House of Representatives
23 March 1961

23rd Parliament · 3rd Session

  1. House of Representatives
  2. 23rd Parliament
  3. 1961

Mr. SPEAKER (Hon. John McLeay) took the chair at 10.30 a.m., and read prayers.

page 519

QUESTION

NAVAL DOCKYARDS

Mr CALWELL:
MELBOURNE, VICTORIA

– I desire to ask the Acting Prime Minister a question without notice. In view of the concern felt by many people at rumours that the naval dockyards at Williamstown, Victoria,’ and Garden Island, ‘New South Wales, are likely to be closed because of lack or orders, or that work is likely to be greatly curtailed, will the Acting Prime Minister arrange for a statement to be made either when this House resumes after Easter, or some time next week even if the Parliament is not sitting, so that people’s fears may be allayed, if possible, or so that they will at least know just what the future of these well-established institutions is likely to be? We are all very proud of these establishments, which give so much employment to so many people.

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

– I shall be glad to have the request of the Leader of the Opposition taken into consideration. I can give him an assurance that no such proposal is before Cabinet at the present time. I do not pretend to be able to peer into the future indefinitely, and nothing is to be read into that last remark of mine.

page 519

QUESTION

CEMENT

Mr MURRAY:
HERBERT, QUEENSLAND

– I ask the Minister for Trade a question. In view of the very serious threat to the north Queensland cement industry, caused by the landing of Japanese cement at Cairns and other northern ports at up to £4 or £5 a ton cheaper than the local product, will he advise what action should be taken to gain urgently needed protection to keep this important and efficient north Queensland industry operating?

Mr McEWEN:
CP

– If the industry to which the honorable member refers believes that it is inadequately protected by the normal customs tariff, two courses are open to it. It may ask the Tariff Board to determine whether further protection should be accorded to it. In the short term, if the industry believes that it is in jeopardy or that imports are likely to cause it serious damage, it may state its case to the appropriate officers of the Department of Trade. When this procedure is followed, the officers report to me the representations that have been made and if, in my judgment, a prima facie case has been made out which warrants a temporary protective duty, I refer the matter forthwith to the Deputy Chairman of the Tariff Board. He makes a report within 30 days, and normally action is taken along the lines recommended by him.

page 519

QUESTION

STANDARDIZATION OF RAIL GAUGES

Mr RUSSELL:
GREY, SOUTH AUSTRALIA

– I wish to ask the Minister for Shipping and Transport a question which relates to the proposed standardization of the railway from Port Pirie to Broken Hill. Will the Minister inform me what progress has been made towards commencing this national project? If a stalemate has been reached, what, precisely, is the trouble?

Mr OPPERMAN:
Minister for Shipping and Transport · CORIO, VICTORIA · LP

– I am quite aware of the interest which the honorable member has in this standardization project. All South Australian members of the Parliament are interested in it, and many of them have been most diligent in asking questions about it.

Mr Ward:

– All Australians are interested in it.

Mr OPPERMAN:

– Well, we shall include all Australians. But this project is particularly close to South Australians, and I am sure that the honorable member for East Sydney will not object to my saying that South Australian members of this Parliament have displayed a very great interest in the proposal. As the honorable member for Grey knows, the standardization of the railway from Port Pirie to Broken Hill was mentioned in the Prime Minister’s announcement about the priorities that would be given to various works which were projected. There has since been intruded a legal move which makes the matter sub judice, but I think I would be safe in saying by way of comment that the writ which has been issued has perhaps put a spike into the standardization of the line from Port Pirie to Broken Hill.

page 520

QUESTION

TAXATION

Mr TURNER:
BRADFIELD, NEW SOUTH WALES

– My question, which is directed to the Treasurer, relates to the deductibility for tax purposes of certain interest payments made by companies. The right honorable gentleman will, of course, be aware of the uncertainty prevailing in the business world in regard to the making of plans for raising capital pending an announcement by the Government of the terms of its proposed legislation in this matter. Can it be expected that by, say, the end of the second week after the House resumes its sitting subsequent to the Easter recess - that is, by about 20th April - the Minister will be able to make to the House a full statement on this matter?

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

– The delay in announcing a broad, general scheme of a permanent character has been attributable very largely to our desire to hear the views of representatives of the various commercial organizations, financial houses and other enterprises that might be directly affected by a measure of this kind. One of the disadvantages under which we laboured before we brought in the interim measure was the difficulty we experienced in making direct contact with the interests concerned. However, once we had a holding measure on the statute-book, we felt less inhibited in raising points and discussing them with people who are well informed as to their own problems and who could give us an insight into the likely effects of proposals which have been canvassed from time to time. That process has been going on and will continue, and I believe that because we have taken this trouble we shall in the end have a measure which is likely to give more general satisfaction.

I should not like to state a date on which I shall be able to make an announcement, but I certainly hope that it will not be later than the time suggested by the honorable member for Bradfield. In any event, seeing that the interim measure expires at the end of this financial year, legislation of a more permanent kind will have to be introduced during this parliamentary session, and that need will make adherence to the sort of time-table which the honorable gentleman has recommended a very desirable target for us.

page 520

QUESTION

DEFENCE

Statement by Vice-Admiral Dowling.

Mr O’CONNOR:
DALLEY, NEW SOUTH WALES

– Is the Minister for Defence aware of the statement reported to have been made by Vice-Admiral Dowling before attending a Seato conference, wherein reference was made to the possible disposition of Australia’s armed forces? Has the Government taken any action as a result of this statement? If so, what action has it taken? If no action has been taken, will the Minister inform all Service chiefs that they are to avoid making statements of this kind, and that the prerogative to make such statements, and the responsibility for them, rest with the Government and the Parliament of Australia?

Mr TOWNLEY:
Minister for Defence · DENISON, TASMANIA · LP

– First of all, I should like to say that Vice-Admiral Dowling is a man who has given gallant and distinguished service to the armed forces of this country during almost the whole of his lifetime. However, he has no political authority whatever.

Mr Whitlam:

– Nor nous!

Mr TOWNLEY:

– I do not know whether the honorable member would be a judge of that.

Mr SPEAKER:

– Order! There are too many interjections and there is too much audible conversation. The purpose of a question is to enable a member to seek information, and he is entitled to expect silence from other honorable members while the reply is being given. If some honorable members are not interested in a reply they should at least respect the interest of the member who asked the question.

Mr TOWNLEY:

– Before I was interrupted I was saying that Vice-Admiral Dowling is a man who has given almost a lifetime of devoted and distinguished service to the armed forces of this country, but that he has no political authority. I think every honorable member in this place, including the members of the Opposition, would agree that to judge a man of his attainments and his distinguished record on a newspaper report which comes from a foreign place such as Bangkok, where there are difficulties connected with language differences and so on, would be grossly unfair. The first step to be taken, and the only step that I have taken, is to ask Vice-Admiral Dowling to let me have the full text of the statement he made.

page 521

QUESTION

TEXTILES

Mr BUCHANAN:
MCMILLAN, VICTORIA

– My question is directed to the Acting Prime Minister. As import licensing still applies over practically the whole field of textiles, and as the Australian Textile Council has informed the right honorable gentleman of the reasons for the present depressed condition of the industry, will he consider reducing the existing import quotas by, say, 50 per cent., unless the licence holders involved are prepared to place orders with local mills, on a proportionate basis, that would allow their trained hands and their machinery, at present idle, to be put into production again?

Mr McEWEN:
CP

– The honorable member is correct in reminding us that import licensing has not been abandoned in respect of about 10 per cent, of all imports. Within this, 50 per cent, of imparts of textiles are still under licensing control. The system was retained in certain instances, as was announced at the time, because in the absence of import licensing there would be no quick and ready way to give short-term protection to the Australian industries involved. The procedures of the Tariff Board are known to be rather prolonged, and I think that industry itself regards it as desirable that there should not be quick changes of tariff in what might be called the normal process of tariff-making. Now we have substituted for import licensing, as a device for giving quick protection, a system which the Parliament approved, involving a reference to a deputy chairman of the Tariff Board, who is required by a statute passed by this Parliament to report within 30 days. That is a device for quick protection. It is contemplated, as I explained to the Parliament when I introduced that legislation, that in most cases the deputy chairman would, if he thought additional protection necessary, recommend an increased duty for a period, pending a full examination by the Tariff Board. In certain circumstances, I pointed out, he might, with advantage to the Australian economy as well as the particular industry, advise a quantitative restriction. It is largely against that contingency that some import licensing has been retained. Consequently, I would not, nor would the Government without advice, follow the course that the honorable member has suggested. We are prepared, as I have already indicated, to consider making a reference to the Deputy Chairman of the Tariff Board, and several sections of the textile industry have already taken advantage of the opportunity to present their case. At least two sections of the industry are under consideration at this moment and a third one, I think, is discussing its case to-day.

page 521

QUESTION

REPATRIATION GENERAL HOSPITAL, SPRINGBANK

Mr GALVIN:
KINGSTON, SOUTH AUSTRALIA

– Will the Minister for Repatriation visit the Springbank Repatriation General Hospital in South Australia when the first opportunity to do so arises? Is the Minister aware that over five years ago the former Minister for Repatriation agreed that the old temporary prefabricated building used as a psychiatric ward was not suitable for this purpose and that it was out of keeping with the other up-to-date facilities of the hospital?

Further, the construction of a new block was considered to have a number one priority by the former Minister, but the project could not be included in last year’s estimates because of lack of money. Will the Minister inspect this block with a view to having provision for a new building included in next year’s estimates?

Mr OSBORNE:
Minister for Repatriation · EVANS, NEW SOUTH WALES · LP

– I am aware of the situation at the psychiatric ward in the Springbank hospital and of the long history of planning a better ward. I hope very much that effect will be given to that planning this year. I shall certainly visit the Springbank hospital at the first opportunity, as the honorable member has suggested. Since my appointment to this portfolio at the beginning of this year, I have already visited almost all of the institutions controlled by my department in the four eastern States. I will go to Adelaide soon after the conclusion of these sittings.

page 522

QUESTION

TIMBER

Sir EARLE PAGE:
COWPER, NEW SOUTH WALES

– Will the Minister far Works be good enough to inquire whether it would be possible to increase the proportion of Australian timber used in Government building construction? If that is found to be possible will he instruct the architects working for the Government to provide for the use of Australian timber when drawing up future plans and, if possible, to provide for its use in present construction?

Mr FREETH:
Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

– The Department of Works is a construction department, and it has been felt in the past that it has no function to make judgments as to the degree of protection or assistance it should afford to industry generally or to specified portions of Australian industry. That has always been considered to be the function of another department. In this case, the right honorable gentleman will be glad to know that an inquiry has already started into the degree of assistance that would be given to the Australian timber industry if we did specify exclusively Australian timber. I am having an examination made at the moment to find out whether this would add materially to the cost of building by the Department of Works and to ascertain precisely what effect it would have on the timber industry. I assure the right honorable member that that inquiry is well under way.

page 522

QUESTION

DECENTRALIZATION

Mr BEATON:
BENDIGO, VICTORIA

– My question is directed to the Treasurer, who has referred on two occasions recently to the need for decentralization of industry. I refer in particular to his statement that the Government’s credit squeeze was in some measure aimed at bringing about decetralization. Is it not a fact that country industries have suffered disastrously from the Government’s economic measures, and that the drift of population to the capital cities has been accentuated? Will he recognize the urgent need of country communities by directing the trading banks to provide sufficient credit for industries and businesses in country towns to maintain their present level of employment? Will he also consider the setting up of a committee of inquiry to investigate means by which the Commonwealth can achieve a policy of real decentralization?

Mr HAROLD HOLT:
LP

– la opening his question the honorable member put into my mouth words which I have not employed. What I have said is that one of the principal aims of the overall economic policy of this Government is to create conditions in which, in the decade ahead, a much larger increase in export income can be produced, and that this process will be assisted if the Commonwealth Government, in co-operation with the State governments, can proceed with some developmental works of a major kind calculated, in themselves, to further this general objective. I have made the point that it may be both undesirable and impracticable for us in the next ten years to develop in the same fashion as we did in the last ten years, around Melbourne and Sydney in particular, manufacturing industry which has now become so large an absorber of imports from overseas for its maintenance. I questioned whether that process could continue on the same scale rn the period immediately ahead of us. This Government needs no reminding of the importance of encouraging the production of rural industries and of the outlying areas and, as we shall have an opportunity a little later, on a proposal which I understand is coming from the Opposition, to discuss this subject, I shall demonstrate that we have, in the arrangements made through the Reserve Bank arising out of the Government’s measures, given special emphasis to the need for the provision of adequate credit for rural industries and for exporters generally.

page 522

QUESTION

TELEVISION

Mr FORBES:
BARKER, SOUTH AUSTRALIA

– My question is directed to the Postmaster-General. I note that he is aware of the importance and urgency of proceeding to the next stage of television development with the greatest possible speed so that many people in country areas, including my constituents in the southeast of South Australia, may receive the benefit of it.

Mr Fairbairn:

– What about other areas?

Mr FORBES:

– And in the electorate of the honorable member for Farrer. In view of the variety of methods by which people in the next stage will receive television, will the Minister consider having the Australian Broadcasting Control Board canvass the views of responsible organizations in the areas concerned before recommending to the Government the pattern of the next stage?

Mr DAVIDSON:
Postmaster-General · DAWSON, QUEENSLAND · CP

– Before the Australian Broadcasting Control Board submits its recommendations to the Government on the fourth stage of television it will, as the honorable member for Barker has suggested, take into account all the circumstances and conditions prevailing in the various areas, lt is true, as the honorable member says, that conditions in the areas to be serviced in the fourth stage of television will differ in some cases quite materially from those already experienced; and it is realized that particular attention must be given to the conditions prevailing in those areas, so as to ensure that the best service shall be given.

page 523

QUESTION

SOUTH AFRICA

Mr CALWELL:

– I ask the Acting Prime Minister: Has the Government yet received the full text of the speech made in the House of Commons last night by the British Prime Minister, Mr. Macmillan, on South Africa? If so, is it a fact that Mr. Macmillan said that South Africa was not forced out of the Commonwealth but, because of the stand she had taken, it was apparent that she could not stay in the Commonwealth? Did Mr. Macmillan also say that bitterness and recrimination after the event would not help the situation? If Mr. Macmillan did make these statements, does the Acting Prime Minister regard his speech as a complete repudiation of the views and attitude of the Australian Prime Minister as expressed since the Commonwealth Prime Ministers Conference ended?

Mr Harold Holt:

– What did Mr. Gaitskell say?

Mr CALWELL:

– I am reporting what Mr. Macmillan said.

Mr SPEAKER:

– Order! The honorable gentleman has asked his question.

Mr McEWEN:
CP

– When I first referred in the House to South Africa’s decision I suggested that it was an incident which called for tolerance, and that recrimination would contribute nothing to the easing of a difficult situation, and the Leader of the Opposition, I am glad to remind honorable members, associated himself with those sentiments and expressed the view that it would be good for the future of the Commonwealth if we exhibited that kind of tolerance. I am sorry that the events of yesterday-

Mr Whitlam:

– And at dinner the night before.

Mr SPEAKER:

-Order! The Deputy Leader of the Opposition must not interrupt.

Mr McEWEN:

– I am sorry that what is implicit in the question, as well as what happened yesterday, represent a departure from that spirit of tolerance and from the belief that recrimination and the stirring up of feelings at this time contribute nothing to the solution of this problem. I have not the full text of what the United Kingdom Prime Minister said in the House of Commons, but I have some brief excerpts from his statement. I will procure the full text and let the Leader of the Opposition have it as soon as it is available. However, so far as I am advised, Mr. Macmillan did say that he did not believe that the withdrawal of South Africa would necessarily weaken the Commonwealth. I would hope that that sentiment is found to be correct, but I cannot myself believe that the withdrawal of one member, or more than one member, of the Commonwealth can in any sense strengthen the Commonwealth, but must, on the contrary, at least open up possibilities of the weakening of it. The real issue here is whether it is not better that there should be full, frank and even difficult discussions in the Prime Ministers conferences, designed to influence Prime Ministers and the policies of their governments, than that such discussions should be carried the one stage further that would produce a situation in which, if a Prime Minister whose government is under attack does not conform, he is compelled to withdraw. That is the deadly danger for this country and for the British Commonwealth, and it is on that principle alone that the Australian Prime Minister, T am proud to recount, has been quite explicit within the Prime Ministers Conference and since.

page 524

QUESTION

POSTAL DEPARTMENT

Mr CASH:
STIRLING, WESTERN AUSTRALIA

– My question is directed to the Postmaster-General. Where is the Post Office progress display now being exhibited? What States have yet to see this display, and when will it be taken to Western Australia?

Mr DAVIDSON:
CP

– Since the Post Office display opened in King’s Hall in this Parliament building last April, I think, it has been to about seventeen places in Queensland and New South Wales. The exhibit is attracting a great deal of interest and, consequently, it is necessary to present it for a minimum of three days in each place visited. Naturally, the display of the exhibit involves spending a considerable time in packing, unpacking, setting up and so on, so its progress may seem to some people to be a little slow. The exhibit is performing a very good public relations function. I understand that it is at present at Wagga Wagga, whence it will proceed to Albury and later to Victoria. Beyond that we have no definite plan for its movement, but it rs intended that it will be shown in all States in turn. If I can find out exactly when it is likely to be in Western Australia I shall let the honorable member know.

page 524

QUESTION

SOUTH AFRICA

Mr BRYANT:
WILLS, VICTORIA

– Having regard to all that the British Commonwealth stands for, does the Acting Prime Minister not agree that South Africa’s action in withdrawing from the Commonwealth and the continuance of its policies imply a demand on the rest of us to place moral sanctions on that country? Does he agree with the Prime Minister’s statement that the only thing wrong with apartheid is that it will not work?

Mr McEWEN:
CP

– I do not agree with any such thing. I have not the slightest doubt that there is some aspect of the internal policies of every member of the Commonwealth which is not entirely satisfactory and may be violently unsatisfactory to some other members. That such policies should be placed upon the table for frank and vigorous discussion at a Prime Ministers’ conference is one thing. It is something to which we subscribe; it is something in which we have engaged; it is something that we approve; it is something that we believe can have no other result than to strengthen the Commonwealth countries. But to press that to the point of imposing such sanctions as to impel withdrawal of a country, not only threatens the sovereignty of that country, but also deals a violent blow at the integrity of the Commonwealth, which has meant so much to all its members, and which has contributed so massively to the cause of peace and to the well-being of the world.

page 524

QUESTION

TIMBER

Mr DRUMMOND:
NEW ENGLAND, NEW SOUTH WALES

– My question to the Minister for Trade relates to the position of the timber industry, particularly in northern New South Wales. Is it a fact that the Tariff Board reported that high rail freights and high royalties in New South Wales created a position distinct from that which exists in any other State, and that the board could not fix its tariff protection based upon the exorbitant charges in any one State? If this is a fact, is it possible for the Minister or for his officers to enter into discussions with the New South Wales Government with a view to bringing these royalties and rail charges more into line with those of the other States?

Mr McEWEN:
CP

– My memory of a very important but very lengthy and comprehensive Tariff Board report substantiates what the honorable member has said. I think that the Tariff Board also referred to circumstances affecting other States, but I am sure that the board did point out that the level of royalties and rail freights in New South Wales imposed a very heavy burden upon the timber industry, or contributed very largely to the cost of delivered timber in that State. Then the board, if my memory serves me correctly, went on to point out something that is obviously correct - that if as a result of recognizing special cost factors in one State it were to recommend a compensating increase in the level of protection accorded, there would be no end to the matter because such recognition could be taken as an invitation to the government of that or any other State to proceed recklessly to increase royalties, freight rates or any other charge within its control, and so to throw upon the Tariff Board the responsibility of recommending further compensation at the expense of the whole Australian community, but particularly at the expense of Australian home owners. The Government believes that that is not a course to which we should subscribe. We hope that the State governments - and the New South Wales Government in particular - will scrutinize quite carefully the possibility of abating these charges in existing circumstances.

page 525

QUESTION

NORTHERN TERRITORY

Mr NELSON:
NORTHERN TERRITORY, NORTHERN TERRITORY

– My question, which is directed to the Minister for Territories, relates to the disallowance by the Government recently of two bills that were passed by the Northern Territory Legislative Council. I am informed that these two bills will be re-introduced in the Legislative Council to-morrow by elected members, who are confident of obtaining the support of the three nominated non-official members, whose support is necessary to pass the legislation again. As the Legislative Council apparently intends to take the opportunity to test the Government’s attitude towards legislation passed by that body, and in view of the consequences that could flow from a further refusal by the Government to assent, will the Minister say what will be hrs attitude to the bills when they come before him again for consideration?

Mr HASLUCK:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– I think the honorable member will appreciate quite well, first, that he is asking me to make a pronouncement on a question of policy; and secondly, that he is asking me to forecast action by the Government in a situation that has not yet arisen. On both counts, I am at the disadvantage of not being able to answer the question.

page 525

QUESTION

DAIRYING

Mr MACKINNON:
CORANGAMITE, VICTORIA

– I direct a question to the Minister for Primary Industry. Recently, suggestions were made - I think, from memory, by representatives of producers - that the countries involved in the export of dairy products, particularly to European markets, should confer in an attempt to arrive at some form of rationalization of deliveries and sales. Will the Minister inform the House whether any progress has been made in this direction?

Mr ADERMANN:
Minister for Primary Industry · FISHER, QUEENSLAND · CP

– The Commonwealth Dairy Committee of Inquiry did make a recommendation that there should be some consultation on the lines suggested by the honorable member. The dairy industry itself, when making representations to me upon these conclusions, did not make any recommendation. In fact, such an approach might involve a policy of quotas that could operate to the detriment of Australia. Both the Government and the industry are examining this matter very carefully. I might add that the Prime Minister of New Zealand took this matter up when he was in England attending the conference of British Commonwealth Prime Ministers, and directed attention to the effect on Australian, New Zealand and British Commonwealth markets of supplies from other countries. The outcome of that conference has not yet been revealed to us, but I know the matter was considered.

page 525

QUESTION

BANKING

Mr WHITLAM:

– I direct a question to the Treasurer. The right honorable gentleman will recall that last November, in answer to a question by me, he indicated that he would examine the possibility of regularly publishing statistics to show movements in unexercised borrowing limits approved by the trading banks, in the same way as such figures are already compiled and published in Canada and New Zealand. I ask the Treasurer: What has been the result of his examination? Does he intend to publish such information, and is he considering any other steps to overcome the weaknesses in the overdraft system in Australia?

Mr HAROLD HOLT:
LP

– I shall try to give the honorable member a considered reply to his question. It will be necessary for me to check how far any examination, both in the Commonwealth Statistician’s field and in other directions, has been found possible.

page 525

QUESTION

GOVERNMENT LOANS AND FINANCE

Mr CLEAVER:
SWAN, WESTERN AUSTRALIA

– I ask the Treasurer whether it is true that the Government has successfully negotiated a loan with Canada. If so, can he inform the House of the impact this loan will have on the Budget programme for loan-raisings, and the general progress at this stage of that programme?

Mr HAROLD HOLT:
LP

– Yes, I am glad to be able to report to the House that a loan from Canadian sources has been successfully negotiated and underwritten. The programme of borrowing for the year, as outlined in the Budget, was for about £150,000,000. That included borrowings both inside Australia and overseas. I think it worth while to remind honorable members that the total works programme of the State governments was of the order of £230,000,000 as it emerged from the Australian Loan Council meeting. The total works programme of the Commonwealth and States amounts, in the aggregate, to £424,000,000. So that when we budget to raise £150,000,000, that is really only a relatively small proportion of our total commitments for these governmental programmes.

The programme of borrowing has been proceeding quite satisfactorily, . having regard to the Budget target. We have raised £77,000,000 ourselves internally and now, with this Canadian loan, we have raised £26,000,000 from overseas. With certain State domestic borrowings, and special bonds yet to be sold, we get a total of £110,000,000, which leaves about £40,000,000 to be raised between now and the end of the financial year.

