping timber from Tasmanian ports. Was that recommendation considered by Cabinet? If it was, what action does the Government propose to take to give effect to the considered recommendation of the board?


– I remember, in general terms, the implied suggestion by the Tariff Board about two years ago that, amongst other things, the Government should do something to alleviate the circumstances of Certain sections of the Australian hardwood milling industry by considering coastal freight charges. The Government had a very full investigation of this matter, first by a high-level committee that included experienced officers of a number of departments and, secondly, by the Cabinet itself. My recollection is that it was found that there was nothing practicable that the Commonwealth could properly do in this regard. The Tariff Board had not really indicated a course of action. In respect of freights from Tasmania to the mainland, one has to bear in mind that cargoes are carried partly by private shipping lines and partly by the Government line. While it would no doubt be possible for the Commonwealth Government to have lower freights on the Australian National Line, if such freights were unprofitable to shipping generally that would hardly be equitable, no matter how advantageous it might be to one section of the community. If the honorable member would like to refresh my memory later in more particular terms I shall direct further attention to the problem. However, I think the matter was thoroughly examined and that it was not found possible to do anything practicable.

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– Will the Treasurer admit that a convincing case has been submitted to the Government for a continuation of the comprehensive water supply scheme in Western Australia? Does this involve anything more than a £1 for £1 subsidy for essential developmental works in Western Australia which, unfortunately, cannot participate directly in the benefits from the mighty Snowy Mountains scheme?

Will he give an assurance that the Government will look sympathetically at this request from Western Australia with a view to enable the current plan of work to proceed without interruption, thus providing an assured water supply to more than 11,000,000 acres of farm lands?


– The honorable member has spoken like a true son of the mighty State of Western Australia. As he and other honorable members will be aware, the Commonwealth Government has continued the arrangement entered into originally, I think, by the Chifley Government under which assistance was to be given for the first phase of what was known as a comprehensive water supply scheme for Western Australia. The financial provision which has been made by the present Government has been substantially in excess of what was originally estimated to be the cost of that scheme. Those arrangements were entered into with the Government of Western Australia before the latest financial arrangement under which very much more liberal provision has been assured for the next six years for Western Australia, in company with other States of the Commonwealth. Recently, Mr. Wild, a member of the Western Australian Government, interviewed me on this matter and I asked him ‘ to submit to me in writing the case which he then presented. This will receive the consideration of the Commonwealth Government. I cannot take the matter further than that at this stage.

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Approval of Work - Public Works Committee Act

Minister for the Interior and Minister for Works · Forrest · LP

– I move -

That, in accordance with the provisions of the Public Works Committee Act 1913-1960, it is expedient to carry out the following proposed work, which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to this House, namely: - Construction of new Customs House, Melbourne.

This proposal provides for the erection, at an estimated cost of £1,609,000, of a multistory steel-framed building comprising basement, ground, first and fifteen upper floors, and mechanical equipment floor. The building will accommodate the present staffs of the Department of Customs and Excise and make provision for future expansion of that department.

The committee has stated in its recommendations that -

A suitable building, which will make economic use of the site, has been proposed and detailed planning should proceed along lines suggested by the committee.

When the House agrees to the motion I have submitted, the necessary planning will be proceeded with.

Question resolved in the affirmative.

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Reference to Public Works Committee

Minister for the Interior and Minister for Works · Forrest · LP

– I move -

That, in accordance with the provisions of the Public Works Committee Act 1913-1960, the following proposed works be referred to the Parliamentary Standing Committee on Public Works for investigation and report, namely: - Construction of apron, roads, car parks and engineering services for proposed new terminal building at Perth Airport, Western Australia; also extension of north-south runway and widening, strengthening and extension of associated taxiways.

The proposals provide for apron development to accommodate the aircraft which will use the proposed new terminal building and for the roads, car parks and engineering services required to service this building. They provide also for an extension of the north-south runway from 4,800 feet to 6,300 feet and the widening, strengthening and lengthening of its associated taxiways to make the airfield adequate to handle the types of aircraft now being used at Perth on domestic and international routes. The preliminary estimated cost of these works is £570,000.

Question resolved in the affirmative.

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APPROPRIATION BILL (No. 2) 1959-60 [No.2]

Second Reading

Debate resumed from 31st May (vide page 2105), on motion by Mr. Harold Holt-

That the bill be now read a second time.

La Trobe

.- It was my original intention to speak on only one sec tion of the bill under discussion, but, like the honorable member for Moreton (Mr. Killen) I had the great pleasure of listening to the Leader of the Opposition (Mr. Calwell) at 8.15 o’clock last night. I had the pleasure of hearing only a portion of his speech, although I was in the House all the time, because the honorable member turned his back to the Government benches and appeared to be addressing his colleagues on the Opposition side. I asked one of my confreres why it was that the Leader of the Opposition spoke with his back turned to Government supporters, and although I do not agree with the reply, my colleague suggested it was because he could not afford to turn his back on his own party. I expected some pearls of wisdom to come from the honorable leader’s speech on the bill, but instead I found myself imagining that I was back on the hustings in the Ringwood Town Hall or in the Prahran Town Hall, hearing again the many promises that the Labour Party would carry out if elected to office.

Mr Curtin:

– It would give you a shock.


– Whether it gave me a shock or not, I still prefer to be in the National Parliament, and to have it retain its proper function - the discussion of legislation. I do not object to the promises which are made, but I think it is clear to this House that the purpose of the Government is to administer and to develop the Commonwealth for many reasons, one of which could be the element of protection of the Commonwealth in the event of any emergency.

The Leader of the Opposition and also the honorable member for Melbourne Ports (Mr. Crean) criticized the development which is going on in this country. I heard ofluxury hotels which are being constructed, of banks which are being built and of various things which, I believe, illustrate the development and magnificent progress going on in Australia. I am not saying that these things do not present some problems; I think they do, but I wonder, particularly as a member on the Government side of the House, why Opposition members always get up and talk about these developments as if they should be banned and should not be carried on. I wonder how their supporters, who are building these constructions, and who are provided with employment by them, and how the many people who will be given employment once they are finished, feel about such remarks?

I should like to put two points to honorable members opposite. They support the statement by the honorable member for Canning (Mr. Hamilton) that the Opposition is fighting a battle that is twenty years old. The first incident occurred during the La Trobe by-election. A Labour supporter - a very good type of person - told me that he was going to vote Labour, as he had always voted because of his family background and training. But he said to me, “ You will win “. When I asked him why, he replied, “ Because the Labour Party has not yet woken up to the fact that we can read and write. We went to school. We can read the papers and count the money in our pay envelopes. For that reason you will win.” The second point I want to make arises from something that the honorable member for Melbourne Ports had to say about what he called the shocking plight of young people to-day. I remember that in 1945, when, as a married man, I was discharged from the Army, I had a small amount of deferred pay. I could not have afforded then to buy a house or even a block of land. To-day young people have refrigerators, cars, houses and, I think, most of the things that they want.

My second criticism of the Opposition concerns its endeavours, in my opinion, to cast gloom and to engender a lack of confidence in the economy of the country to-day. I suggest to honorable members opposite that what they are doing is crying “ Wolf “. If you go on crying “Wolf” for too long, when some trouble does occur the people will not listen to you. As an illustration, let us consider what could happen if the Opposition kept on saying that this country is in a bad way. Luckily, honorable members opposite have not got away with the claim in the past four elections, because the people are intelligent. But if you keep on saying these things and some people decide that you are right, they stop buying. If they stop buying, the shops stop ordering, and the manufacturer stops manufacturing and begins to put off staff. Honorable members opposite are doing something for which they might have to answer in the future.

The question that I think may reasonably be asked by the public is: Does the Opposition want a stabilized economy? Does it want the people to have the things that they have to-day? Do honorable members opposite want to see these buildings going up throughout Australia, which show progress, or is the realization that they cannot govern while things are good something painful to them? Is it not reasonable to assume that they believe that if they can disrupt the economy and create trouble, there is a possibility that they will get into office? I am sure that if Mr. Harry Pollitt, the British Communist leader, were here he would be able to elaborate on this issue.

I put those points to honorable members opposite. Though we discuss and argue things one with another, and though, naturally, the Opposition is here to oppose, I think that some of the matters that the Opposition has raised over the last month are making trouble for its own cause. 1 have heard the Arbitration Commission and the judiciary attacked. If it keeps on attacking those institutions, it is undermining the stability of our way of life. We all know that there are political appointments of judges from the Opposition’s side, as there are from this side of the House, but I do not think that any decent person on either side honestly believes that the courts or the individual judges are dictated to by any political party when it is in power. Such criticism does a disservice to the community generally.

Having covered those matters, Mr. Speaker, I now turn to the one point that I originally rose to discuss. On this matter there will be no disagreement from the Opposition. My case relates to the granting of repatriation hospital and medical benefits to the wives of totally and permanently incapacitated ex-servicemen. It seems wrong to me that such benefits should be available only after the death of the pensioner, as I understand is the case at present. The ex-serviceman who is totally and permanently incapacitated gets his pension, but his wife has no right under the repatriation scheme for hospital and medical benefits. The T.P.I, exserviceman, by contrast with the general pensioner, usually relies only on his pension. Quite often, he has been incapacitated at an early age. In a war a young man of eighteen, nineteen or twenty years of age receives a serious injury and becomes a pensioner for life. Before he went off to the war, his wife looked forward to a bright future, but on her husband’s return she found that she was married to somebody who was badly injured - perhaps mentally as well as physically. The T.P.I, ex-serviceman is not capable of earning extra money by working. His wife is often faced with great hardship in trying to make ends meet financially and in the full-time nursing of her husband. This imposes a great strain on her and if her health breaks down the financial security of the family unit is endangered.

This possibility is a very great worry to the T.P.I. ex-serviceman. I was at Heidelberg Repatriation Hospital when the question was raised. The majority of these men realize that they are receiving reasonable consideration, but their big worry is that if their wives become ill, they will have to meet hospital and medical expenses. They feel that the Government should take over that responsibility, particularly as it does so when the pensioner dies. To me that seems rather extraordinary. I feel that the Commonwealth should alleviate this worry by granting full hospital and medical benefits to the wives of T.P.I, ex-servicemen now - not on the death of the husband.


.- I listened with interest to the honorable member for La Trobe (Mr. Jess) when he suggested that he missed the sight of our leader’s cheery face last evening. He went on to mention a lot of alleged faults of the Opposition. I had expected, knowing his electorate, that the honorable member would pay some regard to its general requirements. It is developing very rapidly, particularly around the Nunawading area. It is an electorate that requires roads, drainage and sewerage in particular, because, unfortunately, through lack of sewerage in some parts of the electorate hepatitis is very prevalent among children. I expected that the honorable member would have dealt with these matters and would have put forward some plea for further Commonwealth aid, as was done by the honorable member for Batman (Mr. Bird).

Mr Anderson:

– That is part of the political stunt.


– The honorable member for Hume informs me that it is part of a political stunt. I do not think that it is a political stunt at all, and I do not want any help from the honorable member. Probably the people of La Trobe would be more appreciative if the honorable member for that division made it a part of his political stunt and desisted from criticizing the manner in which the Leader of the Opposition (Mr. Calwell) addresses the House. Perhaps he did not even want to look at the other side of the picture.

The honorable member said that the construction of luxury buildings provided building workers with employment. That is right, but I have been the secretary of a building workers’ union for 22 years, and I can assure the honorable member that building workers would applaud heartily the statements which were made by the Leader of the Opposition. If the honorable member still wonders about this, he need wonder no longer, because I offer now to take him to any building job so that he can approach the workers himself.

I support the honorable member’s statements relating to the wives of totally and permanently incapacitated pensioners. We on this side of the House have been raising this matter year after year, and we welcome his support. Now that he is a member of this House, not only will he have the opportunity to exercise some influence on the Government to assist these unfortunate women, but also he will find many supporters on the back benches of his own party who agree wholeheartedly with what he had to say. However, when it comes to casting a vote, no doubt he will aline himself on the side of the Government and vote against any amendment to the Budget which the Opposition may advance with a view to securing justice, not only for the wives of T.P.I, pensioners but also for the wives of all pensioners, for there is no more needy section in the community than these women. The wife of an invalid pensioner who may have been injured in industry has to carry a burden similar to that which the wife of a T.P.I, pensioner has to carry. Both are entitled to some relief. The honorable member for La Trobe will have ample opportunity to advance a case on behalf of all pensioners, but he will find from bitter experience that he will not get the support from his colleagues on the Government side that he should.

This debate gives us the opportunity to criticize what has been done in the past and to advance suggestions which we would like the Government to consider when the next Budget is being framed. One such suggestion has been put forward already by the honorable member for La Trobe.

The Governor-General, in his Speech, referred to the existence of dangerous trends in the economy. He pointed out that the Government was aware of these dangerous trends, particularly in relation to inflation, and mentioned the Government’s proposals to deal with them. As far as I can ascertain, only one of those proposals has been implemented. I refer to this matter because the honorable member for La Trobe suggested that we were rather more consistent than he thought we should be in criticizing and attacking the Arbitration Court. Apparently, he considers the Arbitration Court to be above and beyond all criticism. I noted particularly that he said that there had been political appointments to the court. I suggest that where there are political appointments to any court bench there is ample ground for criticism.

I have said that the Government had implemented its first proposal to deal with inflation. This proposal was to intervene in the hearing of an application for an Increase in the basic wage. Presumably, the Arbitration Court was suitably impressed by this political intervention, because the Government obtained the result which it sought - the basic wage was pegged. The Government, so far, has not got round, and I do not think it ever will, to dealing with monopolies and restrictive trade practices. The Governor-General said that the introduction of legislation to deal with these matters was under consideration. I have no doubt that it will still be under consideration at the end of next year- Even if legislation were introduced to deal with monopolies, they would promptly cry out that the legislation was invalid and they would challenge it if an attempt were made to implement it. There is no doubt in my mind that if the legislation were challenged it would be found to be invalid. The Government has succeeded in placing the burden of inflation fairly and squarely on the shoulders of the workers. I believe that the Government will not even consider the other proposals which were referred to in the Governor-General’s Speech.

I direct attention now to a matter which I have raised on several occasions - safety in industry. The answers which I have received to my questions on this subject are most unsatisfactory. Almost twelve months ago I asked the Minister for Works (Mr. Freeth) whether the Government, when letting contracts, would ensure that a clause was incorporated in the contracts to guarantee that a proper safety code - an International Labour Organization convention has determined a proper safety code - was observed by the contractors. I received a reply to the effect that the Government was satisfied that the clause in its contracts, which provided that the successful tenderer must abide by the relevant State regulations in relation to industrial safety, was sufficient to meet the position. Of my own ex,perience, I say that such a clause is not sufficient because most of those regulations cannot be enforced for the reason that there is no machinery by which they can be enforced. I say that here we have a situation where ten men are killed each week - 500 men are killed each year - and 4,000 men are injured each year, and some scores of millions of pounds are paid out in compensation.

Here we have a situation which is crying out for attention. Not only are huge sums of money involved and not only is a hurt to the worker involved; there is also a hurt to his family, should he die. There is the lack of opportunity for his widow, because she can no longer look forward to bringing up the children in the manner in which she and her husband had probably planned. In all probability the children would have to be taken from school earlier than planned and sent to work, and the widow herself would probably have to go to work. Here we have a problem involving not only huge sums of money but also a great deal of physical and social suffering. It is not good enough that the Government, which can, and inexpensively too, take steps to minimize the effect of this catastrophe, should refrain from doing so. If we picked up a newspaper to-morrow and read that there had been a catastrophe in which SOO men had been killed and their families orphaned, and that 4,000 men had been injured, we would be appalled; and questions would be raised in the House as to how much money could be advanced to relieve their suffering. Yet each year a catastrope of such proportions happens in Australia. Annually in industry 500 men are killed and 4,000 men are injured, but the Government does not take steps to prevent that catastrophe.

Knowing the nature of the construction industry, with which I am particularly concerned, I would say that if a construction firm or a firm of engineers tendered for a Commonwealth job such as St. Mary’s - incidentally the Utah construction organization has not a bad safety record, the Americans being very keen on safety provisions, much more so than this Commonwealth Government - and was required under the terms of its contract to enforce the safety code determined by the International Labour Office, it would surely see the benefit of that code and would have the necessary equipment and organization to carry out its provisions. It would observe those provisions in its subsequent contracts, because its employees would have experienced the benefits of the code. It is important to train workers in safety matters, because after all the fault does not always lie with the employer. If workers were trained in safety on a Commonwealth job, when they went to another job they would insist on safety and, in my experience, so would their employers. So, I ask that further consideration be niven to this question. I suggest that the Commonwealth first of all, is not doing as much as it might in this regard. The Treasurer (Mr. Harold Holt) said that he had the honour some years ago of calling the first interstate conference of representatives of industry and State governments to consider the problem. That conference met but it broke up. and little or nothing came of it. More positive action must be taken by the Government. 1 come next to the manner in which this Government handles compensation for those who are injured. Only a fortnight ago it lodged appeals against five claims by widows in the High Court. This Government has a record of being more consistent in appealing against the claims of deceased workers’ wives than has any section of private industry. It has rather a worse record. In a long experience, I have not known widows, except in the field of the Commonwealth Employees’ Compensation Act, to be taxed costs when their case was lost. You do not always win a case. I put to the Government the fact that a returned soldier, seeking repatriation benefits, at least has the right to go before his tribunal and expect that if he loses his case costs will not be taxed against him; but under the Commonwealth Employees’ Compensation Act an injured worker is not treated in that way. 1 raised the cases of three widows who had been - if I may use the term - slugged for £180 apiece. I gave their names and addresses to the Minister concerned and suggested that at least some mercy should be shown to them. Only recently I received the reply that the department had agreed to reduce the costs. Apparently, the quality of mercy is very strained by this Government in its treatment of workers’ widows. Is not the misfortune of a woman whose husband, her mate, is killed at work and his body is brought home in a box, and she is left to struggle to rear her family, sufficient to deter administrative officers from challenging, whenever possible, on technical and legal grounds, her right to a small amount of compensation? To my knowledge no private company has ever asked in such circumstances for taxed costs, except in one class of case and that is where it is proven that the application is fraudulent. There are very few such cases.

So, 1 appeal to the Government not only to give consideration to the matter of accident prevention, a field in which the Commonwealth could give a lead that would return it handsome dividends, but also to examine its compensation legislation with a view to ensuring that it is operated and administered at least as liberally as private insurance companies approach similar legislation. I do not think that is too much to ask. T admit that the Government did amend the Commonwealth Employees’ Compensation Act, or rather agreed to amendments that were proposed by this side of the House, at the time of the last Budget. Those amendments have been very much appreciated. It is not very often that I praise the Government, and I expected some comments from my colleagues in this instance; but it is doubleedged praise because those amendments were proposed by the Opposition. I again appeal to the Government to amend the act further and also to administer it a little more tolerantly than it has in the past.

It has been suggested that there should be development for the purposes of defence. If I have one criticism to make arising from the debate on defence recently it is that the Government’s defence policy offers nothing that I know of in regard to civil defence, and also offers no part to be played by the working class movement in this country. Most of us remember well the effort put forward by the Australian community when the Japanese finally got down to our shores, after the Curtin Labour Government replaced an anti-Labour government which had thrown in the towel. After the Curtin Government’s appointment to office we saw the greatest effort ever put forward by the Australian people. It was an effort never equalled before, and I hope that circumstances will not dictate that it has to be equalled in similar circumstances in the future.

The first thing that the Curtin Government did about organizing the defence of the nation was to put to the leaders of industry and the leaders of the trade union movement the situation that Australia was in. The appeals to the trade unions and to industry did not fail; they succeeded in unifying the people, who made the greatest defence that this country has ever made. So in all sincerity I say to the Government that, though a debate on defence may involve discussion of this or that type of tank or battleship, or of the relative merits of various types of forces, there is also - and this is very important - the question of civil defence, and the part that the people generally would play in defence. Defence must really be a total effort by a nation.

I know that the Government and its supporters find somewhat repugnant any suggestion of an approach to the trade union movement. They showed that in connexion with the canning fruits bills, as the honorable member for Mallee (Mr. Turnbull) well remembers. During the debate on that measure they showed their opposition to worker representation on the board concerned, or on any kind of board. They feel that to have such representation on boards would be too near an approach to socialism. But we needed such an approach for the war effort, and we need it now for the productive effort, quite apart from defence. Indeed, it is the modern trend of things to have worker representation on various bodies concerned with production.

Even if having worker representation on boards were an approach to socialism, everything in socialism is not bad. Some things in socialism may be considered bad, but not everything in socialism is bad. The Government cannot kill socialism in the way it wants. So long as socialism represents the faith of man in the ultimate perfectibility of society, so long will it remain, at least as an ideology. So long as it is demonstrated in some countries that socialism is capable of functioning so long will people look towards it.


– Naturally, in a debate of this character various topics are discussed, and the debate goes in many directions. I should like to deal this afternoon with some major aspects of international affairs which, whether or not we like it, impinge directly, or at any rate impinge very nearly, on the Australian set-up, though the events concerned are taking place a long way away. I refer to the so-called spy plane incident, the Summit conference which followed it, and the present diplomatic impasse which appears to be world-wide.

First, as to the U2 plane which came down over Russia: We do not quite know what happened in regard to this. There are many loose ends in the story as to why the plane came down and how the particular articles recovered from it were recovered. We do not pretend - I, at any rate, do not pretend - to know what these details are; but we do know about some of the things that followed. We do know some of the consequences and some of the arguments which have taken place.

I shall deal first with the need for these reconnaissance nights. It is easy enough for us to write this particular incident off as a clumsy blunder or something of that character. Let us remember that our lives in the free world over the past years have depended on this kind of reconnaissance. This was not just an isolated reconnaissance flight. This kind of reconnaissance has, as we know, been going on over Russia for many years, and has been needed over Russia for many years. The reason it is needed is that Russia, or at least large sections of it, are meant to be a closed book. Apart from what we discover from such reconnaissance flights we do not know what is happening in parts of Russia as large as the eastern half of Australia. We do not know what is being prepared there. This might not have seemed important in the old days when the radius of offensive action was small; but in these days of rockets, when the radius of offensive action is world-wide, and when we have a country such as Russia dedicated to world dominion - and quite ruthless as to the methods it undertakes to achieve that world dominion - we cannot leave these big areas unknown. If we did, we would simply open ourselves to attack.

It is true, unfortunately, that there is no defence on either side against attack - no defence except the impairment of the will to make that attack. And the impairment of that will depends on the expectation of effective retaliation. It is, of course, important that these reconnaissance planes went over Russia; but what is much more important is that for years the Russians have known that they were going over because, although they may not have been able to shoot them down at the altitude at which they were flying, the planes would have been quite apparent on radar screens. The Russians would know, therefore, that we had against them the means of retaliation. Because they knew that, we live. So, when we become sanctimonious and say that these things should not have been done, remember that unless that kind of thing had been done we would not be alive or, certainly, we would not be free here in Australia to-day.

What is Russia concealing? Why is Russia so sensitive about this incident? One good answer has been given, and it has been given by a Soviet source. 1 think that answer is one we can appreciate. The Russians ask, “ If these planes come over for reconnaissance purposes, how do we know they are not carrying bombs? “ Well, we know that they are not, because we are not the aggressors. But they have a right to achieve that same kind ot assurance. In other words, there has go to be inspection. The open skies proposal put forward by the United States some years ago is an essential proposal. But I do agree that it is not a one-sided proposal. Just as their skies should be open to us, so have America and Britain offered, and Australia has conceded, that our skies at the same time should be open to international inspection under proper control so that we would know that the aeroplanes were not carrying bombs, but open nevertheless. This is something that should not be one-sided. We have offered it. We offered it years ago and we still hold it open as an offer for both sides. Here we did right. That it has come to be one-sided is not of our choosing; we have made the offer.

What is Russia concealing? If Russia will not accept our offer, it is necessary, for our own safety and for our survival, that we should make it one-sided. It is all very well to say that it should not have been done at this moment or at that moment. If Russia knows that there is a moment at which it is not being done, this opens to the ruthless - and Russia is ruthless - the opportunity to make a move against us at that moment when it is sure that it is not under surveillance. These are things that are, perhaps, unpleasant, but we had better consider them.

Following that we had the Summit Conference, which was wrecked and deliberately wrecked by Khrushchev. He made an immense show of indignation. That indignation cannot have been genuine. It was a feigned indignation, and that at any rate is certain. Why was it feigned? It was feigned because he has known for years that the aeroplanes were coming over Russia. There was nothing new about this. The U2’s had been flying over Russia and Khrushchev knew about them. Why did he suddenly become indignant about one? Only because he feigned an indignation which he did not feel. Why should he feel indignant about espionage? The Russians have been conducting espionage against us on a major scale for many years. On 14th May of last year and again on 3rd September, I mentioned to the House that concealed microphones, placed there by the Russians, had been found in the Australian Embassy at Moscow, before it was closed some years ago. We now know that this also happened in the American Embassy in Moscow, because the evidence has been put before the American Congress. We have had the evidence here in Australia that this happened at the Australian Embassy in Moscow, but this is only one small incident in the espionage network.

Why does Khrushchev now feign indignation? There is obviously some pattern in this; it is done for a purpose. Some people may say that this is just true to the normal Russian pattern. Russia, which sets out for the Summit Conference, wants people to believe that it believes in peace, but at the same time it does everything to destroy the possibility of peace. This is on all fours with the Russian attitude to the atomic bomb, for example, when simultaneously Russia ran a public campaign urging that the bomb be banned and refused those measures of international control which made an effective ban possible. This is, at first sight, on all fours with that. Perhaps that is part of the explanation, but I do not believe that it is the full explanation nor do I believe that it can be the possible explanation for the violent switches in moves, the violent waves of indignation and the violent exhibitions of passion which Khrushchev has given us.

Various explanations have been made for these switches. Some people think that they are due to inner party pressure inside Russia. Some people think that they are due to Chinese pressure. That may be, but I see no evidence at all of either of those influences. There is no evidence to support either of those speculations. I think a much more rational explanation was advanced some days ago by Bertrand Russell, who remarked that the experiments of Pavlov on dogs showed the way in which the psychology of men and women could be confused by exhibiting an irrational attitude and making them conform to that irrationality. That is a penetrating analysis, and I believe that, to some extent at any rate, it is part of the explanation. But here again I do not think it is the full explanation. I think the full explanation is a far more sinister one and one to which the country might well pay a little more attention. I believe that Khrushchev is endeavouring to build up in our minds, for a reason which I shall give in a moment, the delusion that he is slightly irrational, that he is likely to do anything in a fit of passion, that he is an unpredictable man and, in a sense, mad. I think that this is the image which he is deliberately trying to foist upon public opinion in the democracies and which, unfortunately, because our propagandists do not seem to be terribly penetrating in these matters, he is succeeding in foisting upon us.

He is not that kind of man at all. He is a cold, calculating and ruthless man, as is shown by his history. This is a man who lay low in the Communist Party for two or three decades, and we know the kind of seething intrigue that goes on inside the Communist Party, where one leader in Russia is trying to knife another. This is not the kind of party in which an irrational man, a man who is prey to his own passions, could come through and reach the top. We should think also of the feigned indignation in his speech to the Communist Party some years ago. I refer to the famous secret speech in which he denounced the crimes of Stalin. Here is a man who, with this same kind of calculated emotional outburst, sheds tears about the crimes of Stalin and weeps about the assassinations of comrades. Yet Khrushchev himself was one of the central instruments of the assassinations. He was privy to all the crimes - they were real crimes - which he denounced against Stalin. He was the instrument of Stalin’s butcheries on the nights of murders. This is the man who, at a Communist conference, shed crocodile tears about these crimes. Does not that give us some idea of the kind of man who comes to the Summit Conference and puts on this emotional act?