Having regard to the general situation and, in particular, to some of the comments made in relation to it, it will not be without interest to honorable members to point out that the two most recent overseas loans - those from Switzerland and Canada - had not been immediately solicited by the Government. In both cases, we were asked whether we would be interested hi a loan from those sources at this time. In the case of the Canadian loan, we made history in that, for the first time, the loan agreement was signed in Canberra yesterday. That was the first time any such loan agreement had been actually signed on Australian shores. I regard it as a very encouraging mark of the confidence felt by overseas lenders at this time when they themselves ask the Commonwealth Government whether it is interested in borrowing from their sources.

page 526

QUESTION

COAL

Mr KEARNEY:
CUNNINGHAM, NEW SOUTH WALES

– I ask the Minister for Trade whether it is correct to state that Australia could double her coal exports in the next two or three years provided adequate loading facilities were available at Port Kembla and Newcastle. I ask also whether the Government has yet made firm decisions to ensure that money is made available to effect considerable improvements to the coal loading facilities at these two ports. If so, will he outline the nature of the action which it is proposed to take? Finally, has the Minister considered a recent publicized statement by Sir Edward Warren, chairman of the Australian Coal Association, in which he Is reported as having said, “The removal of 5d. a ton excise on export coal will help in a small way, but urgent action is needed to bring coal loading ports to the required standard “?

Mr McEWEN:
CP

– The honorable member asks me whether it would be possible to double our exports of coal. I do not know the arithmetic of it, but the Government has no doubt at all that it would be possible to increase very materially - probably to double or even more than double - our exports of coal. We believe that there is a market for it. We believe that Australian coal is of a quality for which markets can be found, and that the price is competitive. All the advice, both commercial and technical, which we have received indicates that the greatest inhibiting factors to the development of a much bigger coal trade are inadequacy of port facilities for the berthing of ships of high tonnage and the inadequacy of facilities for economic loading. This is evident in the ports of Newcastle and Port Kembla, and I understand also in the port of Sydney itself. I believe that there is a very high prospect of export - I think through the port of Gladstone - from the Kianga field in Queensland where there is suitable coal.

Port facilities, and the loading facilities in the ports, have since federation been a matter, as schooling has been, entirely within the responsibility of the State governments, and this responsibility is delegated to special port authorities. The Commonwealth has not believed that it had a responsibility or a place as a principal. However, for reasons good or bad - I do not know which - port facilities have not been kept abreast of the needs of Australia to earn export income or indeed of the needs of the coal industry, employers and employees. The Commonwealth has now come in and has intimated in the first place, I think, to the State of New South Wales, that it is willing in principle to contemplate some special financial arrangements which would enable the expeditious and adequate improvement of port facilities in the coalloading ports. My colleague, the Minister for National Development, has been in consultation with the State authorities. I do not know whether I can say at the moment that negotiations are taking place, but his intervention is designed to lead to negotiations with the New South Wales Government. We have expressed our willingness to contemplate special financial arrangements, and I hope that there will be no delay in this matter. I hope that there will be an approach in good faith from both sides, having regard to the needs of the nation in general and to the particular interests at stake.

page 527

LEAVE OF ABSENCE

Motion (by Mr. McEwen) agreed to -

That leave of absence for one month be given to the honorable member for Gwydir (Mr. Ian Allan) on the ground of parliamentary business overseas.

page 527

SPECIAL ADJOURNMENT

Motion (by Mr. Harold Holt) agreed to -

That the House, at its rising, adjourn until Tuesday, 11th April, at 2.30 p.m.

page 527

NATIONAL LIBRARY

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

That, in accordance with section ten of the National Library Act 1960, the House of Representatives elects Mr. Haylen to the Council of the National Library of Australia from this date until the first day of sitting of the Twenty-fourth Parliament.

page 527

QUESTION

PRIMARY INDUSTRY

Mr. SPEAKER (Hon. John McLeay).I have received a letter from the honorable member for Lalor ( Mr. Pollard ) proposing that a definite matter of urgent public importance be submitted to the House for discussion, namely -

The grave harm being done to Australian primary producers by the Government’s policy of credit restriction, the Government’s failure to solve the problem of inflation and its failure to protect the wool-growers against market manipulation.

I call upon those members who approve of the proposed discussion to rise in their places (More than the number of members required by the Standing Orders having risen in their places) -

Mr POLLARD:
Lalor

.- I raise this matter in the hope that the Government will take heed and adopt some measures more appropriate to the existing financial situation than those it has adopted hitherto. Any one who moves amongst the primary producers or has close contact with them cannot be other than disheartened when listening to stories of their experiences as they have tried to obtain credit for the expansion of their activities, for the purchase of equipment or to meet obligations arising from the purchase of their farms.

In the quarter of an hour that I am allowed I cannot deal with all these subjects, butI shall give one instance in particular. A farmer I know recently went to the supplier of agricultural machinery to buy certain equipment. The manufacturer quoted a price and the farmer asked how much discount he would be allowed if he paid cash. The salesman said, “ Two and a half per cent “. The farmer replied, “ You are a bit light, are you not, in these days of financial difficulties? You are being saved all the trouble of arranging hire purchase or preparing a number of documents.” The salesman said, “It is quite true that there are difficulties. As a matter of fact, we find it very difficult now to arrange hire purchase contracts for our clients.” In other words, even the hire purchase companies are finding it difficult to obtain enough finance, though they offer exorbitant rates of interest to people who invest money with them.

When one endeavours to find out the reason for all this, one is inevitably forced back to the picture that confronts him in the newspapers every day of the week. The picture has become larger since the Government commenced its credit squeeze in November, 1960, with an increase in bank overdraft interest rates. That was followed almost immediately by an increase in the interest rates of pastoral companies, which provide a good deal of financial accommodation for primary producers. This can be established by documentary evidence. The Government’s credit squeeze has been continued with increasing intensity. Any honorable member who is interested can do what I did last night. I went carefully through the advertising columns of the Melbourne “ Herald “. I fond that hire-purchase companies which are offshoots of the trading banks have increased the rates of interest they offer in an effort to induce people to lend them money. People who are unable to obtain their needs from the trading banks are now compelled to go to the hire-purchase companies, which are offshoots of the trading banks. I point out that the trading banks are controlled by the Treasurer and by the Commonwealth government of the day, but hire-purchase companies are not.

In looking at newspaper advertisements, I found that the Industrial Acceptance Corporation Limited, which is, I think, an offshoot of the Australian and New Zealand Bank Limited, is offering 8 per cent, for ten years and 7 per cent, for six years. An offshoot of the Bank of New South Wales is offering 6i per cent, for four years and 5f per cent, for twelve months. Esanda Limited, an offshoot of the English Scottish and Australian Bank Limited, is offering 7 per cent, for six to ten years, and so on. The net result of all this is that primary producers who are unable to obtain from the trading banks the overdrafts that they seek are forced to go to the institutions which charge higher interest rates and obtain hire-purchase finance from them. These institutions which find that they can get people to subscribe money to them at interest rates of 8 per cent., 9 per cent., 10 per cent, and even higher, charge the hard-pressed primary producers the higher rates of interest.

This is the sort of thing that we find in financial affairs generally throughout Australia since the Government applied the credit squeeze. I have here an advertisement by the holding company of an industrial concern which is undoubtedly one of the greatest in Australia and which is unable to obtain its overdraft requirements from any of the trading banks or the Commonwealth banks. I refer to Thiess Holdings Limited, which, in a very expensive advertisement in the Melbourne “ Herald “ last evening, offered 81 per cent, interest over a term of ten years and 8 per cent, interest over terms of four or seven years. Who does the Government think will ultimately pay the high interest rates on money obtained on these terms? The ultimate cost will be paid by public authorities, governments and people for whom this company undertakes work. Added to the 8i per cent, interest will be the company’s profits and all the other components which make up the ultimate cost. Inevitably, this will force up the prices of commodities and will lead to an increase in the basic wage and in margins. As a result, the costs of the primary producer will be inflated and finally he will be unable to export at a profit.

Next, I come to an advertisement by Alliance Acceptance Company Limited - a concern financed with American capital. It is not quite so generous, but it probably thinks that because its offer is backed by dollars it will be attractive to the public. It advertises for deposits over a term ranging from five to ten years at 8 per cent. Lo and behold, the next advertisement is one by Ansett Transport Industries Limited, offering 9 per cent, for a term ranging from four to ten years. This is a company which has financed the purchase of its aircraft on a guarantee by the Government, which, if it is drawn against, will no doubt be subject to a substantially lower rate of interest. Who will ultimately pay the interest that is being offered by these companies? Similar offers are advertised by Lombard Australia Limited, and also by the National Bank of Australasia Limited and J. B. Were and Son, who are offering units in an income trust at 10s. each.

Competing against these high rates of interest are public instrumentalities such as the Melbourne and Metropolitan Board of Works,, which is trying to raise a loan at 5i per cent, interest. What hope has a public instrumentality of filling such a loan? What hope is there for government bonds? If it were n<** for all this sort of thing, the deposits of the savings banks all over Australia would have increased, but we find that the proportionate investment of savings bank deposits is not increasing at the rate at which it should increase, and, inevitably, money for public works and the like is short. That is the effect of the credit squeeze, and this Government bears the responsibility for it.

Let me now deal with that part of the terms of this proposal for discussion which relates to inflation, and with its effect on the primary producers of Australia. I have here the indexes of prices received and paid by farmers, compiled no doubt by the Commonwealth Statistician, and published in the “ Quarterly Review of Agricultural Economics “ - the journal of the Bureau of Agricultural Economics. These figures are related to a base index of 100 which represents the average of the five years ended June, 1950. On that base, the index of prices received had risen, at June, 1960, to 177 - an increase of 77 per cent, since June, 1950. But the index of prices paid, or total expenditure, by farmers, including interest charges, wages, marketing expenses and the like, had risen by June, 1960, to 231 - an increase of 131 per cent. We have to take into consideration the effect of the exceptionally high wool prices of the 1950- 51 season. Making allowance for these phenomenal prices, we see that the expenses of the primary producers increased by about twice as high a percentage as did the prices received by them between June, 1950, and June, 1960. That is all a direct outcome of the ineptitude of this Government and its inability to deal with the problems of the primary producers and the nation.

Let me now turn to another factor mentioned in the terms of this proposal for discussion - the Government’s failure to deal with the manipulation of wool marketing. In case there may be any doubt about the importance of this problem to the economy of Australia and to every man, woman and child in the country, all of whom are feeling the impact of the manipulation of the wool market, let me mention what the Minister for Trade (Mr. McEwan) who is at present Acting Prime Minister, said when addressing representatives of the National Farmers Union of Australia on 11th November, 1960. Referring to the decline in wool prices, he said -

This fall in value is the real problem, the one vital thing in our existence over which we have no control at all and can only seek to influence.

The journal “ Muster “, in a report of an address by the right honorable gentleman to the Federal Council of the Australian Country Party in Canberra on 29th November of last year, stated that he had warned overseas wool-buyers that Australia would not condone manipulation to depress the price of wool below its fair value. He was there referring to a statement in the “ Financial Times “, London, to the effect that the Bradford processing interests and the Communist countries and Japan were working together to prevent competition in wool-buying in Australia and in other parts of the world. The Minister emphasized the importance of this problem, and said that the position of wool in the national economy was such that woolgrowers and the nation could not condone manipulation of wool prices.

What has this Government done about this problem, the solution of which the Minister said was vital? It has done almost nothing. The right honorable gentleman said that this was the one great problem. That is not strictly true, because there are others, and notably that of inflation. The right honorable gentleman said that the Government would not condone manipulation of the wool market. It has now had Mr. Justice Cook’s report for long enough, and it could use certain powers which it has. Furthermore, a section of the wool-growers has been asking for something to be done. But the Government’s excuse for doing nothing is lack of unanimity among the growers. To cap everything, what did the Government finally do? It appointed a committee to inquire into wool marketing, and denied it the one power that it requires if it is to probe properly every aspect of this evil manipulation of the wool market and make adequte findings. The committee has been denied power to compel the production of documents and papers and to examine witnesses on oath.

Mr Turnbull:

– The committee can ask for the information that it wants.

Mr POLLARD:

– The honorable member lamely says that the committee can ask. However, I have been a member of committees of inquiry from time to time and I know how a witness deals with an embarrassing question when he knows that the committee before which he is appearing has no power of compulsion. He smiles blandly and says, “That is an awkward one “. The committee can do nothing about it. This situation is not right in view of the allegations that have been made and the findings of Mr. Justice Cook.

The fact is that in the records of the wool-brokers throughout Australia there is documentary evidence, which they will not produce voluntarily, indicating exactly what directions they have been given by every buyer concerning every lot of wool that he has bought over the last ten or twelve years. Does the Government really think that any broker will say to the Wool Marketing Committee of Inquiry, “ We are producing for your examination all our books giving details of the orders of buyers, including the dates of purchase and thendirections as to the destination of each lot. This will show you the people to whom we are supplying wool “? The Government can name any firm of wool-brokers that it likes, including Elder Smith and Company Limited, New Zealand Loan and Mercantile Agency Company Limited and Goldsbrough Mort and Company Limited. None of them will do this. The first woolbroker to produce all this information to the committee would be on the outer with all hrs colleagues for ever. He would be accused of giving the game away. Furthermore, any wool-broker would feel that he was committing a breach of confidence if he gave this information without being compelled to do so.

The prevention of the manipulation of the wool market which was alleged in the “ Financial Times “, and which was established in Mr. Justice Cook’s report, is too important to be passed over lightly and pushed aside by denying to the committee of inquiry these powers which I have mentioned. The Acting Prime Minister (Mr. McEwen), in a letter to me, gave an excuse for the denying of this power to the committee. He said that the Cabinet had considered what powers should be vested in the committee and that it had finally decided that if additional powers were wanted the committee could ask for them. Does the Government really think that any committee would make such a request after the Government had considered the matter and refused to give it these powers?

Mr DEPUTY SPEAKER (Mr Lucock:
LYNE, NEW SOUTH WALES

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

Mr HAROLD HOLT:
HigginsTreasurer · LP

– The matter proposed for discussion by the honorable member for Lalor (Mr. Pollard) involves three elements. The honorable member alleges that harm is being done to Australian primary producers by the Government’s policy of credit restriction. Then he alleges failure on the part of the Government to solve the problem of inflation, and thirdly, he alleges failure to protect the woolgrowers against market manipulation. In the fifteen minutes available to me I shall devote my attention to the first two of these three elements, and my colleague, the Minister for Primary Industry (Mr. Adermann), will, while no doubt touching on the other aspects, concentrate his attention on the third element.

Since the November measures were announced by me on behalf of the Government I have had a number of curious experiences. There was a time when honorable gentlemen opposite used to allege that I and others who sit with me on this side of the House were the spokesmen for the big interests, as they termed them, of Australia. Well, they have put that charge in the background for the time being, because they found that we, from a sense of public responsibility and in the national interest, decided that it was necessary to take action which has proved quite unpopular with many spokesmen for the big interests of this country.

In the days when honorable members opposite were concerned with matters closer to their hearts, and when they concentrated on putting forward the sectional views of members of the trade union movement, they were disposed to lump farmers and graziers with those big interests in a single category as representatives of capitalist influences and capitalist groups. Now they have come forward with this matter for discussion, but not with any statement of policy. You may search through the speech delivered by the spokesman for the Labour Party on this occasion and you will not find any policy recommendations which any Government could seriously consider, or which would represent to any fair-minded observer an alternative line of policy to be adopted if, by some stroke of misfortune, these honorable gentlemen were to find themselves in chargeof the administration of this country.

The farmers and graziers, the men and women who work on the land in Australia, know who speaks faithfully for them in this House when policy matters are decided. They know that if the measures which the Government adopted in November were designed to improve the situation and strengthen the security of any section of the Australian community, they were designed to do just those things for the people who derive their incomes from the land. There is no section which has greater concern with stability of costs and prices, and with resistance to inflationary pressures, than the rural producers. They do not have the shelter of tariff protection. They have to sell their goods on the markets of the world, and they are vulnerable, in a degree to which probably no other section of the Australian community is vulnerable, to rises in the levels of costs, prices and wages, because these would weaken their competitive position.

Of course, this Government has recognized these facts, and in the measures which we introduced in November we emphasized, in a way which could not be misunderstood by any one having to do with the provision of finance, either through the banking system or outside it, that we attached the greatest importance to ensuring that our rural industries should be supplied with adequate financial resources to carry on export production and rural production generally. That was made clear by me in the statement which I gave to the House in November of last year. In the statement that I made on that occasion I included this comment -

We see no ground, based on national credit policy, for an overall attack on current loans to primary industry, loans which have been made for housing, and the many smaller overdrafts which have not been unduly or unreasonably increased in the last year or so. This would be attacking the problem at the wrong end. But there are those who have heavily increased their borrowing limits, or who have called heavily on notional limits established in the past, and who in the process have contributed to those developments we are now seeking to check. These are the avenues where we will expect the main attention to be given.

Not only was that clearly understood at the time; the Governor of the Reserve Bank, in a communication dated 24th November to the general managers of the trading banks, quoted the passage from my statement, giving some elaboration of it. Included in his directive was this passage -

Banks should bear in mind the need for appropriate finance for export production especially in the rural and mining industries and give special consideration to the needs of rural customers affected by adverse seasonal conditions.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Are the banks following that directive?

Mr HAROLD HOLT:

– The policy of the Government was clearly made known by me. It was clearly conveyed by the Governor of the Reserve Bank to the trading banks. The honorable member for Eden-Monaro interjects and asks whether the trading banks are carrying out that directive. Honorable members on this side of the House did not wait until this point of time to raise this matter. They have tried to find out for themselves what has been going on. For my part, I have kept closely in touch with the position, through the Governor of the Reserve Bank and through the Secretary to the Treasury. On at least two occasions, at my instance, the Secretary to the Treasury has caused this matter to be discussed at meetings of the board of the Reserve Bank. At my own direct instance the Governor of the Reserve Bank took the matter up generally with the general managers of the trading banks. When the Government parties met, long before the House commenced this sessional period, I think on 7th February of this year, this was a matter that we discussed very fully. I think I can say without violating party confidences that after my measures had been announced-‘in this House, the principal matter of discussion the following day, in our joint party meeting, was this necessity to ensure that adequate rural credit would be made available. When we came together in February we reviewed what had happened. I invited honorable members from all parts of Australia to tell me their experiences and to produce any concrete instances in which, after full investigation, it could be fairly said that there had been unsatisfactory treatment of rural borrowers.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Did you find any?

Mr HAROLD HOLT:

– We found so little material of this kind that we felt we should pursue it further with the Governor of the Reserve Bank to see what had been his experience and what had been the experiences of the trading banks. I was able, when the House again met in session, to quote an extract from a letter which had been conveyed to me, through the Secretary to the Treasury, from the Reserve Bank, in which the Governor, reporting upon his discussions with the general managers of the trading banks, said -

The Governor is in a position to assure the Government and any other parties through whom complaints are received that the trading banks are carefully giving effect to the current qualitative credit policy, including preferential treatment to the rural industries and other export producers. This policy is adequately known throughout their institutions, and branch managers are fully aware of the need for appropriate discriminatory application of it, and the head offices of the banks stand ready to examine any complaints directed to them by their customers.

So not only were the banks claiming that they were giving effect to the Government’s directive, but they said that in any case of doubt, or wherever it was felt that reasonable treatment was not being given, their head offices would deal promptly with the matter.

The honorable member for Lalor (Mr. Pollard) and other Opposition members who claim to have concrete cases know that I quoted this passage in the House some time ago. But how many of them invited the persons concerned to put their case to the head office? If they did so, what has been the outcome? Since the statement to which I have referred was made, I have not had one such matter brought to my notice by any member of the Government parties.

Here is another point which shows our regard for the well-being of rural producers in this matter: When it became evident that some upward movement in interest rates was necessary and, indeed, unavoidable, we took adequate measures to ensure that favorable and preferential and discriminatory rates of interest were chargeable to rural producers compared with other classes of borrowers. Now, more recently, with the incentive scheme that we have announced for export producers, we have shown a further earnest of our determination to build up the export income of this country. The Government has announced a series of important projects in the outback areas of various States. Again, this is proof of our determination that in the years ahead we will do the things that are necessary to build up the export income of Australia.

We recognize that our capacity to expand manufacturing industries and to improve the living standards of the people is directly related to our export income, which is largely earned by our rural producers. Last year, 86 per cent, of our total export income was earned by primary production. We are fully sensitive of the need to maintain export income at a steadily increasing level in the years ahead.

I should have liked a lot more time to deal with the allegation that we have not done anything to check inflation. The irony of the matter is that the very credit restrictions which the Opposition is using as a stick with which to beat us were designed principally to check inflation.

How did honorable gentlemen opposite assist us between the time that we announced the measures of February, 1960, then the measures of our deflationary Budget, and finally the measures of November last, to hold inflation in check? What policy emerged from them? Neither their Leader, their Deputy Leader nor any one else, except the honorable member for East Sydney (Mr. Ward), who came late into the debate, has sought to make any positive contribution of policy. When the one contribution came it was largely a proposal to impose the kind of controls which proved so ineffective in checking inflation when Labour was in office in the years after the war. As I have said before, when we took over, inflation was running at a rate of between 9 and 10 per cent, per annum under a Labour government. There had been controls over capital issues, controls over profits, controls over prices and, at an earlier point, controls over man-power. Sir. honorable gentlemen opposite who are interjecting can try to upset my remarks if they care. They cannot deny the facts. During those years, inflation was running at a rate which, if it had continued at that level until to-day, would have been completely disastrous and ruinous to the rural producers. On this side of the House are representatives of rural areas almost out-numbering the total strength of the Opposition. This is proof of the support that we get from rural areas.

Mr DEPUTY SPEAKER:

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

Mr Allan Fraser:
Monaro · EDEN-MONARO, NEW SOUTH WALES · ALP

– One answer to this city Treasurer (Mr. Harold Holt) on what is happening in the country comes from Sir Herbert Hyland, leader of the Victorian Country Party who, speaking in the Victorian Legislative Assembly the other day, described the extent of the injury being don.e to the primary producers by the current squeeze as equivalent to the damage from a fire, a flood or a drought. To the extent that I have time I will quote statements by the trading banks, primary producers’ organizations and individual farmers as to the injury the man on the land is suffering while this Government stands idly by. We do not need to go outside this Parliament in order to obtain evidence of the existing situation because every representative of a country electorate who possesses the confidence of his constituents will already have received a flood of letters from rural organizations setting out the effect of credit restrictions being imposed in country districts.

Mr Turnbull:

– I have not received such letters.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I said that -every member who possessed the confidence of his constituents has received them. Who would bother to write to you? Other members will have received letters from individual farmers describing their own experiences in their rejection by the banks of their normal requests for credit. It is true, as the Treasurer said, that some Government supporters became a little restive recently. They ventured to complain to the Treasurer in the party room, but when he administered some soothing syrup to them they went to sleep again. The Treasurer said that not one Government supporter had brought to him one complaint. But in this House the honorable member for East Sydney (Mr. Ward) and other members of the Opposition have brought details of specific desperate cases to the notice of the Treasurer, but not one word of reply and not a hint of action has been received in reply, although all details of the cases have been given.

The Treasurer has quoted a letter in which the Reserve Bank asserts that the trading banks are fully carrying out the directive of the Government. The Treasurer therefore exonerates the trading banks from blame. Where, then, does the blame rest except on the Government of this country? The farmers are being squeezed. The Government agrees that the trading banks are not to blame; that they are carrying out the Government’s directive. Therefore the responsibility rests solely on the Government. Neither the Development Bank nor the trading banks are to-day financing the requirements of primary producers. The farmers themselves are bringing this to attention every day. The banks themselves are admitting it - I will quote their own official statement - but the Government is doing nothing but talk. Government supporters are sitting silently by and betraying the interests of their constituents.