We may well ask why this man should try to build up in our minds the image that he is the creature and the victim of his own emotions. There is a motive for his actions, unfortunately, and it is bound up in this: The world situation is now very clear. Neither side can defend itself or will ever be likely again to be able to defend itself against the will to attack from the other side. That will to attack is constrained by only one thing - by the fear of retaliation. A monstrous game of bluff is now being played out by both sides and in the nature of things, unfortunately, there can be nothing else from now on.

Once Khrushchev succeeds in establishing in the minds of our people the belief that he is almost a madman, that he is an irrational and unpredictable man, popular pressures will make every democratic government give way to all his minor threats. Is not this obvious, when you come to think of it? Must not we think ahead a little when Russia says, “ Give me this or the rockets go up “ ? Indeed, that was what she said when, only a few days ago, she put up the most unprepossessing bulldog she could think of to make the threat that she would send rockets against every base from which U2 aircraft were sent out. Russia will not do that. Khrushchev is a cold, calculating man, not a madman. He knows that if the rockets go up we die, perhaps, but he dies too. He is not a creature of passion but he wants us to believe that he is, because, once our people get that idea fixed in their minds, we cannot withstand any one of his minor threats. We shall have to give way at every point, because our people will say, “ This man is mad. You must not provoke him. He will kill himself, but he will kill us, too.” Once we get the idea that Khrushchev is like that, the popular forces in the democracies will put us in an untenable position. We shall not be able to hold our position.

Let us, instead of falling for the Russian three-card trick and for the idea that we are dealing with a madman, realize that we are dealing with a sane and coldly calculating man who for his own purposes is endeavouring to foist on us the impression that from time to time he loses control of himself and becomes mad and unpredictable.

Mr Bandidt:

– He is a good play-actor.


– I am told that Khrushchev is a good play-actor, and indeed he is. Did not his performance at the secret conference of the Communist Party prove just that? Is not this right in line with the kind of thing that he has been allowed to get away with in the past? Have not we to be on our guard against this? For there will be Russian threats. There will be Russian excursions. Just as we had this preposterous nonsense about Russia sending her atomic rockets against any base and starting a world war, so we shall get threats perhaps against Australia, perhaps against some Asian country, perhaps against some country in Europe. But on each occasion we must stand firm in the knowledge - the certain knowledge - that the Russians do not want to bring the world to an end any more than we do.

You may say, “ Is not this an intolerable position in which the world lives by bluff on both sides? “ It is a difficult and, I think, nearly intolerable position. But you will not escape from it by deploring it, because that is the position. Those of us who warned, as some of us did, ten years ago that this position would emerge if we allowed things to drift, now find small satisfaction in the vindication of that judgment by history. The position is terrible, but we do not make it any better by pretending that it does not exist. Let us turn, rather, to the positive things which we must now do in this situation. I see no alternative now to the emergence of a world government as the only solution to mankind’s dilemma. I do not say that this can come about in a year or two, but I do say that we must work towards it and that we must not close any avenues behind us, whatever the difficulties may be.

The difficulties are tremendous. Indeed, they may be insuperable. But if they are insuperable, there is no hope for humanity. So let us at any rate work on the assumption that the difficulties are not insuperable. At all events, let us do those things which work towards an effective world government. Unless we all are to die - not only us individually, but the human race as a whole - unless the human race is to end, world government will come fairly quickly now. If we dig in our toes and say that we will have no part of it, we make certain that one of two things will happen: Either humanity will end or world government will come in under the aegis of people other than ourselves. In other words, whatever the outcome, if we do that we shall play into the hands of our enemies. We must not make that mistake.

I come back now to a theme with which 1 started. 1 believe that the open skies proposal - fair and open on both sides - is at least one step in the right direction. We have a right to know that the Russians are not preparing to launch atomic devastation against us from bases thousands of miles away. We have a right to know that. But let us concede, also - although this is perhaps an academic matter - that the Russians have a right to know the corresponding thing about us. This is not a one-sided proposal. It was not put forward in such a sense years ago by the United States of America and Great Britain, and it was agreed to by the Australian Government not in the sense that it was one-sided but in the sense that it was equitable. Since we must start somewhere, let us as a first step - I do not put this forward as anything more than a first step - start building up the prestige and authority of the International Court of Justice, which is commonly known as the World Court. If there is to be a system of world government, there must be some accepted body to control the sanctions inseparable from government. I think that there is no body other than the World Court even remotely appearing on the horizon which could discharge such a function effectively.

I have said before, and I repeat: One of the practical things for us to do is to get together by treaty the group of countries on our side and say, “ We shall accept the verdict of some judicial body, whether it be the World Court or some other judicial authority, as binding between ourselves. Not by our consent on any particular occasion, but by our universal consent now given, we shall acknowledge the authority of this body as between ourselves.” If we include in such a treaty an accession clause to provide that other countries can join in it from time to time, we shall at least have the nucleus of one essential ingredient of world survival, namely a tribunal that has authority to make decisions in matters of conflict which must arise from time to time between nations and groups of people. Such a tribunal would have, not only the authority to make a decision, but also the sanction to see that the decision was carried out.

In the meantime, do not let us fall for this trap that Khrushchev is an impassioned man who is liable to fly off the handle and do something unpredictable. We are dealing here with a cold, calculating, ruthless man who will feign madness when it suits his interests. [Quorum formed.]


.- The honorable member for Mackellar (Mr. Wentworth) has spoken of the tensions that have arisen out of the failure of the recent Summit talks. All people throughout the world who have a love of peace among men, and who want to ensure the betterment of mankind must deplore the failure of the Summit conference; but the honorable member for Mackellar, like the honorable member for Moreton (Mr. Killen) who spoke last night, was academic and unreal. We must get down to realistic issues, and there are such issues which we can face. At the current talks in Geneva, we can bring about the cessation of nuclear tests. We must strive to outlaw atomic and hydrogen weapons. These are real issues. But the honorable member for Mackellar, like the honorable member for Moreton, places all the blame for current tensions on the Russians. We must do more than merely place the blame; we must try to break down existing, tensions instead of trying to put the blame on any one section among the world powers.

For example, the honorable member for Mackellar said that the Russians knew about the flights by American U2 aircraft. The Russians also know that the U.S. Air Force and its Strategic Air Command is flying a 24-hour day service with atomic bombs waiting for the word, “ Go “. The Americans have bases to the north-east of Russia in Sweden and Norway. The Russians are bounded on the east by Western Germany and on the west by bases in Japan. Turkey is in a state of preparedness to the south. Bases exist all around Russia. The situation is such that the Japanese Government is reflecting the concern of the Japanese people, and has stated that no flights by U2 aircraft will be made from Japan in future.

We also are concerned with the present situation, but let us not go to extremes and blame Russia for everything. Ali fairminded persons will concede that tha

American action in sending a reconnaissance plane over Russian territory immediately before the Summit talks was very foolish. That was a vital period in world history. What right has the United States Government to jeopardize world peace? As the honorable member for Wentworth has said, a hostile action now could mean the annihilation of mankind. The U2 flight was discovered on the eve of the Summit talks. It was one of the most important moments in history because we know that both sides have weapons which could destroy all life on earth.

All of us regret that the Summit talks failed; but the important thing now is to strive to break down the tension among the great powers. We should strive to bring them together again. We should bring practical issues before the United Nations instead of power politics. We should try to ensure that the Geneva conferences on nuclear weapons are effective. I am not seeking to make political capital out of this matter, because I believe at this time in the history of the world nobody should discuss major issues to gain a temporary advantage.

I rose to speak primarily on the economic policy of this Government. The Government has been in office for approximately ten years, and its approach to inflation is well known. It introduced the horror Budget in 1951, and announced that the problem of inflation would be solved. In 1953, the Government froze the federal basic wage and then, some five years later, because of pressure that had been brought to bear, certain increases in wages were given to the workers. In 1956, the Government introduced the so-called little horror Budget. Its next gimmick was to apply to the arbitration tribunal to freeze the basic wa £re for another twelve months. Now the Government has opened the gates to imports. We know that this Government is one-eyed in its approach to inflation. Its only policy is to freeze the federal basic wage and put pressure on the Liberal and Country Party State Premiers to abolish the quarterly adjustments of the basic wage in the States.

When the Leader of the Opposition (Mr. Calwell) was speaking yesterday, the Treasurer (Mr. Harold Holt) said by way of interjection that the wages of the workers had been doubled under the Menzies Government. Let us examine the position. The workers’ share, by way of wages and salaries, of the gross national product in the year 1951-52 was 50.2 per cent. By 1958-59 it had dropped to 49.2 per cent. In other words, in eight years the proportion of the gross national product received by the workers fell by 1 per cent. In the twenty years from 1938-39 to 1958-59 the workers’ share of the gross national product rose from 48.1 per cent, to 49.2 per cent., an increase of only 1.1 per cent.

Before the war very few wives went out to work and very little overtime was worked. Now, twenty years later, the man on the lower income cannot make ends meet unless his wife works or he works long hours of overtime in order to supplement his salary. This might be called “ economic unemployment “ because although a man may be working he cannot make ends meet. Workers have no power to fix their own wages; their wages are fixed by the Arbitration Court with its controls and penal powers, but big business, which Dr. Coombs has called “ monopolistic elements “, has full power to fix its own prices.

During the period of office of the Menzies Government the increased wealth of the nation has not been equitably distributed among the people. In the last year of the Chifley Administration company profits amounted to £214,000,000. In 1958-59 they amounted to £630,000,000. Dr. Coombs has pointed out that undistributed profits represent another indirect tax. Such a tax permits great monopolistic concerns to provide for their future development. In the last year of the Chifley Administration undistributed profits totalled £81,000,000; in 1958-59 the corresponding figure was £201,000,000.

Another way of diverting wealth to great monopolistic concerns is by means of allowances for depreciation. In the last year of the Chifley Administration the amount involved in depreciation allowances was £96,000,000 or 4.2 per cent, of the gross national product. In 1958-59 the corresponding figure was £475.000,000 or 7.7 per cent, of the gross national product, an increase of 3.5 per cent. Thus, depreciation allowances are helping to build up the monopolistic empires. Although such allowances have increased by 3.5 per cent, in ten years, the workers’ percentage of the gross national product dropped, by 1 per cent, in eight years. That illustrates the distribution, of wealth that takes place under this Government - a Government which represents only a section of the community which is well able to look after itself.

The last report of the Commissioner of Taxation for 1958-59 shows how the wealth of this nation is distributed. It shows that although a mere 5 per cent, of taxpayers receive in excess of £2,000 a year, these people receive 20 per cent, of the total incomes paid in Australia. So, 95 per cent, of taxpayers receive less than £2,000 a year, and 65 per cent, receive less than £1,000 a year. The Government represents that select 5 per cent, which includes the monopolistic elements of the community. They are the elements that benefited mainly when the Treasurer (Mr. Harold Holt) handed1 out a tax rebate of £21,000,000 last year. At least £10,000,000 of that £21,000,000 was distributed amongst this small section of the community.

There are many things that this Government has to face in connexion with inflation. The economic committee of the Australian. Labour Party prepared some figures to illustrate the extent to which this select 5 per cent, of the people were benefiting from the so-called prosperity under the Menzies Government. From 1952 to 1959, H. G. Palmers Limited, the well-known electrical dealers, had capital gains of 1,198 per cent. Ampol Petroleum Limited, another well-known monopolistic concern which recently tried to take over H. C. Sleigh Limited, had capital gains of 720 per cent. Mount Isa Mines Limited had capital gains of 701 per cent, Pope Industries Limited 682 per cent., Federal Hotels Limited 610 per cent., Adelaide Cement Company Limited 458 per cent., and H. C. Sleigh Limited, the firm that Ampol Petroleum Limited tried to take over, 428 per cent. Amalgamated Wireless (Australasia) Limited, which in the days of Mr. Chifley belonged partly to the people but was sold subsequently to a monopolistic concern, had a capital gain between 1952 and 1959 of 407 per cent. These figures indicate where the real wealth of this nation is being channelled.

Look at the great profits of the 5 per cent, of the community to which I have referred! It is about time that the taxpayers and electors realized that this Government represents only 5 per cent, of the community. It is time that the other 95 per cent., particularly the 65 per cent, who earn less than £1,000 a year, kicked the Menzies Government out and put a government in that would distribute the wealth of this nation equitably, attend to national development, and face its responsibilities.

Capital gains have been achieved by bonus issues, cash issues and the appreciation of share values. 1 shall give an example of how some shareholders in Broken Hill Proprietary Company Limited have benefited in this way. The Baillieu family in January, 1954, held 143,000 20s. shares which at that time had a market price of 43s. If that family had taken up all the new issues to February, 1960, it would have made a capital gain, in that six years, of £735,000 on its share-holdings. The name of another shareholder in that company is that of Darling. This is another well-known Melbourne family in the 5 per cent, bracket. In January, 1954, members of that family had 393,000 shares and if they had taken up all the issues to February, 1960, their capital gains would have been worth £1,818,000.

Mr Clyde Cameron:

– Would they have paid tax on that amount?


– No. They do not want to pay a high dividend; they have to pay income tax on dividends. So they water down the stock. But capital gains are tax free. Admittedly, people say that this is only a profit shown on paper but they should realize that the gain on these shares is tax free.

Mr Clyde Cameron:

– Is not that gain regarded as income?


– No. So far no way has been discovered to make this Government face up to the great reign of wealth by this select 5 per cent, who are depriving the people of Australia from sharing in the profits of industry. As a final example I refer to the retail firm of the Myer Emporium in Melbourne. The Australian Mutual Provident Society had 200,000 5s. shares in that firm which, in January, 1954, were worth11s. 4d. As a result of share appreciation that value increased to 35s. 3d. by January, 1960. Because of that increase of 24s. in value the A.M.P. Society made a clear profit of £240,000 on those 200,000 shares. The increase was more than three-fold.

Yesterday when the Leader of the Opposition was speaking, the Treasurer (Mr. Harold Holt) very proudly interjected that the wages of workers had doubled. Why have they only doubled? Every one knows that the cost of living has more than doubled. But these shareholders to whom I have referred have increased their share appreciation value more than three-fold so that they are one-third ahead of the workers. Let us look at the share-holdings of the Myer family. The figures are astounding. This family in January, 1954, had 8,236,600 shares in the Myer Emporium. The capital appreciation between January, 1954, and February, 1960, was 24s. per share and the total gain amounted to £9,874,000. This one family enjoyed the benefit of that capital appreciation free of tax. It was a gain of nearly £10,000,000 in a period of six years.

I now want to refer to the loan market, with which the Leader of the Opposition dealt last night. It is known that the Government failed to fill its last loan of £25,000,000 by about £3,500,000. Last year the Government raised £120,200,000 in domestic loans within Australia. Overseas it borrowed £43,000,000 in London, New York and Switzerland. Of course, the real truth is that as a result of lifting import restrictions more money has had to be borrowed overseas in order to bridge the gap between the value of imports and exports.

A lurk which big business has discovered is to raise share capital by way of debentures. As I have already pointed out, a dividend on shares is subject to income tax, but in the case of debentures, the interest is charged as a working cost in the same way as a firm makes allowances for overhead expenses such as electricity, wages and other necessary charges. Recently big business under this Government has devoted itself to raising capital by this new method of debentures. With the permission of the House I should like to incorporate in “ Hansard “ figures taken from a Commonwealth Bureau of Census and Statistics report showing the amount of new capital raised by public companies from June, 1955, to July, 1959.

Mr. SPEAKER (Hon. John McLeay).Order! The honorable member seeks to incorporate certain statistical information in “ Hansard “. Is leave granted?

Mr Wheeler:

– No.


– Leave is not granted.


– It appears that members on the Government side do not want to hear about the share raising activities of some of their friends.

Mr Clyde Cameron:

– On a point of order. Was any objection raised to the honorable member being allowed to incorporate these figures in “ Hansard “?


– Order! Objection was raised. There is no substance in the honorable member’s point of order.


– According to figures showing new money raised by Australian companies between 1st July, 1954, and 30th June, 1959, the amount of share capital raised during the year ended June, 1955, was £59,700,000. The amount raised in debentures, registered notes and deposits was £27,500,000. Four years later, the amount of share capital raised in the year ended June, 1959, was only £48,700,000, but debentures amounted to £141,300,000. In 1955, for every £1 raised by way of debentures, £3 was raised in share capital. But in 1959, the reverse was the position; for every £1 raised in share capital, £3 was raised in debentures.

Frequently advertisements appear in the newspapers by commercial enterprises like L. J. Hooker Investment Company offering 8 per cent. on loans. International Vending Machines Proprietary Limited offered 15 per cent. But although L. J. Hooker Investment Company was offering 8 per cent., it was costing that company only 5 per cent. to obtain the loan. Recently that firm wanted £500,000 and the loan was over-subscribed by £2,000,000. It wanted £500,000 and received £2,500,000, while the Commonwealth loan for £25,000,000 was undersubscribed by £3,500,000. This is what happens. The £1 debenture actually costs the company only 12s. 6d., because the company would have had to pay company taxation of 7s. 6d. in the £1. Interest on debentures is paid before company taxation and consequently for the 8 per cent, loan the firm will only have to pay five-eighths of 8 per cent., namely 5 per cent. For a firm paying 10 per cent, on a loan, the actual interest rate would be only 6i per cent., and for money borrowed at 15 per cent, the actual rate would be only 9i per cent. This great racket is going on with debenture issues. Last year £220,000,000 was taken from the public vein in the form of shares and debentures by private and public companies, yet this Government in the same period could borrow only £120,000,000 in the domestic field.

For the benefit of honorable members, I mention that the Chifley Government in its last year of office raised over £100,000,000. On present values, that would be worth at least £200,000,000 now. This Government says that it will bring great development and prosperity. Last week I was in Queensland for the State elections. I find that in that great State-


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

Debate interrupted.

page 2132


Issue of Writ


– I wish to inform the House that it is my intention to issue a writ on Wednesday, 8th June, for the election of a member to serve for the electoral division of Bendigo, in the State of Victoria, in the place of the Honorable Percy James Clarey, deceased. The dates in connexion with the election will be fixed as follows: - Date of issue of writ, Wednesday, 8th June, 1960; date of nominations, Thursday, 23rd June, 1960; date of polling, Saturday, 16th July, 1960; date of return of writ, on or before Saturday, 27th August, 1960.

page 2132

APPROPRIATION BILL (No. 2) 1959-60 [No. 2\

Second Reading

Debate resumed.


.- I shall confine my remarks to the rather con troversial subject of the pay-roll tax - an issue that usually comes up at this stage of the year. In the pre-budget period leaders of industry present their cases to the Government for consideration when formulating the Budget, so this is a good time to discuss the pros and cons of the pay-roll tax.

Mr Duthie:

– You have raised this before?


– Never. Some light has been thrown on the subject by the recent statement issued by the Treasurer (Mr. Harold Holt). The statement undeniably comes to the defence of the tax. I should like to be able to say that it makes out a good prima facie case for the tax, but I am afraid that it is too biased and that the compilers have used maximum and minimum figures for the Government’s advantage all the time. To my way of thinking, parts of the statement tend to misinterpret the position or to mislead the public. Reading through this document one gains the impression that the Treasury is trying to hide something that it finds difficult to justify. This is an inequitable tax, which penalizes certain sections of industry. I feel that the purpose of the Treasurer’s statement was to petrify the opponents of pay-roll tax by referring to heavy increases in company and income taxation that would have to be imposed in its place. In these remarks I want to try to answer some of the statements in the Treasurer’s report. I know that the Opposition will not do so, because it is in favour of this sort of discriminatory tax - the type of tax that we would expect from a socialist government. Therefore I take it upon my shoulders to-day to do some of the Opposition’s work.

It is rather amusing and interesting that I should stand up and criticize the pay-roll tax, because I happen to be the son of a former member who introduced the legislation providing for this tax when he was an assistant Minister to the Treasurer some nineteen years ago. That shows how things can alter as time passes by. All honorable members realize that the imposition of the pay-roll tax was necessary at that time. It was introduced to provide finance for child endowment, at a time when the government wanted to keep down the wage structure and yet give a benefit to the man with a family who needed help. Nineteen years ago the family man was starting to receive some assistance. In New South Wales, for instance, the government was providing child endowment for a second child and subsequent children while they were under fourteen years of age, but a means test was applied. I am told that one of the reasons why the Commonwealth did not apply the means test at the time is that many men were serving overseas in the Australian Imperial Forces and that application of the means test would have penalized all those of commissioned rank who were receiving a good salary. Consequently the Commonwealth Government decided to abolish completely the means test.

The pay-roll tax is unique. I do not think any other country in the world has a tax like it. It is a tax, not on company or private profits, but on wages. It is not a tax on the consumption of goods, such as excise or sales tax. I feel that to-day there is no longer any link between the pay-roll tax and child endowment. When it was introduced, the revenue went straight into the National Welfare Fund, from which child endowment was paid, but that position does not apply nowadays. I am particularly interested in the pay-roll tax because it tends to increase costs for our exporting industries, and in my part of the world most of the local industries are exporting industries. I feel that I should do everything possible to try to keep the cost structure down in this country so that those industries will be better able to compete in markets overseas. The Government has realized that this increase in costs is a crucial matter and this year it stepped in with a four-point plan to try to curb our cost inflation. Fellow members of the Country Party realize that the pav-roll tax imposes additional costs on our primary producers, and they have set up a small committee and studied the question. I thank the honorable member for Hume (Mr. Anderson) and the honorable member for Canning (Mr. Hamilton) for the help and information they have given me in the preparation of my speech to-day.

The pay-roll tax is unjust because it is a tax on companies and people irrespective of whether they have the ability to pay. It is unjust because it penalizes people who employ labour with a wage content of over £10,400 a year. However, before criticizing pay-roll tax too severely I want to qualify my arguments on two points. I realize that pay-roll tax cannot be abolished unless the Commonwealth has the cooperation of the States. When we vacated two other avenues of tax - land tax and entertainment tax - the State governments immediately re-imposed them. If the Commonwealth were to abolish pay-roll tax in an endeavour to cut down our cost structure and the State governments immediately re-imposed it, our purpose would be defeated. I notice that the Treasurer has made no mention of this aspect in his statement. That is a hopeful sign. Perhaps this problem is not as insoluble as I may think. If we met the State Premiers and told them of our intentions, we could, perhaps, come to some agreement with them.

The other difficulty in abolishing pay-roll tax is to fill the financial gap which would be created immediately. Pay-roll tax is forwarded to the Treasury at the end of each month. If the Commonwealth had to wait for an equivalent amount to be raised by the additional taxes, or extra tax which would naturally accrue as a result of higher profits, there would be a delay of twelve months or longer. Pay-roll tax is estimated to raise this year about £55,000,000. The gap which would be created if that amount were not forthcoming would be difficult to fill. However, I do not think that that obstacle is impossible to overcome. 1 repeat the two aspects of the matter which I have raised: First, we must have the cooperation of the States if pay-roll tax is abolished, and secondly, we must have some means of filling the immediate gap which would be created by its abolition.

During the recent trade convention the Minister for Trade (Mr. McEwen) and the officers of the department which he administers stressed the point that if Australia is to maintain her present rate of development and living standards she must increase her exports by £250,000,000 over the next five years. It is imperative, therefore, that no cost obstacle be placed in the way of our achievement of this objective. Pay-roll tax tends to increase costs and, therefore, is an obstacle. This point was made by many of the leading representatives of industry during the trade convention, including the manager of Imperial Chemical Industries of Australia and New Zealand Limited and the manager of Lysaghts steelworks. Industry is continually mentioning pay-roll tax as an impost which the Government should review.

Pay-roll tax is discriminatory. It is unfair that a person who employs more labour and so incurs a wages bill in excess of £10,400 should be penalized for his efforts. It is unfair also on groups of men who work together for the welfare of the community. I have in mind doctors and others who run clinics. If, say, five doctors work together and earn an average of about £2,000 a year and their gross wage content is in excess of £10,400, they must pay the tax. But if only one, two or three doctors work in a group and their gross wage content is not above the specified level, they are not required to pay the tax. Take the case of a retailer who may be in business in a small way. If his gross wage content is below the specified figure, he is not liable for pay-roll tax, but if it is £10,401 he must pay the 2£ per cent, impost.

I can understand a socialist government introducing this discriminatory tax to hit at the employers because socialists do not like them. Members of the socialist party have indicated always that they would like to hit at companies. The essence of the speech of the honorable member for Reid (Mr. Uren), who is now interjecting, was an attack on companies. But it is bad that a convervative government should harbour a tax of this kind. If the Opposition deposed us from office, it would exploit this tax to the fullest extent and we would be in a very invidious position because it would be most difficult to argue that the socialist government should1 not continue a tax which we have continued since its inception in 1941.

The Treasurer has stated that the primary producer, who is in effect Australia’s principal exporter, pays very little directly in pay-roll tax. I agree with that statement. The amount collected last year amounted to only £700,000. But the primary producer pays very heavily in an indirect way because the pay-roll tax ingredient is included in the cost of his equipment, the transport of his goods, the fertilizer and wire that he buys, his rates, and the cost of marketing his produce. Pay-roll tax on primary and manufactured goods has an escalating effect. Although the original content may be low, it increases as the article passes through its processes. I shall support my argument by reading to honorable members a statement which was made by Mr. McCarthy, Chairman of the Tariff Board, in the board’s 1956 annual report. I know that this statement has been read on many occasions, but I do not think that there is any harm in reading it again. Mr. McCarthy said -

Pay-roll tax is another example of a Government impost, right at the base of the cost and price structure which might be considered for removal. It may be true to say that every £1 of income received by the Government in payroll tax means an increase in price to consumers of at least £2. These matters though not the cause of present difficulties contribute to them and certainly call for close examination with a view to correction.

I should like to explain in detail how, with the addition of pay-roll tax, £1 can become £2. Take as an example a manufactured article which has a pay-roll tax ingredient of £1. By the time the manufacturer adds his 10 per cent, mark-up, the wholesaler adds his 20 per cent, mark-up and the retailer adds his 33 per cent, markup, there has been a 76 per cent, increase on the original cost of the article and the £1 becomes £1 15s. 2d. But those are conservative figures. Some manufacturers have a higher rate of mark-up. If the rates are respectively 15 per cent., 25 per cent, and 33 per cent., there is a 92 per cent, increase on the original cost of the article and the £1 becomes £1 18s. 4d. Of course, the increase in cost depends upon the point in the chain of production at which you commence adding the mark-up rates. In the extreme case of, say, an ore which is being mined, pay-roll tax is added to the cost of obtaining the ore, refining it, machining it and manufacturing it into an article before it passes into the hands of the wholesaler and the retailer. One must consider also the various subsidiary costs, such as transport, which are incurred as the article passes through the line of commerce.

Clearly, pay-roll tax affects the cost structure. Every £1 tax on an article becomes at least £2 by the time it reaches the consumer. In other words, the £55,000,000 which will be collected this year will add £110,000,000 to the national cost structure. Added to this is the cost to industry of collection. This is another way of looking at this. As 2i per cent, of £1 is 6d., when the average national wage is about £20, as it is at the moment, 10s. of every weekly wage represents pay-roll tax. I admit that not all wages are subject to pay-roll tax, but it is collected in respect of 66 per cent, of the wages paid in Australia, and therefore we can see that on every weekly salary in Australia, 6s. 8d. is collected for pay-roll tax. The Government intervened when it looked as though the basic wage might go up by 10s. or so a while back. If we could cut out pay-roll tax, there is a means whereby we might be able to reduce costs to industry by the equivalent of 6s. 8d. per week in wages. I have shown that the cost to Australian industry is £110,000,000 a year and I want to try now to get to the point of what is the actual net return to the Government in pay-roll tax.

The Treasurer (Mr. Harold Holt) said in his statement that the State governments paid £7,000,000, the State semigovernment authorities paid £5,700,000 and local government authorities paid £1,700,000, and that Commonwealth semigovernment authorities paid £1,000,000, bringing the total to £15,400,000. These are government utilities and whether it be local government, State governments or State government authorities, the money initially comes from the Federal government and is returned somehow through State reimbursements or grants to the States. Therefore it is merely robbing Peter to pay Paul when we tax these governmental authorities. If pay-roll tax were abolished it would mean a saving through these governmental authorities of £15,400,000.

Sir Wilfrid Kent Hughes:

– What about the cost of collecting it?


– I hope to mention that later. The Commonwealth public works programme this year amounts to £144,000,000, and of this we could estimate that at least £70,000,000 would be in the form of wages. Taking 2i per cent, of £70,000,000 and allowing for the mark-up for profit which the contractor should make on top of that £70,000,000 of wages, and also the pay-roll tax factor in the materials used by government utilities, I have calculated that that pay-roll tax factor would be £2,625,000.

We expect to expend £210,000,000 on the State loans programme this year. Let us take the wage element in that £100,000,000 - and I think I am being conservative - 2i per cent, for pay-roll tax plus 50 per cent. mark-up would represent £3,750,000. Another government utility where pay-roll tax would have considerable effect is the Post Office, because in the annual report of the Post Office we see that £30,000,000 is expended on Australian materials. Of these Australian materials, two ingredients in respect of which there is a very high percentage of pay-roll tax are copper and lead. The Post Office uses 7,000 tons of copper and 10,000 tons of lead, so that in the Post Office materials there would be a pay-roll tax ingredient of about £500,000. Adding these items - public authorities, Commonwealth public works, the State loan programme and the Post Office - the redundancy in pay-roll tax amounts to £22,275,000. I want honorable members to remember that figure, because I will revert to it later in my calculations.

The Treasurer, in his statement, says that if pay-roll tax was abolished there would be an immediate gain to the Treasury in the way of increased company tax and private tax amounting to £10,000,000. I think he is being ultraconservative there. I support my argument by saying that the honorable member for Corangamite (Mr. Mackinnon) made a very good speech here on pay-roll tax in 1957 and in it he stated, on information he had obtained from the Treasury, that if pay-roll tax was abolished then it would mean £12,500,000 in the way of company tax and private tax. Mr. Henley, who was Federal President of the Taxpayers Association, said in an article the other day, that it would mean £15,000,000. I do not blame him if he exaggerates a little, but let us take it at £12,500,000, which is the figure the Treasurer gave in 1957 - and it would be higher to-day. That means that the total redundant money and increased finance represented in pay-roll tax would come to £34,750,000, which means that they would have to find a balance this year of £20,250,000. This clearly indicates that the great tragedy of the pay-roll tax is that it inflicts £110,000,000 on the cost structure in Australia for a net return to the Treasury of only £20,250,000. 1 believe that industry would be much happier to have a direct tax imposed on it in the form of increased company tax or increased personal tax to make up that £20,250,000, rather than have to pay payroll tax. We took 5 per cent, off all personal income tax last year, and that 5 per cent, would just about make up the difference if it were re-imposed. In the statement to which I have referred, the Treasurer seems to play one argument against another all the way through. It gives me the impression that it is nothing more than bureaucratic reasoning. I think the Treasury is trying to justify something that it does not really believe in. I have been told - I cannot prove whether it is correct - that this idea of pay-roll tax originally came from the Treasury Department. Maybe the Treasury is trying to justify its original suggestion. One of its arguments is that if you took off pay-roll tax it would mean that there would be less profit by the wholesaler and the retailer, for instance. But I use the argument that if prices came down there would be a bigger turnover of goods and the Treasury would thus pick up more revenue on increased profit.

Another argument is that if pay-roll tax is abolished there could not be reductions in costs of education, local government and the maintenance of law and order. I agree with that view to some degree; but you would not have to tax so much to recoup loss of pay-roll tax revenue. If abolition of pay-roll tax did not reduce costs, the Government would gain in additional tax. It would balance out in the long run whichever way you look at it. I think we all agree that it is an iniquitous tax and one that is hitting heavily on our export industries. The impost of 2i per cent, pay-roll tax weaves itself through the economic fabric of the whole nation and manifests itself as each item moves through the canals of commerce. Those items of production which are fortunate to avoid this tax iniquity, because the degree of wage operations is small, cannot be moved commercially without the tags of pay-roll tax being imprinted upon them. I regard payroll tax as a pest indigenous to Australia; it reminds me of the Noogoora burr. If it was any good, surely other countries would have taken it. All the treasurers of the world are hungry for money, but no other government has considered this tax, and that may be because it is unfair and discriminatory. I consider it to be a parasite on commerce. Of course there are different kinds of parasites, some permanent and some temporary. I believe this tax was first brought in as a temporary measure to see us through the war, but we seem to have got stuck with it. Sometimes parasites, which are beneficial, live in conjunction with their host, and that is called symbiosis.

I think that originally this tax was beneficial. It was introduced, and I think, inevitably, to keep down the wage cost structure during the war. Also, at that time the administration did not want to intrude on the normal channels of taxation - company tax and other direct and indirect taxes - the revenue from which was needed for the war effort. However, I now consider the pay-roll tax to be a parasite which is restricting the economic functioning of commerce generally throughout Australia.

I want to conclude by saying that I consider pay-roll taxation to be politically, economically and morally bad and unwise, for the following reasons: - That it pours approximately £110,000,000 into the inflationary stewpot of this country; that it hits at profitable and unprofitable businesses alike; that it gives no consideration to the capacity of businesses to pay; that it is sectional because it is hitting at employers of labour whose annual wages bill is more than £10,400; that it bumps up the cost of everything from handkerchiefs to highways; that it handicaps the Australian exporter in his search for markets.

Finally, the acceptance of such a form of taxation by a conservative government could place the members and supporters of that government in an embarrassing position if, in the future, as an Opposition they had to criticize a socialist government which would make the most of this kind of taxation.


.- Seldom, unfortunately, is it my pleasure to be able to agree so wholeheartedly with a Government supporter as I can agree with the honorable member for Richmond (Mr,

Anthony) on this occasion. Frankly, I should like to compliment the honorable member on the case he made for the abolition of this inquitous tax - the pay-roll tax. I go further: I invite the honorable member for Richmond to move an amendment to the bill to give effect to his views on the matter. 1 think that if he did so he could be pretty sure of getting the support of the Labour Party.

Mr Bowden:

– He believes your party agrees with it.


– We support the abolition of the pay-roll tax. One of the major items of our policy announced at the last general election was the abolition of pay-roll tax immediately on at least public and semipublic instrumentalities. Indeed, I go further than the honorable member for Richmond, and say that much of the sales tax should be removed for the same reasons as the pay-roll tax should be removed. I shall refer to that in more detail later.

I want to turn now, Mr. Speaker, to a matter that specifically concerns my own electorate, but which I believe has general application. I raised this matter in a question only yesterday. It concerns the transfer between public instrumentalities of land owned by the Commonwealth. This particular case concerns the Kogarah Municipal Council. There is an Army cadet headquarters situated right in the civic centre of Kogarah. The council wishes to acquire this block of land on which to build a new civic centre to include immediately a baby health centre and ultimately a town hall and a public library. When the mayor and the town clerk approached the Minister for the Army (Mr. Cramer) on this matter - and I must say that the Minister was quite co-operative, and saw no particular reason why an Army establishment should be located in the shopping centre of a leading municipality of Sydney or anywhere else - they found that, after having gone into the details, the Minister was agreeable, as were the Army authorities, that the Army should move from the site to a nearby parkland, with the same land title as the Army now has. The understanding was that the council, with the aid of a subsidy of £2,000 from the New South Wales Government, would remove the existing building to the new site, and that in addition amenities would be pro vided for the Army which the Army does not already possess at this Kogarah establishment. The idea was to have a direct exchange of sites, with the understanding that the council was to provide extra amenities to the Army.

The Army was quite happy with this arrangement. Such a situation could happen in the electorates of other honorable members who may have to make applications for the release of land held by the Army so as to enable it to be used for building sites, either for homes or factories. Unfortunately, the whole proposal is at this stage in jeopardy, because the Treasury apparently has regulations which prevent the Army, or any other Commonwealth department, from exchanging land that it owns for land owned by another public or semi-public instrumentality. The procedure required under these regulations is apparently that the Army would have to sell the land that it owns, with the proviso that the money received for it would go into the Consolidated Revenue Fund, and would then have to purchase the other site out of its own current allocation.

I do not blame the Army for resisting such a proposition. It seems an intolerable situation that two public instrumentalities - this is not a deal between private enterprise and the Government, but between public instrumentalities - which could make, and are willing to make, a direct exchange to their mutual satisfaction and convenience, are prevented from doing so by regulations. I understand that the position is under review. The Treasurer (Mr. Harold Holt) yesterday promised me that the matter would be reviewed. I sincerely plead with the Government to change the regulations which prevent the kind of exchange of land that I have mentioned.

In this particular case time is running out. The New South Wales Government guaranteed £2,000 towards the cost of transferring the Army building to the new site. Quite understandably the Army was not going to pay for the transfer, because it was making the move for the convenience of the council. But this guarantee was given by the New South Wales Government on condition that the £2,000 was expended before the end of the current financial year. Here we are at the start of the last month of the financial year and the Commonwealth, as a result of Treasury regulations, is unable at this stage to facilitate this very desirable transfer.

My colleague, the honorable member for Reid (Mr. Uren), spoke about the rich rewards that some people are reaping from the national prosperity. I want to take a little time to talk about some of the people and organizations that are being deprived of a just share of the fruits of national prosperity. I put it to this House that a disproportionate share of our national funds is going to private enterprise as against the public sector of the economy. This is not just the opinion of the Labour Party. I have heard very eminent people, including Professor Copland, put the same view. They say that private enterprise is being very short-sighted in regard to its own interests, apart from the national interests, in demanding that the public sector of the economy have a reduced allocation of finance. So we have a kind of distortion in our economy to-day. We have very elaborate bank buildings and very elaborate new insurance buildings going up all over the place, we have big garages facing each other on practically every street corner, we have elaborate clubs that would be the envy of any school headmaster, we have big emporiums and great shopping blocks, and we have the importation of luxury goods. We have all these things, but nearly every State is short of police to protect these great institutions that are being created. I know that that applies to Queensland, New South Wales and Victoria, and I think it applies to other States also. Whatever we in this House may think, it is a very real fact in our community that property is being damaged and that people are being badgered, threatened and injured all because of an inadequate police force. Yet we can afford all the elaborate features that I have described. The streets in any capital city, quite apart from our provincial towns, are narrow and occupy only about half the space available for them. But we have more cars per capita of population than have most other countries.

Mr Chaney:

– This does not apply all over Australia.

Mr Forbes:

– It applies only in New South Wales.


– That is not so; I have just returned from Queensland, and I saw evidence of it there.

The shortage of money for housing has been mentioned in the Parliament, and 1 have heard reference to it in the various States that I have visited recently. To-day, people are being compelled to buy homes because it is impossible for them to rent homes. The waiting list for Housing Commission homes is growing instead of decreasing, as we have been told in this House. Many people to-day would prefer to rent homes rather than to buy them. I mention as an instance public servants who move around in their jobs.

Mr Jones:

– It is an eight years’ waiting list for pensioners.


– I am told by my colleague from Newcastle that the delay is now eight years. A little advertisement was inserted in the local paper in my electorate recently, advising that four small blocks were to be made available in Hurstville by the Housing Commission for occupancy by pensioners. A swarm of people came in trying to obtain those four blocks, but they did not know that the allocation of them had already been determined and that priority had been given to those on the waiting list. We have all these luxury features, elaborate buildings, garages and clubs, but we lack adequate police forces, roads, houses for rental and other things that are essential for the community.

Honorable members well know that I have spoken here on a number of occasions about our education needs. I add, briefly, that 3,200 people from all over Australia attended a national convention in Sydney recently and pleaded to the Commonwealth, to the States and to any one who would listen, for help in the education crisis. But we still think that we can afford a high proportion of cars per capita of population, that we can afford to have luxurious clubs, that we can afford to have huge insurance and other buildings, and that we can afford many other elaborate features. While this happens, the essential needs for our national development go by the board. A disproportionately low percentage of our national income and national productivity goes into the provision of essential items in the public sector of our economy.

I could speak about the plight of hospitals, but this has already been mentioned in the House. We all know of the growing indebtedness of our public hospitals. I could speak about the delay in the provision of telephone facilities, and I remind the House that this is a prime responsibility of the Commonwealth Government. We find that not only do private homes lack this facility, but business people also are left without a telephone. They have no prospect of obtaining even one telephone, although they may need two, three or four. I know that my electorate lacks an adequate telephone service, and I am sure that this is not peculiar to my electorate. The problem is spread throughout the whole of the community. I hope that the rumour I heard is not true. I heard that the Postal Department is not replacing those who retire from the section that deals with the installation of telephones. I understand that some officers have been transferred to other sections and that those who retire are not being replaced. If this is true, I am very sorry, because, apart from serving a personal social convenience, telephones are vital to our national productivity. Even medical practitioners are not able to get a telephone service or the extension of a telephone service from a group practice to their homes, though an arrangement is made for each of the practitioners in turn to be on duty at night.

I put to the Government that we need a reappraisal of the distribution of our national wealth. It is all very well to talk about our affluent state, but this does not help the public instrumentalities that are not enjoying prosperous conditions. The provision of public services is essential not only for our individual well-being, but also for the development of private as well as government enterprise. This development is necessary if we are to increase our nation’s productivity.

Amongst those who feel pretty badly about the distribution of our national productivity are the local government bodies. Within the last few weeks, four municipal councils in my area have asked me to join with others in making a plea to this

National Parliament for a better deal for local government. The municipal councils of Rockdale, Hurstville, Bankstown and Kogarah have sent to me, as I am sure they have sent to other honorable members in the locality, a plea to ask the Parliament to do something better for local government. They remind us that local government provides essential services to a sector of the communiity whose taxation goes only to the central government. They say that many people in their areas make no direct contribution to the cost of local government, but, through taxation on personal incomes, provide revenue for the Commonwealth Government. Our municipal councils, to my mind quite rightly, ask that we divest ourselves of an additional part of this money to help local government carry on with its great job.

The local government bodies remind us that they meet the cost of providing roads used by transports which pay taxes direct to the Commonwealth Government. They remind us, further, that they are giving communal and cultural services to the community which would otherwise have to be provided by the Commonwealth. For instance, local government is relieving this Government of the responsibility to give further aid to pensioners, because the councils subsidize the rates of pensioners, and this is now amounting to a tidy sum. Personally, 1 am of the opinion that concessions to pensioners should be stopped and that all grants to pensioners should be consolidated into one payment. The Commonwealth should provide a decent pension to enable pensioners to pay their way and’ to meet their obligations to the various instrumentalities in the community. I do not think that pensioners should be placed in the position where they must produce cards to obtain concession fares on public transports and to seek wireless and television licences at concession rates. They should not be placed in the position where they must seek a reduction in the rates on their homes. It is time we looked at all these matters and made one grant in the form of a pension that would be sufficient to meet the needs of pensioners. One effect of this would be to relieve local government bodies of the need to subsidize the rates of pensioners at a time when rates are increasing tremendously. The payment by councils of a subsidy on these rates really means that other ratepayers in the area are meeting the cost of the subsidy.

Local government bodies in my area, and, to my knowledge, in other areas, are taking on very important cultural and communal responsibility. They are helping to provide recreation centres for elderly persons and youth centres for young people. They are providing public libraries and are doing many things that they used not to do. I think it is time that we recognized that local government bodies are accepting these added responsibilities and that they are being saddled with the burden of the quick development that has resulted from this Government’s immigration policy. Because of the rate of development, local government bodies generally deserve and greatly need much more financial assistance from the Commonwealth Government. That is the position with respect to the municipalities that I have mentioned, and I am sure that the same thing applies to all the other local government bodies.

Local authorities are asking, first, that the whole of the proceeds of the petrol tax, which is derived from traffic using local roads as well as main roads, be devoted to local government purposes. Secondly, they are asking for relief from a considerable loss of revenue sustained because government and many semi-government properties are at present non-rateable. I know that the constituent banks of the Commonwealth Banking Corporation, for instance, pay an amount equivalent to the rates that normally would be paid on properties similar to those owned by the banks. As an act of grace, they make that special payment to municipal councils. But other public bodies do not do this. If we are to put the PostmasterGeneral’s Department on a business basis, as has been demanded in this House before, one of the things that it ought to do is pay rates or at least the equivalent of the rates that would normally be payable on properties such as those held by the department. Perhaps the department does this, but my belief is that it does not, and that, therefore, it makes no contribution to local government.

Thirdly, local government bodies are asking for a share of the common pool of taxation by way of grants representing a contribution to the payment of the cost of local government services enjoyed by people who do not own properties. Fourthly, local authorities are asking, as are others in the community, for the abolition of the iniquitous pay-roll tax. This tax was mentioned by the honorable member for Richmond. Whatever we may think about the imposition of the pay-roll tax on private organizations, surely the request that this tax be abolished in respect of government and semi-government instrumentalities is just and reasonable.

Mr Wilson:

– How would you make up the loss of revenue if these suggestions were adopted?


– As the honorable member for Richmond reminded us earlier, one way would have been by the Government refraining from giving the 5 per cent, reduction in income tax in last year’s Budget. I do not say this with bitterness or political spleen, but I think that it was most irresponsible of the Government to give that tax concession. We all like tax concessions, but, in the face of the needs of the public sector of the economy which I have just described, this action was most irresponsible. In the public sector of the economy, there is a great need for the building of homes and the provision of roads, hospitals and other things for which money is urgently needed. But in spite of this, the Government diverted funds back into the pockets of the wealthy people and of private enterprise to the tune of something like £20,000,000 - an amount which happens to coincide with what the honorable member for Richmond estimated would be the net cost of abolishing the payroll tax.

I began ‘by saying that the sales tax has an inflationary effect. That is the first point about it. The second point in relation to this tax is that it is a regressive form of taxation. In other words, it hits hardest those in the community who are least able to bear it. I think that it is generally accepted that all kinds of indirect taxes do this. It is notable that the Commissioner of Taxation stated in his 38th annual report that in the financial year 1948-49 11.2 per cent., I think, of the total revenue collected in taxes was returned by the sales tax and that last financial year the proportion had increased to 16.1 per cent. - an increase of nearly 50 per cent, in the proportion of total revenue represented by sales tax collections.

As I said before, this is most undesirable because, as we all know, the sales tax and other indirect taxes are regressive, since they bear most heavily on the people who are least able to bear them. The same amount of sales tax is paid on a packet of biscuits by a pensioner and by a person in the £50,000 income bracket. The only difference between them is that the person with an income of £50,000 may eat a few more biscuits than does the pensioner. If I had more time I might remind the House of the whole range of items that still bear sales tax at high rates. I think it is bad that motor cars for private use, for instance, still bear sales tax at the rate of 30 per cent. - a rate that was imposed in 1956. To-day, a car is not considered to be a luxury item, and I do not see why it should still bear sales tax at this very high rate.

One of the most disturbing and dissatisfying features of the whole thing is the fact that such a wide range of foodstuffs commonly used in the home still bear sales tax, as do home furnishings and household appliances such as stoves, refrigerators and vacuum cleaners. All these things that are part and parcel of any home to-day are still subject to sales tax. The Australian Labour Party makes no bones about the fact that it believes that income tax and company tax should be the main sources of tax revenue. This party deplores the increasing incidence of the sales tax, which has developed as I have indicated.

Unfortunately, Mr. Speaker, I have taken more time on this matter than I intended. I want to make a final plea. Here we are at the very end of the sessional period before that in which the next Budget will be presented. We have heard much talk about our affluent economy. I have spoken of the disproportionately low share of the country’s wealth which is going into the public sector of the economy, and I should like to remind the House, at this last opportunity before the Budget sitting, that we owe a great debt to those in this community who depend on social services and on repatriation benefits. I am well aware that the Government has been presented with proposals by the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia and other bodies representing ex-servicemen. Having attended conferences with representatives of the league and having met representatives of totally and permanently incapacitated exservicemen, I want to say, in all frankness and sincerity, that I consider their claims on the national productivity and national prosperity to be moderate in the extreme, if I may use such an apparent contradiction. The Government ought to be impressed by the moderation of the increases asked for.

These days, we are accustomed to asking for the limit in the expectation that we may set half what we have sought, but these people have come along with the most modest and most moderate claims. I hope, therefore, that the Government will consider their needs seriously and sincerely, and that it will not forget that it is eight years since the dependent wives and children of certain classes of war pensioners received increases in their pensions. Eight years of increased production and greater prosperity have gone by, and I trust that the Government has not forgotten its promise to review the means test in a comprehensive way.

Last year, in the debate on the Social Services Bill 1959, the Prime Minister (Mr. Menzies) said -

Although the Government has not felt able to deal with the means test or, in particular, the property means test, in the Budget and in this measure, that does not mean that we regard the problem as closed or as finally disposed of. On the contrary, there are still many problems to be worked out, and this, no doubt, is one of the most contentious of them.

I have, some time since, agreed with my colleagues in the Cabinet that it is not always satisfactory to deal with the intricacies of the social services structure at the time when you are considering the broad sweep of Budget preparation, and I therefore propose to have this problem, and those problems allied to it, very carefully examined by the Government well before the preparation of the next Budget. I say that because I know that the problem is difficult, and I believe that it requires concentrated attention and a good deal of close study.

I assumed, as, I think, did everybody else, that the Government would have taken social services separately, and particularly the means test, and would have brought down a measure in the current sessional period rather than wait for the next Budget sitting. That is what the Prime Minister seemed to me to be saying, and I am sure that that was how the great multitude of the people outside this Parliament interpreted him.

In spite of those statements, the Budget session came to a close without any indication that the means test would be eased, although such action is greatly desired in the community. I sincerely hope that the Government will bring down measures in the next Budget session to ease the means test, particularly as it is applied to property ownership. A worthwhile section of the community is being hurt severely by the application of the means test. We hear a great deal of talk about our prosperity and the affluent state of the economy, yet this Government is neglecting the needs of many worthy people.

I strongly urge the Government, first, to give immediate attention to the needs of that sector of the economy which is so vital to our future prosperity and national development and, secondly, to have regard for those people in the Australian community who are dependent on social service and repatriation benefits.

Sitting suspended from 5.56 to 8 p.m.


,- Mr. Speaker, the bill before the House at the moment deals with Additional Estimates and also with Supply for the early months of the next financial year. Most of what I have to say will deal very largely with the former, although the latter is involved. But before embarking on my main theme, I would like to pay a very high tribute to the presentation by the honorable member for Richmond (Mr. Anthony) of his case and, I think, the case of most Australians for the abolition of the pay-roll tax. The masterly manner and the detailed efficiency with which he presented his case, the research work that he had obviously done into the effect of his proposal on the Budget and on the economy of the country, are things for which I think we should highly commend him. I hope that the Treasurer (Mr. Harold Holt) will find time to read the speech and give it the attention it deserves.

I agree with him very strongly that the pay-roll tax can and should be abolished. Considering the Supplementary Estimates amounting to £75,000,000 that are now before us, could it have been abolished this year and if extra revenue had to be found, it would have been better to re-impose the 5 per cent. reduction which was made in income tax last year than to leave the payroll tax in existence. The re-imposition of the 5 per cent. reduction in income tax would have provided an extra £20,000,000 this year and more in the succeeding financial year.

We are now asked, under the Additional Estimates, to put £20,000,000 into the Loan Consolidation and Investment Reserve.

Mr Crean:

– It is £10,000,000.


– It is £20,000,000 now- an extra £10,000,000 under the bill. So we are asked to put £20,000,000 into the Loan Consolidation and Investment Reserve which is, in effect, a way of getting rid of our surplus. Out of that £20,000,000, I understand, £3,000,000 will be required for servicing the shortfall in the loan raisings. That leaves £17,000,000. The addition of £20,000,000 from income tax would have provided £37,000,000 out of the £45,000,000 estimated by the Treasury as the maximum amount that would have to be raised. I cannot imagine any difficulty in getting the £8,000,000 extra.

I feel that this debate would have been worth while if no other speech had been made than that of the honorable member for Richmond. The honorable member for Barton (Mr. Reynolds) is also to be commended for drawing attention to the proportion of expenditure in the public and private sectors of the community. Our future security and prosperity depend on those two being brought into proper balance. Although we may disagree as to what the proper balance is, it is very important that such matters should be discussed fully in debates of this nature.

The honorable member for Barton also suggested the simplification or consolidation of many of our financial measures, some of which have been added to and subtracted from until they are rather like an act of Parliament which has had a lot of amendments and is difficult to understand. I am strongly in favour of simplification, particularly with respect to the presentation of accounts, if it can be attained. I know it is not very easy.

Take this new appropriation bill with which we have been presented: So far as I can gather, as a result of lateness in passing theappropriation, we propose to take an extra £10,000,000 of defence expenditure, which originally was to come out of surplus revenue, and put it back into the loan fund. Another £10,000,000 is to go into the Loan Consolidation and Investment Reserve. On the other hand, we are told that probably £10,000,000 of defence expenditure will be unnecessary.

However, we are still leaving the amounts for defence from revenue in their original form in the Additional Estimates. We are not reducing the expenditure from revenue on defence by £10,000,000 and putting it on to loan or taking it out of the Loan Consolidation Reserve. Defence expenditure is still estimated at £37,590,000 from revenue. Whether it is expended or not, this House will authorize the expenditure of another £10,000,000 on defence and, in addition, we are putting an extra £10,000,000 of surplus revenue into the Loan Consolidation and Investment Reserve.

I may be a bit dull but I find it rather hard to understand exactly what we are doing. I think it would be much better if we said, straight out, that we are putting away another £10,000,000 surplus. Let us say honestly, “ We have found that we will probably have an extra £10,000,000 surplus. We will put it away into one of those trust funds and it will not have to be distributed among the States according to the Constitution.” I know that that has been the practice for many years. It did not matter very much before the introduction of uniform taxation. But since then, and particularly since the Loan Consolidation and Investment Reserve was established in 1955, the operation of uniform taxation and this method of putting surplus revenue into trust funds has resulted in the federal Government becoming richer and richer while the States become poorer and poorer because they have no means of obtaining any surpluses at all with their very restrictive means of taxation.

Take, for instance, the increase in expenditure as represented in the Supplementary Estimates at the present time. Originally the total was £60,000,000, but now it is £70,000,000 plus £5,000,000 for works and services. The total represents an expenditure of £75,000,000 over and above what was estimated in the Budget. It may be contended that the placing of £20,000,000 in the Loan Consolidation and Invest ment Reserve is not expenditure, but it is. One of the purposes for which the trust fund was founded, as was stated in the Treasurer’s speech, wasto buy up loans which would shortly mature and cancel them out. Take our total Budget of £1,391,000,000: From that amount subtract the payments of £321,000,000 to the States in which the only increase has been £70,000, which is chicken feed. You are then left with £1,070,000,000 of the original amount in the Budget. The additional expenditure to that amount of £75,000,000 under the Supplementary Estimates before the House represents an increase in expenditure of 7 per cent. The original increase in expenditure for 1959-60 over 1958-59 was 11.2 per cent., so that the total increase in expenditure for 1959-60 over 1958-59 is 18.2 per cent. Compare this with the increased expenditure of 6.6 per cent, in the Victorian Budget. It is true that this percentage will be somewhat greater due to the margins case, but the increase in the expenditure of that State will fall far short of that of the Commonwealth. Consequently, when we look at these figures we can understand why the States as a whole feel very discontented as regards State and Federal financial relationships at the present time.