What about the proposal of the chairman of the Commonwealth Banking Corporation, Mr. McDonald, that the Government should give the Reserve Bank discretion in the application of restrictions to the Development Bank in the present time of economic stress? The Treasurer was asked about this the other day. He said that if Mr. McDonald had any proposal to put before the Government and if he put it in a formal and proper way it would, in due time, receive proper consideration. At a time when the position of the primary producer is desperate, the Government should be examining immediately any proposal to alleviate it. What about the statement on behalf of the trading banks that the deliberate Government policy of discouraging them from long-term financing was having a disproportionate effect on primary producers and was definitely against the interest of individual farmers? That statement was made a week ago on behalf of the trading banks by Mr. R. B. Prowse, their official spokesman.

What about the continued rejection by Federal Cabinet of proposals for an extended credit system for grain shipments? The Australian Wheatgrowers Federation has been continually urging upon the Government the need to agree to such a scheme, but nothing is done. That is the whole record of this Government - nothing is done. I defy any member of the Australian Country Party or the Liberal Party to deny :that primary producers, both now and over the next few months, cannot hope to obtain from the banks any finance beyond that which is necessary for bare carry-on purposes. And they are not in the race to obtain finance for any expansive purpose or, indeed, for any purpose in excess of the scale of their usual programmes.

Mr Anderson:

– That is not true.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– All right, it is an official statement made on behalf of the trading banks of Australia to the executive of the Graziers Association ten days ago; and they added also that not only is this so, but unless the Government acts in a way in which it has so far shown no disposition to act the credit position for farmers must continue to grow worse up to the end of this financial year. That was the official statement of the trading banks of Australia in March of this year. It is unquestionable that the blame and the responsibility rests with the Government which could, if it chose, make available the additional credit to prevent the current setback to primary production. Will any honorable member deny that?

One course for the Government to follow would be to free specially for advance to primary producers some of the deposits at present held in the statutory reserve. Is there any one in the House who will deny that the primary industries to-day are in need of immediate financial assistance which they cannot obtain and that the extent of the rise in costs and prices which they are enduring constitutes both a burden and a threat to primary producers throughout this nation? That is part of the official submission by this Government, made through its counsel, Mr. Frost, only a fortnight ago to the Commonwealth Conciliation and Arbitration Commission at its inquiry into the basic wage. The advocate for the Australian Council of Trade Unions has made it plain that it is no part of the union’s case before the commission to deny that the position of the farmers in Australia has severely deteriorated. That fact is admitted on all sides. The present position of the farmers is due to various aspects of Government policy, including its failure to cope with inflation and its application of the credit squeeze. Yet the Government stands spathetc and idle, and country representatives on the Government side do nothing to force it into action.

I quote again from a public statement made a week ago by the Research Director of the Australian Bankers Association. He said -

The free enterprise banks are doing what they can to help the man on the land who is creditworthy. But national credit policy is placing a severe limitation on overall bank lending, and this is reflected in a reduced amount of finance available for capital purposes, property purchases, and so on.

Secondly, I quote from “ Muster “, the official organ of the Graziers Asosciation, of 15th March, which states in an editorial -

It is surprising indeed, not to say disappointing, that the Government’s thinking has apparently not progressed to the stage of evolving plans to improve the prospects of primary industry.

Mr Barnes:

– Quote the Graziers Council.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Would you repudiate that statement?

Mr Barnes:

– Quote the Graziers Council.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– The article continues -

Two avenues lay open for action here, first the direct one of incentives, the second, the indirect one of measures aimed at reducing costs in the main sections of primary industry. The Government has done nothing constructive on either of these lines.

I am glad to see the honorable member for Wannon (Mr. Malcolm Fraser) giving a little attention at last to the interests of the primary producers . whom he has consistently betrayed, living a life of indolence and luxury, instead of representing them, ever since he came into this Parliament. The Government provides incentives for the Broken Hill Proprietary Company Limited to export, but no incentives whatever to the primary producers to assist them to export. I have here the despairing resolution of the annual conference of the Graziers Association in Sydney early this month, appealing to the Government, in its attempts to correct the present situation, to stop employing restrictions which are hindering and retarding primary industry. What has any Country Party member to say about that?

The same story comes from all over the State. Farmers have grass to spare, but cannot get finance even for the purchase of store stock. Store cattle are being sold by graziers to meet the demand of the banks that they must reduce their overdrafts, where normally such stock would be carried through to fats. Bankers are refusing to finance the sale of property. Even some of the fringe banking institutions are refusing any longer to operate in country districts. That, then, is the position. The farmers cannot get the money and the banks submit they cannot provide it.

Mr DEPUTY SPEAKER:

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

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I declare that the responsibility rests on the Government; but the farmers have been betrayed by their elected representatives in this Parliament.

Mr DEPUTY SPEAKER:

– Order! Once again I say from the chair that when an honorable member is told that his time has expired he must resume his seat immediately,

Mr ADERMANN:
Minister for Primary Industry · Fisher · CP

.- The speeches of both the honorable member for Lalor (Mr. Pollard) and the honorable member for Eden-Monaro (Mr. Allan Fraser) consisted only of generalities. I want to say at the outset that I have repeatedly invited, publicly, particulars of any individual cases in which primary producers have been affected.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I have put them up.

Mr ADERMANN:

– The honorable member says that he has put them up. He has only put up statements which he has culled from the newspapers, but not cases of individual primary producers. I invited primary producers to put their cases. The honorable member for Eden-Monaro has quoted the Graziers Association, but when the Government, in the person of the Minister for Trade (Mr. McEwen) met the graziers’ deputation on other matters, they suggested something similar to what the honorable member for Eden-Monaro has said about not getting finance. There was present at that deputation a member of the Reserve Bank Board, and when he asked them for particular cases they could not give one. They did not know of one.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I have put up dozens of specific cases.

Mr ADERMANN:

– I tell the honorable member for Eden-Monaro that rural advances by pastoral finance houses, from January, 1960, to January, 1961, increased from £96,300,000 to £114,900,000, an increase of nearly £19,000,000. In his opening remarks, the honorable member for Lalor had said that increased costs were affecting the primary producers. The Treasurer (Mr. Harold Holt) has stated that that is the very purpose for which we brought in these credit restrictions - to counteract the ever- increasing costs affecting the primary producers of this country. I want to be more positive than the honorable members for Lalor and Eden-Monaro, because they cannot produce any direct evidence in support of their claims. They come here and criticize, and even offend, honorable members, like the honorable member for Wannon (Mr. Malcolm Fraser), who have been so loyal to their organizations. The honorable member for Eden-Monaro referred to the wheat-growers. I did not quite get what he said was not made available to them, but when he says that the Government has made no financial assistance available to the wheat-growers-

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– That is not what I said.

Mr ADERMANN:

– Then let me refer to the recent advances made available by the Government by a guarantee to the Reserve Bank so that the first advance to the wheat industry might be paid. That amounted to £150,000,000, in itself. In addition to that, we have guaranteed an amount of £50,000,000 to the butter producers. That is the way we have directly assisted the primary producers - not only by loans but by stabilization schemes, and not only by guarantees to the primary producers themselves, but also by arranging for the necessary finance with the banks so that they might meet their commitments.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– What about credit for grain shipments?

Mr DEPUTY SPEAKER:

– Order! I ask the House to come to order. The honorable members for Lalor and Eden-Monaro have both made their speeches. If the House does not come to order the Chair will take action.

Mr ADERMANN:

– I did not get the interjection by the honorable member for Eden-Monaro, but let me say that all sales of export wheat have been made on the basis of cash against documents. So where does credit come into the picture?

As to the third part of the honorable member’s charge, that which refers to wool, he states that we have not protected the wool-growers against marketing monopolies-

Mr Pollard:

– You put up a sham inquiry, with no powers at all.

Mr DEPUTY SPEAKER:

– Order!

Mr ADERMANN:

– All I want to say is that the wool auction system operated from the end of the First World War until the beginning of the Second World War. It was suspended during the war period. It was resumed when the honorable member for Lalor himself was Minister for Commerce and Agriculture in the Labour Government, and it was the unanimous wish of the industry that the auction system should continue. When the system was threatened in 1952, the industry prevailed upon this Government to maintain it, and we succeeded in maintaining it.

The honorable member talks about protecting our markets. I throw it’ right back in the teeth of the Labour Party that when one of our best markets - Japan - became available, and we were making a treaty with Japan, every Labour man voted against it. They did not want us to sell wool to Japan.

Mr Pollard:

– That is a lie!

Mr ADERMANN:

– They did not want it.

Mr DEPUTY SPEAKER:

– Order! The honorable member for Lalor will withdraw his remark.

Mr Pollard:

– It was a statement of fact. We did want to sell wool to Japan. We did not object to that part of the treaty at all.

Mr Haylen:

– We did not want to kiss our enemies like the Minister did.

Mr DEPUTY SPEAKER:

– Order!

Mr ADERMANN:

– The honorable member cannot deny that the Labour Party voted against the Japanese Trade Agreement. And what is the position to-day? japan is taking more of our wool than the United Kingdom is, and if it were not for the fact that Japan is the chief bidder at the wool auctions to-day we would not have had the increase that has occurred in wool prices in recent months. This season’s opening price was 45.2d. per lb., and to-day it has reached 56.41 d. per lb., almost beating the average of last year, due to the factor of Japanese buying.

Mr Pollard:

– It is not 56.4 Id. per lb.

Mr DEPUTY SPEAKER:

– Order!

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I ask you, Mr. Deputy Speaker, to stop the Minister from making false statements.

Mr DEPUTY SPEAKER:

– Order! The honorable member for Eden-Monaro will withdraw that remark.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I withdraw the remark that I asked you to stop the Minister from making false statements.

Mr DEPUTY SPEAKER:

– The honorable member will withdraw that remark, which reflects on the Chair.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I withdraw the statement I made that I asked you to stop the Minister making false statements.

Mr DEPUTY SPEAKER:

– Order! I ask the honorable member to withdraw both statements that he made, which are reflections on the Chair.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I withdraw all the statements that you have asked me to withdraw.

Mr ADERMANN:

– Obviously, members of the Opposition have established no charges of substance against the Government. They have produced no evidence of individual cases of hardship among primary producers, for which the banks were responsible and they will not admit that, by voting against the Japanese Trade Agreement, they themselves have been guilty of not supporting the wool industry in relation to marketing. Let me say that the wool industry has been supported by the Commonwealth Government, which established the Australian Wool Bureau to help it. In recent years we established the wool testing authority to assist in the marketing of wool and, at the unanimous request of the three grower organizations that we establish a wool committee of inquiry, we did so. The honorable member for Lalor scorns that, of course, by saying that compulsory evidence is not being called for. If what is desired is to delay things then let us appoint a royal commission, which would have power to compel witnesses. It was on the request of the three organizations concerned, which wanted proceedings to be expedited as much as possible, that the Government appointed the present committee, and fixed the procedures to be followed. The Prime Minister made a statement in which he said that if there were any need for further action the matter could be brought back to this House, and action taken accordingly. When the honorable member talks about implementing a floor price plan for the wool industry, I must say that I do not agree with him, nor would the honorable member himself support such a proposal if he were Minister, because we must have agreement in the industry itself before any plan can be acceptable.

Mr DEPUTY SPEAKER:

– Order! The Minister’s time has expired.

Mr PETERS:
Scullin

.- The population of Australia in 1939 was 7,077,000. To-day, it has more than 10.000,000- an increase of 3,000,000 people in about twenty years. Of those 3,000,000 people not one person has become a proprietary farmer, not one person has gone into rural production, without displacing some other farmer or some other rural worker. Not one ex-serviceman has gone upon the land since 1939 without displacing some other farmer. Not one immigrant has gone upon the land without replacing one other person. Not one farmer’s son has gone upon the land since 1939 without displacing one other farmer. Not one of those persons has gone into rural occupation without replacing another person. My authority for this statement is the Minister for Primary Industry (Mr. Adermann), who now sits at the table. This week he gave me the following information in reply to a question I put on notice about the number of rural holdings -

At 30th June, 1939, there were 253,536 such holdings, excluding the Northern Territory for which figures are not available . . .

The nature and extent of assistance to civilians to secure farms since 1939 is not available to me

To 30th June, 1960, 8,974 farms had been allotted under the War Service Land Settlement scheme and 14,307 applicants had received agricultural loans. Of this latter number, 4,840 used these loans to assist in the purchase of land . . .

To 30th June, 1960, the direct expenditure on the scheme by the Commonwealth and States was approximately £184,000,000. In addition, agricultural loans made under the Re-establishment and Employment Act total £10,200,000 of which £4,000,000 is estimated as being used for the purchase of land . . .

The number of rural holdings at 30th June, 1960, was 251,974.

That is, despite the vast expenditure, despite the number of people put on farms by Government assistance to ex-servicemen, despite the number of civilians put on the land with the assistance of governments - about which the Minister can tell me nothing - there has been an annual reduction of 2,000 in the number of farms in the period in which the Government has been in office. More than 1 7,000 farm-holders have gone off the land. But that is not the worst feature of it, because the Minister’s reply contained the following statement -

While this number showed a decrease on the 1939 figure, the aggregate area of rural holdings increased from 897,000,000 acres in 1939 to 989,000,000 acres in 1960; that is, by 92,000,000 acres.

Ninety-two million acres more of rural land in this country since 1939 and 2,000 fewer farms each year since this Government has occupied the Treasury bench! What is the cause of that vast aggregation of land and the diminution in the number of people on the land? It is the high price of land. People want to go on the land. About 50,000 returned soldiers applied for land under the soldier settlement scheme and, although they were suitable applicants, they were unable to secure any allotment. To-day the Lands Department in Melbourne has 20,000 applications from civilians and others who want to settle on the land. In every capital city there are thousands of people who want to go on the land, but they are unable to do so because the price of land has skyrocketed. The Government is responsible for this inflation in land prices which, apart from keeping people off the land, has raised the price of commodities to such an extent that the general development of this country has been retarded.

When the Arbitration Commission froze wages in 1953 and refused to hear an application for an increase in margins, prices continued to rise. What was the reason for this? The reason is that wages are not the only component in costs. The price of land is also a component to be taken into consideration because it adds vastly to the cost of commodities that are necessary for our secondary industries and for every person in the community. Not only that; there are also the high interest rates that have to be paid. These also play their part in multiplying costs. Because of the increase in land prices, for which this Government is responsible, and because of the other increased costs that primary producers have to meet, we are unable to sell our products abroad. Every secondary industry depends upon some primary product, so our secondary industries also are unable to sell their commodities at competitive prices.

The Government has now proposed an impossible scheme in an endeavour to rectify the position, but its scheme will fail. All that the Government has done by its credit squeeze and by the flood of imports that it has allowed into this country has been to strangle to a large extent the secondary industries that have expanded despite it. The Government is strangling secondary industries because primary production is being restricted due to there being fewer people on the land.

I know that some honorable members will say that more land is being intensely farmed to-day than ever before. When the Cain Government was in office in Victoria, a survey was made of an area in the western districts and it was found that in that fertile area alone 600,000 acres could be taken away from the big land-owners without reducing their production or their income in any way, and that the land could be used for a soldier settlement scheme. This country must be evenly balanced.

Mr Adermann:

– Would you know which end of the cow to milk?

Mr PETERS:

– That is the futile kind of proposition that the Minister puts forward. I was in the Victorian Lands Department for twenty years, and for ten years I was secretary of the Victorian Public Works Committee which investigated all kinds of land settlement schemes, so I speak with more authority than does the honorable gentleman who spent his time acting as Uncle Joe speaking over the radio to the children in an effort to inveigle himself into a position that he cannot carry out adequately.

Mr DEPUTY SPEAKER:

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

Mr JEFF BATE:
Macarthur

.- The honorable member for Scullin (Mr. Peters) has made some remarks about falling production and about people going off their farms but he forgets - I suppose we can expect it - that in the last ten years wool production has increased from 1,000,000,000 lb. to 1,600,000,000 lb., and that the sheep population has increased from below 100,000,000 to 155,000,000. During the debate on, I think, the Japanese Trade Agreement, the honorable gentleman, who comes from an inner city electorate, asked, “ Why do we have to buy goods from Japan? Could Japan not just give us a cheque for the wool?” If that is the attitude of mind of the honorable gentleman

Mr Peters:

– I did not say any such thing.

Mr JEFF BATE:

– It is a silly statement, but I heard him say it and it is recorded in “ Hansard “. As though a piece of paper would be enough for Japan to give us for our wool! There was no need for an exchange of goods and there would be no currency problem!

Mr Peters:

– I said no such thing.

Mr JEFF BATE:

– Of course, the honorable gentleman now wants to deny that statement because in the last few years he has matured a little after hearing some of the debates in this House. I am glad that he seeks to dissociate himself from those remarks because they are probably among the most absurd ever to have been made in this Parliament.

This Government which we have the honour to support has leaned over backwards to do everything possible to help the primary producer. 1 propose to substantiate that claim and to show that the Opposition, on the other hand, on its own record has done everything possible to make it difficult for the primary producer to carry on. The honorable member for Lalor (Mr. Pollard), a former Minister for Commerce and Agriculture, is sitting on the front bench on the Opposition side, so he will be able to confirm what I say.

The first statement to which I wish to refer was made by Dr. Coombs. Who is Dr. Coombs? He is the man who was favoured by the Labour Party. He was thought highly of by the late Mr. Chifley, who was a socialist. Therefore the opinions of Dr. Coombs ought to be accepted by the Labour Party. He is by no means a private, enterprise man. In a Reserve Bank directive to all trading banks, he stated -

Banks should bear in mind the need for appropriate finance for export production especially in the rural and mining industries and give special consideration to the needs of rural customers affected by adverse seasonal conditions.

Do honorable members opposite believe that statement to be true? If they do not, let me read an extract from a letter which the Treasurer (Mr. Harold Holt) received from Dr. Coombs and which the Treasurer read in this House in reply to a question. The extract reads-

The Governor-

That is Dr. Coombs - Labour’s Dr. Coombs - is in a position to assure the Government and any other parties through whom complaints are received that the trading banks are carefully giving effect to the current qualitative credit, policy, including preferential treatment to. the rural industries and other export producers.

That preferential treatment, has been extended to the rural industries because we see in the classification of bank advances that from the end of December, 1957 to the end of June, 1960, borrowing in the agricultural sector increased from £200,000,000 to £236,000,000, an increase of 18 per cent. This indicates a credit expansion policy, not a credit restriction policy. If honorable members opposite want further proof of the Government’s policy, they have only to look at all that the Government has done to assist the primary producers. The Government’s actions are quite different from those of the Opposition when it was in power. Honorable members will remember that when a soundly based application was made for an increase in the price of butter from ls. 6d. per lb. to ls. 7id. per lb. the then Prices Commissioner, a man who was sponsored by honorable gentlemen opposite, including the honorable member for Lalor, refused to grant the increase because he said that there would be two good seasons and therefore Australia might be flooded with butter. This attitude was in line with the price pegging which the then Government was imposing and which was having such an effect on primary producers, particularly in the Eden-Monaro electorate, where farmers now, for the first time in their lives, are receiving a decent income. At that time butter was rationed. The Prices Commissioner set himself up as a weather prophet. He said that there would be two good seasons and so refused the application for an increase in the price of butter. Two years later the Prices Commissioner refused a similar application because there had been two bad seasons which would cause an abnormal rise in the cost of producing butter. That is the record of the Opposition. The electors in Eden-Monaro who are dairymen read the “Bega District News “ which the honorable member for Eden-Monaro has quoted as a good newspaper. Let us see what that journal has to say on this matter. In a leading article, it agreed with me that, as a result of a succession of splendid seasons, the dairyfarmers of that district had insulated themselves against all the possible ill effects of the present economic position.

The Government’s efforts to achieve a stable economy are aimed entirely at making conditions better for the man on the land. If honorable members want any proof, I cite Mr. Mick Scott, federal president of the Graziers Council. He has repeatedly said that these economic measures are designed to establish a sound and stable economy in Australia and that they are, first of all, in the interests of the primary producers. I have here an agenda of one of the big meetings of graziers. The conference of the Graziers Association of Riverina was attended by 100 farmers, and a motion was moved that the conference believed that the primary producers should receive some sort of preferential treatment. That was defeated1. In other words, these men did not believe what the Opposition is trying to say.

If honorable members opposite want any further proof of what the Government is trying to do, let them consider some of the things that are being done. Everybody knows that tax concessions - all of which mean money in the pockets of the men on the land - are almost unlimited for primary producers. Anything at all that you do on the land is deductible as a tax concession. That is not so in the case of secondary industry where allowance is made only for a return of 35 per cent, from profits and the rest is subject to company tax. Farmers have unlimited tax concessions. That is why wealthy men go into the country to buy farms. The tax burden on them in the city has been too heavy. The tax concessions for primary producers are enormous. Let us consider the other money that the Government is allowing to producers. I have been a Commonwealth representative on the New South Wak: flood and bush-fire relief organization. Enormous sums have been provided in credits entirely free to men in necessitous circumstances. In cases where men have equipment in their places they have been given a grant together with a loan from the Rural Bank at a low rate of interest. Enormous sums have been provided in flood and bush-fire relief. The dairying industry last year received £247,338 as an efficiency grant, as well as large sums for drought and bush-fire relief. The grant for food production in the way of agricultural advisory services last year totalled £217,684, and this year it will amount to £264,000. The dairying industry subsidy totals £13,500,000 a year and altogether has passed £100,000,000.

These figures are proof that the Government has done everything possible to assist primary industry, whereas the record of the Opposition shows that it has done everything possible for other sectors of the community. The honorable member for Scullin (Mr. Peters) represents an inner city electorate. The Labour Party’s policy is to provide cheap food for the trade unionists so that their wages will be worth more. They want margarine for the workers. They attack the producers all the time. Now the Opposition has submitted the ridiculous proposal that is before us.

Assistance to primary producers provided by this Government includes £1,028,063 for wool use promotion last year and a proposed grant of £1,000,000 for the same purpose this year. The Government provided last year £514,031 for wool research, £186,823 for wheat research, £126,519 for dairy produce research and £206,918 for dairy sales promotions, thus bringing more money into the industry. Might I repeat as chairman of the Government Members Food and Agriculture Committee, with the co-operation of the chairman of the Government Members Wool Committee, that if any person, inside or outside this House, can submit any proposal that will further help the man on the land, we will work day and night to put it into effect.

Mr DEPUTY SPEAKER:

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

Mr LUCHETTI:
Macquarie

.- The Australian Labour Party is concerned with the problems facing the man on the land, and I am pleased to support the contentions of the honorable member for Lalor (Mr. Pollard) in proposing this subject for discussion as a matter of urgent public importance. The honorable member refers to the great harm that is being done to the primary producers by the Government’s policy of credit restrictions, by its failure to solve the problems of inflation and by its failure to protect the woolgrowers against marketing manipulation. That is a three-pronged attack. The case has been driven home by the honorable member for Lalor and the honorable member for Eden-Monaro (Mr. Allan Fraser), and they have been supported by the honorable member for Scullin (Mr. Peters); but not one word has been expressed by the Treasurer (Mr. Harold Holt), the Minister for Primary Industry (Mr. Adermann) or any other speaker on theGovernment side to indicate that things are not as good as they might be in primary industry and that something ought to be done. It is clear from the statements of the honorable member for Macarthur (Mr. Jeff Bate) that Government supporters are quite satisfied with the condition of primaryindustry to-day. The Treasurer said that adequate finance was available to rural industry. I leave it to the rural community at large to say whether adequate funds havebeen available for primary producers.

Overdrafts have been called up and farmers, like everybody else in the community, have been told to reduce their overdrafts. We know that 31st March is the deadline fixed by the banks when overdrafts must be brought into line with Government policy.

The Treasurer said that honorable members should produce some cases.I have submitted numerous cases to him in the past. In January of this year I submitted a housing matter to the right honorable gentleman. I told him that a constituent of mine who had £650 in a savings bank wanted to buy a house. After paying a deposit he went to the bank and was told, “ You should have had £1,000 in the savings bank. You cannot get the accommodation.” That case was submitted to the Treasurer in January. It took him approximately one month to reply to me and since then no further action has been taken although my constituent had withdrawn £1,600 from his savings account and had invested it in government bonds. Yet, honorable members on the Government side say that everything is in a happy state in primary industry.

Supporters of the Government should know that, although production has increased, incomes have fallen, and that the problems of the man on the land are continuing to multiply. He is the victim of the credit squeeze, inflation and restrictive trade practices. All these points have been hammered home by members of the Opposition, yet the honorable member for Macarthur, in an attempt to support the Government’s case, said, “ We have 155,000,000 sheep to-day”. Is that satisfying to those who are receiving less income from the wool clip? Of course, it is not. The honorable member said, “We have been bending over backwards trying to satisfy the man on the land “. Might I say to him that the Government has been going backwards; I am not sure about it “bending backwards. The Minister for Primary Industry, who is sitting at the table, knows that the Government has pigeon- holed a report on the dairy industry and has refused to face up to its responsibilities.

Mr Adermann:

– That is not true. I gave a decision.

Mr LUCHETTI:

– Let me say without equivocation that this Government and this

Government alone is responsible for the problems besetting primary industries. Every farmer who is unable to obtain the finance necessary to develop his farm has every justification for condemning this Government for its guilt. The victims of the wool pies and restrictive trade practices are well aware of this Liberal-Country Party Government’s refusal to protect them. Every primary producer who is fighting an unequal battle against prices and costs knows that this Government either is an unwilling or an active accessory to the crime of permitting primary producers to become the victims of inflation and the ever-increasing cost spiral.

Day after day statements are published in the press and uttered in this House emphasizing the difficulties confronting the man on the land as a result of the credit squeeze, which this Government imposed by its decision of Novemberlast, and which has been intensified since then. And this is the policy of the Treasurer (Mr. Harold Holt). This is the policy which is supported by every member of the Country Party; indeed, by every member on the Government side. There can be no evading responsibility. Every member of the Country Party and every member of the Liberal Party must accept his share of the guilt for the imposition of this tragic credit squeeze. Here, I remind honorable members of the following article appearing in the Sydney “ Daily Telegraph “ of 14th February, 1961: -

Trading Banks Slash Advances.

Australia’s trading banks have cut overdrafts by the largest margin for four years in efforts to meet the Reserve Bank’s directive for a 9 per cent reduction in lending by the end of March.

And members on the Government side say, “ But there is no shortage of funds “. The Treasurer said that even to-day. In the Melbourne “ Herald “ of 3rd January, 1961, we find this statement -

Govt. Policy Hits All- Says A.N.Z. Bank.

Present Government policy tends to fall with equal severity on less essential and basic developmental sections of the economy, says the A.N.Z. Bank in its quarterly review.

That article points out that the primary producer, whether he be growing wool, or wheat, whether he be a dairyman or whether he be a producer any other product, is suffering as severely from the bludgeon-blow of this Government’s credit squeeze and restrictions as are those who may be engaged in some get-rich-quick or non-reproductive calling. There can be no doubt that a strong case for the easing of the credit squeeze can be advanced. Again, the Sydney “ Daily Telegraph “ of 26th November, 1960, ran these headings -

Coombs Outlines Policy.

Banks given deadline to cut advances.

That only confirms what I said previously.

The honorable member for Eden-Monaro (Mr. Allan Fraser) sheeted home to the Government responsibility for the serious effects of the credit squeeze when he referred to the complaint by Mr. Warren McDonald, Chairman of the Commonwealth Banking Corporation, in which he made a plea that the Development Bank be freed from restrictive control so that funds might be made available for essential development. The Country Party is not prepared to agree to that, and the members of the Country Party branch at Liverpool Plains or any other part of Australia are just as guilty as are the members Who represent the Country Party in this place. They must accept responsibility for their action. Let it be said to the everlasting credit of the honorable member for Calare (Mr. England) that the first question he asked in this chamber emphasized theunwise action taken by the Government in imposing this credit squeeze. An article appearing in “Muster” of 8th March, 1961, points out that the beef industry on the north coast of New South Wales is beset by difficulties because sufficient funds are not available for the purchase of store stock. And this is one of Australia’s best export income earning industries!

As to restrictive trade practices, I point out that, whereas in America organizations engaging in restrictive trade practices are fined as much as £2,000,000, and in some cases their executives are imprisoned, here, despite repeated promises to take drastic action, this Government does nothing.

Mr TURNBULL:
Mallee

.- I am delighted to take part in this debate, the subject-matter of which, according to the proposal before us, is the great harm being done to Australian primary producers by the Government’s policy of credit restriction, its failure to halt inflation, and its failure to protect the wool-growers against market manipulation. First let me say that the Labour Party has been asking for a long time that some action be taken to bring prices down. This Government’s credit squeeze is designed to do that, and the Labour Party objects to it. These credit restrictions are designed to halt inflation, and they are having that effect; but the Labour Party objects.

I wish to deal with that part of the proposal which relates to the Government’s alleged failure to protect wool-growers against marketing manipulation. I was amazed to hear both the honorable member for Lalor (Mr. Pollard) and the honorable member for Eden-Monaro (Mr. Allan Fraser) making such allegations, because they were supporters of a Labour government which was responsible for one of the greatest pieces of market manipulation we have ever known in this country. Using its war-time powers after the war was over, the then Labour government introduced into the Victorian stock markets the onebid auction system. So that honorable members might understand what that means, let me explain that the Government appointed certain men to go through the pens of sheep and lambs and fix a certain price for them. When the auctioneer was selling he had to knock down those sheep andlambs immediately the bid reached the prices fixed by those government officers, irrespective of what the stock were worth at open auction. It was a one-bid auction system, a ceiling auction system. There was no minimum price fixed; the figure set by the government officers was the maximum and the auctioneer had to knock down the stock at that figure. The then honorable member for Darling (Mr. Clark) said, when speaking of the Government’s action -

If the graziers are wise, they will send their stock to the market and accept what is a reasonable price.

A price fixed by a Labour government! Because the graziers and fatteners refused to send their stock to market under those conditions, Mr. Clark said -

The action of the graziers is unpatriotic. Indeed, their patriotism is conditioned by their anxiety to make profit.

Let me remind members of the Labour Party, too, of what happened when Mr.

McLennan, president of the Newmarket Producers Association, a man whom Mr. Scully, the then Minister for Commerce and Agriculture, described as an estimable gentleman, with a deputation on this subject visited Mr. Scully at Parliament House, Canberra. When Mr. Scully had to leave the meeting to keep another appointment, his successor as Minister for Commerce and Agriculture, the present honorable member for Lalor (Mr. Pollard), insulted Mr. McLennan, who had come to Canberra to plead for the producers. And to-day the honorable member for Lalor has the audacity to speak about practices which he says are having the effect of preventing people from bidding at auctions! Could anything be more absurd?

Mr Pollard:

– I insulted him all right.

Mr TURNBULL:

– The honorable member admits he insulted Mr. McLennan. Again, we have Labour’s action in restricting the harvesting of wheat. The farmers were not allowed to strip any more than their quota, and when one producer asked for permission to strip for pig-feed the excess over his allotment of 400 acres for pig-feed, the then Labour Government replied -

The regulations will not permit of your harvesting the excess area and retaining the proceeds for pig-feed.

And this former Minister in a Labour government to-day complains of market manipulation.

I point out to him that the New South Wales Government passed legislation declaring wool sale splitting of lots illegal, but that measure has not yet been proclaimed. The honorable member for Macquarie (Mr. Luchetti) is concerned only about Liverpool Plains, and that is because at the moment an election is pending in that area. He mentioned the honorable member for Calare, and he will always remember the honorable member for Calare for his success in routing the Labour candidate during the recent by-election in that electorate. The Country Party candidate in Liverpool Plains should have equal success in defeating the Labour candidate there, also.

Sitting suspended from 12.45 to 2.15 p.m.

Mr TURNBULL:

– Before the suspension of the sitting, I had dealt with parts of the proposal of the honorable member for Lalor which refers to the Government’s policy of credit restriction, its failure to solve the problem of inflation and its failure to protect the wool-growers against market manipulation. I had said that members of the Australian Labour Party were better manipulators than the most capable magician in the world, and I had proved that assertion up to the hilt. I had commenced to say that the honorable member for Eden-Monaro had asserted that primary producers could get only enough money to carry on. He nods agreement that he made that comment. In answer to a question regarding money for primary producers, the Treasurer (Mr. Harold Holt) said -

However, in terms of the directive and even in the light of the current banking situation, funds should be available to assist primary producers in their normal farming operations.

That rs exactly the same in meaning as the comment made by the honorable member for Eden-Monaro. I have asked people in my electorate whether there are any primary producers who cannot get enough money to carry on. I do not mean money that would put them up to their necks in debt to the banks or money to buy land, but money to carry on with their normal production. I have not yet found any one in this position. I have told my constituents that if they bring to my notice any such instances I will take them to the Treasurer or raise them in the House if they are reasonable. I have said that publicly and privately throughout the Mallee electorate and now that this debate is being broadcast, I say it to Australia. The honorable member for Macquarie said that he had a very urgent case to mention. This turned out to concern a man in his electorate who wanted money to build a house. The case may have been good, bad or indifferent, but it had nothing to do with primary production.

Let me settle once and for all this matter of the trade agreement with Japan. What happened about that agreement? It is all recorded rn “ Hansard “. On 27th August, 1957, the Minister for Trade (Mr. McEwen) brought the agreement to the House and two days later the then Leader of the Opposition moved that the following words be added to the motion for the printing of the paper: - and this House expresses its disapproval of the Agreement on Commerce between the Commonwealth of Australia and Japan.

He was supported by every Opposition member in the House at the time. Let me put on record that the honorable member for East Sydney (Mr. Ward) said -

This agreement constitutes the greatest betrayal of Australian interests that has been perpetrated by this anti-Australian Government in all its long, sorry history.

We are buying from Japan goods worth approximately £48,000,000 a year and Japan is buying from us goods worth £135,000,000. Japan is our main customer for wool. But the Labour Party condemns it. We cannot have it both ways. The honorable member for Lalor may say that he was overseas and did not vote against the agreement, but would he have voted for his leader’s amendment if he had been here. If he had not supported his leader, he would soon have been out of the House permanently.

Let me sum up in the short time available to me. It must be clear to every one that the primary producer cannot continue to produce and export to the markets of the world and at the same time buy all the goods he needs in our present high-cost economy. Therefore, the Government has introduced these restrictions in an effort to produce some favorable balance between the primary industries and the secondary industries so that we will have employment in the future and so that Australia’s economy will be strong. This policy has the support of honorable members on this side of the House because those who will benefit most from it are those who provide Australia’s greatest wealth and the main items in our national wealth, the primary producers.

I have spoken in favour of the Government’s present policy because, after all, if the primary producer goes to the wall, there will be unemployment as we will not be able to import the raw materials needed by our secondary industries. Chaos will prevail. Even though there may be some financial restriction, the manufacturers in the cities, including motor firms, surely can stand it without sacking employees. When people can obtain bigger dividends for their money than the same amount invested in primary industry, then it is high time that some financial restriction was imposed.

Mr. SPEAKER (Hon. John McLeay).Order! The honorable member’s time has expired.

Motion (by Mr. Adermann) agreed to -

That the business of the day be called on.

page 544

BUSINESS OF THE HOUSE

Mr SPEAKER:

– As it is now past the time provided for Grievance Day, Order of the Day No. 1 will not be called on.

page 544

NORTHERN TERRITORY SUPREME COURT BILL 1961

Motion (by Sir Garfield Barwick) - by leave - agreed to -

That leave be given to bring in a bill for an act to create a Supreme Court of the Northern Territory of Australia, in place of the Supreme Court previously established.

Bill presented, and read a first time.

Second Reading

Sir GARFIELD BARWICK:
Acting Minister for External Affairs and Attorney-General · Parramatta · LP

– by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to establish the Supreme Court of the Northern Territory by act of Parliament. The present court was established by and functions under an ordinance of the Territory. Having regard to the development of the Territory, the growth of the population there, and the altered status of its political institutions, the Government feels that the time has now come when the Supreme Court should, like the Supreme Court of the Australian Capital Territory, be put on a statutory basis, with provisions similar to the provisions in the Australian Capital Territory Supreme Court Act. There is no need for me to enter here into refined questions as to the constitutional status of the Supreme Courts of the mainland Territories, which form part of the Commonwealth. Suffice it to say that the High Court has upheld the constitutional sufficiency of an ordinance to support the Supreme Court of the Northern Territory. It is, however, equally clear that there is power in the Parliament of the Commonwealth to establish this court by statute and, in the present situation, the Government feels that it is appropriate to do so.

The tenure of the judges of courts created by Parliament is laid down by section 72 of the Constitution and the judges of the court established under this bill will of course have that tenure. The judges will hold office for life, As to the number of judges, honorable members will observe that the bill adopts for the Northern Territory a principle that was put into operation in the Australian Capital Territory in 1958. Clause 7 contemplates that one judge will be appointed giving his full time to the work of the court. I may call him, although that is not his official title, the “ regular judge “.

The bill then, in order to make provision for the carrying on of the work during the absence of the “ regular judge “, contemplates the appointment as “ additional judges “ of the Northern Territory of judges of other courts created by the Parliament. The “ additional judges “ would not receive any additional salary in respect of the Northern Territory appointment and would normally sit only in their own courts, but would be available as circumstances required to sit in the Northern Territory Supreme Court. By this means, I hope to ensure that in the future, in the event of the illness of the judge, or of his absence on duty in another Territory or of a vacancy, there will always be a judge available for the work of the Northern Territory Supreme Court.

Provision is also made in the bill for the appointment of the “ regular judge “ of the Supreme Court of the Northern Territory as an “ additional judge “ of some other court - for example, the Supreme Court of the Australian Capital Territory. This, the Government hopes, will open the way to a most useful interchange of judges from time to time, which should in particular alleviate the isolation and physical strain of life in the tropical north. It is a necessary concomitant of this scheme that the Northern Territory judge should have the same status and receive the same salary as the other judges included in the scheme, and this bill and a supplementary bill to amend the Judges’ Pensions Act provide accordingly.

The provisions to which I have already referred are contained in clause 4 and clauses 6 to 9 of the bill. Clause 15 defines the jurisdiction of the Supreme Court of the Northern Territory. Broadly, it continues as hitherto. The basic jurisdiction of the court will be the same original jurisdiction, both civil and criminal, as the Supreme Court of South Australia had in relation to that State at the time the Territory passed to the Commonwealth in 1911. This jurisdiction may, from time to time, be added to by ordinance of the Legislative Council and the court will also continue to have jurisdiction in matters in which a writ of mandamus or prohibition or an injunction is sought against an officer of the Commonwealth, being matters arising in or under the laws in force in the Territory. In addition the court will sit as a court of appeal, with such exceptions and subject to such conditions as are provided by act or ordinance, from all judgments of inferior courts in the Territory.

Part VI. of the bill makes extended provision, along lines familiar in the Australian Capital Territory, for appeals to the High Court of Australia. Under the Supreme Court Ordinance of the Northern Territory, an appeal from the court is possible only with the leave of the Full Bench of the High Court. Under the bill, no leave will be required where appeal is brought from a judgment in a civil matter which (a) is given or pronounced for, or in respect of, a sum or matter at issue amounting to or of the value of £1,500, (b) involves a claim, demand or question to or respecting property, or a civil right, amounting to or to the value of £1,500, or (c) affects the status of a person under the law relating to aliens, marriage or divorce; or where appeal is brought from a conviction on indictment on any ground of appeal that involves a question of law only. Until such time as we can provide for an appeal court to hear Territory appeals, appeals in divorce cases must go to the High Court without leave from the Supreme Courts of the Australian Capital Territory and the Northern Territory.

The concurrent administration of law and equity in the Supreme Court of the Northern Territory is regulated by Part III. The customary administrative and procedural provisions are to be found in Parts

IV., V., and VII. Perhaps I should specifically direct the attention of honorable members to clause 55, which authorizes the “ senior judge “ to make rules of court to govern its practice and procedure. As is the case under the Australian Capital Territory Supreme Court Act, and is also the current position in regard to rules of the Northern Territory Supreme Court under the ordinance, the bill provides that rules so made may be disallowed by the Attorney-General by notification. The notification is to be published in the “ Government Gazette “ of the Territory. Provision is made for the present rules to continue in force, as if they had been made under the act.

Transitional provisions are contained in clause 4, which enables proceedings already commenced to be completed as if they had been instituted m the new court, and allows appeals to the new court from judgments given in lower courts before the commencement of the act. The act is to come into operation on a date to be fixed by proclamation.

I commend the bill to the House, Mr. Speaker.

Debate (on motion by Mr. Whitlam) adjourned.

page 546

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1961

Second Reading

Debate resumed from 21st March (vide page 389). on motion by Mr. Harold Holt-

That the bill be now read a second time.

Mr SPEAKER:

– Is that agreeable?

Mr Calwell:

– Yes.

Mr SPEAKER:

– There being no objection, the course suggested by the Treasurer will be adopted.

Mr CALWELL:
Leader of the Opposition · Melbourne

– Mr. Speaker, I have agreed to the proposal made by the Leader of the House (Mr. Harold Holt), but I have no compliments to offer to the Government in respect of this bill, because it does not go far enough. The Opposition will not vote against it, but at the committee stage it will propose an amendment to clause 2 for the purpose of providing that the measure shall operate from 15th November, 1960, instead of from 22nd February, 1961. The Opposition’s object, of course, is to provide for a refund of all the moneys collected in respect of the additional 10 per cent, of the sales tax on motor vehicles imposed under the terms of the Sales Tax (Exemptions and Classifications) Act (No. 2) 1960, which increased the rate from 30 per cent, to 40 per cent. I should like to remind honorable members that this increase was described by the Government at the time as a temporary one. I remind them, too, that when the sales tax on motor vehicles was raised from 161 per cent, to 30 per cent, in the little horror Budget of 1956, that increase also was described by the Government as a temporary one. But, after five years, it seems to have taken on the character of something permanent rather than temporary.

When the Government decided on 21st February last to revert to the rate of 30 per cent, in respect of the sales tax on motor vehicles, the consensus of opinion throughout the Commonwealth was that the Government had at last recognized that the tax should never have been increased in the first place and that the results achieved, or at least something like them, could have been achieved just as easily by the Government’s other policy feature of credit restrictions, which are referred to, popularly, or unpopularly, as the credit squeeze.

Mr Harold Holt:

– But the Opposition did not approve of that.

Mr CALWELL:

– Of course, we did not approve of that. An opposition’s role is not to help a government to govern. An opposition’s role is to sink a government, and that we proceed to do to the best of our ability. And we hope to continue to do it until we achieve our objective. 1 have never known it to be argued at any time previously that when a government is in trouble, an opposition’s true role is to help that government out of its difficulties. I never knew members of the present Government parties, when they were in opposition, to give any help to the Curtin Government or the Chifley Government, except in the darkest days of the war. If honorable members will look back over the “ Hansard “ record, they will find that when the war was over the present Prime Minister (Mr. Menzies), the present Treasurer, and the present Minister for Trade (Mr. McEwen) used all the stratagems and all the ability which they possess - and they possess a considerable measure of it - in their efforts to misrepresent the Labour Government’s intentions and to thwart it at every turn.

Mr Harold Holt:

– Be fair. We tried to help the Labour Government through the industrial troubles of 1949.

Mr CALWELL:

– Yes, by attacking us for putting troops into the coal-fields and by suggesting that we should have tried to smash the unions instead. That was the sort of help that we received. The Treasurer has been misquoting the facts of that situation ever since by saying that the level of unemployment at that time was typical of the unemployment which existed in the days of the Chifley Government.

Mr Turnbull:

– Did you put troops into the coal-fields?

Mr CALWELL:

– I shall not be taken off the track any further, not even by my esteemed friend, the honorable member for Mallee.

The Government, of course, says that it could not have achieved the results which it sought by applying the credit squeeze only to the motor trade and that it had to impose this particularly savage increase in the sales tax to achieve the end it sought. With due respect to the Treasurer, I suggest that the Australian people just laugh hilariously when Ministers attempt to justify their latest change in the long series of changes of economic policy by saying that the increase in the sales tax was justified and achieved its purpose and that the rate can now be reduced.

The Treasurer said that he is not able to refund the additional tax to the people who bought motor vehicles between 15 th November, 1960, and 22nd February of this year. We of the Opposition will be interested to see how honorable members opposite vote on the amendment, which will be moved at the appropriate time, to give effect to our desire to refund the amounts that have been paid by way of this increased impost by the unfortunate persons who have been involved. We will look particularly to the Country Party - but, of course, we will look in vain - for support for our amendment. There are many primary producers who just had to buy vehicles during the period when the increased tax was in operation. There are many other persons who also could not wait.

Mr Duthie:

– Including ministers of religion.

Mr CALWELL:

– Yes, ministers of religion, too. 1 am very grateful to the honorable member for Wilmot for that interjection. There are many persons in various walks of life who had to buy motor vehicles, and who could not put off their purchases until a later time. They had to pay sales tax at the higher rate, and now they are looking to this Government for a refund of the extra money that they paid. After all, the Government has, by its decision to reduce the tax, admitted, in effect, that it made a mistake in increasing the tax in the first place. That is our contention, and we will listen with interest to the attempts that will be made by members of the Country Party to justify the Government’s action.

Mr Turnbull:

– We will be with them!

Mr CALWELL:

– The honorable member for Mallee will always be with the Government, no matter what it does. He will always tail in behind the Government. He has never cast a vote against the Menzies Government or against The Liberal Party in all the years that he has been with us in this Parliament.

Mr Turnbull:

– That is not true.

Mr CALWELL:

– If he ever did so I would like to find some evidence to thai effect. If he ever did cast a vote against the Menzies Government, :it must have been so long ago that it has been forgotten.

Mr Turnbull:

– If I show you evidence of it, will you apologize?

Mr CALWELL:

– Of course I will.

Mr Harold Holt:

– Have you ever cast a vote against the Labour Party?

Mr CALWELL:

– No, because the Labour Party is always right. Why should 1 vote with people who are always wrong?

The Minister says that no government - and by that he means no Labour government as well as no non-Labour government - has ever made any refund of sales tax. Technically he is correct. But it is also true that this Government has either forgone revenue that was due and payable, or it has refunded money that was collected and should never have been refunded. I will deal with such cases in due course.

Labour governments, of course, have never used the sales tax as a revenue producer in the way in which non-Labour governments have used it. In the depths of war the Labour Government never raised the sales tax to a higher rate than 121 per cent. The general rate, even in the worst days of the war, when the Japanese were coming closer and closer to our shores, was only 8i per cent. But this Government, long after the war, long after what is usually called the post-war period, long after the transitional stage from war to peace had passed, and in a period in which there was no war except the Korean War, in which two Australian battalions were engaged, actually increased sales tax, by a provision in the horror Budget of 1952, to 60 per cent, on one category of articles and 50 per cent, on other articles. On a large range of goods at the present time the sales tax is at the rate of 30 per cent. Honorable members of the Country Party, however, who know that this is a most iniquitous form of taxation, never raise their voices in protest against it. They are quite ready to coast along with the Liberal Party. Whatever the captains of industry say is good enough for these pseudo-representatives of the rural community. Honorable members can protest as much as they please, but pseudo is the correct term. Auctioneers, doctors, lawyers, all kinds of people except working farmers constitute the membership of the Country Party in this Parliament. Why, there are more primary producers on the

Liberal side of the House than there are in the Country Party corner. There are more genuine farmers among the Liberals than there are among the members of the Country Party. However, this is merely an interesting diversion, and 1 shall return to the bill.