I understand that a Premiers’ Conference is to be held on 23rd and 24th June. I take this opportunity of again congratulating the Acting Prime Minister (Mr. McEwen) and the Treasurer on the way in which they handled the last of these conferences at which the new formula was evolved. Instead of discussions being as bitter as they had been in the past, they were more inclined to be friendly and frank. I hope that it will be the same at this year’s conference at the end of June. I think a few facts have to be realized by some of us in the Federal House if that atmosphere is to continue, because results of the new formula have not been satisfactory, certainly as far as this financial year is concerned, and the hopes that it raised have not been fulfilled.

I think we all realize that financial problems are very difficult, and in discussing them one can only throw one’s ideas into the ring and hope that they may be of some value. To the average person, the mass of figures in a Federal or State budget is very much like a maze in which the ordinary person is very rapidly lost. Irrespective of whether we believe in unification, as the Australian Labour Party does, or in federalism, as the Liberal Party and the Australian Country Party are supposed to do, we must agree that for the States to carry out even their administrative responsibilities efficiently they must have a proper allocation of revenue with which to do those things which come under their control as a result of our Constitution.

Whatever the State governments do, they require an adequate provision of finance because everything they do has a very forcible impact on the lives of practically every citizen - transport, development, land settlement, education, hospitals, and in many other ways. They affect practically every phase of our daily lives. Was the Prime Minister (Mr. Menzies) right when he said -

The Commonwealth was already straining its own resources to give “ generous “ financial assistance to the States and must view with the greatest misgivings any proposal that will add to our financial burdens.

On the other hand, four at least of the Premiers of the States, excluding the two that come under the Commonwealth Grants Commission, were asking for a State Premiers’ Conference earlier this year in order to discuss the difficulties encountered by the States as a result of the margins decision which nobody, I think honorable members will agree, had foreseen before it was made.

In assessing the rights and wrongs as between what the States say and what the Commonwealth Government says, I think we have to consider first of all what fields of taxation can be exploited by the States; and, secondly, whether the Federal Government has been generous in its financial assistance. If we take, first of all, the State fields of taxation, even there they are strictly limited. They work in a very restricted field which is very inelastic and which has been becoming more restricted and more inelastic over the past few years. For example, in the case of the entertainment tax - I have the figure for my own State only but I think it is fairly true for other States-

Mr Reynolds:

– There is practically no revenue from that tax in New South Wales now.


-I was going to say almost exactly the same conditions apply in Victoria, because the entertainment tax has fallen tremendously since the establishment of television; and the same thing will happen in every other State as soon as television becomes established. In the year 1956-57, the amount of entertainment tax collected in Victoria was £1,148,000. In 1959-60 it will drop to approximately £800,000. Admissions to motion picture theatres in the same period dropped from 34,000,000 to about 17,000,000, approximately 50 per cent. I merely quote those figures as an example of what is happening when something like television is introduced. This is controlled by the Federal Government, and from it revenue to the extent of about £20,000,000 a year is obtained in sales tax, customs duties and other charges of that nature. As a consequence the Commonwealth becomes richer and richer and the States get poorer and poorer. All these factors have to be taken into consideration.

I believe that the urgent problem with regard to general principles is to provide the States with a much wider and more elastic field of taxation. This might be done by giving the States back a proportion, or the right to collect a proportion, of the individual income tax and not company tax, as can be done. Alternatively we might be prepared to alter the Constitution so as to allow the States the right to sales tax and/ or excise duties, as happens in the Canadian provinces at the present time. They are possible under the British North America Act which provides all the power in the federal sphere and it is delegated to the States, not vice versa as it is under our Constitution. The main necessity lies in the fact that the States must be given greater responsibility and then there will be better government. They must have wider fields of taxation than they have at the present time. It is no good saying that State deficits are all due to bad management. Over the last eleven years there have been 39 deficits in 66 Budgets in the six States. This clearly indicates that the deficits cannot all be due to bad administration. Therefore, do not let us start accusing the States of being much worse in respect of administration than we are in the federal sphere.

Turning for a moment to the question of whether the Federal Government has been generous or not, we must first of all realize that the inter-action of the financial agreement of 1927 was followed by the uniform income tax law which was introduced during the war. This was followed by the failure of the money market to provide sufficient loan funds even for the States, and consequently they have had to be assisted by the Federal Government from revenue since 1951. These three unrelated factors operating in their own spheres created a totally different situation as regards State and Federal finance than existed before. Whereas it did not matter so much for the Commonwealth to put its surpluses into trust funds, now that it gets the whole of taxation revenue both private income and company taxation, this practice of stacking away its surpluses in trust funds has impoverished the States. About £400,000,000 surplus revenue has, in the last five years, been transferred to the Loan Consolidation and Investment Reserve. I know that a proportion of this money has been used to finance loans but some of it has been used also to buy up federal loans which are maturing in the very near future and cancelling them out.

I was told the other day that we do not do that sort of thing, but if any one reads the second-reading speech of the Treasurer, in 1955, Sir Arthur Fadden, explaining the bill dealing with that fund, he will see that that was one of the purposes of it. When we see that happening and also are aware that the Commonwealth is paying for nearly all its main works, to the extent of £100,000,000 or more a year, out of revenue, the situation with respect to loan funds is becoming ridiculous. The Treasurer of Queensland said at the last Premiers’ Conference that State loans were all the time getting higher and higher until they were reaching the height of Everest whereas the Federal loan indebtedness is getting lower and lower and will be practically wiped out in ten years’ time.

I am leaving aside housing loans because although they are Federal loans they are serviced by the States. I think it was the Premier of South Australia who, at the same conference, said that if the Commonwealth Grants Commission operated in the same way as the Loan Consolidation and Investment Reserve, it would be ruled out for life. These things are not said lightly or in a sense of humour, or to push the particular case of the States. Any one who looks at the figures and at what is happening will find that there is every justification for making such statements. I think all of us ought to realize that we should do a lot of homework and ascertain the position for ourselves, instead of taking it from the Treasury, which naturally wants to get everything it can into its own hands.

We should remember that we charge the States interest and sinking fund payments on our surplus revenue which we let out to them on loan. That interest goes back into the Loan Consolidation and Investment Reserve - not into our Budget - and now the States are paying interest upon the interest which they have paid into that fund. If we assess the States’ works expenditure at roughly £200,000,000 a year over, say, the past eight years, and the Federal works expenditure at £100,000,000 a year - that is a bit low but I will leave it at that - there is a ratio of 2 to 1. If the Federal Government had shared with the States over the past eight years the interest-free money we have put into our own works programmes - £100,000,000 a year- the States would have had available another £20,000,000 a year, calculating interest at 5 per’ cent, per annum. That sum would get the States out of most of their present financial difficulties. It is quite true, as the Treasurer of Queensland said, that we are getting all the cheap money or all the free money, while the States are paying interest and sinking fund payments on our surplus revenue that we lend to them.

Let us for a moment look at the new formula. The Acting Prime Minister (Mr. McEwen) said at the Premiers’ Conference that the tax reimbursements and special assistance grants would represent, I think, £220,000,000. The Federal Government then announced that it would raise that sum to £242,500,000. Eventually another £1,000,000 was given to both South Australia and New South Wales, making a total of £244,500,000. It has been said to me by the Treasurer in this House that the Commonwealth Government was very generous. But we have to add to that £220,000,000- which would have come from the old formula and the special assistance fund - another £21,000,000, which would have been recommended by the Commonwealth Grants Commission and paid to the three claimant States. That brings the total to £241,000,000. In other words, there is a difference of only about £3,000,000. Then we must add the £7,300,000 which the Grants Commission recommended should be paid to two States and which was paid. So under the new formula £10,300,000 more went to the States than would have gone to them under the old formula.

Nobody foresaw the margins increase. 1 asked on two occasions whether it was correct that the States, as a result of that increase, would be in deficit by an extra £12,000,000 while the Federal Government would profit to the extent of £7,000,000 from increased taxation revenue arising from margins payments. Those figures were not made out by me, but by experts. It is only a fortnight ago that I asked the question, but it could not be answered by the Government. The Treasury officials are either withholding facts from the Government, or all their estimates and supplementary estimates - which are much more complicated - are so much hooey and are not worth twopence.

I was rather surprised at the Treasurer. I do not think it was intentional, but his answer sounded flippant and foolish. He said that the margins increase would result in the States getting increased revenue from betting and from a greater use of public transport. He said also that more cars would be bought and that the States would benefit through increased registration fees. I cannot imagine a high percentage of the marginal increase going in betting, but if this were true, much more would be spent on beer and cigarettes, from which the Government gets a high excise revenue. The States get much less revenue from betting and lotteries. I do not think we can say to the States that they should have bigger and better lotteries to increase their revenues. As for a greater use of public transport, the States would not benefit as the only increase would be in air traffic and air fares, from which the benefit would go to the Federal Government. If more cars are bought, there will be less use of public transport. The States get a very small revenue from motor licence fees, but the Federal sales tax on motor cars brought in £60,000,000 last year. We would get a heavy increase in the revenue from sales tax if more motor cars were bought. I feel that the answer was not meant to be what it appears when you analyse it - both flippant and foolish. An honorable member says that the Treasurer was just speaking offhand. I agree that what he said was in answer to a question. He could have said that he had not got the figures, but he listed those three points. I am sure that he did not mean his answer to sound as it did.

We ought to be a little more careful in these things, because it is apparent that all the time we are getting more and more and the States are getting less and less. Take, for example, the £10,300,000 which I said was an improvement in the States’ revenue over the old formula. Subtract the £12,000,000 loss due to the margins increase this year. The betterment rate of 10 per cent, on increases in wages under the new formula does not operate until 1st July, and that £12,000,000 loss is for the last six months of this financial year. Look at the estimates and see the increased expenditures arising from increased telephone and postal charges. I listed them on the back of a sheet of paper as I travelled down by air the other day. They amount to approximately £500,000 for Federal departments and the equivalent for State departments would be £2,000,000 or £3,000,000. Therefore the States are up for an additional £14,000,000 or £15,000,000 which they did not anticipate when the new formula was under discussion, while the Federal Government has the benefit of an extra £7,000,000. The additional £10,300,000 granted to the States under the new formula has gone down the drain and they are £3,000,000 or £4,000,000 worse off. Therefore I suggest, Mr. Speaker, that we should give these matters very serious consideration. I feel there should be an extra grant of £15,000,000 for the States for this year to make good those losses which were not foreseen at the time and to cover the position until the 10 per cent, betterment rate operates from 1st July. Then we can see how the new formula works out, without this backlag of losses.

Furthermore, the Government must consider the yearly increasing unfairness ®f the loan position. It should, in my humble opinion, allot to the States their proportionate share of the interest-free and low-interest-rate money available - for example, treasury-bill finance - and should increase the formula grant by £20,000,000 to make up for the past injustice to the States. A genuine attempt should be made to increase the extent and elasticity of the States’ fields of taxation, as in Canada. This would give them a greater sense of responsibility and make for better government. Three fields come to my mind: Return to the States a percentage of the field of individual income tax, or else look at the possibility of altering the Constitution so as to give the States rights on either excise or sales tax. These measures should be taken irrespective of whether you believe in unification or federation. For my own part, I strongly support the old Liberal policy because I believe that the foundation of good government lies in local government. When you get too much unification you get on the top a heavy bureaucracy - to a certain extent irresponsible - which undermines and decreases the efficiency of local government. Since 1945, as a result of uniform taxation, we have moved more swiftly into unification by financial strangulation of all forms of local government than at any time in the 44 years of federation prior to that year.


.- The honorable member for Chisholm (Sir Wilfrid Kent Hughes), a man who has had long experience and high office in both the Victorian and Commonwealth Parliaments, very properly devoted himself to an examination of the federal system in its financial aspects and the relationship between the Commonwealth and the States. I believe that the malaise in the federal financial system is more deep-rooted than he is prepared to acknowledge. No one now seriously presses that the sources of Commonwealth and State revenue should be redistributed. We should, however, press that the avenues of Commonwealth and State expenditure be redistributed.

It is fundamentally unsatisfactory that all State public works should be financed by money which is lent to them by the Com monwealth from funds which the Commonwealth has borrowed or raised in taxes. It is fundamentally unsatisfactory that twothirds of Western Australia’s current expenditure and three-fifths of the remaining States’ current expenditure should be raised in taxes by the Commonwealth. To put it another way, the problems of the federal financial system will only be solved when this Parliament is given the responsibility of financing the most expensive avenues of government in Australia. In that way there will be a proper co-ordination of responsibility in governmental expenditure which cannot be obtained when six States spend money which the Commonwealth has to raise, or when the Commonwealth does not have the responsibility of deciding the priority as between works of a federal or territorial nature and State projects.

The most expensive State functions are the higher forms of education - secondary, technical and university - hospitalization, railways, ports and housing. I suggest that there would be a greater sense of responsibility in Australia if those functions were given to the Commonwealth to administer because it already largely and increasingly finances them.

It is true that we are unificationists but it is not true to say, as has been inferred so often, that we believe, therefore, that everything should be run from Canberra or from one centre. We believe in unification and regionalism. In other words, we believe that the States are too large to run things of local interest and that they are too small to run things of national interest. When we debate the Budget and the various supply bills we realize that through every speech on the federal financial system runs the thought that the States have no economic basis. They were created over 100 years ago by Englishmen. They were not created by Australians, nor were they created with any economic end in view.

I propose now to deal with some other aspects of our economy - inflation and national development, lt is appropriate that I do so in the light of several important events which have happened during this sessional period. First, there was the decision of the Commonwealth Conciliation and Arbitration Commission in the basic wage case. Then there was the National

Export Convention and other similar conferences; and there was the Treasury economic survey and the balance of payments bulletin for the last financial year.

The decision of the Arbitration Commission in the basic wage case brings to a head the role of wages in inflation. We believe that a completely unprecedented and improper degree of pressure was brought to bear on the commission by this Government and by all the organs of propaganda in the community. When we criticize certain decisions of the commission relating to wages or penalties, we are not subverting either the commission or the arbitration system. What we are doing is directing attention to the sectional and partial attitude which this Government imposed upon the commission and on the economy as a whole. Wages are not the only ingredient of inflation, but they are the only ingredient which this Government seeks to curb. There are distinct limitations to the economic powers which are vested both in this Parliament and in the States, even if the States - as has never happened hitherto - act in concert. However, there are some powers which this Parliament can exercise on the economy apart from the arbitration system. The Government pays lip service to some of them, but never implements any.

At the time of the basic wage hearing we were told that the economy was balanced on a razor’s edge, and we were warned about feeding the fires of inflation. We find now, however, from the Statistician’s figures which have just been released, that the price rise in the March quarter of this year was less than for many preceding quarters, and in the recent Treasury economic survey it was stated that the economy is sound. The Treasurer (Mr. Harold Holt) was bruiting that abroad when he toured Queensland last week in a Royal Australian Air Force plane.

If the income of labour is regulated or pegged, why should not the income of industrial property be regulated?

Mr Anderson:

– Wage-earners are also shareholders.


– Some few of them.

Mr Anderson:

– Then why try to segregate people?


– That is just what the Government is doing, lt believes in limiting wages, but not the income from shares. We believe that what is sauce for the goose should be sauce for the gander. We believe in fair, co-ordinated regulation of all sources of income and of inflation in Australia. The Government deals with the people partially and sectionally. We believe in dealing fairly between all sections of the community. The Minister for Labour and National Service (Mr. McMahon) stated that it was not necessary for business to justify its income because its income was subject to company tax. Wage and salary earners, however, whose incomes are regulated, also pay tax. Furthermore, the Australian company tax is low by world standards. Companies, of course, join with the Government in saying that wage increases will affect the price spiral. They realize, however, that business is never so good as it is in times of inflation. They can pass on their increased costs particularly if, as so often happens in Australia, they are the only organization producing some commodity. ^

The causes of inflation are numerous. The evidence in the 1950 basic wage case was that a 10 per cent, increase in wages would lead to an increase in prices of not more than 3.8 per cent. I aim to demonstrate how this Government acts in a completely sectional way by pegging wages, and wages alone, in an attempt to combat inflation.

One important influence which is contributing to inflation is speculation in shares and in land. This is known to every one in Australia including, one should think, the Government, although the Government will never admit it. Stockbrokers have told us recently that between 1952 and 1959 the capital gain to shareholders in Ampol Petroleum Limited has been 720 per cent.; in H. G. Palmer Limited 1,181 per cent.; in Mount Isa Mines Limited 701 per cent.; in North Australian Rubber Mills Limited 806 per cent.; in Riley Dodds Australia Limited 1,198 per cent.; in A.R.C. Industries Limited 506 per cent., and in Ralph Symonds Limited 485 per cent.

Mr Freeth:

– I could give you a few losers too.


– It would not take you long to name those if you wish.

Mr King:

– Where did you put your money?


– I have an overdraft at the bank, and I have had to pay three increases in the interest rate on it since this Government has been in office. Between 1949 and 1959 there have been capital gains in Broken Hill Proprietary Company Limited of 156 per cent.; in Email Limited of 265 per cent.; in Imperial Chemical Industries of Australia and New Zealand Limited of 263 per cent., and in Myer Emporium Limited of 358 per cent. In all cases the increase has been greater than the inflation during the period. This is only a small proportion of the companies which have exhibited amazing capital gains in their shares, both by new issues and price rises. The newer and smaller companies have shown the greatest capital gain of all. There is L. J. Hooker Limited and its subsidiaries and the television manufacturing companies. In the six months ended in December, 1959, there were bonus issues by listed companies amounting to £20,000,000, and the market value would be nearer £60,000,000. And it has all been free of tax. If a shareholder in the Broken Hill Proprietary Company Limited had held £472,000 in ordinary shares in January, 1954, and had taken up all the new issues, his holding would have appreciated by £2,600,000 by February, 1960.

Mr Buchanan:

– There would not be many such shareholders, would there?


– Howard Smith is the case. I did not want to mention names but I have the cases. If the shareholder in B.H.P. had taken up all the new issues, his holdings would have appreciated by £2,600,000 by February, 1960. In the same period a £620,000 holding in Colonial Sugar Refining Company Limited would have appreciated by £1,900,000, a £330.000 holding in Burns Philp and Company Limited would have appreciated by £2.200,000 and a £478,000 holding in H. C. Sleigh Limited would have appreciated by £2,600,000. The appreciation of land values has been even more in percentage, although not in total amount.

Capital appreciation in this country, as distinct from realized capital gains is probably well in excess of £200,000,000 per annum at the moment; and this is a source of inflation, if any one wants one, and a capital gains tax would deal with it. A tax on capital profits exists in the United States of America, the citadel of private enterprise, and in Belgium, Holland, Denmark, Finland, Norway, Sweden, France and Switzerland.

Mr Freeth:

– ls that part of your policy?


– Of course it is, and the Taxation Commissioner’s staff could well implement it, as your authorities have told you. You refused to publish their reports or to implement their recommendations or carry out your own promises in this regard. Capital gains are not shared among the community but are concentrated in the hands of property owners and they are subject to manipulation by the taxpayer. There are wide opportunities in this country for an individual so to arrange his affairs that he receives not taxable income but non-taxable capital gains.

Another form of tax avoidance is the expense account abuse. It is quite unjust to have this well-known practice of businessmen making as many personal expenses as possible a company expense, so that it is not taxable. The wage earner is not able to avail himself of such practices, and his tax deductions are minutely scrutinized by the taxation authorities and have to be vouched for. He does noi get such deductions. The practice also of individuals creating companies and shuffling money from one company to another is also widespread. Encouragement is given to individuals to do this because company tax rates are lower than the rates applicable to individuals at the higher levels of income. Tax minimization in this way has become an industry in itself.

We believe that the tax administration must be tightened up and much severer penalties imposed on tax avoidance and tax evasion. In fact companies which dodge tax have the use of the money they misappropriated before they can be caught, and the benefits they receive will exceed the fines and legal costs that they may incur. In taxation matters the honest are penalized under this Government’s administration and the doubtful morals of the sharp businessmen and speculators are rewarded. You will notice that I say, “ This Government’s administration “, because the tax authorities are as honest and competent men as one would find anywhere in Australia; but they can be no more strict than the legislation requires them to be. They can only implement the law. We have had, in the last ten years, plenty of examples showing that the law is full of holes, and this Government does nothing to close them.

Another factor contributing to inflation, which the Government ignores, is the advertising and packaging of goods. We spend over £100,000,000 per annum on advertising, and it is estimated that within five years we will be spending £140,000,000 on packaging. Such costs far exceed the wages and margins claims made by unions. Not only does this advertising and packaging expense add to demand, but such expenditure is, in the very nature of things, designed to create demand. Some of this expenditure, of course, is necessary, but it should be curbed by disallowing certain expenses as taxation deductions.

If the Government will rid itself of its prejudices in these matters and direct its attention to these fields, it will find that there are many other and more remunerative and successful means of dealing with inflation than through wages alone. Another important cause of inflation has been the practice in this country of companies imposing private price fixation and indulging in private restrictive trade practices; in other words rationing schemes, monopoly rings and that sort of thing. Up to now we have always been told that talk of monopoly and restrictive practices was tubthumping and that such talk had no place in a welfare State, but in monopolies the profits are determined before the prices, and not vice versa. Any increase in costs is passed on in increased prices, regardless of productivity increases. The degree of inflation is closely related to the degree of competition existing in the economy. Price control, particularly in monopoly industries, is urgently required.

We believe that the Government is not genuine in its professed intention of introducing anti-monopoly or restrictive practices legislation.

Mr Cope:

– That is being charitable, too.


– In America they have the power to control this sort of thing and can deal with it more successfully because there are 48 States in the same land mass, whilst we in Australia have only six States. In America there are many companies trading in each field, but in Australia there may be one company alone producing certain goods and it is then difficult to discover’ its restrictive trade practices or how it inflates costs and passes them on to the public. The only way of dealing with such practices in this country is for Parliament to legislate for them or to implement some control after some impartial body such as the Constitutional Review Committee has made recommendations. In the Constitutional Review Committee we had twelve members of this Parliament, from both Houses, unanimously and strongly reporting and recommending that the Constitution should be amended to permit this Parliament to legislate with regard to restrictive trade practices and all this talk about implementing some such code now is belated. We are going about it in an extremely dilatory way. We do not act in this matter as promptly as we did in regard to wage fixation.

Anti-monopoly legislation has existed in the United States and Canada since last century. Great Britain, under the Attlee Government, introduced anti-monopoly legislation in 1948, and New Zealand, under the Nash Government, did so in 1958. Why will we not do something similar? If every party in this Parliament supports an amendment to the Constitution we will get it. Does any honorable member doubt that the people would endorse such a recommendation being carried out to assist them. The only people who would suffer under such legislation would be those who are skimming off the cream at the moment.

Mr Howson:

– You are jumping on the band wagon.


– When are you going to get the band wagon moving? You never acknowledged the need for such legislation until the Constitutional Review Committee made its recommendations, and this talk by the Attorney-General (Sir Garfield Barwick), and in His Excellency the GovernorGeneral’s Speech at the opening of Parliament, is belated. When is this legislation going to operate? There have been flagrant examples of these practices given during the debate, but we have heard nothing from any Government member as to what the Government would do about it.

In taxation policy the sectional attitude of this Government is still more obvious. In the last Budget we saw the new Treasurer (Mr. Harold Holt) in a pathetic attempt to achieve plaudits from the crowd, reducing direct taxation by £20,000,000, the chief beneficiaries being the higher income groups, and on the other hand increasing indirect imposts in the form of postal and pharmaceutical charges.

It is true that bachelors benefit very much under this Government, but we put the family first. If we have to increase taxes to finance our capital and current commitments and to remove excess demand, let it be done by the honest method of direct taxation.

I now turn to the longer run problems of combating inflation by increasing productivity and output. The Government measures our material prosperity in terms of motor cars, television sets, washing machines and refrigerators. There is a comparative abundance of these goods, although not for all sections of the community. On the other hand we lag badly in the field of social welfare - hospitals, education, housing, sewerage, roads and railways. At the moment, more is spent on advertising than the States spend on education. We have television sets before sewerage, and luxurious cars before we have adequate roads for them. The best buildings are insurance offices and emporiums; the worst are schools and hospitals. In the Commonwealth sphere, the best buildings are the branches of the Commonwealth Bank, and the worst are the post offices.

Advertisers tell us continually that what we possess is obsolete, and they endeavour to create new demands for consumer goods long before the goods we possess are physically obsolete. People are induced to express themselves in goods which confer social status, and people buy for what prestige certain goods confer - whether it is a television set or a motor car. In this way, wasteful consumption expenditure becomes almost limitless. At the same time, advertisers pour ridicule on social priorities and public enterprise. That is the regular technique, and the mass media controlled by private enterprise disparage public enterprise and government expenditure.

It is not that the Australian people have chosen between these alternatives. A consumer cannot choose between television and sewerage, or between advertising and education. Only governments can decide whether or not there is to be more social expenditure. This Government is condemned for allowing great distortions to develop in our economy. These distortions go to the very root of the private enterprise system, for it is in the private sector that profits are made. In the last seven years the proportion of the gross national product spent on public works has declined by onefifth.

Another form of distortion in the economy is geographical. Whilst the consumer economy of the south-east flourishes, the remote States of Western Australia and Queensland, and the Territories, languish. Private enterprise, whether local or overseas, goes where there are markets, where there are existing consumers and amenities. It is not interested in pioneering. The Department of Trade says that in 1959, of 651 United States manufacturing subsidiaries or affiliates in Australia, only three had head-quarters in Western Australia, and only thirteen had head-quarters in Queensland. Of 460 United Kingdom manufacturers in Australia there were only seven with head-quarters in Western Australia and only six with head-quarters in Queensland. The Commonwealth, by its own expenditure, does nothing to improve the position.

I am glad to see that the Minister for Supply (Mr. Hulme) is at the table. Yesterday he gave me an answer to a question that I had put on the notice-paper four weeks before. He obviously kept the reply until after the Queensland State elections.

Mr Hulme:

– That is not true.


– Then you are very inefficient at getting information from your department.

Mr Hulme:

– You have never been in charge of the department.


– Was it inefficient before you went there? The answer showed that Queensland receives oneseventieth of the total value of orders from his department while Victoria receives more than one-half. One-seventieth! North of the Tropic of Capricorn there is 40 per cent, of our land mass, but only 4 per cent, of our population. The challenge to develop northern Australia-

Mr Forbes:

– What kind of investment would you have up there?


– I would have government investment. Private enterprise has had the opportunity to invest there, and still has it. As I was saying, the challenge to develop northern Australia is not accepted by this Government, because the Government dislikes public investment, which alone could, or would, pioneer the north.

A fundamental examination of the priorities of our economy is a prerequisite of any worthwhile increase in productivity and Output. The superficial pleas by this Government for improved productivity deserve to be ignored. Only by allocating more resources to education, roads, railways, shipping and other social over-heads can we achieve substantial increases in productivity. This re-allocation of resources to the public sector must, of course, be at the expense of the private sector, and particularly those parts of the private sector which can best stand it. Increased company tax, capital issues and hire-purchase controls are essential to this end. The Government should also discontinue allowing interest on company debentures, mortgages, deposits and so on as deductions for income tax purposes. In this way private companies would not be able to offer their 8 per cent, to 10 per cent, interest rates on these securities to the public. This would facilitate Government borrowings at the expense, one would hope, of the enormous amounts which to-day are being raised, particularly by hire-purchase companies.

Mr Hulme:

– Is this part of your policy?


– Yes. What is yours? You just believe in the north remaining stagnant, with productivity in its basic forms running down. New money raised by listed companies in the form of debentures, mortgages, &c, last financial year was £140,000,000, and for the nine months ended in March this year the amount; was £151,000,000. Government borrowings on the domestic market in this financial year have been only £120,000,000. The imbalance between private and public money raisings is quite obvious.