Labour governments, as I have said, have never used the sales tax in the way in which this benighted Government has done. The Curtin and Chifley Governments, could, if they had so desired, have raised sales tax to very great heights during the war, but they refused to do so. They raised direct taxation, and that was a fair and proper thing to do. This Government should be setting about reducing sales tax now, if the country is even half as prosperous as it claims it is. The Government should be reducing sales tax on motor vehicles, not from 40 per cent, to 30 per cent., but perhaps from 30 per cent, to 25 per cent. It should be giving effect to the promise it made in 1956 that it would reduce, as soon as possible, the rate of sales tax on motor vehicles, which it was then proposing to increase from 16) per cent.

Mr Hamilton:

– What is the use of imposing sales tax when one cannot buy the things one wants?

Mr CALWELL:

– That is a very fair reflection upon the state of the economy as brought about by the Government which the honorable member for Canning (Mr. Hamilton) supports. No one has any purchasing power left in this country. The value of the £1 has diminished greatly since this Government came to office.

Mr Hamilton:

– Even men on the basic wage are going to work in motor cars these days.

Mr CALWELL:

– Not many basic wage workers have cars to go to work in to-day. The primary producers of Australia, for whom the honorable member is supposed to have some concern, have suffered, according to the honorable member’s leader, a diminution of income to the extent of 11 per cent, over the four years ended in 1960, while they increased production by 11 per cent, over the same period. The Minister for Primary Industry (Mr. Adermann) said the other day that primary production had increased by 5 per cent, last year while primary producers’ incomes had been reduced by 5 per cent. That is the state of the economy brought about by a government which includes members of the Country Party. However, I shall not allow the honorable gentleman to divert me further.

The Commissioner of Taxation receives sales tax, in respect of any month, on and after the 21st day of the following month. The additional sales tax which was collected in the first three weeks of February was not paid to the Treasury until four weeks later. No legal difficulty in respect of the repayment of sales tax revenue would be involved, therefore, if there had been a remission of the extra 10 per cent, collected after 1st February. On 21st February the Prime Minister announced that the Commonwealth was commencing to receive the sales tax for January.

The Government intended this extra 10 per cent, of sales tax, in conjunction with the credit squeeze, to put a fourth of the motor industry employees out of work, and to render a fourth of all motor industry plant in Australia idle. It deliberately set out to reduce the incomes of the particular companies concerned by one-fourth. It succeeded, of course, because, as the Minister said in his speech, registrations of motor vehicles in January stood at 16,254, whereas in December the number had been 22,368, and in November, 31,865. Registrations of new vehicles were not reduced by onequarter; they were actually reduced by one-half. When that situation arose the Government, metaphorically speaking, rubbed its hands together and said, “We have achieved the result that we wanted. We now control this industry in the way in which we want to control it and now we can lift the sales tax.”

This is the Government that calls itself a free enterprise government! This is the Government that says that controls are socialistic! I suppose that if you put the two propositions together you would conclude that this is a free enterprise socialistic government. What else? It can never say that it is a free enterprise government. There have never been more controls on the economy than there have been in recent years under this Government. There has never been a more savage form of control than that operating at present through the credit restriction, or credit contraction, policy, under which a number of people are unable to get the things that they are entitled to receive or that they think they are entitled to receive.

Mr Harold Holt:

– What about your own credit restriction policy in 1948?

Mr CALWELL:

– Nonsense! The Labour Government encouraged people in every way possible. We set up the Industrial Finance Department of the Commonwealth Bank and told it to give all the aid that it possibly could give to primary producers. We put no limit on that aid at all. We framed our taxation laws so that the primary producers and others could claim as deductions for taxation purposes many items that they had never been able to claim previously. We subsidized primary producers and did everything possible to encourage them.

Mr Harold Holt:

– You have forgotten the details of your own White Paper on hire purchase.

Mr CALWELL:

– I have not. Nor have I forgotten that the Government is continually complaining that the operations of the fringe banking system are impairing its efforts to control the economy. In that respect, it is completely right, but it lacks the courage to ask the people for additional power to control interest rates other than banking rates. If the Government wants the power - we say that the Government should have it - we will help it to get it. The Constitutional Review Committee, on the vote of eleven members out of twelve, recommended that this Parliament should be endowed with that power. This is the only federal parliament in the Western world which lacks this important power.

T have said that the Government did forgo revenue to which it was entitled. On 18th August, 1954, the present Government introduced a Sales Tax (Exemptions and Classifications) Bill which contained a provision in clause 7 as follows: -

Notwithstanding anything contained in any Sales Tax Assessment Act, sales tax is not payable, and shall be deemed not to have been payable, upon the sale value under any Sales Tax Assessment Act of an aeroplane, including a flying boat, seaplane or helicopter, if the transaction, act or operation in relation to which the sale value arose was effected or done on or after the first day of January, One thousand nine hundred and forty-six, and before the commencement of this Act.

The clause, whilst not authorizing the refund of sales tax already collected, authorized the cancellation of a debt legally due and owing for eight years - from 1946 to 1954. The Government’s action had the same effect as a refund. To-day, we of the Opposition ask for a refund of sales tax paid during a three months’ period on motor vehicles. We do not ask for cancellation of a debt which has been owing for eight years, but which this Government did cancel. The amount involved was £393,750. The beneficiary was Australian National Airways Proprietary Limited. This company, now absorbed by Ansett- A.N.A., had imported aeroplanes and aeroplane parts and had then refused to pay sales tax upon them. The Chifley Government considered prosecuting the company. So, I think, did the Menzies Government. But under the plea of rationalizing air services and, allegedly, in order to put a private enterprise airlines on a basis of fair competition with Trans-Australia Airlines, the Government introduced its give-away legislation.

The present Minister for Labour and National Service (Mr. McMahon), who was then occupying some other portfolio - he has been tried in many portfolios without ever being very successful in any one of them - intervened in the debate on that legislation and said that the airline company had acted in good faith when it refused to pay its lawful debts. He argued that airlines should be exempt from sales tax because rolling-stock owned by governments, and ships, were exempt from it. He said that the bill merely extended that exemption to another form of transport.

Mr Crean:

– “ Good faith “ depended upon his interpretation.

Mr CALWELL:

– Yes. He was the interpreter of what was “ good faith “. While he was speaking, my distinguished colleague, the honorable member for East Sydney (Mr. Ward) interjected with his usual sagacity -

Motor transport pays sales tax.

To which the Minister whom I am quoting fumbled a reply -

Yes, but a different kind.

The bill before us shows that motor transport does not pay a different kind of sales tax from that paid in respect of anything else.It is covered by the same legislation. It comes into the category that is decided to be appropriate and it is paid at the rate determined by the Government. The Auditor-General of the day had different views from those of the Government on the liability of Australian National Airways in respect of the sales tax which the Government remitted - it is a question of the difference between a refund now and a remittance then, but the effect is the same. The Auditor-General in his annual report on the Treasurer’s statement under the date, 30th June, 1954, said-

Sales Tax on Aircraft.

Recent inquiries revealed that sales tax of approximately £393,750 had not been paid by an airline company on aircraft imported since February, 1946. An investigation by Taxation officers disclosed that, in addition to £143,750 payable on two aircraft imported at the end of 1953, for which extension of time to pay had been granted, the company concerned had not paid sales tax of approximately £250,000 on fifteen other aircraft imported in earlier years.

The company secured entry of the aircraft into Australia by quoting the number of his certificate of registration under the Sales Tax Assessment Act, but failed to declare when the aircraft were placed in commission and to pay the sales tax involved. The total amount of such tax was still owing to the Commonwealth on 30th June, 1954, but does not appear in the statement of outstanding taxes hereunder because it had not been assessed by the Commissioner of Taxation at that date.

It is noted that, in the Sales Tax (Exemptions and Classifications) Bill submitted to the Parliament on 18th August, 1954, provision is made that sales tax be not payable upon aeroplanes retrospectively to 1st January, 1946.

In our view, what the Government did then is justification for what we ask the Government to do now. The Government cannot correctly say, as it did say, that no government at any time has ever remitted any sales tax, but it is only right to point out that the Government’s story on this matter is a false one. As I have said, theoretically they may be right, but morally they are completely wrong, and we shall move our amendment in order to test the feeling of the House upon the matter.

There is another case, also, which the Government cannot deny. It is the case that occurred in 1950 when a refund of revenue was made in respect of considerable sums of money paid as duty on timber and other commodities admitted to the Commonwealth for home building. The amount of money involved in this case was something of the order of £500,000. It represented duty that had been collected on timber. I emphasize the fact that it had been collected on timber and other such commodities imported into Australia between December, 1949 - the date upon which the Government was elected - and 17th February, 1950. When the Government decided to give a refund to its friends it dated the refund back to the day upon which it was elected. There was no legislation dealing with the matter; there was just a manipulation of tariff items by the Controller-General of Customs under the direction of the Government. But it was money - and I emphasize this - which had been received and accounted for but which was paid back to the merchants from whom it had been collected.

The merchants were the people entitled to get the refund, and I suppose that if a refund were granted under the legislation we are now discussing it would be paid back to the dealers. We would have to follow our proposition through to an additional proposal that the dealers should be made “to refund the amount Jo the purchasers of the cars. In 1:950, there was no obligation .placed upon the limber merchants to refund the money, .and little or none of it went to those who paid ‘the .duty when they bought the timber. As I have -said, the merchants were under no obligation to pay the money back, and many of them had -not .expected a refund of the duty they had paid and had certainly mot asked for it. The big interests, however, benefited greatly, and .some of them in after years told me how surprised they were to receive “this money and how grateful they w.ere to the Government for ;giving ,it to them. The whole idea at that .time was that ,a refund of this sort would .cheapen home .building and that taking the duty , off imported .timber would make houses cheaper. It was not a proposal, however, .to reduce ;duty at a date in >the future. This was a refund .of :duty already paid. Therefore,, how could it hay( reduced the cost of building?

Tn this House on “behalf of the Opposition, in October, 1950, I proposed this subject for discussion as a matter of urgent public importance. I argued that, on the amount of timber involved over .only two months, at 6s. per 100 super, feet, which was the amount of duty refunded, the Government must have refunded £500,000 to its friends in the timber trade. I think the Government ought seriously to consider making a refund to the little people who have paid this increased tax on motor cars, station wagons and other motor vehicles between November last and February of this year. We have not been told by the Minister how much would be involved if a refund were granted. We were certainly not given that information in his speech. But in answer to a question asked by the honorable member for Bendigo (Mr. Beaton) on 8th March last, the Treasurer said -

If a total refund of the additional tax were to be made, the loss of revenue, on the advice received by me, would be £3,800,000. However, the number of sales of motor vehicles was well down during the relevant period and despite the increased rate of tax revenue collections were actually lower than the Budget estimate for that period. So, if there were to be a complete refund, the total loss of revenue would not be £3,800,000 but £5,300,000. However, the decision was based primarily not upon the revenue aspect but upon these over-riding considerations of taxation principle .and practice.

I have indicated to the Treasurer that during the period of this Government’s occupancy of office there have been two occasions when the taxation principle and practice on which he relies were not observed. So we think that the Government should now make the refund which we suggest should be made. The Government has said that the effect of its measures would not he very serious. I say that the Treasurer was a little more careful than his colleague, the Minister for Labour and National Service (Mr. McMahon), in estimating the effect of the Government’s measures. The Treasurer did say in this Parliament, however, on 23rd November last, as reported in “Hansard” at page 3141, in answer to a question -

My assessment is that if the measure has the results we hope for, there will be little or no increase in revenue; in fact there could be some reduction in the revenue previously expected from this source.

Now he argues, of course, that it would cost £5,300,000 to make the refund, which indicates just how little the Government knows of what is happening in the economy and just how little prepared it is for the changes that are occurring daily, and how irresponsible it is in the decisions it makes in connexion with the economy.

But, then, in answer to a question asked by the honorable member for Bendigo (Mr. Beaton), about employment and unemployment, as reported at page 3’3 11 of “ Hansard “, the Minister for Labour and National Service said -

I think I can say that in only about four factories have problems arisen.

I interpolate that they would be problems of employment and unemployment. The Minister continued -

Two of them are factories of Ford Motor Company of Australia Proprietary Limited in Queensland and in New South Wales.

I interjected, “ How many do you expect to be retrenched? “ And the Minister said -

Certainly no more than 250.

The Minister was referring to Ford factories; but up-to-date the Ford organization has already discharged 1,750, and the end is not yet. The Minister continued -

There will be about 170 at Homebush and probably 70 in Queensland, but they will all find jobs quickly. I understand that there will also be retrenchments at Chrysler Australia Limited in South Australia. I have also read of the position of the Standard Motor Car Company in Victoria, where there are about 80 retrenchments. Here, I think, about 40 applied to us for placement in other jobs, and already about two-thirds of them have been placed. I think we can quickly find jobs for the balance of them. So, in summary, I think I can put it in this way: There have been some, but very few, retrenchments as a result of recent decisions and we are confident that we can find jobs for all these people in the near future.

At least 8,000 people have been thrown out of the motor industry up-to-date, and goodness knows how many more have been thrown out of the ancillary industries which supply the electronics, leather, plastics, springs and all the other things which go into the making of a motor vehicle. Of course, as men are discharged from one form of employment, they tend to throw out of work people in other forms of employment. So, when the Ministry admits there are about 76,000 people out of work to-day, there are probably many more than that number. Many people do not register as unemployed because they move from place to place in the hope of finding em ployment for themselves. The figure is probably much greater than that given by the Government. So it stands condemned on what it did in the first place. It stands condemned for increasing the sales tax, a measure which, within three months, it was compelled to abandon. I do not believe that it abandoned that additional sales tax for the reasons it gave. I believe it abandoned the increase because of the pressure of public opinion. I believe also that under the pressure of public opinion it will one day reinstitute import controls. If it does not do so we shall have no money overseas with which to finance the importation of essential capital and consumer goods in the next financial year.

Mr Hamilton:

– Have you a break-down of that figure of 8,000 people that you mentioned in relation to the motor car industry?

Mr CALWELL:

– I have not a breakdown of the figure, but I will be very pleased to get one and give it to the honorable gentleman. I will write my autograph on the back of the document, provided that he does not present it to the Commonwealth Bank.

The Government has not made out a case that satisfies the Australian people, for the reversal of its policy. But now that it has reversed its policy it ought to do the decent thing by the people who were compelled to pay increased sales tax. If it will not do that, it stands condemned for indifference to the interests of a lot of little people. It is not the big people who are being hurt by this. Most of those who have been adversely affected are small people.

Mr Anderson:

– How do you know?

Mr CALWELL:

– Because the people who write to me are small people. Because of my position, I get a voluminous mail from small people telling me their grievances and the reasons why they had to buy motor vehicles at the time the increased sales tax was in operation. I can imagine that if a labour government had done this the people who sit in hill-billy corner would scream to high heaven in indignation about the way the primary producers were being treated. I know that the representative of Possum Paddock, the honorable member for Mallee (Mr. Turnbull), would refer bitterly to the unfair treatment being meted out to the primary wealth producers of the nation. But when an anti-Labour, capitalist government does this thing, not only do the members of the Australian Country Party condone the Government’s action, they even support it. When we move an amendment of the sort we propose they will not give us any moral support. Some of them even will not vote with us to force the Government to do the decent thing by those who have been compelled to pay a sum of money - which is very considerable to the individuals concerned - that they should never have had to pay.

Mr Hamilton:

– Are these small people on small incomes?

Mr CALWELL:

– I suppose they are. They are buying their cars, like most people do, on hire purchase. Of course, the honorable member does not buy a car that way, nor do most members of Parliament, but quite a lot of people are buying their cars with the assistance of banking institutions and hire-purchase companies. Very few are able to pay the full cash price for cars.

We will move our amendment at the committee stage.

Mr Turnbull:

– Move it now. Let us have done with it.

Mr CALWELL:

– No, we will move it at the committee stage. We will separate the sheep from the goats, and we shall not find too many sheep in the Australian Country Party nor among the Liberals. But we shall find support outside this Parliament. As this Government rushes to its doom, emulating the Gadarene swine, we shall find the people saying that the Labour Party ought to be back in government, that it is time for a change. This action of the Government is further and conclusive evidence of its complete incompetence when it comes to managing the country’s finances.

Mr Turnbull:

– I desire to make a personal explanation, Mr. Deputy Speaker.

Mr Calwell:

– I think you need one.

Mr Turnbull:

– I do not mind the low wit of the Leader of the Labour Party in his reference to hill-billy corner. If that rs his idea of a comedy style he is solely responsible; but I want to say that early in his speech he made the statement-

Mr DEPUTY SPEAKER (Mr Luchetti:
MACQUARIE, NEW SOUTH WALES

– Order! The honorable gentleman is not entitled to make a speech.

Mr Turnbull:

– I am making a personal explanation.

Mr DEPUTY SPEAKER:

– The honorable member is making no personal explanation.

Mr Turnbull:

– I will make it now. Early in his speech the Leader of the Opposition said that the honorable member for Mallee - referring to me - had never voted against the Government or against the Liberal Party. At that time I said, “ If I can prove I have, will you apologize? “ and he answered, “ Yes “. Now I am proving-

Mr DEPUTY SPEAKER:

– Order! This is a debatable matter.

Mr Turnbull:

– But I am proving it.

Mr DEPUTY SPEAKER:

– Order! The honorable member will resume his seat.

Mr Turnbull:

– You are completely out of order. The Clerk has told you so, too.

Mr FORBES:
Barker

.- The Leader of the Opposition (Mr. Calwell) in the closing stages of his speech indicated clearly why his party intends to move this amendment, and why his party has taken the attitude it has taken on this particular matter, because he said that, although the Opposition might not get support in this Parliament, it would get support outside. Earlier he said, “ I have had a lot of letters written to me protesting about it”. Of course he has! So has every one of us. This is the explanation of the expectation of support outside. The fact that a few letters have been written, the fact that there have been a few critical editorials in the newspapers, is apparently enough in itself for the Opposition to move an amendment of this sort which asks for something that the Opposition knows is completely opposed to all precedent and all sound principles of government. But because the Opposition is so hungry for office, so hungry for votes, it is prepared to take this stand. There has to be only one letter in a newspaper, one leading article in a newspaper, one criticism expressed by one person and amplified in a newspaper, and the Opposition is right in, giving encouragement in the hope that this might mean another vote for it. It does so irrespective of the merits of the issue and the principles involved.

It was very difficult to know what the Leader of the Opposition, who opened this matter, was arguing, because he spent most of his time trying to bait the Australian Country Party. So seriously did he regard the matter that he spent a great deal of his time baiting my respected friends of the Australian Country Party who were sitting there paying attention to what he was saying.

In the course of his speech the Leader of the Opposition made some extraordinary statements. I have been very interested to hear honorable gentlemen opposite moaning about the profits of the motor manufacturing companies. One of the things that the Leader of the Opposition said was that this measure had reduced by onequarter the income of the motor vehicle manufacturers. Yet I have heard during mv time in this Parliament repeated complaints from members of the Opposition about the huge, inordinate profits of General MotorsHolden’s Limited. This has been their cry: “ This is a company which has been making huge profits. Let us pull it down. When we get into office we will fix it.” Yet for political purposes this afternoon honorable gentlemen opposite have been weeping crocodile tears because a measure taken by the Government might reduce the profits of that car manufacturing company - and no doubt of other car manufacturing companies. What an extraordinary statement to come from a party which has so consistently abused that company.

The Leader of the Opposition made another extraordinary statement. He said that a Labour government would not do the things that this Government has done in relation to credit restrictions. He stated also that when the last Labour Government was in office it did not restrict bank credit. I have no doubt that the Treasurer (Mr. Harold Holt) will have the details on that, but my recollection is that it was a Labour government which, in the first place, introduced the mechanism that made it possible to restrict credit in this country. I refer to the Banking Act of 1945. That act set up the special accounts system which is the mechanism by which the Reserve Bank can restrict credit. What is more, during its term of office the Labour Government made good use of that system and credit restrictions were never lifted. The Labour Party wanted to take the matter further and to nationalize the banks, thereby giving itself complete and absolute control not only over the level of bank credit but also over its disposal. Yet the Leader of the Opposition comes into this House and, to reinforce his argument, states that the Labour Party does not believe in using bank credit in this way!

He mentioned instances in which the Government had remitted sales tax owing to it. Perhaps honorable gentlemen felt as I did, that he was using this argument not so much to justify his point, because the cases were completely different from the one now in question, as to pursue the Vendetta which the Labour Party has been waging for years against the private enterprise airlines in Australia. When Labour was iti office it failed to run the private airlines out of business and since then it has done everything iri its power to discredit them.

The Leader of the Opposition has said that because the Government repealed the 10 per cent. increase in sales tax three months after it was imposed, this indicated, by definition, that the Government was mistaken in imposing the tax in the first place. Quite clearly, that was the position that the Leader of the the Opposition took up. Let us consider his statement. What does it imply? It would be difficult to get away from the suggestion that the Leader of the Opposition is claiming that taxation should not be used to achieve economic objectives. In effect, that is what he has said. There is a widespread, perhaps justifiable, misconception about this matter in the mind of the community as a whole. Although the Australian community these days expects the Commonwealth Government to accept responsibility for maintaining an adequate level of stability in the economy and does not hesitate to criticize the Government when there is inflation and unemployment, large numbers of people, to whom I believe the Opposition is pandering by its attitude to this bill, still believe that governments impose taxes solely to raise revenue for government purposes. It has not yet filtered through to many people in

Australia that it is necessary fdr the Government, if it is to fulfil its’ obligations to the people and to maintain stability in the economy, to use the weapon of taxation, not only to raise revenue for government purposes but also to achieve the Government’s economic objectives. I should have thought that the Labour Party would be the first to admit that.

Although the” Leader of the Opposition claims that Labour governments never used sales tax for this purpose - I suppose I must believe him because I do not know anything to the contrary - they certainly and frequently Used other forms of taxation to achieve economic objectives. What about the land tax which Was introduced 50 years ago by a Labour government with the specific economic objective of breaking up large holdings Of land in Australia and, in effect, reducing farmers to peasants? The Labo-.ir Party pursued that objective When it was in office. In other words, it used taxation for a social and economic objective. When this Government came into office it immediately repealed the land tax because we do not share the Labour Party’s aspirations. However, the Leader of the Opposition has said that as soon as the Labour Party returns to power it will re-impose the land tax because it intends to pursue its objective of turning Australian landowners into peasants. This is the party that came into the Parliament this morning and, to influence a by-election in New South Wales, represented itself as the friend of the primary producer. However, that is incidental. The point I am trying to make is that the Labour Party frequently and as a matter of principle has used taxation in one form or another to achieve a particular economic or social objective. In other words, it has used taxation for some reason other than to raise revenue.

Another example of the Labour Party’s attitude is to be found in the speeches of Opposition members who always claim that we should increase income tax on the higher incomes. They make this claim not because they want more money for government purposes, but because they are pursuing a particular social and economic objective in which they believe. In this instance the objective is to take money from the wealthier people in the community and to re-distribute it in one way or another among those who have less. It would not be appropriate in this debate to argue the merits of that principle, but I have given as illustration of how the Labour Party has Used, and will use, taxation for some reason other than to obtain revenue.