Monopoly, of course, also causes serious distortions. To increase productivity, a national view of resource allocation and development is required. Viewed in this light, the Government’s trade promotion drives appear hardly to scratch the surface. The problem of resource allocation is becoming all the more difficult by reason of the fact that substantial sectors of our economy are now in foreign hands - particularly the post-war industries of motor cars and oil. Unless we take resolute action we may find ourselves in the same position as the Canadians, who have become economically subservient to a foreign country.

The Acting Prime Minister (Mr. McEwen) appeals for partnership between local and overseas shareholders. His appeals, of course, will be ignored in the future as they have been ignored hitherto.

Mr Cope:

– It is only hot wind.


– Well, there is plenty of that coming from him. The only interpretation that can be placed on the right honorable gentleman’s appeals is either that he is simple in his thinking or timid in his actions. He also has not told us what action, if any, he intends to take to curb the export restrictions imposed by overseas investors on our local industries.

Private portfolio investments from overseas more than doubled last year - rising from £7,900,000 in the previous year to £19,400,000. This investment is the least desirable of all overseas investment, for it brings with it no skills and merely inflates share prices - and it will get worse with the flight of investment from South Africa. The other disturbing trend has been the substantial increase of £20,000,000 in the undistributed profits of overseas companies established in Australia. Last year, these undistributed profits rose to £59,000,000. The problem of mounting dividend commitments, as profits snowball, will become acute earlier than the Government is prepared to admit. Since 1952-53 the income payable overseas has risen from £43,000,000 to £107,000,000- a rise of about 250 per cent. On the other hand, national income in that period has risen by only about 140 per cent., and export earnings have fallen. Our obligations have increased, and our capacity to meet them has declined.

Despite the claims of the Government, direct overseas investment is not coming in at the rate that the Government would have us believe. The direct inflow from overseas, excluding undistributed profits, fell by one-fifth last year. Total undistributed profits in that period, however, rose by one-fifth. In the same period the undistributed profits of United States and Canadian companies rose by one-half. The Australian economy has been allowed to drift for too long. The Government is too limited by its own terms of reference to grapple adequately and justly with the problems of inflation and growth.


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


.- I think the House will agree that the honorable member for Werriwa (Mr. Whitlam) did not deliver a speech of his usual standard to-night. It seems pretty obvious that the cares of being Deputy Leader of the Opposition weigh very heavily on the honorable gentleman. He does not know whom to trust and is suffering the darts of his discontented colleagues. This, with the gaunt shadow of Dalziel flitting disconcertingly across his path, has affected his logic. The honorable gentleman from Werriwa is obviously in an unenviable position. He cannot play the role of the comedian, as the Leader of the Opposition (Mr. Calwell) does, and in his search for a role, he must find something into which his character will fit. I am sorry that this evening he gave no inkling of whether he will be a comedian, a serious statesman or a cross between both.

It seems that the honorable member’s carefree days - the days before he was appointed Deputy Leader - have gone. The days when the only thing that worried him was ambition have gone and to-day he has the cares of office on his shoulders. He makes the confession that he is a unificationist, and then says that he is a regionalist. It seems that these claims are just as valid as the claim of his respected Leader, who says that he is a democratic socialist. I should like a definition of a unificationist, a regionalist and a democratic socialist Whatever it may be, I think the House will agree that the Australian Labour Party and Labour politics are a drug on the market and cannot sell. The evidence of the Queensland election is proof of this.

The honorable member for Werriwa gave a doleful repetition of the speech made by the honorable member for Reid (Mr. Uren). I give the honorable member for Reid a higher mark for an effective speech than I give to the honorable member for Werriwa, because the honorable member for Reid had all his facts correct. If the honorable member for Werriwa borrowed his facts from the honorable member for Reid, something must have happened in the exchange of ideas because he got them completely confused. He complained of public companies and said that they enjoyed capital appreciation. Does the honorable member for Werriwa prefer to see these companies making losses? If he does he has no faith in Australia, no faith in the development of Australia and no faith in the prosperity of the Australian people. He said that it was a tragedy that there had been capital gains. One can only conclude that the honorable member for Werriwa would prefer to see companies making losses. He bemoaned the fact that he had an overdraft, as if it were a badge of poverty. But does the honorable gentleman not possess assets to get an overdraft? If he has a banker who will give him an overdraft without assets, I should like to meet that bank manager.

Mr Mackinnon:

– Dalziel will get it, though!


– Dalziel is not an asset; he is a liability at the moment. The honorable gentleman for Werriwa will be able to console himself with the thought that, if Dalziel promotes this action, he will be able to save some money by appearing at the hearing for himself. I would not know how effective his advocacy would be, but he could at least save that much money.

The honorable member then trots out an argument which he borrows from his Leader. I will give his Leader this credit, that he does have an idea now and again. The honorable member for Werriwa borrowed the idea of a tax on capital gains. What is a capitalist? On whom will the honorable member for Werriwa levy this tax? I should imagine that he is on very treacherous ground. Shades of John Dedman, who said that he did not want a mob of capitalists in this country! Every man who owns his home is a capitalist. Because real estate values have increased, does the honorable member for Werriwa propose to levy a tax on the capital gain of the man who owns his home? That in effect is what he says. Or will the honorable member make this a very sectional tax? All I can say is that the honorable gentleman for Werriwa should have had a longer conversation with the honorable member for Reid when he borrowed the ideas used by the honorable member for Reid earlier to-day.

I do not want to waste too much time on the trivialities of the honorable member for Werriwa. All I say is that I am sorry that the honorable member did not produce a more effective speech on this occasion. His speech was a dirge against prosperity, and there cannot be any argument about that. It is the result of disturbed thinking, and I shall leave him to his unhappy thoughts. Maybe this gentleman Dalziel has had some effect on the honorable member’s thinking, but I shall leave it to him. If I have time at the end of my speech, I shall refer to some of the comments he made recently when he was speaking in Queensland prior to the election in that State. I do not like saying these things about the honorable member for Werriwa because his electorate adjoins mine. I do not like his politics, but I like the gentleman himself. I am sorry to see this metamorphosis come over him.

Mr Haworth:

– Will you have a border disturbance?


– No, there is no need for a border disturbance on the borders of our electorates. The honorable member for Werriwa has some very strange ideas. I can come to one conclusion only, and that is that he has been talking too much to his Leader.

I want to devote my time to a discussion of the Post Office. The Post Office has absorbed so much of Commonwealth revenue that, in a debate of this nature, its functioning becomes a vital issue. The Post Office once boasted, and still boasts, that it is Australia’s largest business under taking. Certainly, it is our most important business undertaking, because it touches the lives of every one. Every citizen must use its services, and most of us use them several times a day. We used to be proud of that service, and in many respects we can still be proud of the Post Office. However, complaints are mounting all the time. It has proved incapable of growing with our fast-growing community. It is just not organized to grow rapidly and it is not keeping pace with the development of the country. In my electorate of Mitchell, I recently stood watching the long queue on a child endowment payment day. It extended down the street from a building which may have been adequate twenty years ago, but is completely hopeless today. It is in these rapidly developing areas, such as the area that I represent, that we see the Post Office system at its worst. Despite the efforts of the local staff, there are complaints all the time. These are not against the staff but against the inadequate provisions that have been made.

A large proportion of my mail coming from the constituents concerns Post Office matters - telephone, mail services and the other multitudinous things that it handles. Such expanding areas find the Post Office in a permanent state of overstrain, and I despair of it ever catching up unless there is some drastic reform. The fact is that the Post Office had its hey-day in the times of Cobb and Co. Since then, dozens of new jobs have been loaded onto it as the needs of the community have become more diverse. Physically, it is making a valiant effort to keep up with the times. The new all-air service for interstate mail is a big improvement, but administratively it is a matter of loading all the new burdens on to the same old coach. It just had to be this way.

Government departments, by their nature, are rigid and settle into a certain way of doing things. This becomes the tradition with a concern as old as the Post Office. Basic changes can be made only from outside, and the department has not the flexibility for continual reorganizations such as are demanded by an expanding business in our rapidly growing community. I understand that the strain resulting from this state of affairs is showing itself very seriously among the top executives of the department. There have been several retirements, hastened, I think, by overwork. If this continues, there must come a time when the reserves of properly trained and proved men will be seriously depleted.

Something can be done to improve the situation, I believe, and it should be done immediately. One of the things that can be done is to separate some of the activities which are not directly related and make them autonomous in order that the Post Office may get on with the main work of providing postal services. The provision of new telephone installations, for instance, represents the worst failure in the PostmasterGeneral’s Department. In this respect, we are still under conditions of wartime scarcity. If the telephone services were put under a separate, autonomous department, the situation would be much better. That department would be able to raise its own finance and would possibly be able to eliminate much of the red tape which seems to be part of the trouble at the present time. In some of the new areas, there are business and professional men who are hamstringed by their inability to get a telephone service, while private citizens face a wait of years. This is not good enough. Something must be done. Some of the trouble seems to lie in the method of working. For instance, a routine task like the installation of a new telephone is spread over a period of weeks, with a series of visits, each by a different pair of men. This is a situation in which a new broom might sweep clean. A specialist department might be able to speed up the process.

Radio and television are another highly technical field which has become attached to the Post Office, more by accident than for any special reason. This is a field for specialists, and I believe that they might be able to operate more efficiently in this field if they were autonomous. There is a definite need for a change of the present system, which is not very successful. Some things have happened recently, particularly in regard to the allocation of frequencies for radio transmissions, which should never have been permitted to happen. I am especially concerned about and am thinking particularly of the threatened curtailment of the frequencies allowed to amateur radio operators. These amateur operators, some 3.000 in number, have given good service to Australia in times of peace and of war. During World War II., they were invaluable, as they have been in floods, bush fires and other emergencies since.

Australia alone among the nations of the free world wants to cut down the range of frequencies allowed to amateur operators, and it advanced such a proposal at the recent international conference at Geneva. But the other Western nations turned it down flat. We were in the unenviable position of finding ourselves in the totalitarian camp in this matter. Two departmental experts, before leaving for Geneva, met interested members from both sides of the House within the precincts of this building and gave an undertaking that if these proposals for restricting the amateur bands were not accepted by the other nations they would not be imposed on the Australian amateurs. However, on the proposals being rejected in Geneva, the officials who represented Australia at the conference added to the report of the conference a footnote reserving the right nevertheless to apply the restrictions in Australia. In my opinion, this was a breach of faith and a breaking of the pledge given to members of this House within this very building.

The Postmaster-General (Mr. Davidson) has now been involved in this deception. In such a technical matter, obviously he has to rely on expert advisers. These advisers recently gave him a departmental brief in reply to an inquiry - a brief which stated that the pledge which had been given before the officials left for the Geneva conference referred not to the amateur bands as a whole, but to only one of them. This is contrary to the clear recollection of those honorable members who had conferred with the departmental officers before their departure to attend the conference. I know that the Minister feels that he must defend his officers, but I think that in this instance he is carrying loyalty too far, and that the department is acting in a manner unworthy of a great department.

I can conclude only that the conduct of these officials is that of harassed men, and that they have reached a stage at which the solution of departmental problems is the only thing that matters. The fact that the appropriating of these frequencies for other uses is harsh and unfair to some members of the public does not seem to weigh with or concern them. This is a stage at which I think it is the duty of the Government to intervene. I believe that these actions which I have described are a by-product of a situation in which a department has grown too big and too complex to be efficiently managed, and that the sooner it is reconstructed the better.

The Telephone Branch of the PostmasterGeneral’s Department is at present in the early stages of the working of the extended local service areas system, which is commonly know as Elsa. This is the most radical reform for a long time. The general opinion among my constituents is that Elsa, like many modern girls, does not lack attractions, but is rather expensive. I was surprised to hear many complaints in places like Glenorie and Arcadia, in my electorate, which have been brought into the Sydney metropolitan network. This enables subscribers at those centres to call any one in Sydney for 4d., which is the local fee. It is admitted by my constituents that that is very good. However, their telephone rentals have been just about doubled, and many reckon that this is too big a price to pay.

A little further out from the metropolitan area, places like Windsor have fared considerably worse. Rentals have been raised and calls to Sydney are still charged at trunk rates, these rates having been increased. I think that in fixing the boundaries of the new zones the department has lost sight of the pattern of modern development. The influence of a great city like Sydney radiates far beyond its boundaries. Communications and telephone business tend to flow along these radial lines. There is a large volume of telephone traffic to Sydney from places like Windsor, Richmond and Penrith, and there is much traffic from these centres also to the nearer sub-metropolis of Parramatta. The charge for a three-minute call from these places to Parramatta has been raised from 8d. to ls. 8d. - 250 per cent, of the original charge - and the cost of a call to Sydney has risen by 4d. It is little compensation to a resident of Windsor to be told that he may now make, at the local-call rate, calls to places like Glenbrook and Blaxland, with which the residents of

Windsor, Richmond and Penrith have had very little communication anyway.

The boundaries of the other zones around Sydney appear to have been determined by the simple but very arbitrary method of drawing lines on the map at fixed distances from the Sydney General Post Office, with very light variations. In doing this, the department has lost sight of the factor of community of interest. It has also wiped out the concessional trunk-call rate from Sydney to places like Windsor and Penrith which operated for twenty years. That concession was granted to satisfy a very real need, and I hope that the Postmaster-General will restore it as quickly as possible. The objective of Elsa - a complete automatic direct service from subscriber to subscriber throughout Australia - is a bold and imaginative one on which the Post Office is to be congratulated. I hope that it will not spoil the whole thing by riding rough-shod over the interests of particular communities.

Another important matter touching on the rights of minorities has been much, in the news of late. The announcement that the Government is to consider action against restrictive trade practices was very welcome. Competition is the only effective control of prices, and the maintenance of effective competition is the lifeblood of the economy of a free community. But how can its maintenance be guaranteed? It is a problem that has puzzled the best legal brains of many countries. It can very easily happen that a law which seeks to promote competition may, in fact, be used to suppress it. The Attorney-General (Sir Garfield Barwick) has demonstrated his legal virtuosity both in the courts and in the House, and his solution for the difficulties involved is awaited with interest.

Many people think we had an indication of the shape of things to come in some of the provisions of the Broadcasting and Television Bill. If so, it was a rather ominous one. Any wider application of some of the drastic principles involved in that bill would be highly dangerous, in my opinion. That bill, in an attempt to prevent one group having too much control of television programme material, introduced a form of compulsory price-fixing. It may be that the courts will have a say on its legality, but the final verdict on its wisdom surely must be left to the future.

To gain his immediate objective, the Attorney-General has compromised one of the basic principles of liberalism. The lessons of history show that in politics, to compromise principles for expediency is always unwise. No doubt it is part of the training of a lawyer that he must learn to compromise to secure agreement by concession when nothing better is possible. On the other hand, it is part of statesmanship that, on basic principles, no compromise is possible.

It is not surprising that the Opposition supported this bill. One could see them secretly licking their lips in anticipation of what they could do with this new method of price control for far less worthy objects if ever they regained power. It would be a wonderful tool for the socialists. It promised them an immediate means of putting on television stations pressure which could mean one-party control of this vital means of propaganda. Further, the method of price control, if valid, would be capable of a very wide extension, with damaging results to the economy through the destruction of competition. Price control, if continued long enough, almost always destroys competition.

Fortunately, the Government accepted amendments which broke down one of the worst provisions of the bill - that which forced the sale of programmes at an arbitrary price - by giving a right of appeal. However, the Government deprived itself of one of the most valuable safeguards of democracy by its method of handling the bill. It kept the bill under cover until the last days of the session, and then attempted to rush it through in a few hours. Thus there was no real opportunity for critical analysis of its provisions. This House, and the people, are entitled to the opportunity of voicing their opinions before any bill becomes law, and a wise government welcomes criticism, because it is far better for a government if any weaknesses are discovered in the beginning and do not appear only after a law has been in operation. I hope no such mistake will be made with any legislation aimed at dealing with restrictive practices, and that every opportunity will be given for advance examination of such legislation.

If the Attorney-General can solve the problem involved in this matter, his name will go down in history, and I venture to say that he will obtain international fame, for most democratic countries are worried by this question of restrictive practices. However, the very fact that it has proved so difficult indicates what a colossal task he has set himself. I hope the AttorneyGeneral does not come up again with a short cut such as he used in the Broadcasting and Television Bill. It would be not only useless, but also dangerous to preserve the outward forms of competition by unwarranted restrictions on the liberty of the individual. I think we have had sufficient foretaste of that sort of thing.

But two traps must be avoided if the proposed legislation is to be successful. It must sustain and expand the area of constructive competition and not make of the imaginative, the progressive and constructive entrepreneur a parasitical host upon which the incompetent may attach himself and fatten upon the successful man’s efforts. In addition, its purpose and effect must be truly liberal. Restrictions administered by a government department are no remedy for restraints applied in private. They are always more damaging, in the long run, to the community because they tend to stifle initiative and enterprise, and they always tend to expand in the area they cover.

The Australian people, who have rejected the policies enunciated by the Opposition, are not likely to welcome these policies if they are applied from this side of the House. It is difficult to know how one may launch a verbal rocket capable of penetrating the rarified strata of government thinking; but somehow, in some manner, I hope it will become known to the Government that there are members on this side of the House who have nothing but principle to lose in this place. Consequently, they put a high value on it and will not easily surrender it.


.- The measure before the House relates to supply, and honorable members are able to speak on a very wide range of subjects. I propose to devote my time to social services, and I am pleased to see that the Minister for Social Services (Mr. Roberton) is in the House to hear what I have to say. First and foremost, I contend that the spirit and the intention of the social service legislation is not being put into effect by those who initiated it, despite what the Minister may say to the contrary. 1 do not think that even the Prime Minister (Mr. Menzies) is aware of the narrow and parochial interpretation that is being placed on the various sections of the social service legislation, such as the means test that is applied to income and property by the Minister for Social Services or some of the regulation-conscious public servants who administer it.

In recent years, honorable members on this side of the House have become accustomed to the brush-off they have received whenever they have asked the Minister questions about social services and associated anomalies. I raise the question to-night, some three months before the Budget is brought down, in the hope that 1 can put before the House a practical illustration of what is going on in relation to social service entitlement, and in the hope that I shall be able to move the Government, through the Minister, to adopt a somewhat more humane approach to a really human problem. I want to ensure, if I can, that numbers of people who now suffer impoverishment as a result of the current inflation may receive some addition in their pensions and allowances. For years now, when deputations representing pensioners have waited on the Minister for Social Services at Budget time to urge upon him the needs for increased pensions and the removal of anomalies that are contained iri the relevant legislation, invariably they have been informed that their representations were made too late for any alterato be made in the Budget that year because the Budget had already been prepared. I hope that this year the Minister and the Government will heed the plea of pensioners to do something of a tangible character in the Budget to ease the poverty that these people now experience, especially as a result of the increased prices following the recent marginal increases. There can be no doubt that, as a result of increased prices for food, clothing and other commodities, the base pension should be substantially increased. The Government has used social services legislation to deny sufficient sustenance to many of the sick and unemployed. I propose to show that, in many cases, applicants for invalid pensions have had their claims rejected by medical officers without a proper medical examination having been carried out to ascertain whether the applicant was permanently incapacitated for work or not.

For a great many years, the income and property means test prevented thousands of people from qualifying for either a part pension or a full pension. Apparently, in 1954, the Government found out that some workers, by thrift, had been able to acquire either a second home or a week-end cottage and that, because of the property means test, those people were being denied pensions. It appears that the Minister for Social Services who, at that time, was the honorable member for Lowe (Mr. McMahon), had been able to convince the Government of the need to remove many of the anomalies which were operating in the social services legislation against thrift. I emphasize “ thrift “ because the word is important to my argument. To the credit of the Government of that time, action was taken by the Minister to ease the means test so that the thrifty person, upon reaching the age of retirement, would come within the range of the means test and receive either a part pension or a full one according to his or her means.

Let me say this with all the emphasis that I can employ: I do not accept the view that the Government, in easing the property means test in 1954, ever intended that the conditions associated with pension entitlement should become any worse as the result of the amendment to the act at that time. That is exactly what has happened since the present Minister has had the portfolio of Social Services. I suggest that the action of the Minister in his interpretation of the income and property provisions of the act reveals him to be a Scotsman in the worst sense of the word. He possesses all the attributes of a dour Scot in that he is mean, provocative, parochial and paltry in his administration of the act, to say the least. There is positive proof that the Minister, in applying, himself to his portfolio, has deliberately set out to reduce the standard of the base pension. Any one would think that the Minister had to pay pensions out of his own pocket. In order to show how the Minister has used and twisted the legislation to deny to pensioners increased benefits which the 1954 amendment was designed to provide, I shall make several references. Part III., section 30 of the Social Services Act provides -

  1. In the computation of the value of property . . (a) there shall be disregarded (i) the value of any property which is owned by a claimant or pensioner or by his spouse and is the permanent home of the claimant or pensioner;

I ask honorable members to note that the section says - any property which is owned by a . . . pensioner . . . and is the permanent home of the . . pensioner.

The legislation does not prohibit the division of the home into two or more parts as the Minister has done. I believe it is impossible to have a home sub-divided into flats under local government requirements unless one part is completely shut off from the other all the way up to the roof. The Minister himself admits that he has put a stop to the practice which existed some years ago of renting rooms for substantial amounts by having internal access to the other part of the house. However, as 1 see it, the intention of the Minister in 1954 was to help the pensioner who had no other form of income to qualify for a better existence than he had at that time. If the Government wishes to restrict the letting of rooms I suggest that it should amend section 30 of the act to define the Government’s intention clearly. As the act now stands, I contend that the Minister is literally robbing many pensioners of their rights while, at the same time, he is keeping closed hundreds of homes which could well be used by old people and others who are badly in need of accommodation.

Following a question which I had asked the Prime Minister (Mr. Menzies) recently with regard to pensioners structurally altering their homes to accommodate members of their families, the Minister gave me a reply which, to use his own words, showed how he had closed up the loophole which existed in the act prior to his being elevated to the Social Services portfolio. The Minister’s letter, to my mind, proves the point that I am making. In it he said: -

As you know, the value of any property which is the permanent home of the pensioner is disregarded for means test purposes. Up till a few :years ago the major factor taken into account in determining whether the whole of the building in which the pensioner resided constituted his home was whether or not there was internal access between all the rooms in the building. Experience- showed, however, that greater weight :should be given to’ other factors. This Has been particularly so since 1954 when “income” was re-defined in the Social Services Act to exclude income derived from property. The purpose of this amendment was to assist pensioners by correcting the position whereunder both the capital value of their property and the income received therefrom had been taken into account in the assessment of pensions.

This is where he puts himself in -

But the new provision highlighted anomalies which had already been caused by the rather loose definition of a “ home “ employed up till that time. If the Department looked only at the question of whether there was internal access, it is evident that the anomalies would have been intensified.

Then the Minister mentioned the possibility of landlords with big apartment houses drawing a pension while receiving rents. He went on -

On receipt of legal advice in the matter it was decided to determine cases against the practical test - “ Is the house, or part of the house, in fact the permanent residence of the claimant or pensioner? “ Where a claimant or pensioner makes structural alterations to his home to keep the tenanted portion separate from his own portion, two homes are created, one of which is the home of the pensioner and the other the home of the tenant.

But he does not create two properties. The act says that -

  1. . any property which is owned by a claimant or pensioner or by his spouse and is the permanent home of the claimant or pensioner shall be disregarded for pension purposes. It will be seen from what I have quoted that the Minister is having a bob both ways so he is sure to be on a winner. He claims to have had legal opinion on what constitutes a home. I wish that I had sufficient cash to test the interpretation, because I feel sure that the Minister is only bluffing. In 1954, the honorable member for Lowe, in introducing the amendment, used words which should leave no doubt in the minds of honorable members as to what he meant. He said -

This is a bill relating primarily to the modification of what is called the income and property means test. The effect of the application of this test is that a person may be disqualified from receiving a full pension, or, alternatively, the maximum pension payable is reduced, because of the amount of his other income or the net value of his property. Modification is desirable because in some cases the test creates anomalies, and is a penalty on thrift-

That is the point I raised earlier. He went on - particularly in the lower income groups: It is an essential element of Liberal policy that people should be given incentive to work and save, and by this means to increase the amount of property owned by them. Both work and savings are necessary if we are to ensure full employment and progress, with a reasonable level of stability for the purchasing power of money.

He further said -

The modifications of the means test in this bill provide incentives to work and savings. The amendments will make law the Prime Minister’s policy pledge of “ continuing vigorously the work of modifying the means test” to provide these incentives.

Later he went on -

To-day, the pensioner is relieved of the fear that rising prices will destroy the purchasing power of his pension and deny to him the goods and services that he needs. The pension to-day has a greater purchasing power than it did when Labour left office.

We will see about that. He went on -

In the bill before the House the permissible income for pensioners - that is, the income that may be received without reduction of pension - is being increased by 75 per cent., that is, from £2 to £3 10s. a week.

He added -

A married couple, both eligible for pensions, will be able to receive by way of income and pensions a total of £14 a week, instead of £11 as at present.

I have here details of a case where the couple cannot get the maximum base pension. The Minister went on -

The value of a pensioner’s home, furniture and personal effects is disregarded entirely.

Later he said -

A fundamental change relating to the means test made by the bill is the exclusion from the income test of income derived by a claimant or pensioner from any property owned by him or by his spouse. Hitherto, the income from property has been taken into account in applying the income test, and the capital value of the property, except where it is the pensioner’s home, has also been taken into account in applying the property test.

On 29th March, 1944, when the present Prime Minister (Mr. Menzies) was speaking on the Unemployment and Sickness Benefits Bill, he said -

The moment we establish, or perpetuate, the principle that the citizen, in order to get something he needs, or wants, and to which he has looked forward, must prove his poverty, we convert him into a suppliant to the State for benevolence. That position is inconsistent with the proper dignity of the citizen in a democratic country.

It will be seen that in this case my constituents, who are both pensioners, had a son who had resided with them all his life. He married a second time but the parents could not get on with his second wife. Without asking the son and his wife to leave home because they could not agree, and in order to maintain domestic happiness - which is the most important factor of home life - the owner partitioned off part of his home. He and his wife lived in one part and the son and his wife in another. When the inspector of the Department of Social Services saw what had happened he promptly reduced the parents’ pension by about £4 a fortnight.

Representations to the Director of Social Services were of no avail. I pointed out that the house had never been let to anybody besides the son and that the son had occupied it and had lived with his parents all his life. I pointed out also that any monetary consideration the son had given his parents for occupying the rooms could be disregarded as coming within the meaning of the act, because if it were held that the rooms he occupied should be regarded as property for means test purposes, it would mean that the parents would be virtually penalized for allowing their son to live at home.

I further stated that even if the son were paying his father £3 a week, the parents would be more than £1 a week worse off than a base pensioner. I regret to say that the Director of Social Services, in his usual unsympathetic way, rejected my representations out of hand. I then appealed to the Minister, and I shall quote from his reply to me. He wrote -

In computing the value of property for age pension purposes, the Social Services Act provides for the exemption of any property which is owned by the claimant or his spouse, and is the permanent home of the claimant.

But the Minister does not carry that out. He went on -

In this instance, the dwelling is divided into two living units, each of which is completely selfcontained. The parents occupy one unit as their home, and the other is let to a son and daughterinlaw.

The portion of the property which is occupied by the son and the daughter-in-law cannot be regarded as the home of the parents, as it is, in effect, a separate residence which is the home of the occupants. This being the case, it has been necessary to take the value of the portion let into, account in the assessment of pension.

This home was valued at about £5,000. That was a grossly inflated figure because the property is 50 or 60 years old. If that house were halved, it would mean that the owner, if a married man, would have his and his wife’s pension reduced by £4 a week. This man was not getting £3 a week from his son, but if he were he would be £1 a week worse off than a ‘base pensioner.

We have told the Minister about this sort of thing time and time again, but he simply takes no notice. If he continues to interpret the income and property means test as he is now doing, he is virtually compelling old people to keep their homes closed up, because they are afraid of losing their pensions. There is an unprecedented demand for homes by young married people and many others who would welcome the opportunity to share the homes of aged people. This in turn would help to relieve the distress of pensioners who have to rely on the base pension.

I now turn to a case in which not even a member of the Liberal Party would be prepared to concede that the Minister had done the correct thing. It is one in which the Minister ruthlessly applied the means test.

Mr Turnbull:

– You cannot call the present Minister for Social Services ruthless.


– If the honorable member will listen he might change his opinion. As a result of applying the means test the Minister denied this person a sickness benefit and also any part of the invalid pension. For many months he got nothing at all, and for the next year he received only 18s. a fortnight.

This person was a resident of Lismore. He owned his home, and worked for the Department of Main Roads. He contracted a mysterious complaint which paralysed him. It baffled the local doctors, and after some weeks he was ordered to Sydney and in March, 1958, was taken to the Sydney hospital. His complaint developed so seriously that he could not fend for himself. Neither could he say where he wanted to go when the hospital authorities determined that his condition was a permanent one and he would have to leave hospital and be placed in a home. Arrangements were made for him to be admitted to the Rossmayne Convalescent Home at Burwood about August that year. At about the same time the Department of Social Services discovered that the patient was permanently incapacitated and promptly suspended his sickness benefit in September, 1958, because he was no longer entitled to receive it. The department wrote and informed him that he could test his eligibility for an invalid pension. All the time that this was going on the man’s only daughter, who herself had a young child and husband to care for, was being compelled to pay £5 12s. a week to the convalescent home for the care and upkeep of her father besides buying him clothes and other items such as medicine, spectacles and so on.

The Department of Social Services then determined that because the father owned his home at Lismore, even though it was not tenanted, he was not entitled to an invalid pension because its value exceeded £1,750 at the time. Between September and 20th November, 1958, nothing was paid to the father of my constituent. On 20th November, 1958, the Department of Social Services excelled itself and became big-hearted following an easing of the means test. It paid the man the handsome sum of 18s. 6d. a week. This rate of pension was based on the inflated value of the home at Lismore - £1,960 - although it was situated in the flood area. I made representations to both the Director of Social Services and the Minister, but neither of them could be moved sympathetically in any way. The Minister took umbrage at the tone of the letter that I had written to him, and he ticked me off. Any honorable member may look at that letter and see whether he can find anything in it to which exception could be taken. A little later the Minister again wrote to me and said that he was pleased to think that my later letter was much better than the previous one. Although the house was valued at £1,960 it could be sold for only £1,200 at the end of 1959. The money was immediately given to the daughter who purchased a home to which she could take her father and look after him. The department became generous and increased the pension to the maximum rate, and because the sale was negotiated in August, 1959, it decided to increase the pension from that date.

Many features of this case rile me. In the first place, my constituent should never have had to pay all the money she has had to expend for her father’s upkeep. If he was not entitled to sickness benefit or an invalid pension he should have received at least some benefit under section 124 of the Social Services Act, under which a special benefit is payable to those who are not otherwise qualified. The section reads -

The Director-General may, in his discretion, grant a special benefit under this Division to a person -

who is not in receipt of a pension or allowance under Part III. or IV. of this Act or a service pension under the Repatriation Act 1920-1954;

who is not qualified to receive an unemployment benefit or a sickness benefit; and

with respect to whom the Director-General is satisfied that, by reason of age, physical or mental disability or domestic circumstances, or for any other reason, that person is unable to earn a sufficient livelihood for himself and his dependents (if any).

The statement of the Minister that when the man applied for an invalid pension in November, 1958, he did not intend to return to his home at Lismore - as he wrote in his letter to me - is little short of an insult. In the first place, the man was incapable of making out an application form for a pension because he was paralysed. Secondly, he could neither speak nor write and he had to do what others wanted him to do. Virtually, he had no choice in the matter at all. It is open to my honorable friend from Mallee (Mr. Turnbull) to go through the file to see for himself whether there is anything wrong or any reason why a person with no income at all should be denied any form of assistance-

Mr Turnbull:

– Blame the Government or the department, but do not make personal attacks on the Minister.


– The Minister is in control, and he has to bear the responsibility for what the department does. It is clear from the speeches of the honorable member for Lowe (Mr. McMahon) and the Prime Minister (Mr. Menzies), compared with the letter of the Minister for Social Services, together with the illustrations that I have given, that the Minister, by his application of the income and property provisions of the Social Services Act, is out of step with his colleagues. There is a great divergence in the views of the Prime Minister, the honorable member for Lowe and the Minister for Social Services on the same subject. Of that there can be no doubt as far as I am concerned. If the Minister is not willing to rectify the anomalies in the act as they apply to many pensioners who wish to share their accommodation with others, he stands condemned in the eyes of all decent people.

There are many other cases of applications for invalid pensions having been refused, and I want to cite one or two. The first concerns an application that was rejected by the government medical officer in Newcastle. On 7th January last, Dr. F. A. Morrison, a coal board doctor, wrote to Mr. G. R. Cressy, of Boolaroo -

I agree with Dr. Gluckstern that you are suffering from coronary ischaemia, a condition which means that your heart does not receive a sufficient blood supply when it has to perform extra work as it has to do when you exert yourself. The blood supply, however, is quite sufficient when you are not exerting yourself. Accordingly you should try to avoid any exertion which brings on tightness and pain in the chest, and should these come on at any time you should take your tablet and rest until they have gone. It is however quite safe for you to do anything which does not bring on the pain or tightness. Above all, do not sit down all day and do nothing because this would hinder you rather than help. The rest of the examination was quite satisfactory. The x-ray of your chest was normal, your blood pressure was within the usual limits and your kidneys are quite healthy.

He enclosed this certificate which he signed on the same day -

This is to certify that Mr. George Richard Cressy of Fourth Street, Boolaroo, is suffering from coronary ischaemia and is permanently incapacitated to an extent of at least 85 per cent.

Yet the government medical officer rejected this man’s claim for an invalid pension. The next case concerns a woman 56 years of age whose husband had worked until he was 67 years old and was retired through ill health - he had a heart condition. The woman was born a cripple with both feet turned inwards. Her application for a pension had been rejected because her husband’s application for an invalid pension was rejected by the department which gave him an age pension instead. For eight months this couple lived on one pension only because the woman’s application had been rejected. When I squealed to the department in Newcastle the woman was granted a pension within a few weeks. I offered to pay half her wages if the registrar in Newcastle could find any local employer who would give her work for even a month or two.

The third case I want to mention is that of a young girl who was born without control of her lower bowels. At the outset the doctor in Newcastle told this child that she could work at home if she could not go out to work, and her application for a pension was rejected on the grounds that she was not permanently incapacitated. I come now to the case of my own sister, whose application for an invalid pension was rejected. Her husband is over 70 years of age. She was operated upon by Dr. Newman at the Mater Hospital, North Sydney, and the doctor subsequently said that hers was one of the worst cases of its type that he had ever seen. I hope the Minister will look into these matters. I shall return again and give him more examples of people being denied the right to live because of the interpretation placed upon the act.


.- I am sure that everybody is thankful to the honorable member for Shortland (Mr. Griffiths) for having raised these few anomalous cases out of the many thousands with which the Minister for Social Services (Mr. Roberton) has to deal, but I do not think that they warrant a personal attack on the Minister, who, I am sure, is trying to do the best that he possibly can. In certain of the cases mentioned by the honorable member the doctors have disagreed. It is most unfortunate that they should do so. I always try to get them to agree with me. It is good to publicize these anomalous cases, but I think “ Softly, softly, catchee monkey “. It does no harm to put the cases in that way.

I have no intention of dealing with that matter, nor am I going to deal with the Budget that was brought down at the beginning of this financial year and from which supply is now being taken through for the first two or three months of next year. This is the right time to say a word about the next Budget because it should be designed for a condition of affairs in Australia and in the world far different from the conditions obtaining last year. The failure of the Summit talks in Paris following the revelation of the real attitude of the Soviet Government’s offensive mentality, and its expressed determination to let force dominate its decisions, indicates the folly of pursuing the existing pattern of Australian development. I refer to the action of all governments in Australia - particularly State governments - in encouraging by every possible means the crowding into the few big cities of our native inhabitants and migrants, and the establishment there of many of our most important key industries for both civil and defence purposes. The higher and more closely cramped these cities become the better targets they make for an attack by bombs that may rain upon them - and they can be so easily identified in the aerial pictures that are now being taken of every country, apparently from aircraft flying so high that they cannot be detected.

The time has come when we should recognize the danger which confronts our large cities. We should do something similar to what the Soviet Government has been doing for the last twenty years - decentralize our industries. The Soviet has developed internal areas of about 60,000 square miles each and has placed in those areas a certain number of its factories and industries which are necessary in peace and in war. The Soviet has found that by having such self-contained areas it has effected tremendous savings in transport costs. An added advantage is that by decentralizing its industries and population it has lessened the danger of becoming impotent in the event of a nuclear attack, because even if a number of these areas were destroyed the nation could still carry on. But if four or five of our large cities were destroyed by bombs, the whole of our manufacturing industries which are so necessary both in repelling an attack and in ourselves attacking would be gone.

When we think that the only outlet to the north of Australia from the southern States is across the Hawkesbury bridge and through the very greatly congested Newcastle area, we must realize just how vulnerable we are. If that outlet were closed, northern New South Wales, Queensland and the north of Australia generally would be practically defenceless. It is absolutely essential that we get down to the job of improving the present position. We should concentrate on decentralization. We should. ascertain whether the Commonwealth can take action of its own volition or whether it is necessary to consult and co-operate with the States. In any case, the sooner we get on with the job the better. In 1939, prior to the outbreak of the Second World War, I advocated that the Commonwealth and the States should establish a defence and development council so that the money which was available for defence could be used not only for our peace-time development but also for war purposes should the occasion arise. Unfortunately, the States would not co-operate in the plan.

The advantages of navigation to the eastern part of Australia seem to have been overlooked. Section 98 of the Constitution states -

The power of the Parliament to make laws with respect to trade and commerce extends to navigation and shipping, and to railways the property of any State.

Section 100 of the Constitution is in these terms -

The Commonwealth shall not, by any law or regulation of trade or commerce, abridge the right of a State or of the residents therein to the reasonable use of the waters of rivers for conservation or irrigation.

In my opinion the Commonwealth Government has the clear right to deal with the question of navigation. At present, practically all the rivers of New South Wales have been closed. Even the Hunter River, along the banks of which the steel industry of the State lies and which, therefore, is of great importance, is always in trouble because it is not deep enough to permit ships of any size to enter it. Other rivers in New South Wales are in similar difficulties. The Government should consider what can be done to rectify the position. If we opened the ports along the eastern and southern parts of Australia we would effect tremendous savings in the cost of production and open up vast resources which are known now to only a few geologists. We would save many millions of pounds which are now being spent on imports, and we would earn many millions of pounds by exporting our products at a competitive price.

Another factor of which we are not taking advantage is that Australia is the only island continent in the world. We have something like 12,000 miles of coastline opening on to the seas that lead to every part of the globe. If we thought about the matter carefully, we would realize that our dense population and the areas of our highest production are in a belt extending for less than 300 miles from the coast. If our coastal ports were open, we would be able to transport our goods not only overseas but also to other States. We have only to think about the position of Tasmania and the aluminium industry there. The honorable member for Bass (Mr. Barnard) has told me of the high cost involved in obtaining bauxite from overseas to keep the Bell Bay plant going, but at Inverell in New South Wales, about 100 miles from the coast, there are some 8,000,000 tons of bauxite. We should find some means of transporting it to Tasmania.

I should like to refer now to some of the undeveloped areas in Australia. Of course, the area which 1 know well is northern New South Wales where there are ample resources and the opportunity for great land development. Unfortunately, that land development is clogged and hindered to a large degree by the cost of getting goods to market. That results in the price to the consumer being high, and then the vicious inflationary circle commences. The development of a deep sea port in the area would effect a tremendous reduction in freights and would far outweigh the initial cost involved. Let us take one or two examples. I have already mentioned the enormous deposits of bauxite at Inverell which, I think, are the second largest in Australia. The largest deposits are in North Queensland where, I think, there are 10,000,000 tons. The New South Wales deposits are within about 50 miles of the hydro-electric works on the Clarence River. The engineers on the job have told me that they could increase the output to the equivalent of 1,000,000 horse-power if it were necessary to develop the deposits at Inverell.

In the vicinity is the biggest stand of virgin timber in Australia - some 3,000 square miles - about 2,000,000 acres - in one solid block. That timber is awaiting exploitation. It has been examined by scientists and specialists in paper manufacture who have said that the trees, which are close together, can produce both short and long fibre paper pulp. The paper which is now being made in Tasmania is of very high quality but it has to be reinforced by, I think, 25 per cent, of long fibre. In New South Wales we have this supply of both short and long fibre paper and I am sure that it would be possible to transport the long fibre to the Tasmanian mills for very much less than the cost of importing it. In addition, in the area to which I have referred the production of wool, wheat, mutton, lamb, beef, butter and vegetables is carried on.

Some twelve or fifteen years ago the New South Wales Government said that the northern part of the State needed development most urgently. It proposed to spend £5,000,000 to put a deep sea port on the Clarence River. The Government said it was very urgent, and it started to spend £100,000 per year on it, but if that is the rate of expenditure we can see how long it will take. I believe there is only 20 feet of water there, but if we expended sufficient money that could be increased to 50 feet. If this snail-like pace is to operate all the time we can easily have all these difficulties in the event of bombing from the air.

During World War II. I, as Minister for Commerce, was able to place emergency supplies throughout Australia so as to ensure that if the means of locomotion and transport were cut we could keep the people going. On the last occasion we had a fair amount of time in which to get ready and make our preparations, but this time war will come upon us like a thief in the night and we will have to be ready for it. Here we have this great opportunity in one place, which I have mentioned, but it is typical of what is to be found farther north in Queensland, in two or three places, and in the Northern Territory, as well as in the other States of the Commonwealth. If we were able to have all our aluminium products made here we would save something like £4,000,000 per year; and if all our paper requirements were able to be made here we would save something like £45.000,000 per annum. The paper we are manufacturing at present is worth something of the order of £30,000,000 per year, but we have to import the balance of our requirements.

As I was told in London, when I was there a few months ago, if we could send our chilled beef from the centre and most easterly parts of Australia to England by the shortest route we would be able to get our meat there, especially chilled meat, in as good condition as that from the Argentine which has only to cross the Atlantic. I was told that that would make a difference of something like 2d. or 3d. per lb. in the price received. Even an additional Id. per lb. on 10,000 tons of chilled meat would make a difference of £200,000 a year, and that would pay the interest on the cost of constructing the harbour necessary for shipment. It seems to me, therefore, that now is the time when we should get busy on this matter. I believe that we should endeavour to create a council of defence and development, including all the States in it so that they could pool their resources in order to do what is necessary in regard to not only ocean transport but also land transport. We could then decide the specific spots at which development should take place in order that it might be safe should fighting occur; and we would in that way be able not only to get ready for war but also greatly to increase our development. From my own experience I am satisfied that we could make all these things pay for themselves and thus greatly improve our economy.

Mr Griffiths:

– How long do you reckon the next war will last?


– Khrushchev said it would be quite a long war, that there would be a tremendous smash at the start, but that some would be able to keep going; and we want to be the people who will be able to keep going. However, if we continue as we are, we will be the first people knocked out, because we are throwing away our chances. Therefore, it is the height of wisdom to follow the course which I have indicated. If we do that we will solve many of our trade problems, because we will have the goods with which to negotiate with other peoples. We will also to a large degree solve the question of placing our migrants, and instead of having them hanging around the cities we will be able to place them wherever it is necessary to produce all these things. We might get New South Wales to adopt the practice that has been adopted in both Queensland and Victoria where they say to the local people, “ We will give you complete control of your own port”.

If that were done they could get on with the job as has been done in Mackay,

Bundaberg, Maryborough, Townsville and Portland, where they have good port organizations. During the last five or six years Portland has become one of our firstclass ports, simply because it has its own control. Every one realizes that when war comes we must use all our national resources to the best of our capacity. Surely we should get ready for war and do all we can to prevent war. We must do everything possible in preparation to defend this country. We should get on and do something to bring about the decentralization of industry and population so as to lessen the risk of complete damage to all our essential equipment. I am certain that if we followed such a course it would make us not merely a happy, prosperous and full employed people, but also a thousand times safer in the event of a war.


.- The bill before the House is to appropriate the millions of pounds necessary to meet the commitments of this Government until the next Budget session which will not take place until some time in August. That is a long time for some people to wait for an alleviation of their circumstances. In the speeches from Government supporters there has been no mention of putting some sort of value into pensions and other social service payments upon which a large number of people in the community depend. During this session I have listened to honorable members from both the Country Party and the Liberal Party presenting petitions to the House and appealing to the Government to do something for these people by increasing their pensions. I believe those honorable members are being hypocritical, because we on this side of the House have given them plenty of opportunity, if they were sincere, to vote for the very increases in regard to which they have presented such petitions. So. I can only say that apparently they are hypocritical. I would not dare to present a petition in this House unless I felt I could be 1 00 per cent, behind it.

I know that the Government has received representations far and wide from all the categories of people dependent upon social services to do something for them. I have had hundreds of letters from different organizations asking me to put their views to the Government. There would not be one section of the people who depend upon fixed incomes who have not petitioned me to bring their serious plight to the notice of the Government, and so I take this opportunity to do so again. It may sound monotonous to keep on repeating what we should do for these people, but it is said that the constant dripping of water will wear away a stone; so we might shift the Government in this regard at some time. The letter I am about to quote is typical of some of the letters and representations I have received. I will not read them all because it would take hours to do so. This is a letter from the Mortdale and District Inter-church Council, an organization which is interested in invalid, age and widows’ pensions and the application of the means test. It reads -

It was resolved at the last meeting of the above Council to bring to your attention the fact that it is considered that Invalid, Old Age and Widows’ Pensions are most inadequate, and to request that necessary action be taken by you to have same substantially increased, and the means test eased.

Most of these pensioners find themselves in dire need of even the bare necessities of life with little or no prospect of having some semblance of comfort without some assistance.

Trusting this matter receives your urgent and most favourable attention, and with every good wish,

Yours sincerely, Alma Peters, Secretary.

That is typical of representations that come to me, and of the petitions that are presented to this Parliament for attention by the Government. A great number of people are concerned with the petitions presented to us here. Recipients of age, invalid and widows’ pensions and allowances number about 663,000. Repatriation pensioners number 637,502. Burnt-out diggers number 43,619. People who have no income, and whose circumstances are very bad, to whom the Government makes compassionate allowances, number 496. Recipients of special pensions for people in somewhat similar circumstances number 2,187. In all, 1,346,810 people depend on some sort of pension for their sustenance.

I believe that the inflationary policy of this Government has destroyed the arrangements that many of these people made for themselves earlier in their lives, and has also destroyed all hope for them. By investment in war loans or in property and other things, many people provided for their old age, but this Government’s actions have destroyed all hope for a vast number of them. Pensions in all categories remain at the level at which they stood when the last Budget was introduced. In fact, the majority of pensions were not increased at the time of the last Budget, and since then, of course, many things have happened that have caused a very steep rise in the cost of living. For instance, there were the 28 per cent, increase in margins and the 15s. increase in the basic wage. All this has, of course, de-valued the pension rates.

These increases have certainly maintained to some degree the value of wages and salaries. At the time the Conciliation and Arbitration Commission awarded the increases it stated that the economy could absorb them without the necessity to increase prices. The commission said that productivity had increased by 14 per cent, since the previous increase of margins and that increase of productivity would enable the absorption of the 28 per cent, increase of margins. But industry, to the contrary, did not absorb the cost of either the margins increase or the basic wage increase. It simply added it to the prices that the consumers had to pay for commodities. So nearly 1,500,000 people who depend on pensions had their pensions decreased in value as a result. The people who fix the prices to be paid by consumers for commodities had no right to pass on to the consumers the cost of paying the increased margins and wages.

Recently, the Treasurer (Mr. Harold Holt) issued a White Paper on this subject. He talked of measures of restraint, and said -

The position reached at the beginning of 1960 was not critical but it held a threat of serious instability if certain trends were allowed to develop further.

He added -

The worst of these was the price and cost movement.

This situation should not have come about because the commission said that increased productivity could absorb the wage and margins increases. The Treasurer also said in the White Paper -

In assessing the position during February, the Government had to take these two aspects into account. If the Conciliation and Arbitration Commission were to grant an addition to the Federal Basic Wage, this would represent a third general wage increase, following two others of considerable magnitude, within twelve months. It wasbelieved that it would add further to demand and push prices and costs up still faster.

There we have the position. The Government allows the value of increases rightly awarded to wage and salary earners to be offset by increases in the prices of consumer goods. Then, because of the position that arises, the Government goes before the Conciliation and Arbitration Commission and pretty well tells it that, irrespective of what the evidence may be, it does not want the commission to increase wages. This was absolute intimidation. On the one hand we have the Government blaming increases of wages for the position, and using intimidation on the commission to prevent wage increases, while on the other hand it takes no action about increases in prices.

Already, as I have pointed out, many organizations have approached the Treasurer in connexion with their needs. Deputations have come to Canberra on behalf of age and invalid pensioners and of exservicemen’s organizations. Representatives of the organizations covering maimed and limbless ex-servicemen and civilian widows have also been here, as have representatives of the organizations for totally and partially blind people, totally and permanently incapacitated pensioners, and other people who rely on fixed incomes. Another group has been making representations to the Government about the means test.

I should like to examine some aspects of social service payments that are causing hardship, and which I think the Government should adjust immediately. Some of my colleagues have spoken of these matters. Some of them mentioned the property means test. We have had instances of pensioner couples and single pensioners partititioning off portions of their homes for letting, so as to augment their small pensions. As soon as the Department of Social Services finds out about this it immediately decreases the rate of pension payable. I believe that that is quite wrong, because under the Social Services Act it is permissible for a pensioner couple to have an income, apart from pension, of £7 a week. If an old couple can re-arrange their home to earn some money for themselves, they should be allowed to earn money in that way up to £7 a week, without affecting their pensions. The Government could easily adjust this anomaly and alleviate the distress of many pensioners who are trying to help themselves in an honest way.

Another anomaly that should be corrected concerns the supplementary rent allowance. I believe that an age or invalid pensioner living alone and paying off a -home should receive the benefit of the supplementary rent allowance. The paying of instalments to buy a home or liquidate a mortgage should be regarded as ‘being in the same category as payment of rent. The law provides that a single pensioner living alone and paying rent is eligible for the supplementary rent allowance. The Labour Party held that this allowance should be paid to all pensioners, but the Government would not accept an amendment to that effect. I know of a widow who is paying £2 15s. a week on a mortgage that was contracted by her husband. When he died, all she had was the pension of £4 15s. a week, but if she is to retain the house she must pay the £2 15s. a week on the mortgage. In addition, she is responsible for rates and insurance on the home. She pays water and municipal rates of £1 a week and insurance at the rate of 5s. a week. Her payments on the home total £4 a week, and this leaves her with 15s. a week out of her pension. I ask the Minister for Social Services (Mr. Roberton) to amend the act so that people in a similar position to this lady will be able to receive the supplementary allowance of 10s. a week.

I wish to speak also about the pensioner medical service. This has been mentioned before, but if we keep repeating it, the Government may take some notice. I asked the Minister for Health (Dr. Donald Cameron) several questions about this matter, but he did not seem to be familiar with the provisions of his own legislation. There are certain anomalies in the scheme and they are hurting people. I wish to refer to hospital attention for aged and invalid pensioners, the chronically ill and certain others who are not pensioners. When people apply for a pension, they are told in all good faith by officers of the Department of Social Services that they need not contribute further to a hospital benefits fund because, as pensioners, they would be entitled to free attention in a public ward of a hospital. If they can obtain admission to a public ward, they would receive this attention. However, these pensioners stay at a hospital for a while and are then advised that, as they are chronically ill, the hospital can do no more for them and they are asked to find other accommodation.

The only other accommodation that they can get, in view of their need of nursing, is in an institution such as a convalescent home. However, on admission to such an institution, they are told that the charge will be £12 or £13 a week. If they are contributing to a hospital benefits fund on a scale providing for admission to an intermediate ward, they would receive the Commonwealth benefit of £1 a day or £7 a week. They have been advised by the Department of Social Services not to join such a fund because they are entitled to free hospital attention, but they then find that they must join a hospital benefits fund and wait the required two months to qualify before they receive the Commonwealth benefit of £1 a day. In my view, the Commonwealth benefit should be paid at all times to these pensioners, whether they are members of a hospital benefits fund or not. Surely a health or hospital scheme that is worthy of the name should cater for the aged and the chronically ill. After all, they are the people who need such a scheme.

Another matter I wish to bring to the notice of the Government concerns the means test that is applied in the pensioner medical service. Before 1955, all pensioners, irrespective of their means, received free hospital and medical benefits.

Mr Cope:

– The right honorable member for Cowper, who has just spoken, changed that.


– Yes, the right honorable member for Cowper (Sir Earle Page) was the Minister for Health at the time. He introduced a means test and, since 1955. any pensioner with an income in excess of £2 a week has been denied free hospital and medical attention. A single pensioner who earns £2 Os. 3d. a week is deprived of these benefits, but his income of £2 Os. 3d. with the pension of £4 15s. totals only £6 15s. 3d. a week.

Mr Cope:

– This applies only to about 12 per cent, of pensioners.


– That is true. This means test should be removed, and all pensioners receiving up to the permissible income should be allowed hospital and medical benefits without being required to pay into a benefits fund.

Another matter I wish to mention - this [has been brought to the notice of the Government on many occasions - concerns the wife of an invalid pensioner. Her allowance has stood for many years at the present rate. I do not know why the Government has fixed this figure, but it applies also to the wife of a repatriation pensioner. The amount is 35s. a week. If a worker in industry becomes an invalid, he is entitled to an invalid pension of £4 15s. a week and his wife receives only £1 15s. a week, making a total of 6 10s. a week. The husband is sick and the wife must stay at home to nurse him. She cannot go to work and receives only 35s. a week. I believe that these wives should be treated as pensioners and should receive the full pension of £4 1 5s. a week. The Government should give attention to this matter when it is considering the next Budget.

Then we have the civilian widows. They recently made representations to the Government. Their pension is still very much below an adequate rate, because of the existing inflationary trend. The class A widow, with three dependent children, receives £5 a week, with 10s. a week for each child. How could a widow in these times exist on such a small income? The class B widow receives £4 2s. 6d. If she is unable to go to work, she must do her best to exist on that very small amount. Then we have the wives who have been deserted by their husbands or whose husbands have been sent to prison. They also receive £4 2s. 6d. These rates should be revised and brought more into line with the present cost of living. The unemployment and sickness benefits still stand at £3 5s. a week. If there is a wife, she receives £2 7s. 6d. a week, and a further amount of 10s. a week is paid for a child. A husband, wife and one child are epected to live on £6 2s. 6d. a week. But it is almost impossible in these times to rent a house for less than £4 a week.

I refer now to child endowment. Recently members of the Australian Country Party presented petitions praying that the Government increase child endowment. The rate has not been increased since the Australian Labour Party last increased it, before this Government came to office. Certainly, this Government granted 5s. a week for the first child in 1950, but nothing has been done since then. We believe that the amount should be increased in keeping with the policy of the Australian Labour Party. If we look at these matters objectively, we find that a means test applies to every social service benefit except child endowment and the maternity allowance. I mention also that maternity allowance is another social service benefit that has stood at its present level for many years. In the war days when the Australian Labour Party was in office it increased the maternity allowance to its present level of £15 for the first child, £16 for the second, and £17 10s. for the third or subsequent children. The purchasing power of those amounts is very much below what it was when they were fixed by the Labour government for the benefit of the mothers of families.