The Labour Party has claimed that by repealing this tax three months after it was imposed the Government has admitted that a mistake was made in imposing it in the first place. The only conclusion that can be drawn from that is that the Labour Party believes that the taxation weapon should not be used to achieve an economic objective. I will be interested to hear what the honorable member for Melbourne Ports (Mr. Crean), who will follow me in this debate, has to say about this matter, because the Government has clearly stated that it increased the sales tax on motor cars to achieve an economic objective. After a careful review df the economy, the Government came to the conclusion that in the circumstances , then existing in Australia the motor vehicle industry was using more than its fair share of the available resources. I Was able to see that at first hand because 1 represent a great rural constituency. For months and months the primary producers iri my electorate had been unable to obtain fencing wire, fencing posts and other steel products. One of the reasons why they had not been able to obtain those products was that the motor vehicle industry was drawing to itself too much of the steel available in Australia. Can anybody say that the Australian motor vehicle industry is more important than the primary industries? That is the implication in much of the criticism.

Reference has been made to the scarce labour resources which were being used by the motor industry. This argument has been reiterated by the Treasurer (Mr. Harold Holt) time and time again. No member of this House and no member of the Australian community should be in any doubt as to why the Government increased the sales tax on motor vehicles on 15th November last. The Government did that to reduce the level of activity iri the motor Vehicle industry-a purely economic objective. If it is accepted that the increased sales tax was imposed to achieve a purely economic objective, following ofl from that we come to this question: Did the Government achieve its economic objective by imposing this increased tax? Quite obviously it did. The Leader of the Opposition said that the Government had achieved its objective in that it had brought about an immediate and substantial reduction in sales of motor vehicles and a redistribution of labour from the motor vehicle industry to equally important industries which previously had not been able to obtain labour.

So there is no doubt that the Government imposed this increased sales tax to achieve an economic objective and there is no doubt whatsoever that it achieved that economic objective. Having done so, does the Opposition suggest that the Government should have continued the increased sales tax beyond the achievement of the economic objective? To me, that is the implication in what members of the Opposition are saying. Three months after the imposition of the increase, the Government looked at the position and decided that the objective had been achieved, that is, an immediate and substantial drop in sales of motor vehicles. Consequently, the Government decided to remove the increased sales tax, being confident at that time that the general credit squeeze, which always works slowly, had caught up with the situation and would maintain sales of motor vehicles at a desirable level.

Mr Reynolds:

– Does that mean that the credit squeeze is a permanent fixture from now on?

Mr FORBES:

– No, not by any means, because the economic circumstances of the country vary. For one thing, the Government has recently announced measures designed to increase the output of steel in Australia. As a result of those measures it is possible, indeed it is almost certain, that supply and demand in Australia will once more be in balance. Unlike the Australian Labour Party, we believe that when supply catches up to demand it is no longer necessary to have this sort of restriction. In my view, it is an entirely temporary and transitory measure. But if you pursued the Australian Labour Party’s philosophy of controlling everything and making no attempt whatsoever to increase the total supply of resources which go into produc tion, then you would maintain credit restrictions permanently.

Because I believe that these days the Australian community demands that the Government accept some responsibility for stability and for the level of economic activity, and because the taxation weapon is one of the few really effective methods available to the Government to achieve those objectives, I believe that the Government was right in increasing the sales tax on motor vehicles in view of the economic circumstances that existed at that time and in view of the responsibility placed on the Government by the Australian people. For the same reasons I believe that the Government was equally justified in lifting the increased sales tax when it did so, three months later, because the economic objective which it set out to achieve had in fact been achieved. Therefore, I support the bill.

Mr CREAN:
Melbourne Ports

– Before I refer to the interesting arguments of the honorable member for Barker (Mr. Forbes) on whether or not taxation should be used for social purposes, on behalf of the Opposition I support the amendment that has been moved by the Leader of the Opposition (Mr. Calwell), urging that the additional tax that was collected between November and February be refunded. Despite the arguments of the honorable member for Barker, we urge that we believe that the legislation before the House is an admission of a mistake by the Government. The magnitude of that mistake gives an indication of the damage governments can do when they make mistakes. The magnitude of this mistake is shown by the fact that about 50,000 or 60,000 Australians who bought motor cars during the period from November to February paid approximately £80 to £100 too much for them and the Commonwealth Treasury gained about £5,000,000 of revenue in the process.

When the measure to increase the sales tax on motor vehicles was introduced in this House in November last year, the Australian Labour Party opposed it. We said that it was an unnecessary double-barrelled measure.

Mr Forbes:

– You did not say that at the time.

Mr CREAN:

– We said that at the time. I led on behalf of the Opposition on that occasion, and I ask the honorable member to read “Hansard” for 29th November, 1960. The Opposition insisted that the credit squeeze in itself would be sufficient to achieve what the Government says the sales tax measure has achieved, namely, halting the sale of motor cars. We believe that, if the increased tax had stood alone, people who needed motor cars probably would have paid the extra £80 to £100 of sales tax, if the credit had been available. But because credit had been shut off the sales tax measure was unnecessary. Consistently, we now say that because the Government has belatedly realized that it made a mistake, morally it is bound to refund to the people who were the victims of the Government’s mistake - I suggest that it would not be difficult to find the 50,000 or 60,000 of them - the sums of £80 to £100 which they paid in additional sales tax, amounting in total to £5,000,000.

The Treasurer (Mr. Harold Holt) has said that there is no precedent for this sort of thing. I would agree with him if he said merely that there is no precedent; because I suggest that no government in Australia has previously repealed one of its own emergency measures three months after it was imposed. This shows the ineptitude or the stupidity of the Government three months ago in not foreseeing the true situation.

Mr Duthie:

– lt was the shortest application of a sales tax on record.

Mr CREAN:

– It was the shortest in the history of Australia. I challenge the Treasurer to find a precedent for the Government’s action. It introduced a measure as a matter of urgency and emergency, and repealed it three months later. There is no precedent for such an action. The Government made a mistake and it has a moral obligation to do what it can to re-imburse those who were the victims of its mistake.

In a sense, that is all that need be said here; but I would like to take up the challenge that was thrown out by the honorable member for Barker. I listened courteously to his speech, but I regret that he has left the chamber. No doubt he can read my speech in “ Hansard “ even if he did not read the previous one to which I have referred. If he had read that speech, he would have known that the Opposition argued three months ago that the sales tax portion of the Government’s economic measures introduced in November was unnecessary. In effect, the Government loaded a double-barrelled gun. The first shot was the credit squeeze, which still applies. The second barrel was loaded with the sales tax and was used after the first shot had already laid the victim out.

This is an interesting case study of the lack of application by the Government to the problems of economic growth and development in the Australian community. There was a great deal of undistributed middle in the syllogism used by the honorable member for Barker. To hear him, one would think that there was no sales tax on motor cars before November last year. According to his argument, it was merely the difference between the 30 per cent, and 40 per cent, rates of sales tax that achieved the objective he claimed had been achieved. All that has been achieved by the measure, so far as I can see, is that more than 1,000 persons have been dismissed from the motor car industry. The repercussions have not stopped there but have flowed into other branches of industry, and some 80,000 Australians are without jobs in a community which calls for economic development of all kinds. The Australian Labour Party believes that the Government is irresponsible and that there should not be a single Australian unemployed if he is able and willing to work.

Mr Harold Holt:

– You will live to regret that statement.

Mr CREAN:

– I might live to regret it, but I think you should be a little less casual about the situation.

Mr Harold Holt:

– I have given much earnest attention to it.

Mr CREAN:

– You might have done so; but if you had given some earnest attention to some of these matters a long time ago, it might have been more significant. I am sorry the honorable member for Barker is not in the chamber, as J want to quote from an official publication of the Department of Trade entitled “The Australian Motor Vehicle Industry “ and published in March, 1959 - two years ago.

It points to the fact that in March, 1959, when this document was printed, the Australian motor car industry had a certain capacity. I quote from the document at page 11 -

Excluding vehicles for which demand is insufficient to warrant local production or assembly, the Australian vehicle industry now has adequate capacity in terms of manufacture and/or assembly to meet all demands. Present capacity-

I ask honorable members to note that this was two years ago - -is approximately 335,000 motor vehicles a year. . . .

That was obvious, apparently, .to the Department of Trade two years ago; yet in November, 1960, when the sales of motor vehicles in Australia matched the capacity of the motor vehicle industry in March, 1959 - namely, 335,000- the Government began to get alarmed about it. It said that it was alarmed because of the drain that the motor car industry makes on imports generally. It makes a drain for two good reasons. The first is the importation of petroleum. A motor car is not much good without petrol, and imports of petrol total about £100,000,000 a year. Components of motor vehicles account for something like another £100,000,000 a year in the aggregate. Again, I .ask honorable members to note a statement published in this document, “The Australian Motor Vehicle Industry “, two years ago on import licensing. It .states-

As from April, 1957-

That is almost four years ago - there was a general relaxation of import licensing and the motor vehicle industry was granted certain important concessions. Within an annual ceiling, these concessions allow vehicles to be imported on a sales replacement basis instead of by quotas .calculated on a base year of imports.

In other words as far hack as 1957, the motor car industry was given more favorable treatment regarding import licensing than were other branches of industry which relied on a quota. The motor car industry could show that because of its sales increase it was able to get a higher level of imports. That goes back to April, 1957 - four years ago. The Government encouraged the investment of foreign capital and other capita! in Australia to get a motor car industry with a capacity of 335,000 vehicles in 1959, and by way of assistance it relaxed import controls on motor vehicles. That happened before the general relaxation of import licensing in February, 1960.

This highlights the sort of thing that the Government ought to be doing. It should be using import licensing sensibly and selectively. The Treasurer has mentioned the record of this Government with regard to full employment or high employment. If one thing stands out more in 1961 than it has for many years it is the dependence upon maintaining a high level of employment in Australia for proper expansion of the secondary industries, of which the motor car industry is a singular and conspicuous example.

The motor car is being used not only for pleasure. It is also being .used commercially and on the farm to increase primary production. The Government has encouraged the growth of the industry. Ancillary to its growth are increases in imports of petrol and components. If our export earnings are limited, as we know they are, is it not rational that we should do something to allocate those earnings properly in order to get the best that we can get from imports? If we require a certain amount of petroleum and a certain amount of components to make motor vehicles, does that not lead to the conclusion that the rest of our imports should be chosen selectively and that some ought to he .banned altogether? But, of course, this Government does not look at this matter in a comprehensive fashion at all. It goes along haphazardly from day to day. For the life of me, I could never follow the logic in the argument that removing import licensing would produce lower prices in the Australian economy. That was one of the supposed attacks upon the evils of inflation which have been with us as Jong as “we have had this Government. It is conterminous with the Government.

That solution disrupted the whole of our internal economy and we had to face up to the measures that were brought down here in November, 1960. The thing that was wrong with those measures was that instead of re-imposing import controls, the relaxing of which had led to a flood of goods from overseas, the Government adopted the stupid device of a credit squeeze that hit everything, the innocent equally with the guilty, and supplemented it with the increase of sales tax. So we were hit hard by the charges from a double-barrel weapon. Now, belatedly, the Government recognizes one mistake, but it will not admit its greatest mistake, which was made in February, 1960 - the general relaxing of import controls.

Because of the nature of the Australian economy, with its dependence for export earnings upon primary products which are relatively few in number but are great in aggregate, this country cannot afford to squander imports. It has to be rational and logical in the allocation of those imports. This Government has been everything but rational or logical in its approach to these matters. It gears up an industry and encourages the industry to gear up to a certain capacity. Then, because of the trend in imports, the Government becomes alarmed when the capacity is reached, despite the fact that as far back as four years ago it released import controls in this section of the economy.

I am not arguing at this stage that if it had been conceived in 1957 that there ought to be limits in the growth of the motor car industry - as the honorable member for Barker suggests, apparently, that it was conceived in November, I960- the Government should have taken entirely different steps in 1957. For once I agree with the honorable member for Mackellar (Mr. Wentworth), who suggested last night that there was nothing very sensible about shutting down activity in one industry if at the same time the capacity of another was not opened up. But that is going on in the Australian economy at the moment. It is not as though the resources being released from the motor car industry by what the honorable member for Barker calls the achievement of the Government’s objective are leading to increased activity somewhere else. At the moment there is an atmosphere of stagnation and a feeling of pessimism about the future of the Australian economy. Not for quite a long time have we been so apprehensive about what the next few months will bring. “Economists of note have predicted that unemployment may reach a figure of 200,000 by the end of June. I hope that that prediction is wrong, After all, what is achieved by having 200,000 people unemployed, in an economy such as ours, when so much requires to be done? In terms of the things to be done, whether by way of public development or investment in certain basic industries, Australia ought to be short of man-power rather than having too much of it.

At the moment, the fact that we appear to have 80,000 too many in the work force would seem to be justification for the Government to look closer and ask whether there is not something wrong with its economic theories. I think that everything has been wrong with the economic theorizing by this Government and it ill-behoves the Treasurer to say that when at some future time we look back to this period, it will be hard to match the record of this Government in respect of full employment. It will be hard to match the Government’s record regarding inflation and a number of other things! Certain measures were taken in this Parliament three months ago. One of these, but only a minor one, which in a sense was unnecessary, is now being repealed. Other measures, ancillary to it, which in the view of this side of the House were wrong, are going on as before. Nothing that this bill does will change the general situation of stagnation.

The honorable member for Barker said that of all political parties the Labour Party should be the last to argue that taxation ought not to be used for social ends. I would agree with him, although my colleague, the honorable member for Warringah (Mr. Bland) might not agree with the honorable member for Barker about that. But that does not mean that a particular tax measure taken at a particular time is necessarily the right measure. In my view, this was an entirely wrong measure.

Taxation, in conjunction with monetary and other measures, can be used to secure social direction, and I would think the most significant lesson to be learned from the measures that have recently been taken is that the term “economic control” can no longer be considered a dirty word in the context of the Australian economy. Economic control is necessary in any economy such as the Australian economy in order that, in terms of limited resources, we get the maximum national development. The arguments in this House ought not to centre round whether there ought to be controls or no controls. Primarily, they ought to be about what kind of controls there should be.

The honorable member for Barker, a member of the Liberal Party, has suggested that taxation, properly and sensibly applied, can be an instrument of social control. I should think that the implication behind all these measures is that, in 1961, the Government recognizes that too much of the resources of the Australian community has been allowed to go into the one channel - the motor car industry. If that is the view of the Government in 1961, I suggest that a good deal of damage to the Australian economy would have been obviated if this trend had been seen as far back as April, 1957, when the relaxation of import controls favoured and encouraged the development of the motor car industry to the stage where it was capable of producing 335,000 vehicles a year. As we have said on former occasions, if the Government’s argument were - and I ask honorable members to note the “ if “ - that the sales of motor cars must be reduced in order to release machinery and man-power for use elsewhere, such as to build schools instead of motor cars, that might be a conscious enough social choice. But it is stupid to reduce the capacity of the motor car industry if you do not build schools or do something else with the machinery and man-power so released. It is clear from a careful analysis of the present circumstances of the Australian economy that the recession or damping down in some sections of the economy is not being accompanied by a stepping up or increase in activities in other directions. Rather is there stagnation. Unfortunately, when economies begin to roll downhill they roll very quickly, and they are not always retrieved as easily as they were allowed to get out of hand. We say that the Australian economy is out of hand because this Government does not know where it is going.

This measure is, to say the least, a recognition of one mistake. When compared with an Australian budget df £1,500,000,000, perhaps £5,000,000 does not sound very much, but £100 still is of some significance to the individual Australian. Between 50,000 and 60,000 people have each had to pay £100 because of this mistake by the Government. That is one mistake the magnitude of which can be measured, and I suggest that the Government should try to measure the magnitude of the effect that 80,000 people being out of work in any one week has upon the Australian economy. The effect is even greater when there is a continuation of this position for more than a week. That is the situation we have in Australia at the moment, and it calls for a change of policy on the part of the Government, just as much as the position of the motor car industry necessitated the change of front illustrated by this measure.

Mr Turnbull:

– I wish to make a personal explanation.

Mr SPEAKER (Hon John McLeay:
BOOTHBY, SOUTH AUSTRALIA

Does the honorable member claim that he has been misrepresented?

Mr Turnbull:

– Yes. When the Leader of the Opposition was speaking during this debate - probably to get some publicity, although perhaps unthinkingly - he said that I, the member for Mallee, had never voted against the Government or the Liberal Party since I have been in Parliament. I have never voted against the Government when my vote would have meant putting Labour into office, because I owe that to my constituency. But I have voted against the Government. In fact, on two occasions, with four others, I voted against the whole House. I asked the Leader of the Opposition whether he would withdraw his assertion if I proved my case and he said he would. I now expect him to withdraw it.

Mr BARNES:
Macpherson

.- I support this bill and I am confident that in doing so I have behind me at least the sixteen farmer members of the Country Party, despite what the Opposition says. I might add, too, that, being a religious group, we also have our own chaplain.

Mr Haylen:

– You also have your own race-courses.

Mr SPEAKER:

– Order! I ask honorable members not to interfere with the honorable member in the straight.

Mr BARNES:

– The honorable member for Melbourne Ports (Mr. Crean), in his usual thoughtful contribution, painted a very moving picture. But that is the traditional attitude of the Labour Party, which has condemned this Government on many occasions when it has introduced measures designed to put a brake on our economy. The Labour Party’s criticism of what it termed the horror Budget of a few years ago was even more severe than its criticism of the present measures being put into operation by the Government. The honorable member for Melbourne Ports has admitted that to some degree the present measures are necessary, but he seeks to make the point that if we persevere in the present state of affairs we will have a continuing condition of stagnation. I believe, on the other hand, that there are signs that the economy is picking up and that it will regain its steadiness and progress to an outstanding degree in the future.

Here, I should like to quote from a publication which came into my hands only to-day. It is the “ Empire Trust Letter “, issued by the Empire Trust Company of New York, a company which obviously has a large clientele that is interested in foreign investment. I think it may be taken as a summing-up by people in a neutral position of how overseas investors view the measures being taken with relation to our economy. It reads -

Recent indications suggest that the financial spiral in Australia has begun to abate, paving the way for continued strong growth under somewhat steadier conditions. The vigour and despatch with which the Australian authorities attacked the problem has not gone unnoticed in overseas financial centres.

That is a very heartening comment from overseas. The honorable member for Melbourne Ports went on to say that the productive capacity of the motor car industry in December, 1959, was 330,000 vehicles a year. T think it only reasonable to suggest that one never expects an industry to produce at full capacity, and the important factor here is that the expansion of the industry increased in rapidity as the year went on. Figures which we saw recently indicated that one of our largest motor car manufacturing firms was employing 41,500 persons as at 30th June last, and that by 31st October the number had increased to over 43,000. Through the dismissals that have taken place since, the number has now dropped back to what it was at 30th June last year. That indicates that there had been a spurt of expansion which could have been disastrous. I think that it conveyed to the Government the necessity for urgency.

In order to protect our precious overseas balances, which are so necessary to keep our industry functioning and employment at a high level, it was essential to make sure that the measures that were taken were successful. The motor industry was the greatest offender in the reduction of our overseas reserves. As honorable members know, we were spending about £200,000,000 a year on the importation of petroleum and its by-products, rubber, steel, and other commodities used in the motor industry. The Government was reluctant to adopt the measures that it did, but in view of the tremendous expansion of the motor industry in the latter half of last year, the Government obviously felt that it had to be sure that the measures it took would be successful. The Treasurer (Mr. Harold Holt) indicated at the time, that the increased sales tax on motor cars would be removed when the objective of the Government had been achieved. That has now been done.

We have heard some amazing statements from members of the Opposition. For instance, I heard an honorable member opposite say recently during a debate in this chamber that the Treasurer could have stated that the additional sales tax on motor cars would be removed in three months from the time it was first introduced. What a disastrous effect such a statement would have had on the motor industry! Every car dealer and salesman in Australia would have been ruined. No one would have bought a car until the three months period had elapsed.

Undoubtedly, the Government’s objective was reached far sooner than most people thought it would be, due largely to extravagant statements published in the press. The press has joined the Opposition in criticizing the Government. Fortunately, not all the newspapers in Australia have done so; there are still a few that take a realistic view. Nevertheless, sections of the press have espoused the cause of the speculative elements of the community which are, of course, the best advertisers. These newspapers have shaken the confidence of the whole community and have affected employment to a great degree. Despite all that, the measures adopted by the Government are gradually having the desired effect, and there are indications that our position overseas is improving.

The Minister for Labour and National Service (Mr. McMahon) pointed out recently that in September there was a turnover iri the industrial work force of 6*6 per cent. If we multiply that percentage by the number of months in the year, we have a figure of nearly 80 per cent. Sd) Sir, it cannot be said that the Government’s economic measures have had a disastrous effect on employment. The figures indicate that that is not the case. I have followed Up iri my own electorate many stories about unemployment because I am concerned for the welfare of people who are out of work. I went to a man who had had to put off a number of employees; and I asked, “ Where are those men now? “ 1 found that they had obtained other employment. I know that that has not been sO in all cases. Nevertheless, our record is a really good one in relation to the world employment position. On last month’s figures, there is 1.9 per cent, of unemployment in Australia, but if we look at our newspapers, such as the “ Sydney Morning Herald “, we see that there is still a tremendous number of employment vacancies. Unfortunately, most of them are for skilled workers. Queensland, with 3.3 per cent, of Unemployment, is Worst off. But there is seasonal employment in Queensland and few people realize that the awards for seasonal workers are loaded to carry them over the part of the year that they will be idle. In the prosperity which this Government Has ensured to the people of Australia, those seasonal workers have been in the habit of finding other employment as soon as their seasonal work has ended. Consequently, many such people are unemployed only temporarily, until such time as our meat industry begins to operate and the sugar industry commences operations in a month or so. When that time arrives, the position will right itself.

As has been announced, the Government’s measures will result in the acquisition of funds for the construction of roads and the development of areas of Queensland where, it has been found by experiment, pastures can be grown to keep a continuous flow of fat cattle coming forward to the meat works, thus making for continual employment.

The motor industry, Mr. Speaker, has a habit of over-expanding. In America, every few years there is a tremendous surplus of production. At times, millions of cars are unsold in that country, with consequent unemployment in the industry. To*day, there are 1 ,000,000 unsold cars in America. In that country, 7.7 per cent, of the work force is unemployed. Those of us who are engaged in the grazing industry know that after a succession of good seasons some graziers are foolish enough to over-stock. When the inevitable dry time comes along, they have to suffer the consequences. I do not think that industry can expect to be immune from that kind of thing. No doubt many people purchased cars which were subject to the increased rate Of sales tax, only to find that the tax was reduced the next day. But that kind of thing is a part of our way of life. We have a system of free enterprise. We may purchase something before the market falls, or we may purchase something before the market rises. That is just something that happens.

I wish to make a particular plea for a Section of Our motor industry which I believe has been unfairly hit. In fact, I think that it is iri a position that could almost be described as anomalous. It certainly is at a disadvantage with its competitors. I refer to motor dealers who finance their own floor plan. Tn the motor industry, many dealers, particularly in the cities, where the turnover is large, have on display cars which are financed by hire-purchase companies; but in the country, where the turnover is smaller, many dealers finance their own floor plans. For sales tax purposes, those dealers are treated as the purchasers of the cars. They pay the sales tax. Honorable members will appreciate that when the rate of sales tax was reduced by 10 per cent., they lost money, and of course they are unable to obtain refunds. On a Holden car, the increased sales tax amounted to about £80. The competitors of those dealers, in the same towns, who had floor plans financed by hire-purchase companies were at no disadvantage. I make an urgent plea that something be done for dealers in that position because many of them had no choice but to finance their own floor plans.

I know that when the Government’s economic measures were introduced it gave- hire-purchase companies in remote areas a great excuse to remove their interests. Because of the cost of repossessions, the outlying areas were not as profitable as were other areas. The dealers had no choice but to finance their own floor plans if they were to stay in business. I am pleased to say that most of the hire-purchase companies are now returning to country areas in a limited way. They do not finance the whole of the floor plan. A dealer may have four cars on display. The hire-purchase company provides finance for two or three cars and the dealer is left to finance the remaining one or two. In most instances, the dealer is not in a position to make a choice. In a sense, these smaller men have followed the Government’s idea of living within their means. They have financed their plans without seeking money on the public market, and I believe that they have a very good case for some consideration.