Last but not least, we come to the funeral allowance, which has stood since 1943 at £10. This is all that the present Government will pay towards the cost of a funeral for a pensioner. I believe that this benefit should be increased four-fold at least in order to bring it to anything like the cost of a funeral at the present time.

With respect to social services generally, it is interesting to turn to what was said by the present Prime Minister (Mr. Menzies) in his policy speech for the general election of 1949, while he was still in opposition and shortly before he became Prime Minister. Many representations have been made in this House from time to time for the removal or easing of the means test. Speaking of the means test in his policy speech of 1949, the present Prime Minister said -

Australia still needs a contributory system of national insurance against sickness, widowhood, unemployment, and old age. It is only under such a system that we can make all benefits a matter of right, and so get completely rid of the means test.

During the new Parliament we will further investigate this complicated problem, with a view to presenting to you at the election of 1952 a scheme for your approval. Meanwhile, existing rates of pension will, of course, be at least maintained. We will, much more importantly, increase their true value by increasing their purchasing power.

That is another promise that has never been honoured. The means test has been neither eased nor eliminated. No move has been made to honour the promise to put value into pensions - a promise that was made by the present Prime Minister in his policy speech. The purchasing power of the various social service benefits is less to-day than it was then.

I turn now to repatriation benefits. I know that the bodies which represent exservicemen have sent representatives to Canberra to make representations to the Government on this matter. I myself have received deputations from those organizations. The rates of repatriation pensions to-day are very much lower than they should be, and the ex-servicemen’s organizations are making modest approaches to the Government seeking increases. I hope that the Government will give proper attention to these pensions in framing the Budget and that increases will be provided for. The Prime Minister was very vocal on this subject, also, in 1949. He said -

Repatriation remains a great and proud responsibility.

He said that the present Government parties contained a majority of members and an overwhelming majority of new candidates who were ex-servicemen, and he added -

We shall see to it that there is speed, financial and human justice and understanding in our administration of soldier problems.

Despite that promise made by the Prime Minister, repatriation pensions have lost their value. Their purchasing power has decreased considerably.

The crux of the whole problem is everrising prices and costs. The Prime Minister was very vocal on this matter, also, in 1949. He said he believed that the problem of prices was serious, and that his greatest charge against the financial and economic policy of the Labour Party at that time was that, although it had paid a good deal of attention to increasing the volume and circulation of money, it had largely neglected the problem of what and how much that money would buy. One can see how absurd is such a statement coming from the leader of the present Government. He said, in 1949, that he believed that a production policy which he had discussed earlier in his speech was of the essence in prices control. We know that that is completely wrong, because whatever policy this Government has been pursuing in relation to inflation has been a complete failure. We know that under the Labour Government prices control was imposed under the National Security Regulations, and that the cost of living was lower in Australia than in any other country. In 1948, the Labour Party tried to get authority for permanent prices control by the Commonwealth, but the present Prime Minister led his followers out on the hustings and advised the people to vote against Labour’s proposal because he had a production policy that would meet the situation and there was therefore no need to control prices.

Mr Cope:

– He said that healthy competition would keep prices stable.


– Yes, but we find that with respect to airlines, where there is healthy competition, this Government tries to destroy it. The Government is doing all that it possibly can to cripple TransAustralia Airlines - the national airline - which is the only competitor of the big private airline. So, this Government does not believe even in its own policy of free competition.

I take this opportunity, Mr. Deputy Speaker, to appeal to the Government to have a look at the social service benefits that I have mentioned this evening and to put value back into them as it has been promising for some time to do.


.- Mr. Deputy Speaker, it is expected that within the next 24 hours the House will go into recess, leaving still to be taken some urgent and, I believe, quite important decisions, particularly in the field of the allocation of radio frequencies involving services of two kinds.

Mr Bryant:

– Hear, hear!


-I am glad to hear the chorus of support from the Opposition. Among those looking for a decision by the Government on these important matters will be some 3,000 Australian amateur radio operators, to whom the honorable member for Mitchell (Mr. Wheeler) referred earlier this evening. Another group waiting for a decision by the Government will be those who are anxiously awaiting the outcome of applications before the Australian Broadcasting Control Board for licences for television stations, and beyond them are the tens of thousands of country people who are looking forward to the commencement of country television services.

At the risk of being tediously repetitious, I want to mention once again the position of the Australian amateur radio operators. For more than twelve months, strong and consistent representations have been made, both in and outside this House, to the PostmasterGeneral (Mr. Davidson). A good deal of quite pointed criticism of the administration of the Postmaster-General’s Department has been offered, and in my view none of the questions asked on this subject has been adequately answered. I do not want to repeat in detail the story of the last twelve months. I know that the House is generally aware that, almost twelve months ago, the members of this Parliament were given in quite specific terms an undertaking by senior and responsible officers of the PostmasterGeneral’s Department - an undertaking which in my view has been repudiated, even if only by proxy for the moment. The PostmasterGeneral holds that there has been no repudiation of that undertaking, but that is simply because a decision has not yet been taken by the department. Since the Minister says that there has been no repudiation, 1 understand that he does not like the sound of the term, and I therefore hope that the undertaking will be honoured.

In this matter, Sir, I am concerned not least for the Minister himself and for the sort of advice which I believe he has received from senior officers of the PostmasterGeneral’s Department. I want to illustrate this by reference to some departmental letters signed by the PostmasterGeneral which have recently been sent to members of the Parliament who had made representations on this subject. It is only a week or two since I questioned the Minister in this House and asked him was he aware of the undertaking by officers of the department that, failing any alteration in the reservations of frequencies for amateurs at the Geneva conference of the International

Telecommunications Union, the Australian reservations would not be altered. The honorable gentleman said that he was well aware of the undertaking.

At this juncture, I should like to read to the House a paragraph from a letter which was recently received from the Minister by an honorable member. It is in these terms -

The assurance which it is implied was given to Members of Parliament by officers of the Post Office, in May, 1959, was in reply to a question concerning the attitude likely to be adopted in Australia if the proposals for alteration of the 14-14.35 Megacycle band were negatived by the Geneva Conference. The relative proposal was withdrawn and consequently no change will be made in the band concerned.

That was brought out as though it disposed of the whole matter; but of course the clumsy attempt to suggest that the undertaking referred to only one of the several bands available to amateurs will not hold water. One is surely entitled to question the use of the term “ implied “ because I can assure you, Mr. Speaker, that in my memory, and in the very lively memory of other members on both sides of the House, there was nothing implied about the undertaking. It was quite unequivocal.

When one goes further into this matter, it is noticeable that letters from the Postmaster-General on this particular subject have continued to repeat the story that the Australian amateur is not worse off than his American counterpart in the availability of frequencies and in general conditions. I have made one effort to indicate that this is demonstrably untrue, and I do not know what you have to do to carry the point, because the fact is that all these reservations are on the record, and any honorable member who cares to add them up will see without doubt after five minutes of simple arithmetic that the Postmaster-General’s story is just not true. Why he continues to send out this sort of letter I, for one, will never understand. In one letter, the Postmaster-General stated - . . bearing in mind that Australian amateurs, numbering approximately 4,000, will have substantially the same frequency space for their use as do their 200,000 brother enthusiasts in the United States of America. . .

Now, this is one of those cases where simple proportions do not hold. It is not right to say that 200,000 amateurs in America ought to have 50 times the space available to Australians because, in fact, they all operate within the same narrow frequency band. But the operative words of that correspondence are contained in the phrase “ have substantially the same frequency space “. If one is going to examine this proposition, it would be better to look perhaps at the three top bands - the lower frequency bands - which are most used for international and interstate communications by the Australian amateurs. In the field of 1.8 to 2 megacycles, the Americans have 50 kilocycles width and Australians have none. In the field of 3.5 megacycles, the Americans have 500 kc. and the Australians 300, and in the field of 7 megacycles the Americans have 300 and the Australians 150. We therefore have 450 kilocycles against America’s 850. If the proposals now under active consideration are put into operation, the total difference will be even greater. Whereas the figure will remain at 850 in America, because these reservations continue, in Australia the figure will be 300, which is just a little more than one-third of the American reservations. How. in the light of these figures, the Postmaster-General is able to say we are not substantially worse off than the Americans is something I cannot understand.

Sir, if I am to continue on this theme perhaps T should quote a little further from one of the Postmaster-General’s letters, because he has been particularly careful to cite some sections from the report of the late Mr. John Moyle, who was sent abroad at the expense of the Australian amateurs to be an observer with the Australian delegation. It was a very good thing that Mr. Moyle was sent abroad and admitted to the delegation by the Postmaster-General. But when Mr. Moyle wrote his report it was to say -

I only wish every amateur could have been present at least part of the time. First let me say that the amateurs received an excellent hearing at every level of the conference and a very fair hearing at that.

The Postmaster-General is prepared to quote this extract to prove beyond doubt that the amateurs of Australia had a fair deal. That is plain dishonesty, because the fact is that Mr. Moyle’s report, which I have had the pleasure of reading, referred to the treatment given to the amateurs throughout the world as an international service internationally recognized by the International Telecom munications Union conference. What I am complaining about is not the attitude of world powers to the amateurs; I am concerned about the fact that this sort of treatment can be given on an overall basis, yet in Australia our administration is niggardly, mean and incompetent to a point where it has threatened to cut the reservations of Australian amateurs. That report does not deal in any way with the Australian situation.

For my part, I have said before, and I am prepared to say again, that I would have little confidence in the handling of this very important problem by people who are prepared to mislead their Minister in the way I have indicated in quoting from the Minister’s own correspondence.

This leads me to another closely related matter. It deals with the special committee the Postmaster-General has promised to set up to deal with the question of frequency allocation and use in Australia. I find myself hoping beyond hope that this committee will solve the problem of the efficient use of communication channels in Australia because on its decision might well depend the value that Australians will get from their possession of radio frequency channels, and it might well decide whether television will operate, not just in the immediate future, but perhaps for all the future. I want to repeat that the job should have been done many years ago by the agencies responsible for this work - the PostmasterGeneral’s Department on the one hand and the Australian Broadcasting Control Board on the other. It may seem idle to say at this stage that the job should have been done years ago, because that is water under the bridge, and I would not mention the matter except to underline once again my belief that the department has not dealt with this enormously important problem with the competence that we in this Parliament, and the people, are entitled to expect.

One of the most important questions to settle in the immediate future will be whether television in Australia in its next and succeeding phases will use frequencies in the very high frequency band, as it does now, or move to the ultra-high frequency band proposed in some quarters. The present technical inquiry on which the Australian Broadcasting Control Board is engaged is, in the first place, rather an odd creature. The main job of allocating all frequencies in this country should belong to the Postmaster-General’s Department, but already some part of the PostmasterGeneral’s responsibility has been usurped by the Australian Broadcasting Control Board to the point where the PostmasterGeneral’s Department is going along to give technical evidence before this body which is almost one of its own creation. That is bad enough, but although I have not had a chance to read in detail the technical submissions that have been placed before the board - because there is an enormous amount of reading and study involved - one thing emerges. It is this: The general concensus of opinion is that Australia, for the future, can find the channels it needs in the very high frequency section of the band. The only persons who disagree with this general contention are those in the Postmaster-General’s Department. I should like to know why that department has delayed so long in reaching a decision on this point and in notifying the Government that we might be heading for deep water. Perhaps I should quote from an extract taken from the submissions of the Postmaster-General’s Department -

The adoption of a liberal plan for development of our TV system would therefore leave no option but to use the channels in the UHF band. In this event, it would be necessary to allocate UHF channels to all future stations, except to any additional stations that are to be established in capital cities in the near future . . It would be preferable for changes to be made now.

I believe that the decision to begin on V.H.F. alone was, perhaps, a mistake. But having gone that far, and committed ourselves to V.H.F. in the cities perhaps we should see what the effect will be if the recommendations of the PostmasterGeneral’s Department are accepted. On the coast, on either side of Sydney where V.H.F. is operating, there are two important centres of population - Wollongong and Newcastle. In Newcastle alone there are about 14,000 television receivers capable of responding only to signals on the V.H.F. band. If the Postmaster-General’s Department’s recommendation were accepted and Newcastle stations went on to U.H.F. this would mean one of two things: Either the 14,000 people would have to erect new aerials and buy adaptors for their receivers to receive U.H.F. signals or, perhaps, have their sets rebuilt; or, instead of spending the £30 or £40 required to modify the sets, the 14,000 people in Newcastle might prefer to put up with a somewhat indifferent or variable signal from Sydney stations in which case the economic future of the Newcastle licensees would be threatened.

A consequent event will follow from this: It is well known, technically, that the U.H.F. transmitters are not nearly as efficient as those now operating. Consequently, they will give a smaller coverage. Therefore, if U.H.F. is to be used in the country, increasing numbers of people in country areas may never get a satisfactory television signal. Therefore the ultimate effect of this will be felt almost completely in the country areas. It may well be that this picture ought to be reversed - that preparations ought to be made to shift the capital city stations on to U.H.F., reserving the more efficient V.H.F. for country areas. This would have to be done by having the metropolitan stations radiate their programmes on two frequencies over a long period in order to allow present owners of receiving sets to change over as their sets become obsolete.

I am not canvassing that as a solution to the problem. I am. merely trying to highlight to the House, to the Government, and perhaps to the people, the enormous costs in this field when a mistake of this kind is made early in the service. Therefore it becomes of prime importance that we should settle this question of how many V.H.F. channels can be made available in Australia. Some technical authorities have submitted, with plenty of evidence to back their contention, that if we could get twelve or possibly thirteen V.H.F. channels in Australia we would have enough for an overall competitive national service for many years to come, with the hope that, in the meantime, the efficiency of U.H.F. transmission will have been improved.

I think that we have to address ourselves to two problems: We have to decide how many V.H.F. channels can be made available and, consequently, how many of them we will want. There is a great deal of loose talk going on in the country about having a transmitter at this town and some other town with a small population. There is a problem of economics to be solved before we can scatter television transmitters all over the landscape. It may be that the multiplication of transmitters for television will be so uneconomic as to be impractical. I believe that either that problem should be solved or some clear ideas developed on it before we proceed much further.

It is said that we can probably get twelve or thirteen television channels. This will require some rearrangement. In the first place, that section of the V.H.F. spectrum previously reserved for frequency modulation broadcasting may have to be taken. 1 do not suppose that that would be a particularly great loss because, if we are competent to broadcast television on U.H.F., it would be equally competent for us to broadcast sound on the same frequency. So these additional V.H.F. channels can be secured for television and we can shift frequency modulation broadcasting into the U.H.F. band if we need to do so. We would also be involved in shifting the D.M.E. - distance measuring equipment - installation of civil aviation. I am reliably informed that the cost of moving D.M.E. out of its present location to clear the way for additional television channels might be £400,000 or £500,000. Once again, this illustrates the enormous cost of a mistake made in frequency allocation. Here, patently, is a mistake that has been made only in recent years because somebody did not see our television requirements far enough ahead. The result is that either we must lose some valuable V.H.F. television channels with enormous and continuing cost to the country, or we correct this error at a cost of £400,000 or £500,000.

If we are going to shift D.M.E. it will be shifted at the public expense. Some public authority such as the Department of Civil Aviation will have to take care of that. If that is not done, the cost to the general public in the modification of television aerials and television receivers may well be three or four or five times that amount. So it is not exactly an uneconomic proposition to move the civil aviation measuring equipment and provide additional V.H.F. channels.

So, the importance of the work of this new committee will readily be seen. It must resolve this clash of opinion between the Postmaster-General’s Department and the bulk of the alternative views put before the Australian Broadcasting Control Board. But if we accept the Postmaster-General’s Department’s proposal, we are headed for the same sort of situation that developed in the United States of America in 1948 which caused the authorities to freeze all television licence applications for a period of four years. It meant the setting up of a congressional committee and of a Television Allocations Study Committee to which I will refer in a moment.

I want to come back to this special committee. I do not want anybody to believe that I am not in favour of it. I think it is time that we had a competent and thorough look at this problem. But this is not the most satisfactory solution for these reasons: Until very recently the Frequency Allocation Sub-committee dealt with the problem of frequency allocation. That committee advises the Telecommunications Advisory Committee, which body, in turn, advises the Postmaster-General’s Department. Now we have the Broadcasting Control Board starting an inquiry and, over and above all these things, we propose to set up an additional committee.

Two propositions emerge from this situation: One, I believe, is proof that the Broadcasting Control Board and the Postmaster-General’s Department have singularly failed to discharge reasonably their obligation. Because the Broadcasting Control Board, over a period of five years, has failed to do a job which it acknowledges as its responsibility, there has been great delay in issuing licences for country television in stage three. This should have been done months ago but it was only in the middle of hearing applications that it became abundantly clear that the job could not be done without a technical inquiry. So the Broadcasting Control Board launched an inquiry which it should have conducted long years before. If the Government now< sets up this additional committee promised by the PostmasterGeneral’s Department, it will hardly be competent for the Broadcasting Control Board to issue licences on recommendations coming out of its own inquiry, because if it does it will surely prejudice the overall consideration of this great and important problem by this special committee. I would be very glad to be informed that I am wrong but, as I see it, that will be the position. Therefore, the setting up of this new committee will impose on the Government and the board the necessity to wait until its findings and recommendations are available before it can issue television licences for stage three. To the prolonged delay and the unduly prolonged hearing of applications, created by the Broadcasting Control Board’s need to have a technical inquiry, there is now to be added this further delay. It may be that we will not see recommendations for licences for country television before the Government before the end of the year. But, as I say again, I hope that the Postmaster-General can show me that I am wrong in that contention. Nothing much has been said about this special committee. We do not know its terms of reference; we do not know who will be on it and I doubt whether the Postmaster-General knows that at this stage. But it will be a short-term committee dealing with a long-term problem, and therefore it will have some limitations. Nevertheless, as this seems to be the quickest way of dealing with a tremendous problem, I hope that the Government will deal with this matter quickly, set up the committee expeditiously and put it to its essential task of producing some order out of near-chaos,

A moment ago I mentioned that when faced with a problem similar to this in the United States, the same sort of organizations in that country which will be co-opted by the Postmaster-General - that is, trade organizations, scientific people and so on - set up a Television Allocations Study Committee. That committee’s work is supplementary to that of the Federal Communications Commission. It has been set up for a period of three years and it recently issued a report of not less than 730 pages of intensely technical material. This gives us some indication of the magnitude of the problem before us. I say again that I do not believe that a job of this magnitude and all the difficulties presented by it can be dealt with on an ad hoc basis. I should like to know when we propose to stop temporizing with this problem and separate the control of this great section of the Postmaster-General’s present responsibilities - for reasons well stated by the honorable member for Mitchell (Mr. Wheeler) earlier this evening - and put them in the hands of a responsible, completely independent organization which is impartial and not controlled by users of radio frequencies.

The important point about all of this is that we have a continuing problem; one which changes its very shape, magnitude and kind as the years go by. And as we see more and rapid technological development in electronics, unless we in this country set up a competent, long-term body to deal with every aspect of this problem as it develops, we will not merely get ourselves into a complete mess but into a mess from which we will not be able to extract ourselves.


.- I bring to the notice of the Minister for Immigration (Mr. Downer) the imbalance between the sexes that is developing in the population of Australia. Last week representations were made to me in Adelaide by people who are very concerned about this circumstance which is creating great difficulty in the four States mainly affected. I am sure the Minister will be understanding and sympathetic in respect of the problem . According to recent figures of migration to Australia there has been a slight correction of the problem, but it has not been sufficient to have a very material effect. We need greater emphasis to be placed upon balancing the sexes in our migration policy to deal more effectively with this problem.

According to the “ Year-Book “ for 1959, which is the latest available to me, the population of Australia consisted of 5,029,275 males and 4,922,141 females. That is an excess of 107,134 males over females, which is a considerable number. In the year 1958, the increase of females over males who migrated to Australia was only 6,040; and honorable members will appreciate that it would take a considerable time to correct that very anomalous position by way of natural increase. In New South Wales and Victoria the position seems to be satisfactory, but in the other four States it is very unsatisfactory. In South Australia, the State to which I have the privilege to belong, the population consists of 459,522 males and 448,470 females. That represents a majority of 11.052 males. In the last year for which statistics are available the population of South Australia increased through migration by 11,547 females and 10,240 males, an excess of 1,307 females over males. At that rate, it would take nine years to overtake the excess of males over females in that State. The number of females is fewer than that of males by 33,478 in Queensland, by 19,129 in Western Australia and by 13,091 in Tasmania. The problem of achieving a balance in population by way of natural increase through marriage and families is by no means unimportant, and we should not be indifferent to it.

The earnestness of the representations made to me in Adelaide clearly indicated how seriously people in the Australian community regard this matter. I hope that the Minister and the Cabinet will give serious consideration to this problem when dealing with migration policy and that efforts will be made to bring males and females to this country in proportions that will effect a better balance. This would result in a greater development of home-life, a better fulfilment of the obligations of citizenship, and a greater natural increase of population. I submit with much earnestness and feeling the representations that have been made in that way to me, and in discharging my obligation to bring them before the House and under public notice I trust that the Minister and the Government will seek to mould their policy so as to correct that anomalous position.


.- At this hour I do not propose to detain the House very long, but there are one or two matters that seem to call for some comment. Once again, the Leader of the Opposition (Mr. Calwell) has made great play with inflation. He realizes, as we must all admit, that the weakest point in this Government’s administration is its policy towards the progressive deterioration in the value of the Australian currency and the ensuing price rises, and all the other distortions that come with inflation. To what extent any country can develop at the pace we have been attempting without inflation is open to great question. The Leader of the Opposition performs no great service in merely attacking the Government because it fails to cope with the problem. If he is to perform any useful service in this respect, he should produce a policy to combat inflation.

The honorable member for Melbourne Ports (Mr. Crean) replied to an interjection of mine that it is the business of the Government and not of the Opposition to contain inflation. If the Leader of the Opposition is to make any impression on the country in his claim that he would be able to cure the situation he will have to produce a policy setting out in concrete form the measures that he proposes. Indeed, the honorable gentleman is in a strong position to perform a public service in this respect. He has at his disposal, if he likes to seek it, expert advice from many people competent in these matters who are themselves most concerned about inflation. If the Leader of the Opposition, instead of making so many off-the-cuff statements ad lib about a multitude of miscellaneous matters, took time off to study the problem and produced a consistent policy to cure inflation he would be doing the country - and probably himself - a little more service.

Mr Uren:

– What about the suggestions of the Deputy Leader of the Opposition?


– He has been given some advice which he read out in the course of his speech this evening. I only wish the Deputy Leader of the Opposition (Mr. Whitlam) would take still more interest in these matters and give his personal opinions, instead of producing second-hand material. However, his remarks this evening certainly indicated a move in the right direction.

In this debate mention has again been made of pay-roll tax. It is all very nice to talk about the “ iniquitous “ pay-roll tax, or about any tax. After all, all taxation is unpleasant and could well be dispensed with but for pressing necessities. If payroll tax were abolished, as has been suggested, the revenue lost could be made up by increased company taxation. But that changes the incidence of taxation. Although it might be said that pay-roll tax is unfair in its incidence because it affects mainly big companies with large pay-rolls and State public authorities, the fact is that equivalent taxation on companies would shift the incidence of taxation, and many of those who now lend general support to the idea of abolishing pay-roll tax would not enjoy paying the equivalent in another form.

A number of honorable members have already made play with the complicated nature of these bills under consideration, and they have criticized the difficulty in eliciting to what extent we have or do not have a real surplus. In this matter the Government is the victim of circumstances. Two basic facts lead to this rather muddled accounting. One is that if the Commonwealth Government borrows for other than defence purposes it has to submit its claim to the Loan Council. Therefore, it has to resort to this particular dodge of charging extra defence expenditure to the Loan Fund. That is the hard fact with which the Government has to deal. The other reason is the provision in the Constitution by which any surplus Commonwealth revenue has to be returned to the States. In a complicated system of financial provision for the States that was never envisaged when the Constitution was drawn up this provision is archaic. However, it is there and constitutionally binding, so that measures have to be taken to get around it. The only possible way is the present method. If honorable members do not like that way it is open to them to suggest a better and clearer method of setting out the accounts.

The honorable member for Chisholm (Sir Wilfrid Kent Hughes) and others complained about the way the States are treated, how easy money comes to the Commonwealth and how difficult it is for the States to get money. All this is very true and well known, up to a point, but the fact is that the majority of States do not wish to get rid of uniform taxation which, with the consequences that flow from it, results in the net effect in transferring resources from New South Wales and Victoria to the other States. In practical terms there is almost no chance of reversing this process. If we did not have uniform taxation we would be obliged to have a grants commission on such a large scale that the smaller States would still be dependent on the revenue provided by the Commonwealth. If the money were not distributed under uniform taxation it would have to be doled out in another way. It is inevitable that in the process some financial sovereignty and sense of responsibility are lost to the States. This consequence arises not through any governmental action or inaction but as a result of the general feeling of the Australian people that education, social standards and other things should be reasonably uniform throughout the continent. If we are to transfer resources from the more populous States to the others - a process by and large supported by all Australians - we cannot have a system in which each State is completely sovereign financially. Everything flows from that basic proposition.

The Deputy Leader of the Opposition has complained about the Government’s alleged policy of interference with the decisions of the Conciliation and Arbitration Commission. The fact is that the decisions of the commission do not limit the level of wages - they only set the standard which is applied quite widely. If the basic wage is not to be raised there would have to be rigid controls over the whole profit-making operations and other activities of private enterprise, which would have to be limited in some way. However, it is essential to realize that the decisions of the commission do not place a ceiling on wage levels. In fact, very few wages are as low as the basic wage. This also is something which is inherent in the system. If the honorable member for Werriwa suggests that there should be a vast increase in expenditure on public services of one kind or another he should tell us in detail how he proposes to bring about the result which he desires. If we increase taxation in a free enterprise economy such as we have, it is very doubtful whether we can devote a higher proportion of our resources to investment because the people of Australia will not willingly submit to any reduction in their standards of consumption. It is only by reducing consumption or by reducing private investment that you can free the resources necessary to carry out all these public works. If you reduce private investment in order to increase public investment you will inhibit development in other directions.

The high interest rates which are involved in the present expansion of private enterprise are very largely a by-product of inflation. The land boom and speculation in other spheres to which honorable members opposite have referred flow basically from the inflationary trend. Undoubtedly, the main cause of the inflationary trend is our attempt to develop in some directions at a faster rate than we are able to maintain. We do not develop any quicker by pressing ahead in any particular direction. We cannot increase our resources in that way. On the contrary, we get distortions and lack of facilities in many sectors of the economy.

If the process which has been advocated by the Deputy Leader of the Opposition were implemented, rigid control over the economy would result. There would have to be direct control over consumption and investment. I realize that the honorable member would not shrink from imposing those controls but, under the present system, it is extremely doubtful whether they would produce the resources to do the things which he wishes to do. It is all very well to point to some spectacular luxury expenditure, but coupled with that luxury expenditure are the incentives of many of the most dynamic elements in the Australian economy. If they are seriously tampered with, the pace of Australia’s development in every direction will be reduced.

The case which has been put up by the Opposition, therefore, does not amount to very much. It can only make sense if rigid controls are imposed on the Australian economy and if the standard of consumption of the Australian people is rigidly curtailed. But the people most certainly will resent that. If this policy were implemented, it would result in further dislocation of the economy and would stimulate still further the inflationary process. Until the Opposition produces a clear-cut policy indicating what it proposes to do to stop inflation, it is useless for it to continue to make irresponsible charges against the Government.