I ask the Treasurer to consider seriously granting some relief to these people. I know it has been said that if the price rose they would have an advantage over their competitors. But in a country town they would not be in a position to enjoy that benefit and, in any event, I believe it is against the law to take advantage of increased sales tax. In a small country town, people know what cars are available and even if the dealers were permitted to take advantage of the increase, they would not have a competitive advantage over other dealers. Of course, when the sales tax dropped, they were at a considerable disadvantage. I should like the Treasurer to consider all aspects of this matter.

The Opposition has been careful to raise another matter, and that is the effect of increased sales tax on country people, to whom a motor vehicle is a necessity. The Government showed that it realized this position when it exempted utility trucks from the increased tax. If a man was in a desperate position and needed a motor vehicle, he could buy a utility truck without paying the increased tax. This has not been mentioned. I know that the utility truck is not as favoured now as it was previously. The station wagon has taken its place to a large extent, but unfortunately more station wagons can be seen in the cities than in the country areas. However, the Government took into consideration the fact that country people need a motor vehicle.

I support this bill. I have full faith that the measures adopted by the Government will result in a continuation of the prosperity that Australia has enjoyed under this Government.

Debate (on motion by Mr. Daly) adjourned.

page 563

TARIFF PROPOSALS 1961

Customs Tariff Amendment (No. 5); Customs Tariff Amendment (No. 6)

In Committee of Ways and Means:

Mr OSBORNE:
Minister for Repatriation · Evans · LP

– I move - [Customs Tariff Amendment (No. 5).]