Sitting suspended from 11.34 p.m. to 12 midnight.

Thursday, 2 June 1960


.- Towards the end of this discussion on the supplementary estimates the question has been put fairly clearly by the honorable member for Wentworth (Mr. Bury) as to what the Labour Party was doing about inflation, and at this late hour I would like to devote a little time to answering that question. In order to answer it, it is necessary to realize that the way in which any of us looks at the economy involves a certain kind of economic theory. The theory that the Government has accepted as its way of looking at the economy is what is known as the Keynesian theory. This came into fashion after December, 1935. Ever since then conservative people have thought of the economic system as an aggregate. They have adopted the aim of full employment; they have believed that if a sufficient level of demand can be maintained - sufficient to maintain full employment - the position is fairly satisfactory. This was a relatively new way of looking at the economy.

Involved in economic theories for a decade have been other ways and from time to time notable people have not been satisfied with this way of looking at the economy and have directed attention to what has been going on inside the economy. They have said it is not sufficient to be concerned with the aggregate income, but that you have to be concerned with the difference between the high income and the low income. They have said it is not sufficient to be concerned about whether all the resources have been employed or not, but that you have also to be concerned about what those resources are employed upon. They have said that you have to be satisfied that there is a fair distribution of income and that there is an allocation of resources which are suitable to meet certain social purposes and, of course, “ social purposes “ involves a particular point of view.

It should be apparent to the honorable member for Wentworth particularly that throughout this debate members on this side of the House have said that we are not satisfied that sufficient is being spent upon public works. We are not satisfied that sufficient is being spent on education, roads, public transport or social services. We say that there is undoubtedly a distortion and lopsidedness in the economy because not sufficient is being spent on these things. We say also that on the other side of the line too much has been spent upon certain kinds of private activity. Large private corporations, in particular, have been able to acquire a very large and increasing share of the national income and a considerable amount of that income has been reflected not in the actual distribution of income to shareholders through dividends but has been allowed to become an accretion inside the structure in the corporation concerned. This has led to two things: First, it has led to an astounding amount of capital appreciation. The Deputy Leader of the Opposition (Mr. Whitlam) gave a very fine analysis in that respect this evening, to which the honorable member for Mitchell (Mr. Wheeler), who should have had more sense, gave a very inadequate answer. My colleague gave figures which I will not repeat; but he cited company after company which had a capital appreciation of ten or twelve times. He mentioned astounding amounts of capital appreciation.

The honorable member for Mitchell said that land speculation and asset speculation are the result of inflation, but it is the other way round. Inflation is the result of speculation which has been made possible by the enormous appreciation of capital that has taken place in recent years. Inflation, as we know it, is the result of distortion of the economy because people who have plenty of money have had so much more during the term of office of this Government. They have had so much more money to spend up and down the country from Surfers Paradise to Western Australia. They have had money with which to extend their own capital structures and buildings in the capital cities and set up service stations at every street corner. The fact that they have had so much money to bid up the prices of land and build service stations is in Itself inflation. Inflation is the result of the distortion of the economy, and therefore the Labour Party has said so; and we have been saying it for seven or eight years that I know of. We were pointing out this distortion in the economy long before Kenneth Galbraith, the American economist, set a new fashion among economists in talking about the affluence society and describing as a fundamental defect of the wealthy society the fact that less and less essential needs are receiving attention. Thus television sets come before houses - in my electorate people fall through the roofs of houses while they are putting up television antennae - and motor cars come before roads. We know that the banks and big corporations have fine new buildings, while schools are depressing, dingy and dirty. The Labour Party was emphasizing these things long before the American economist became famous.

The honorable member for Wentworth has asked what the Labour Party would do about inflation. We say that if inflation is to be dealt with in this country the -economy must be put back into balance. It is not sufficient to think in terms of the aggregate and the total amount of effective demand, unconcerned with who has it or who spends it. It is not enough to think about the total resources being employed. You have to think of what those men and materials are employed on. We say that the Australian economy at the present time is distorted and unbalanced and that until that balance is restored we will have fundamentally the problem of inflation. Let me quote a few figures to indicate, first of all, the nature of the distortion; and then I will try to suggest the action that can be taken by a government that is genuinely concerned to cure inflation and to restore balance in the economy. Some of these figures have been given previously to-night. I will not talk about pensions, because we know the state of affairs there. We know case after case where servicemen who have given great service in two world wars have been turned down by the Repatriation Department which applies the letter of a technical interpretation strictly though it should never do so. We know that the cost of attention in hospitals has now risen to £3 or £4 per day, and we know the situation that faces many people in the community who are in those categories to-day, we know that in recent years wages and salaries have risen, in money terms. In 1951-52 they represented 50.2 per cent, of the gross national product and to-day represent only 49.2 per cent, of it - a fall of 1 per cent., or more than £60,000,000. If wage and salary earners now had the same share of the gross national product as they had nearly eight years ago they would have almost all that they would have got as a result of the increase of the basic wage which the Conciliation and Arbitration Commission was asked to award recently.

The next group we come to in considering the national income is that containing unincorporated businesses - the smaller business concerns. Like the share of the wageearners, their share of the gross national product has fallen. Those members of the Liberal Party, and their friends, who are associated with small businesses, are in the position of having a lower share of the gross national product, but, of course, for social and political reasons they identify themselves with the big fellows. The share of unincorporated businesses in the gross national product was 10.1 per cent, in 1951-52 and had fallen to 8.8 per cent, in 1958-59 - a fall of 1.3 per cent., which was a greater fall than the fall in the share of the wage and salary earners.

Now we come to the share of the national income of all companies, large and small, which increased in the same period from 9.8 per cent, to 10.2 per cent. - an increase of .4 per cent. The big fellows have about all of that increase. As I said a few moments ago, the most significant thing about companies now is not that their aggregate income has increased so much, but the amount that they have been able to keep back as reserves and in the form of capital appreciation. Depreciation allowances have risen from 3.8 per cent, in 1951-52 to 7.7 per cent. - an increase of 3.9 per cent. That represents more than £250,000,000 that companies have been able to hold back, largely thanks to the committee with which the Minister for Supply (Mr. Hulme) was associated. These companies to whom he gave such great service should keep him in luxury for the rest of his life.

The net rate of interest has risen from 3.7 per cent, to 5.2 per cent. - an increase of 1.5 per cent. So the pattern of income shows a rapid increase, since 1951-52, to property income receivers, and a fall to people who are not property income receivers. In addition to that, of course, there is tax avoidance. It is becoming increasingly the practice for managers and executives of companies of all sorts to have motor cars and petrol supplied by the company, to have holidays paid for by the company, entertainment expenses and many of their own personal expenses found by the company.

This change in the distribution of income, which we say is fundamental to the inflationary situation is a result of the fact that’ wages have been frozen and have been subjected to very vigorous control, while profits have been free. In fact, the dynamic of inflation starts on the side where there is freedom - that is, on the side of private enterprise and big business. We were saying this for a long time. Then Dr. H. C: Coombs said it. When he said that monopoly elements in the economy were free to pass on wage increases, and were the originating forces of a state of inflation, people took a little bit more notice of this truth. But, as is true of most statements made by people who qualify as economists, this one was made many years behind the time when the same statement had already been made by the practical men.

The result of all these factors is, of course, that there is a vast accumulation of the current income in the hands of income receivers in proportion to the size of their incomes. When this point was made earlier on in the debate a number of members on the other side said, “ What about dividends? Don’t wage and salary earners receive dividends? Don’t they receive their share of growing capital incomes? “ Some of these people on the other side have been repeating this interrogative assertion for a long time.

Mr Uren:

– It is sheer fantasy.


– It is a complete fantasy. I shall give evidence that will blow that assertion sky high. This evidence is in the 1956-1957 report of the Commissioner for Taxation, which is available to every one. Here is the position with regard to dividends: There were 2,099,272 persons who were not subject to provisional income tax in 1956-1957. They were substantially wage and salary earners. These people received no more than £1,643,988 in dividends, or less than £1 each in that year. These are the wage and salary earners who receive dividends! They received income from dividends which averaged less than £1 each in that year. Now let us look at the individuals who were subject to provisional tax - the property owners and the business people. In that same year there were 625,274 of them. People in that relatively small group received in dividends £97,178,661.

Mr Ian Allan:

– Now give us the insurance figures.


– One would need to have an insurance policy to understand your point of view. Of that total of 635,274, only 224,801 actually received dividends. Not all the taxpayers subject to provisional tax received dividends. That meant that 224,801 people - the property owners - received in dividends £97,178,661, as against £1,643,988 - an average dividend of £1 each - received by the 2,099,272 persons who were substantially wage and salary earners. If one breaks up that number of 224,801 persons subject to provisional tax who received dividends, one finds that 109,117 of them received less than £99 a year in dividends, and 46,207 received less than £299, while 21,474 received less than £499. That means that in that year, in the whole of the Commonwealth, only 48,013 persons received more than £500 a year from dividends. That is how important dividends are to the ordinary member of the community!

Mr Uren:

– Is that people’s capitalism?


– Yes, people’s capitalism. Of the total number of taxpayers, which was 2,724,496, only 48,013 received more than £500 a year from dividends. I have not worked out the percentage, but it is a very small one. We say that this unequal distribution of income - a situation which no Australian should be prepared to accept - has resulted in an unequal and unfair allocation of resources. Wherever the money is, men and the materials are drawn to serve that money. To-day, the money has gone over to the people who are well-to-do, and the resources have tended to do that also. So we get a distortion of activity in the private sector, as the honorable member for Chisholm (Sir Wilfrid Kent Hughes) recognized to-night. He recognized that there was a distortion between the private and the public sectors. What we have to face at this stage is how we are going to correct that distortion.

Do not let any one think for a moment, as the honorable member for Wentworth (Mr. Bury) seemed to think to-night, that this great acquisition of income by private people has resulted in a great uplift of investment. It has not done that at all, as I will show when I refer the House to the figures for private fixed capital equipment purchased during the year.

One might expect that this vast increase in income by investors - a capital appreciation which has never occurred in this country before - would mean that there would be a lot of new investment, that factories would be built and would increase in number in proportion to the gross national product. Let me tell the House what has happened in that respect. In 1958-59, gross private investment in fixed capital equipment was 17.2 per cent, of the gross national product. In the year before that, it was 17.6 per cent., and the year before that it was 16.5 per cent. In 1955-56, it was 17.6 per cent., and in 1954-55 it was 17.6 per cent. So, the amount of new investment has fallen, or has remained fairly stable, in its proportion to the gross national product during this time. In 1951-52, it was 18.9 per cent.

If the unequal distribution of wealth is to be justified, it should lead to more investment, but it has not done so. Instead of resulting in more new capital investment, which would raise the proportion of fixed capital equipment to the gross national product, it has resulted in speculation. The companies have not put their gains so much into new capital equipment as they have into land, which is not produced by any human effort. They have put their gains into existing assets, with the result that we have had a constant process of building up, and this is inflation. When the value of land rises, the value of the food produced on that land also rises and so the cost of living rises.

What are the wage-earners to do? Are they to suffer a decline in their actual living standards? No; they attempt to maintain their position in relation to the cost of living. At first, they begin to negotiate with the employers. Their wages are not increased automatically, in the way that the prices charged by employers are increased automatically. There has never been a more unfair and unbalanced state of affairs than that present in industrial bargaining. The workers’ wages are controlled; the bosses’ profits are free. If we cannot work out a better system of industrial arbitration than the one which provides this condition, the workers will not accept the position for very much longer.

Mr Whitlam:

– It is arbitrary.


– Of course. We say that this inflation is the result of there being far too much money in the hands of the welltodo, who have not put that money into private investment so as to increase the amount of new capital equipment in the economy.

What has happened on the other side? We have not had an increase of private invest- ment. What has happened in public investment? The position is worse. The official figures show that the proportion of public works to the gross national product - this includes a number of items that are nonproductive - was 8.4 per cent, in 1958-59; 8.2 per cent, in 1957-58; 8 per cent, in 1956-57; 8.3 per cent, in 1955-56; 8.5 per cent, in 1954-55; 8.7 per cent, in 1953-54; 9.1 per cent, in 1952-53; and 10.2 per cent, in 1951-52. The record shows that we now have 2 per cent, less of the gross national product in public works than we had in 1951-52. That is £120,000,000 less. If the same proportion of the gross national product went into public works to-day, we would have a much better record in the provision of schools, hospitals and roads - the basic requirements of national development.

The inflated economy over which the Government has presided for ten years has not resulted in a greater proportion of the gross national product being used in public works. We have had a falling trend, with a reduction of 2 per cent, in the last ten years. Whether we look at the short-term effect of inflation - the speculation that has come from this unequal distribution of income - or whether we look at the long-term effect, as outlined by the honorable member for Werriwa in his speech to-night, the result is the same - a decline in productivity. Productivity depends on an increase in the proportion of capital equipment of the gross national product, and because this proportion is falling, we are losing in the long-term race.

What is the remedy? The remedy is certainly not for the Government to sit wringing its hands, as hopeless as a beetle on its back, which was a very apt expression used by the Leader of the Opposition (Mr. Calwell) in relation to the Treasurer (Mr. Harold Holt), who is, I understand, much more at home in the water than he is in the Treasury. The remedy is certainly not for the Government to express regret that it has not constitutional powers to deal with this matter, when really it is very pleased that it has not those powers. The Government is concerned only to stop wage increases; it is not concerned to do anything about the increase of profits and capital appreciation. It seems clear that if we are to deal effectively with inflation and if we are to get the kind of capital development that we need, particularly in the private sector, an attempt must be made to change the present flow of income.

The first step is to discover where income is going. The official statistics show that it is flowing increasingly into the hands of private enterprise and that private enterprise is not using it as it should be used. Instead of using it for increasing investment in new capital, private enterprise is using it for speculation, and we have the speculative boom that is called inflation. It would seem to me that several things must be done. First, the Government should review the position of tax avoidance and plug the hole which enables company managers and executives to live at high standards on incomes that are not subject to taxation. Secondly, the Government should review the position with depreciation and undo most of the things that the Hulme committee did. If a company can show that it has used a certain amount of its income for investment, it can be given tax remissions on that amount; but it should not be given tax remissions on an amount that it can hold back, irrespective of whether it uses it to replace capital equipment or not. If this were done, funds would be diverted from speculation into the provision of new capital equipment in the private sector.

The third need is for the Government to realize that more funds are needed in the public sector. I was very pleased to hear the honorable member for Chisholm underline this point to-night. More money is needed in the public sector of the economy. How do we get this money? We either borrow it or we raise it by taxation. In the present situation, it is impossible for the Government to compete with private borrowers. The Government, at best, can offer only 5 per cent, or 6 per cent., but private borrowers can offer fantastic rates of interest. As a result, loan funds, like other funds, are flowing at an increasing rate towards the private borrowers and away from public borrowing. In the circumstances, it is impossible for the Government to obtain a larger share of the total borrowing. It must turn, therefore, to taxation.

The official figures show the position with taxation. An increasing proportion of company income is not subject to taxation.

That part of it which is subject to taxation represented, in 1951-52, 3.9 per cent. of the gross national product; in 1952-53, 4 per cent.; and in 1958-59, only 3.6 per cent. Companies, large and prosperous though they have become, are providing a declining part of the gross national product. These companies, of course, can afford to pay a greater share towards public development. Much of their success depends on the public services upon which they draw and on the growth of the community around them. They depend upon the development of roads and the provision of electricity, gas, water and all the other services. Of course, they can afford to provide a greater proportion of the gross national product.


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

Question resolved in the affirmative.

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

page 2183


Motion (by Mr. Harold Holt). - by leave - agreed to -

That Standing Order No. 104 - 11 o’clock rule - be suspended for the remainder of this week.

page 2183


Second Reading

Consideration resumed from 11th May (vide page 1604), on motion toy Mr. Harold Holt-

That the bill be now read a second time.

Question resolved in the affirmative.

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

page 2183


Second Reading

Consideration resumed from 11th May (vide page 1604), on motion by Mr. Harold Holt-

That the bill be now read a second time.

Question resolved in the affirmative.

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

page 2183


Second Reading

Consideration resumed from 11th May (vide page 1605), on motion by Mr. Harold Holt-

That the bill be now read a second time.

Question resolved in the affirmative.

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

page 2183


Dr. Rudolph Brasch - Coal- Port Facilities

Motion (by Mr. Harold Holt) proposed - That the House do now adjourn.


.Mr. Deputy Speaker, what I have to say will take only a minute or two. It was not relevant to the debate on the Appropriation Bill (No. 2)1959-60, or I should have said it then. On 28th April, in a speech in this House, I said -

South African business people visiting this country, one of whom is Dr. Brasch who is in favour of apartheid, have praised the Prime Minister.

I have received a letter from the honorable member for Wentworth (Mr. Bury), who points out that Dr. Brasch is the Chief Minister of the Temple Emanuel, in Sydney, is an Australian and a minister of religion, and is not a businessman. The honorable member points out also that Dr. Brasch has always made it most emphatically clear that, far from being in favour of apartheid, he has always been strongly against it.

So as to have the record straight with regard to Dr. Brasch, I want to make it clear that he is not a businessman, that my reference to him in that respect was incorrect, and that he is not in favour of apartheid, but, on the contrary, is against it. I have much pleasure in accepting the assurance to that effect contained in the letter which I have received from the honorable member for Wentworth, and I am very pleased to correct the statement which I made about Dr. Brasch.


.Mr. Deputy Speaker, I want to raise a matter which concerns my electorate.

Mr Chaney:

– The honorable member will talk to himself.


– I shall talk to myself if 1 want to, and if the honorable member does not want to listen he may get out.

I want to raise a matter which affects my electorate and to refer to the comments made by the Minister for National Development (Senator Spooner) condemning and criticizing the coal-handling facilities at the port of Newcastle. I want to deal with the matter as it affects the employees in the coal trade. We have heard quite a lot of criticism by the Minister about the lack of proper facilities at Newcastle. However, 1 wish to refer to the lack of organization, by the stevedores in providing for the loading of coal. On 23rd May the ship “ Lord Byron “ was loading more than 1 0,000 tons of coal for Japan. According to the coal trimmers, the ship was delayed upwards of 30 hours in the port because of the failure of the employers to engage sufficient labour on the night shifts. This was done to save the payment of penalty rates. The records show definitely that there were not enough trimmers engaged in the early stages of loading. If the employers had been prepared to engage sufficient men, the ship would have left about 30 hours earlier than it did.

We often hear criticism from the Minister for National Development directed against the New South Wales Labour Government for its alleged failure to make enough money available for harbour development. The fact is that in the current financial year, it is estimated that £943,200 will be spent on the development of the Newcastle harbour. Over the past six years, the total expenditure on the port has totalled about £4,500,000. At the same time, a large sum of money has been expended on the Port Kembla harbour.

Recently I asked the Acting Prime Minister (Mr. McEwen) in this House why the Government did not use the powers conferred on it under the arrangement with the Joint Coal Board to make money available for the development of the ports at Newcastle and Port Kembla. I pointed out that money could be made available for such work in any Australian port provided the development was associated with the coal export trade. I know that supporters of the Government are not pleased because I am directing attention to these matters at this late hour, but the Government made us sit in this place until 4 a.m. recently and honorable members opposite can listen to these facts now.

The Minister for National Development is snaky with the New South Wales Government because it is not prepared to permit private enterprise to develop new coal mines and so reap a rich harvest in profits. The Minister continually snipes at the New South Wales Government on the question of harbour improvements and at the unions, but he is not prepared to inquire into the inadequate organization which is responsible for ships not clearing the ports more quickly. I urge that more consideration be given to the provision of money for port development, under the arrangement 1 have mentioned.

In conclusion I want to protest against the policy of the Japanese Government and various Japanese companies in trying to play off one port or one State against another so that the Japanese can get coal at prices below the cost of production; in fact, I will go so far as to say that the Japanese are trying to play off one country against another. One newspaper report that I have states that a representative of Australian and Japanese engineering concerns had discussed at Rockhampton the possibility of buying Kianga coal through Port Alma. From time to time, the Japanese show interest in coal from Newcastle, Port Kembla, New Zealand, Canada and America and they play one off against the other. I hope the Government will watch this development and make sure that the interests of the Australian trade as a whole are protected.

Question resolved in the affirmative.

House adjourned at 12.45 a.m. (Thursday).

page 2184


The following answers to questions were circulated: -

Land Ownership in East Germany

Mr Swartz:

z asked the Acting Minister for External Affairs, upon notice -

  1. Is he able to state whether collectivization of farms has been introduced in East Germany and whether all private ownership of land has been terminated in that country?
  2. Is he also able to state whether large numbers of refugees have fled from rural areas in East Germany to other countries to escape from this Communist system?
Sir Garfield Barwick:

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

  1. Collectivization. - (a) A drive to complete the collectivization of all arable land was begun in East Germany some three months ago. (b) On 15th March, the Baltic State of Rostock became the first of the fourteen East German States to announce that collectivization was complete within its borders. On 15th April, Herr Ulbricht, head of the East German regime, announced that with the completion of land collectivization in Karl Marx State (formerly the State of Chemnitz) all arable land in East Germany was now under public ownership. (c) Thus the East German regime has become the first of the Soviet satellites to claim 100 per cent. collectivization of all arable land. (The next two in order of land claimed as collectivized are Czechoslovakia and Hungary, both of whom claim over 70 per cent.)
  2. Refugees from East Germany, - (a) Over the first sixteen weeks of this year, from 2nd January to 29th April, some 49,877 people fled from the eastern zone of Germany, compared with 48,806 people for the corresponding period last year. This is despite the fact that refugee figures, chiefly due to stricter East German border control measures, have shown a significant decline in the early part of this year. For instance, 24,936 refugees from East Germany entered the Federal Republic and West Berlin during the first seven weeks of 1959, compared with only 21,902 in the first eight weeks of this year. It is important to note that the rapid increase in refugee crossings for this year came in the period late February to early April, when the collectivization programme was reaching its climax. (b) Official figures regarding the occupation of refugees reaching East Germany in 1960 are not available as yet, so that it is not possible to say definitely whether the increase is made up largely of people from rural areas or not, but unofficial figures indicate that about 3,000 (or nearly 25 per cent.) of the 12,500 refugees who left East Germany in April this year are from rural areas, compared with an average of 4.5 per cent. for the whole of 1959. (c) In a recent statement the United States Under Secretary of State, Mr. Douglas Dillon, said that “more than two and a third million East Germans and East Berliners have, during the last ten years, exercised the only franchise available to them and have voted with their feet against Communist rule by fleeing to West Berlin and the Federal Republic “.

Industrial Arbitration

Mr Bryant:

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

  1. In how many cases in each of the last five years has the Registrar of the Conciliation and Arbitration Court directed that financial assistance be given to a union member who had applied for an order voiding the rules of his union?
  2. Who engaged the solicitors, and what assistance was given to each member?
  3. What is the total amount of this assistance which has been paid by the Commonwealth?
Mr Harold Holt:

– The following answers have been provided to the honorable member’s questions: -

  1. The following are the numbers of cases in each of the years 1955-1959 in which the Registrar has directed that financial assistance be given to a member of an organization proposing to take proceedings for the disallowance of, or an order as to the validity of, a rule or rules of the organization under section 80 of the Conciliation and Arbitration Act 1904-1955 or section 140 of the Conciliation and Arbitration Act 1904-1960:- 1955, five; 1956, four; 1957, three; 1958, one; 1959, two.
  2. Engagement of solicitors in these cases is a matter for the applicant. The amount of assistance granted to the applicant in each case was as follows:- 1955- £131 10s. 6d., £1,151 17s. 2d., nil, nil, £689 10s. 3d. 1956- nil, £414 1s. 8d., £7031s. 3d. £575 16s. 3d. 1957- £620 1s.1d., £222 17s. 3d., £159 16s. 1958- Nil. 1959- Nil, nil.
  3. The total amount of assistance granted in these cases is £4,66811s. 5d.
Mr Cairns:

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

  1. Does the Commonwealth Conciliation and Arbitration Commission, in exercising constitutional powers relating to the settlement and prevention of industrial disputes, find it necessary to make awards which fix or determine wages?
  2. Is it possible for employers to pass on into prices part of any increased wages and thereby cause an increase in the cost of living?
  3. Do increases in the cost of living lead trade unions to submit claims for higher wages which may cause, or contribute to the causing of, industrial disputes?
  4. If so, may it be necessary for the Commission to determine profits or prices in the course of settlement or prevention of industrial disputes?
  5. Has he received any advice as to whether the exercise of this power by the Commission would be constitutional; if not, will he do so?
Mr Harold Holt:

– I have been provided with the following answers to the honorable member’s questions: -

  1. The Commonwealth Conciliation and Arbitration Commission does prescribe award rates of wages in settling industrial disputes within its jurisdiction.
  2. It is possible.
  3. Applications for variations of awards are made from time to time on the ground that wages prescribed ought to be reviewed so as to preserve their purchasing power.
  4. The Commission may by its awards make provision only for matters within the ambit of an industrial dispute within its jurisdiction.
  5. No.

Industrial Awards and Aboriginal Workers

Mr Bryant:

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

In what areas and under what conditions are federal awards not applicable or are not applied to the employment of aboriginals?

Mr Harold Holt:

– The following information has been supplied in answer to the honorable member’s question: -

Generally speaking, federal awards, where operative, have equal application to all workers whether or not they are aborigines. There are, however, two exceptions to this principle. The first concerns aborigines who are declared wards under the provisions of the Northern Territory Welfare Ordinance 1953-1959. The second covers the case where a federal award expressly excludes aborigines. As regards the first instance, section 14 of the Northern Territory Welfare Ordinance empowers the Administrator-in-Council to declare a person a ward if that person, by reason of - (a) his manner of living; (b) his inability, without assistance, adequately to manage his own affairs; (c) his standard of social habit and behaviour; and (d) his personal associations, stands in need of such special care or assistance as is provided for by this ordinance. Under the Northern Territory Wards’ Employment Ordinance 1953-1959 an Employment Advisory Board has been appointed. Its function is to advise the Administrator, inter alia, on the regulation of conditions of employment of wards. Under section 38 of the Wards’ Employment Ordinance, the Administrator may specify, by notice in the “ Gazette “ of the Northern Territory, the wage payable to a ward in a specified industry or calling. Section 38 also provides for the prescription of conditions of employment of a ward by means of regulations, which, by virtue of section 66, may be made by the Minister for Territories. Section 38, however, does not operate so as to prevent a ward, the Director of Welfare or a Welfare Officer from procuring or procuring on behalf of the ward, employment in accordance with the terms and conditions contained in an award or industrial agreement applicable in respect of the calling in which the ward is employed. The second instance, the case of federal awards expressly excluding aborigines from their operation, has occurred rarely. In fact, at the present time, only two such awards are operative. They are the Cattle Station Industry (Northern Territory) award, clause 6 of which states that “ this Award shall not apply to station hands, managers, overseers, members of the owner’s family, aboriginals or domestic servants”, and the Pastoral Industry Award which specifically excludes, inter alia, the employment of aborigines as station hands, one of the classifications covered by the awards.

Lord Howe Island

Mr Minogue:

e asked the Minister representing the Minister for Civil Aviation, upon notice -

What steps have been taken to construct the airstrip on Lord Howe Island?

Mr Townley:

– The Minister for Civil Aviation has furnished the following information: -

The proposal to construct an airstrip on Lord Howe Island is at present under consideration within the Department of Civil Aviation. It is anticipated that by the end of June, the Department of Civil Aviation will be in a position to discuss the whole question with representatives of the Premier’s Department, New South Wales, and other interested bodies. It should be mentioned that the problem is technically very difficult due to the terrain of the island.

Cite as: Australia, House of Representatives, Debates, 1 June 1960, viewed 22 October 2017, <>.