That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals introduced into the House of Representatives on the sixteenth day of March, One thousand nine hundred and sixty-one, be further amended as set out in the Schedule to these Proposals and that on and after the twenty-fourth day of March, One thousand nine hundred and sixty-one. Duties of Customs be collected accordingly. [Customs Tariff Amendment (No. 6).] That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals intoroduced into the House of Representatives on the sixteenth day of March, One thousand nine hundred and sixty-one, be further amended as set out in the Schedule to these Proposals and that on and after the twenty-fourth day of March, One thousand nine hundred and sixty-one, Duties of Customs be collected accordingly. **Mr. Chairman,** Customs Tariff Proposals Nos. 5 and 6, which I have just tabled, relate to proposed amendments of the Customs Tariff 1933-1960 and will take effect to-morrow morning. In the main, the proposals provide for changes in duty on - Artificial flowers, foliage and fruit, Saws and saw blades, Wrist-watch movements and cases, Maize and maize grits, and arise from consideration of Tariff Board recommendations on these goods. I shall table the Tariff Boards reports at a later stage. The protective duties on artificial flowers, foliage and fruit are being removed. The Tariff Board has found that the extremely high level of duties which would be necessary to give adequate protection to local industry could not be justified. However, as the principal manufacturers of artificial flowers are also importers of such goods, the board considered that the reduced duties would provide some benefit to them in their role as importers. I come now to saws, saw blades and saw frames. Following a review of local industry, the Tariff Board has recommended a reduction in the protection substantively applicable to hand saws, and to saw blades, hand and machine types. At the same time, it has recommended that certain types which have until now been admissible at concessional rates of duty become dutiable at the protective rates of duty recommended. The Tariff Board report indicated that there has been an expansion in the production of machine saw blades in Australia and that these developments can be maintained with less protection than appeared to be necessary previously. The effective duties on most circular saw blades remain unchanged. However, certain diamond impregnated stone cutting types, which were previously admitted at concessional rates, will now become dutiable at rates of 7½ per cent. British preferential tariff and 15 per cent. otherwise. In regard to hand saws and blades, there is little variation in existing duties. The British preferential tariff rate of 22½ per cent. is unaltered and the intermediate tariff rate has been increased by 2½ per cent. However, primage duty of 5 per cent. is removed so that the effective level of duty on intermediate tariff imports is actually reduced by 2½ per cent. Frames for hand saws, except hacksaw frames, will be admitted at concessional rates under customs by-law. I shall deal now with wrist-watch movements and cases. The by-law item providing for a duty reduction of7½per cent. on wrist-watch movements imported for insertion in Australian-made cases is being deleted from the tariff on the recommenda- tion of the Tariff Board. These movements will now be dutiable at 27½ per cent. British preferential tariff and 45 per cent. intermediate tariff - that is, the rate now applicable to other wrist-watch movements. The Tariff Board has also recommended a reduction of 2½ per cent. ad valorem in the duties on wrist-watch cases. The new rates will be 25 per cent. British preferential tariff and 42½ per cent. intermediate tariff. In regard to maize and maize grits, the Tariff Board has recommended a level of duty which is equivalent to the sum of the customs and primage rates now payable on the goods. The net result is, therefore, no change in the present position. I commend the proposals to honorable members. Progress reported. {: .page-start } page 566 {:#debate-27} ### TARIFF BOARD Reports on Items. {: #debate-27-s0 .speaker-KMD} ##### Mr OSBORNE:
LP -- I lay on the table of the House the reports of the Tariff Board on the following subjects: - >Artificial flowers, fruits, plants, leaves and grains. > >Hand saws and saw blades, &c. > >Maize and maize grits. > >Wristlet watch cases and movements. I am also tabling two other Tariff Board reports on the following subjects: - >Photographic exposure meters. > >Vitamin C (Ascorbic acid). These do not call for any legislative action. The board's findings have in both instances been adopted by the Government. Ordered to be printed. Sitting suspended from 4.26 to 8 p.m. {: .page-start } page 566 {:#debate-28} ### ADMINISTRATOR'S SPEECH Address-in-Reply: Presentation to the Administrator. **Mr. SPEAKER (Hon. John McLeay).I** desire to inform the House that, accompanied by honorable members, I waited to-day upon His Excellency the Administrator at Government House, and presented to him the Address-in-Reply to His Excellency's Speech on the Opening of the Third Session of the Twenty-third Parliament, agreed to by the House on 22nd March. His Excellency was pleased to make the following reply: - > **Mr. Speaker,** > >Thank you for your Address-in-Reply which you have just presented to me. > >It will afford me much pleasure to convey to Her Most Gracious Majesty The Queen, the Message of Loyalty from the House of Representatives of the Commonwealth of Australia, to which the address gives expression. {: .page-start } page 566 {:#debate-29} ### QUESTION {:#subdebate-29-0} #### INSURANCE AND SUPERANNUATION FUNDS {: #subdebate-29-0-s0 .speaker-009MC} ##### Mr HAROLD HOLT:
Treasurer · Higgins · LP -- by leave - **Mr. Speaker,** in my statement to the House on 15th November, I announced that the Government had decided to introduce measures to establish a minimum level of 30 per cent. for the ratio of public authority securities to the overall investments of life companies and of superannuation and provident funds. I also announced that the legislation to give effect to this would provide that, of the amount of 30 per cent. to be held in public authority securities, not less than two-thirds was to be invested in Commonwealth securities. Since then, Cabinet has on a number of occasions considered the detailed arrangements which will be necessary to give effect to these decisions. 1 had hoped that it would be possible to introduce the new legislation to-night. However, while the Government has taken its decisions on the principles of the proposal, the drafting of the legislation has taken rather longer than I had expected, and it will not now be possible to introduce the new legislation until shortly after Easter. In view of the wide interest which has been displayed by both the public and investment institutions generally, I have thought it desirable to give, in the House, this earlier indication by way of a brief summary of what the Government intends. At least, it will be as brief as the details permit. Over the years, the Commonwealth Government has looked with favour on the increasing amount of personal insurance in Australia, which represents a most important form of individual saving. The life companies have been well conducted and, as custodians of an increasingly large volume of community savings, they have acquired a certain institutional status which has not been without importance for their rapid growth and commercial success. Because of this, special status and- the. recognition by governments that these institutions have been traditional, sources of substantial investment in securities-' offered by the governments of. the Commonwealth, and the States, successive Commonwealth, governments have- accorded the life companies specially favorable taxation treatment. It has. been calculated, that the average rate of. tax which they pay on their total assessable income, is, on. the average, less than ls: 6d. in the £1. Honorable gentlemen who can. compare this with the normal company rates will know how much lower this, rate is. There are two principal factors producing this low average rate of tax. The first, is that, when arriving at the amount to be taxed, section 115 of the Income. Tax and Social Services Contribution Assessment Act entitles a life company to a. special, deduction from, assessable income which is designed to free from tax an amount ranging from *H* per cent, to 3 per cent, of its Australian policy reserves. This means in effect that between one-third and one-half, of the Australian investment income of most life companies is tax free. As with all- other resident companies, life companies are also entitled- to a rebate; under' section 46 of the same act, in1 respect of dividends included in their taxable income, but, whereas dividends received by other companies become taxable income when they are distributed! im due course to their own- shareholders, dividends received by the life companies can be distributed to policy-holders- tax free, since- reversionary bonuses on life policies ame not subject to tax. With- the increased holdings of company shares by the life companies, this has become an increasingly valuable privilege. Indeed, it produces- a sort' of inbuilt discrimination against" government securities, the income front which is' taxable, and it thereby tends te increase the attraction of company equity investment. This? is a consequence certainly never intended when the: provision: was introduced and, in fact, is. a consequence which, runs counter to the wish of past governments, as well as that of the present one, that a- large- proportion of. insurance investment- should be i» government securities:. But- while1 the life- companies,. as> has- bean- seen, pay very little tax. indeed, the position of the privately managed; superannuation and. provident funds is even more favorable. The vast majority of them are completely tax free. The amount of funds, coming into the hands of the life companies and the privately managed superannuation and provident funds has been increased very considerably by other tax. concessions, notably the substantial tax concessions granted to policy-holders and others in respect of life insurance premiums and. contributions to the superannuation, and provident, funds. These concessions, I might recall,, relate not only to payments of. life insurance premiums,, superannuation contributions and the like by individual taxpayers,, but also to contributions by employers in respect of their, employees. Individual taxpayers may deduct such payments up to a maximum, of £400 each year, the limit having been £150 in 1949 when the concession was in the form of a rebate, and having been raised from' £300 as an outright deduction in the 1959-60 Budget. This concession alone, it has been, estimated, now results in about £35,000;O00' of revenue being forgone by the Commonwealth. Except in special cases, the maximum deduction allowable to employers for contributions to pension and retirement funds on behalf of their employees is £200, or' 5 per cent, of the employee's annual remuneration, whichever is the greater. A further amount of about £9,000,000 is forgone from revenue as a result of this concession. The total Australian' assets of the life companies now exceed £1,000,000,000. The rate of growth of these assets is indicated by the- fact that in 1944 they were less than £300,000,000: They grew by about £90,000,000 in 1960 and are estimated to be increasing at the" rate of about 10 per cent, per annum. Assets of the separately managed1 superannuation and provident schemes- are- increasing even more rapidly and were approaching- £600,000,000 in 1960, after having been less than £200,000,000- in 1-951., The annual rate of increase is of. the order of 15- per cent Approximately half of these assets are in privately managed- superannuation schemes and- the remainder im Commonwealth and State public service and similar, superannua-tion schemes. Policy-holders in the life insurance companies and contributors to superannuation and provident funds have a direct interest in the stability of the currency and the avoidance of inflation. They have an interest, as citizens, in sound national industrial development assisted by essential government programmes of works, utilities and services of a great variety of kinds. They are taxpayers for the most part, and thus have an interest in the successful financing of these governmental programmes from loan proceeds rather than from direct taxation. All these things can be materially helped by a reasonable proportion of investment in governmental securities of the assets of these sources of community savings. In fact, however, the life companies and the privately managed funds have been progressively reducing the proportion of community savings coming into their hands which they invest in public authority securities. As an example of the reduced support which public authorities have received from the life companies over recent years, they increased their total assets by £562,000,000 between 1949 and 1959, but they increased their net holdings of Commonwealth securities by only £4,000,000 in that period. Semi-governmental securities fared a little better than Commonwealth securities, with an increase of £77,000,000, but the remaining £481,000,000 of the total increase was applied to investments other than public authority securities. Whereas life companies held 50 per cent, of their assets in Commonwealth and semigovernmental securities in 1939 when the long-term bond rate was 3i per cent., and 68 per cent, in 1949 when the long-term bond rate was 3i per cent., the proportion had fallen to 37 per cent, by 1959. Only incomplete details are available in 1960, but it appears that the proportion in that year was less than 33 per cent. The longterm bond rate in the latest Commonwealth loan was 51 per cent. Figures available for a number of the larger privately managed superannuation funds showed that they held only 1 1 per cent, of their assets in Commonwealth securities in 1959, compared with 20 per cent, in 1956, and that these larger funds have actually been reducing their holdings of Commonwealth securities over the last few years. This reduced support for public authority loans by the life companies and the privately managed funds has been a major factor adding to the difficulties we have faced in recent years in financing Commonwealth and State works programmes. Over the last ten years, more than 60 per cent, of Commonwealth and State capital works expenditure has had to be financed ultimately from Commonwealth taxation revenue. The total amount supplied from revenue over this period exceeds £2,000,000,000, a heavy burden on this generation of taxpayers for public assets which will, for the most part, be servicing many generations to come. For this financial year, the proportion looks like being 65 per cent., or nearly two-thirds - £274,000,000 - of the total programme of £424,000,000. In other words, Commonwealth taxation has had to be much higher than would have been necessary had public authorities shared more fairly in community savings, including the large and rapidly growing volume of such savings of which the life companies and the private funds have been the custodians. There are thus good grounds, I suggest, for the view that, of the large amount of community savings being deposited with the life companies and the superannuation funds, a reasonable proportion should be channelled back through public authorities to finance essential community services. I might mention that more than once since it assumed office in 1949 this Government has sought, by discussion with representatives of the life companies, to obtain greater support by them for Commonwealth securities, but the companies have, in total, continued to reduce their support. In fairness to the general taxpayer, and having regard to the need for a more balanced use of community savings to sustain sound national expansion, the Government reached the conclusion that action to check this drift was necessary. This, then, was the background which prompted the Government to decide that life insurance companies and superannuation and provident funds would be required to keep a minimum amount of their assets in the form of public authority securities, with at least two-thirds of that amount in the form of Commonwealth securities. Following the announcement of the Government's position, there has been, as was expected, much press and public comment and some criticism of the proposals, more particularly from the life insurance companies and from spokesmen for the superannuation and provident funds. Some of this criticism was based - wrongly in my view - on the proposition that we were singling out the life insurance companies and superannuation funds from all other institutions by requiring them to hold a certain proportion of their assets in public authority securities. But, as I have pointed out, those institutions had already been singled out for considerable taxation concessions not enjoyed by other businesses. The Government, as is proper, has given careful study to all these views, both as they affect the life companies and as they affect the superannuation and provident funds. We believe we now have a set of proposals which should be acceptable to, and of potential advantage to, all of the life companies now operating in Australia. First let me clear the ground of a few aspects and then summarize the proposals briefly. The proposals are based on a combination of incentive and disincentive. They enable life companies and superannuation and provident funds to decide for themselves whether or not they will conform with a certain pattern of investment in public authority securities. None of the proposals requires any action by the individual policy holder or superannuation or provident fund contributor. They invite action by the life companies and the private funds - not by the individual. In the case of the private superannuation and provident funds, the position, broadly speaking, will be that, subject to relatively minor arrangements, they will not be subjected to any tax disadvantage in respect of their investment income earned up to the level of 1960-61. The proposals are essentially prospective in approach. In the case of the life insurance companies, however, past investment is brought into calculation, because a purely prospective approach would work unfairly among companies with different existing holdings of public authority securities, as they are in active commercial competition with each other. I repeat, that under our new proposals there will be no compulsory direction of the overall investment of a life company or a privately-managed fund, and they will be entirely free to control their own pattern of investment. However, we do propose to alter the taxation arrangements in such a way that some financial advantages will be available to those companies and funds which co-operate in achieving the Government's broad objectives. The scheme provides that there will be different taxation treatment, depending on whether life companies and privately managed funds maintain what I shall call a " 30/20 per cent, ratio " in relation to holdings of public authority securities, or new investments in those securities. This 30/20 per cent, ratio means that at least 30 per cent, of Australian assets, or increases in assets, should be in the form of public authority securities, including at least 20 per cent, of assets, or increases in assets, in the form of Commonwealth securities. Let me deal first with the superannuation and provident funds. The present investments of many of these funds are already tied up tightly in assets of a very illiquid nature. Some of the funds have no investment at all in public authority securities. As the majority of them are completely exempt from taxation, the 2s. in the £1 income tax rebate available on Commonwealth loan interest is of no advantage to them, and many of the funds have, therefore, made much greater investments in semi-government securities than in Commonwealth securities because of the differential in the nominal interest rates. In order to comply with both sections of the 30/20 per cent, ratio in relation to their total assets within even a moderately long period, certain of the funds would have to realize some of their existing assets, including in some cases semi-government securities. It has accordingly been decided not to attempt to direct or to induce the re-arrangement of the existing assets of the privately managed funds. Attention will therefore be directed only to the future annual increases in the investible resources of the funds. Privately managed funds which are now at or below the 30/20 per cent, ratio in relation to their total assets will remain tax-free on all investment income, provided that they retain an amount of public authority securities equal to that which they held on 1st March, 1961, and invest not less than 30 per cent. of their future accruing resources in public authority securities, including not less than 20 per cent, in the form of Commonwealth securities. Any fund which has a present " surplus " over .the 30/20 per cent, ratio in relation to total assets will be allowed to offset this against, the future annual investments of accruing resources which would otherwise be necessary to qualify for tax exemption. In the case of any funds which choose not "to arrange the investment of annual increases in assets in accordance with the 30/20 per cent, ratio, it is proposed to limit the taxation exemption to the 1960-61 level of investment income, but this exemption will only apply if existing holdings of public authority 'securities are maintained. Full details of taxation arrangements for these funds will he announced when .the legislation is introduced. Generally speaking, all privately managed funds which are now exempt from taxation will be able to remain exempt from taxation on investment income at least up to the 1960-61 level. However, privately managed funds will not be able to retain their exemption from tax if the existing fund is closed at the present level and existing holdings of public authority securities are transferred to a newly created fund. These provisions will come into effect in respect of the 1961-62 income year. The provisions will apply to all provident, benefit, superannuation or retirement funds which would now be entitled to taxation exemption under Section 23 (j) or (ja) of the Income Tax Assessment Act, but medical and hospital benefit funds and funeral benefit funds will be excluded. There are of course certain overseas superannuation funds which have no connexion with Australia, apart from the fact that they invest funds here. It is not proposed to alter the tax exemption at present allowed to such funds. There will be provision for the Commissioner of Taxation to exercise his discretion in cases where great hardship could result for a privately-managed fund during any year of income through its inability to arrange its investments in accordance with the proposed provisions, or where the trustees have made a gen Joe and bona fide attempt to achieve the prescribed ratios, but have temporarily or inadvertently failed to comply. It is proposed to institute broadly similar arrangements in relation to that part of the business of life insurance companies which is concerned with the provision of superannuation benefits of a type similar to those provided by private funds which are now exempt from taxation under the existing provisions. For some time past, the life companies have claimed that it was .anomalous that the investment earnings of privately-managed superannuation funds should be entirely free of tax, while earnings derived from life company investments in pursuance of superannuation (business is taxable under .the normal life company conditions. It is true that, because of the very large and somewhat arbitrary deductions .allowed to life companies, their effective rate .of tax is something less than ls. 6d. in the £1 on their net investment income, hut even this is held by the life 'Companies to place them at a competitive disadvantage with the privately-managed superannuation funds when they are soliciting superannuation business. The new proposals will correct this position for .any life company which ensures that the .desired ratios of public investment are observed in the investment of funds arising from that -superannuation business. However, .they will not be eligible -for this concession and other concessions unless they also make certain arrangements., which I shall outline later, concerning the investment of the funds arising out of their other life insurance business. In order to make the correction of this anomaly administratively practicable, it will be necessary for the life companies to set up a separate statutory fund relating -to assets arising from their superannuation business. This will be more or less a bookkeeping operation. Indeed, it is difficult to devise a method of meeting their wish to .have this taxation concession given to them without making such a separation of their statutory funds. The fairest method of allocating existing assets between the two funds would be to do so as near as practicable to a pro rata basis. As this method would also have certain administrative advantages, it has been decided to adopt it as the basis of allocation. The main purpose of the separation of assets is thus to enable companies which arrange their investments in a certain way to be fully exempted from income tax on interest arising from their approved superannuation business, and to receive the full benefit of the proposed financial inventives. If the full benefits are to be received from 1st July, 1961, the separation of assets will have to be made as at 30th June, 1961, or an earlier date. The companies will also, no doubt, wish to set up a separate statutory fund in order to exclude their oversea assets from the 30/20 per cent, requirements. Provision will also be made for this. To obtain freedom from tax on their superannuation business, the companies will have to ensure firstly that, during the year of income, they had held not less than the 30/20 per cent, ratio in relation to the total assets of their superannuation statutory fund. However, companies below that ratio which desire to build up to it as part of an approved pattern of investment - which I shall explain later - will also be fully exempted from taxation on their superannuation business. Secondly, they will have to ensure that they have also become eligible for the special arrangements proposed to be allowed for investment income from their other Australian life business. The arrangement of its investments in this manner will automatically mean that, as will be the case with the privately-1 managed funds, a life company can qualify for full tax exemption on its superannuation income. Also, as with the privatelymanaged funds, it will be possible for any initial surplus over the 30/20 per cent, ratio in the statutory superannuation fund to be offset against future requirements to invest superannuation assets in public authority securities. Companies which choose not to arrange their investments in the manner which I have outlined will still have the whole of their superannuation income taxed at the same rates as at present, but certain adjustments will be made to the section 46 rebates and section 115 deductions which I have mentioned earlier. The general effect of these adjustments will be that the income from superannuation business of these life companies in excess of the 1960-61 level will be taxed on a somewhat similar basis to the investment income in excess of the 1960-61 level of privately-managed superannuation and provident funds which choose not to arrange their new investment in accordance with the 30/20 per cent, ratio. It is proposed to alter the taxation arrangements relating to investment income arising out of the ordinary Australian life business of life companies in a way which will make that business less profitable if they choose not to invest in public authority securities in accordance with the 30/20 per cent, ratios, and progressively more profitable as they move up towards or improve upon those ratios. {: .speaker-BV8} ##### Mr Calwell: -- I thought you were opposed to socialism! {: .speaker-009MC} ##### Mr HAROLD HOLT: -- The honorable gentleman will find, as he goes along in his public career, that there is a wide and unbridgeable gulf between us. {: .speaker-BV8} ##### Mr Calwell: -- It is growing narrower all the time. {: .speaker-009MC} ##### Mr HAROLD HOLT: -- Oh, no. The honorable gentleman wishes to change the face of Australia, but the face of Australia after he had finished with it would be very different from the face of Australia that I would like to see result from the implementation of our policies. What we are trying to do is so to expand and improve the welfare of the people of Australia that they will look to the 1960's as being the greatest decade in their history. I know honorable gentlemen opposite are not very comfortable about these arrangements, which we believe will commend themselves to all thoughtful people who have taken the trouble to study this problem as being fair and reasonable. Our friends opposite continue to interject. {: #subdebate-29-0-s1 .speaker-10000} ##### Mr SPEAKER: -- Order! I ask honorable members to allow the Treasurer to continue with his speech. {: .speaker-009MC} ##### Mr HAROLD HOLT: -- A life company will not be able to take advantage of the proposed tax concessions on the superannuation section of its business unless it takes advantage of the arrangements on the ordinary Australian life side, and vice versa - that is, it will either be eligible for both sets of advantages or ineligible for both. It has already been said that all companies will need to set up a separate statutory fund in relation to their superannuation assets. This having been done, any company may become eligible for the taxation privileges offered on superannuation business, and for certain other taxation concessions on its other Australian life business, which I shall describe shortly. In order to become eligible for the advantages, an individual company will need to show, firstly, that, in respect of its superannuation statutory fund, it has followed an investment policy qualifying it for tax exemption on the whole of the investment earnings of that fund. Secondly, it will need to show that, during the year of income, it has held in public authority securities not less than 30 per cent, of the assets of the Australian ordinary life statutory fund, including not less than 20 per cent, in Commonwealth securities. There will be, however, a proviso added to both requirements. A company now below the 30/20 per cent, ratios will not incur any extra tax if it builds up to those ratios in both of its statutory funds within a reasonable period - approximately on a pari passu basis - by adopting an agreed investment programme. The legislation will provide a guide to the nature of these measures. Their general object will be to ensure that all life companies which are now below the 30/20 per cent, ratio, and which desire to qualify for the tax concessions, will build up as quickly as practicable to that ratio, but certainly no later than lune, 1971. {: .speaker-BV8} ##### Mr Calwell: -- Do you mean 1961 or 1971? {: .speaker-009MC} ##### Mr HAROLD HOLT: -- I mean 1971. Apparently that is where the honorable gentleman differs. He would give the short sharp axe to these companies, with no mercy shown, as socialist governments in other parts of the Commonwealth have done. However, unless it could not otherwise reach the desired ratios by that date, no company will be expected to invest more than 40 per cent, of its annual increases in assets in public authority securities, nor more than 25 per cent, in Commonwealth securities. Generally speaking, the arrangements we have decided upon mean that only what I have called eligible companies will be able to receive in the future the full benefit of the section 46 rebates on their dividend income. Once again, generally speaking, companies which do not choose to become eligible for the concessions will receive section 46 rebates in the future only on the amount of dividends on which they were allowed rebates during the 1960-61 financial year. In addition, a sliding scale will be applied to the taxation deduction allowed under section 115 for the income of the ordinary Australian fund which will significantly increase that deduction if a company exceeds the 30/20 per cent, ratio in relation to the total assets in its Australian ordinary life statutory fund. This section 115 deduction will be reduced, however, also on a sliding scale, if a company is below the 30/20 per cent, ratio and decides not to adopt measures which would achieve that ratio in a reasonable time. The sliding scale to be applied to the section 115 deduction will depend mainly on the " surplus " over 30 per cent., or the " deficiency " below 30 per cent., which each company has in its holdings of public authority securities in relation to the assets in its Australian ordinary life statutory fund. A further adjustment will be made according to the " surplus " over 20 per cent., or the " deficiency " below 20 per cent., which each such fund has in its holdings of Commonwealth securities in that fund, but this will be only one-half of the adjustment which will be made in relation to the overall ratios of public authority securities. A possible difficulty with a scheme of this kind is that it might encourage some companies to sell part of their existing holdings of semi-governmental securities in order to purchase Commonwealth securities instead. It is for this reason that the additional benefit to be gained from holding Commonwealth securities in excess of 20 per cent, will apply only if the amount of semi-governmental securities held on 1st March, 1961, is retained and, even then, the amount of this benefit will be reduced if the proportion of the holdings of semigovernmental securities falls below 10 per cent. These proposals must sound very involved to those honorable gentlemen who have not had an opportunity to study the taxation provisions of the existing law as they relate to superannuation funds and the life insurance offices. They do not complicate these matters to any considerable degree. Most taxation provisions are by no means simple, and I appreciate that some study will be needed for honorable members to see just how these proposals will work out in detail. That is one important reason why I thought it was desirable that, during the Easter recess, an opportunity should be provided to honorable gentlemen from all points of the House to study carefully the elements of the proposal I have outlined. If I may summarize the proposals, we are first proposing to put the privately managed superannuation and provident funds, on the one hand, and the superannuation business of life companies, on the other hand, on a more or less comparable footing. Provided they make sufficient investments in public authority securities, all of their investment income will be tax free. There will be no compulsion regarding the investments of life companies, but it will be to their advantage to maintain increased holdings of public authority securities. Some of the life companies and the privately managed funds may still prefer not to take advantage of the new arrangements. That will be their business. But I feel confident that the majority of the funds and companies will recognize the value of the taxation advantages which will in the future be available from increased investment in public authority securities. We may expect to receive much greater subscriptions to Commonwealth and semi-governmental loans from them in the years to come. In this way, I am hopeful that we will achieve our purpose of not only stopping the drift of life company and superannuation fund investments away from public authority securities but also of ensuring that a reasonable proportion of the community's savings is channelled back to public authorities in order to finance essential community services. {: .page-start } page 573 {:#debate-30} ### SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1961 {:#subdebate-30-0} #### Second Reading Debate resumed (vide page 563). {: #subdebate-30-0-s0 .speaker-6V4} ##### Mr DALY:
Grayndler **.- Mr. Speaker,** the matter under discussion, as well as the bill actually before us, is legislation introduced on the 15th November with a number of other measures by the Treasurer **(Mr. Holt),** which he stated were necessary to restore economic stability in the country. Among those measures were the proposals in regard to life insurance companies, changes relating to deductibility of interest for income tax purposes, and the increase to 40 per cent, of the sales tax on cars, and to 25 per cent, on certain other items. To-night, we debate another remarkable change in policy by the Government of the day. Clearly, the announcement which the Treasurer should make at the conclusion of each speech he makes in this Parliament is, "That is my policy, and if you do not like it I will change it". I say that because undoubtedly the policy of the Government on sales tax and other matters, particularly financial matters, has changed as consistently as the weather has changed in recent times. The apologetic speech made by the Treasurer in introducing this measure, on which he was not consulted by the Prime Minister **(Mr. Menzies)** and the effect of which is to repeal the previous measure and the tragic speeches made by Australian Country Party members, indicate that the Government is not Sin,ere in its policies and knows no. what it is doing. There is an honorable mer/ber in the Parliament known as the honorable member for Mcpherson **(Mr. Barnes)** a very likeable person, and a man who, I thought for a time, had considerable ability. But after hearing his last couple of speeches on the sales tax legislation I am reluctantly and somewhat sadly forced to the conclusion that he will support anything and that he is a very bad judge of what is good, and what is bad policy. To-day he stated, " support the Government's measure ". He was referring to this measure to repeal the sales tax legislation. At page 3348 of " Hansard ", of 27th November, 1960, the honorable member for Mcpherson is reported as having said when speaking to the legislation now being repealed - >As the representative of a rural electorate, I am very glad to have the opportunity of supporting this bill. *Hi* puts it in one door and is delighted to shove it out the other. He says that it gave him great pleasure to support the previous legislation. In the- course of his speech on the 29th November, 1960, supporting the introduction of a measure which it is now proved should never have been introduced, he said - > I congratulate the Treasurer on this very statesmanlike attempt to do what is really required to bring balance to our economy. {: .speaker-KDA} ##### Mr Duthie: -- Who said that? {: .speaker-6V4} ##### Mr DALY: -- The honorable member for Mcpherson. The Prime Minister did not think that the Treasurer was a statesman, because he did not consult the Treasurer before he arranged for the legislation to be repealed. Let us pass down the line a bit from the honorable member for McPherson and examine the almost change-daily attitude of the Government on policy matters. The honorable member for McPherson went on to say. In reply to a question by a member of the Opposition to-day the Minister for Labour and National Service **(Mr. McMahon)** mentioned various areas where there was unemployment, or where it was anticipated, and he gave an undertaking that the men concerned would be re-employed. As he indicated in his answer to the question, he had no doubt about the outcome. I believe that we cannot go much further as we were going with this boom economy. To-day, 80,000 people are out of work. The number sacked from the motor industry, from which the honorable member for McPherson said that no men would be displaced, is 8,000. What has the Treasurer or the Minister for Labour and National Service done to re-employ these people who have been displaced? **Senator Wood,** who by no means is the darling of members of the Government, and **Senator Wright** opposed the legislation increasing the sales tax when it was introduced in the Senate because they knew, as the Labour Party knew, that it should never have been introduced because it was vicious, unjust and opposed to all the principles on which this Government was elected as a tax reduction administration. **Senator Wood** said in another place- {: #subdebate-30-0-s1 .speaker-10000} ##### Mr SPEAKER: -- Order! I warn the honorable member that anything in relation to another place is on dangerous ground. {: .speaker-6V4} ##### Mr DALY: -- It was reported in various newspapers from time to time when this matter was being debated that a senator from Queensland had said - >In the present case, we are not conscripting labour but we are virtually doing the same thing by saying to people, " You have to get out of this industry and find a job somewhere else ". {: .speaker-KDA} ##### Mr Duthie: -- Who said that? {: .speaker-6V4} ##### Mr DALY: -- A Liberal senator in criticizing the increased sales tax. When that legislation was introduced, **Senator Wood** pointed out that the Government was introducing legislation which should not be supported. Do you not notice, **Mr. Speaker,** that when I mention the criticism of one of their own members, members of the Country Party endeavour by way of interjection to stop me from proceeding? The point that I make is this: The previous legislation should never have been introduced. It has produced disastrous results so extreme that the Government cannot control them. The Government has been forced by public opinion to remove the legislation because of the tremendous upheaval in the community. {: .speaker-KWP} ##### Mr Turnbull: -- That is not right. {: .speaker-6V4} ##### Mr DALY: -- It is all right for members of the Australian Country Party to interject but, as the Leader of the Opposition **(Mr. Calwell)** said, the hardest thing to find in this Parliament is a farmer among the members of the Country Party. Look at the honorable member for Herbert **(Mr. Murray).** He came into the Parliament as a Country Party member, saw what he had to sit with, and bolted with the speed of a jet to join the Liberal Party. Members of the Country Party here should be defending the rights of the people in regard to sales tax and other matters which affect men and women on the land, but they were prepared blindly to support the Government's policy because their party is just an appendage of the Liberal Party. They have no policy of their own, and are opposed to everything that is reasonable and decent. Let us look at the changes that have taken place in respect nf these matters. I wonder what worker in industry and what member of this Parliament can follow the policy of the Government on sales tax and other matters. Let us remember that the Government was elected on a tax-reduction policy. The only tax reduction that it has ever given it gave a couple of years ago when it reduced income tax by 5 per cent. and in the following year restored it to its previous level. In other words, a Dutch reduction - -down one year and up the next. That is why the Government is completely discredited to-day. This is what a leading newspaper said a short while ago under the heading, " Round and Round With Holt " - >Federal Treasurer Holt has faced more ways than a merry-go-round in explaining his Government's economic policy. This applies particularly to this sales tax legislation. The report continues - >In Adelaide on November 13 last, **Mr. Holt** denied Australia was facing an inflation crisis. > >Two days later, on November 15, he announced increased sales tax on cars and tighter bank credit as part of the Government's new programme to check inflation. Since then, **Mr. Holt** has had this to say: - > >November 18: The Government's new measures were not directed to crippling the local car industry, but to slowing down production. > >November 21: Australia would have plunged into a depression as disastrous as that of the 1930's but for the Menzies' Government economic policy. It changes like the weather. The report continues - >November 27: The recently imposed restrictions were " just one of the changes of tactics " necessary to maintain the Government's objectives - national expansion, full employment and a rising standard of living. > >December 1: Criticism of the Government's measures would abate considerably when the full story of the Government's intentions and reasons was made known. > >December 4: He had no regrets about any of the measures he announced on November 15. > >February 20: Australia's economic situation might worsen before it improved. > > **Mr. Holt** made this last statement to an A.C.T.U. delegation. The newspaper reported in the following terms a statement made by the Prime Minister on 21st February: - >Prime Minister Menzies announced that the Government had decided to drop the 10 per cent. sales tax increase imposed on motor vehicles on November 15. It is history now that the Prime Minister did not even consult the Treasurer on these matters. Here is a man in a responsible position - responsible for the economic policy of the country - who made a number of conflicting statements. The day after he had told an Australian Council of Trade Unions delegation that things would be worse before they were better, there was a complete policy change, and the 90 days wonder tax was abolished almost overnight. Then, the Sydney "Daily Mirror" of 22nd February published the following: - >MENZIES SNUBS HOLT. > >Tax Reversal Shocks Cabinet. > >Prime Minister Menzies did not consult Treasurer Holt before asking Cabinet yesterday to reverse its policy on car sales tax. **Mr. Menzies** had very brief talks with some Cabinet members, but apart from that took no one into his confidence. And, as a pretty fair judge, I am sure that the Minister at the table would not be taken into his confidence. The Prime Minister knew that a major error had been made; he was frightened by the numbers of people who were unemployed in the country because of his policy, and by the pressure applied on him by wealthy supporters of the Government. He knew that the policies which he had enunciated through the Treasurer were false and wrong and, as such, had to be repealed; and that is why this legislation is before the Parliament to-night. Government supporters will deceive nobody by claiming that this action is being taken from a sense of justice and that the Government did not intend to retain the increased sales tax indefinitely. I recall that in 1956 a temporary sales tax was imposed on motor cars, but that tax still operates. So, when honorable members opposite claim that this measure has been introduced in fulfilment of a promise to the people, they are pulling their own legs; and that is a very dangerous game. Earlier, I mentioned that this Government was elected on a tax reduction policy. As my time is limited- {: .speaker-KGC} ##### Mr Hamilton: -- Ah! {: .speaker-6V4} ##### Mr DALY: -- A Country Party member says " Ah " when I mention tax reduction. And well he might, because he intends to withdraw from politics at the end of this year, no doubt because he is disgusted at the failure of the Government to carry out the policies that it announced. Members of the Country Party can interrupt as much as they like. Every time the honorable member for Richmond **(Mr. Anthony)** interjects, I think of the statement of the late William Morris Hughes when a man once asked him why he did not join the Country Party, and said to him, " It is the only party you have never been in ". **Mr. Hughes** replied, " Good Lord, man, a fellow has to draw the line somewhere "; and every time I look at the honorable member for Richmond, I realize what he meant. Let us look at page 26 of the Prime Minister's famous policy document of 1949. Let it never be forgotten or taken from the archives of this Parliament, because it is an indelible record of the fact that the present Government parties were elected on false pretences. At page 26 of that document, under the heading " Taxation " - and do not forget it was paid for by private banks - we read - >We still believe that rates of taxation must be steadily reduced, as national production and income rise, and as economies are effected in administration. Now listen to this promise on sales tax - >We will review the incidence of indirect taxes (which are a huge though sometimes unrecognized item in Australia) upon basic wage and cost of living items and housing costs. This Government certainly made them recognizable. Let us look at how the Government has carried out its policy; and the thousands of people listening to this debate will no doubt realize why the Government is afraid. In 1948-49, the last year of the Labour Government, £39,000,000-odd was collected in sales tax, and last year the figure was £164,000,000, under this tax reduction Government. Would not the Government be a riot if it really carried out its policy? This financial year, £180,400,000 is to be collected in sales tax, as against £39,000,000 at the time when the Government was elected on a policy of tax reduction. Let us look at the Government's taxation of the individual. In 1948-49, under Labour, direct taxation averaged £57 per head of the population, but to-day, under this tax reduction Government, it is £135 per head. I suppose the Government is working on the basis that if it goes on long enough it will come back to where it started. That is about the only way in which its tax reduction policy will be carried out. The Government says that it had to take it out on the car industry, that there were too many cars in this country and too many imports to service the motor car industry. Two-thirds of the Government's supporters would not be here if they had1 not ridden into Parliament on the promise to abolish petrol rationing irrespective of the drain on our overseas reserves as a result of such action. Every member opposite me has quoted in this Parliament again and again the countless numbers of cars purchased by the people as an indication of the prosperity of the country and of what this Government has done for the country. But, to-day, the Government is not only forcing out of business car manufacturers; it is also forcing out of work the people employed in manufacturing them. This Government hypocritically got into office by boosting imports of petrol which this country could not afford at the time, and to-day it is trying to destroy an industry which Labour encouraged and expanded. I could speak for a long time on the Government's policy, because I know that under this tax reduction Government taxation has not been reduced. Under the Labour Administration in 1948-49, the general rate of sales tax was only *8i* per cent, but now it is about 30 per cent. This Government came into office on its pledge to reduce direct and indirect taxation. But it repudiated that pledge; and1 now, like a thief in the night, it sneaks this legislation into the Parliament, without consulting the Minister, because it realizes that the people have had it. The Government now knows that the people will not tolerate its policies, which are completely destroying the economy of this country. I welcome this opportunity to speak on this measure and with the Leader of the Opposition **(Mr. Calwell)** and other honorable members on this side of the Parliament, I say that the tax which has been taken from the people under false pretences should be refunded to them. To-day the Leader of the Opposition quoted instances in which taxation has been refunded in less justifiable circumstances. Would not the Country Party members be on their feet, man for man, for once in a while, if the Government took from the farmers even a couple of shillings and refused to give it back, no matter how unconstitutional or illegal such action might be? I have to talk for the farmers because nobody in the Country Party is qualified to do so. I remind members of that party who question that claim that I come from Currabubula which is a centre of primary production. However, I shall not be diverted from making the remarks I wish to make finally. The original legislation should never have been introduced, and the money falsely taken from the people should be refunded to them. The Government has changed its policy in the face of public opinion and to-day it wants to get this measure quickly through the Parliament in order to hide the blunder it has perpetrated. Look at the famous man of the mystic " 5 " who is silent to-night; his mystic " 5 " will not help him when the Government goes before the electors in the not-far-distant future. I support the Government's proposal to repeal the original legislation. It is interesting to note that the Government has seen the error of its ways; but I hope it will go the full distance and refund to the people of this country the money that has been taken from them falsely. It should also publicly apologize to **Senator Wood** and **Senator Wright** for its treatment of them when they were the only Government supporters who had the brains and the courage to oppose the increase of sales tax on motor cars. {: #subdebate-30-0-s2 .speaker-KBH} ##### Mr WILSON:
Sturt .- After the feast of words we have had from the member for Grayndler **(Mr. Daly),** perhaps it would be of interest to the House to know the purpose of the bill before us. Its purpose is to reduce the sales tax on motor vehicles and motor cycles; and it has my whole-hearted support. Last November the Treasurer **(Mr. Harold Holt)** announced in this House that the Government proposed to take certain action to reduce the purchasing power in the community for the purpose of preventing what otherwise would have been a most serious calamity. Australia has been through eleven of the most prosperous years in its history, and probably the year 1960 was the most prosperous of all of them. As so often happens in a year of great prosperity, the spending of the people completely outstripped the capital savings of the community. As a result of that, interest rates rose alarmingly. The demand for capital and savings was so great", and the competition between various industries desiring the scarce capital was such that there was a tendency for savings and capital to be transferred from our essential industries into the non-essential and less essential industries. At the same time it became apparent that the motor car industry was producing at a rate far in excess of that which Australia could absorb. Consequently, there was an acute shortage of steel and other commodities, with the result that the steel which should have been used for our essential industries and which should have been exported to build up our export credits was used to an undue extent in the motor car industry. Imports of steel during 1960 compared with those in preceding years increased by 1,000 per cent., due, in no small measure, to the excessive production of motor vehicles. Any government having in mind the need to maintain stability within Australia and to prevent a bust had to take action. During 1960, we spent in Australia 22s. for every 20s. that we earned, and spent overseas £500,000,000 more than we earned overseas. Faced with those circumstances is there any one in Australia who suggests that it was not necessary for some action to be taken? If there is, that person just does not understand the basic and essential principles of economics. I was pleased to hear the honorable member for Melbourne Ports **(Mr. Crean),** speaking on behalf of the Labour Party, agree that action was necessary last November. However, he suggested that the Government should have relied upon the credit squeeze alone and should not have taken action in relation to the excessive use of steel, savings and capital in the motor industry. {: .speaker-JAG} ##### Mr Crean: -- I did not say quite that. {: .speaker-KBH} ##### Mr WILSON: -- I think that if the honorable member looks at his speech he will see that he did say that. {: .speaker-JAG} ##### Mr Crean: -- You should listen a little more carefully. {: .speaker-KBH} ##### Mr WILSON: -- I took down the statement as the honorable member made it, and I had the honour of hearing every word that he said. I think it is agreed on all sides that action had to be taken last November. When introducing the legislation dealing with this matter the Treasurer **(Mr. Harold** Holt) stated in the clearest and most definite terms that the increased sales tax would be of a temporary nature and would remain in operation only so long as was necessary to bring the utilization of capital and steel into line with what was a fair proportion to be used by the motor car industry, and that it would then be removed. Honorable members of the Labour Party laughed at him. Almost with one voice one Labour man after another virtually stated: " Do not take any notice of what the Treasurer said. Do not believe him. This tax will remain for ever." Now that the Treasurer has kept his promise and the Government has reduced the tax as soon as it was possible to do so, the Labour members who have been through their electorates telling their friends to buy motor cars in defiance of Government policy are now squealing because their electors are saying to them, " What rotten advice you gave us ". It is apparent that the Labour Party to-day is the friend of those people who bought expensive motor cars in defiance of the Government's wishes, and now is asking the Government to refund to those wealthy people, the increased sales tax that was included in the cost of the motor cars that they purchased. I am amazed that Labour members and others have had the audacity to describe the Government's action now as a change of policy. What possible change can there be when in every respect it is in accordance with Government policy and with the announcement that the Treasurer made in this House? He stated that the tax would be temporary; it was temporary. We are extremely pleased to note that the Government's action was so successful and worked so quickly that it brought the production of motor cars into line with Australia's absorptive capacity. Now that this has been done, we are pleased to have before us this bill which reduces the tax to the former figure. I want to deal now with one or two points that were made in the thoughtful speech of the honorable member for Melbourne Ports. Although I disagree most violently with him on an approach to political matters. I always credit him with giving to this House a well-reasoned speech according to his political point of view. As I said earlier, the honorable member agreed that the Government was duty bound to take some action last November. As 1 understand it, he suggested that the Government should have imposed the credit squeeze and, I assume, should have relied upon the credit squeeze to rectify this maladjustment in the motor industry. I believe that the credit squeeze alone would not have achieved the desired result. An excessive amount of capital, savings and steel was being used by this industry and direct action had to be taken. The honorable member also stated that the Government's objective could have been achieved by restricting the importation of petrol. There again we see the Labour approach to this problem. We remember petrol rationing when Labour was last in office and we remember the coupons, the graft and the scheming that went on when people were trying to get more than their fair share of petrol ration tickets. We know that that is the kind of legislation which Labour would introduce immediately after coming into power again. It was interesting to hear the honorable member refer to a 1957 magazine and tell the House that we could have achieved the desired objective by restricting the importation of petrol which, of necessity, would have entailed petrol rationing in Australia. All I can say, **Mr. Speaker,** is that I do not think members of my party will ever agree to petrol rationing again, and I will not. We heard from the honorable member for Melbourne Ports something that we did not hear from any other member of the Labour Party. We heard from him, first, an admission that something had to be done and, secondly, some suggestions of the way he or the Labour Party would have done it. Last November the Labour Party would have introduced petrol rationing. I ask honorable members and the people of Australia which they prefer - petrol rationing as we had it under Labour, or these temporary measures which quickly bring about the desired results. Several honorable members opposite have mentioned what they refer to as " the thousands of dismissals" that have taken place. That retrenchments have taken place is admitted on all sides; but I remind honorable members that last month the Commonwealth Employment Service placed 40,000 people in employment. What has actually happened is that people have been retrenched from non-essential industries and have now gone into essential industries, such as the steel industry, to increase our export income and to produce steel which is an essential requirement of Australian industry. The policy of this Government is full employment. The Government has successfully maintained a policy of full employment for eleven years and it will continue to maintain such a policy. The Government introduced its economic measures last November, but the employment figures that were produced up to the end of February still showed a very high level of employment - one of the highest in the world. The figures also showed that a very large number of people who had been retrenched by the motor car and some other industries had been absorbed into other industries very quickly. The Government is determined to maintain its policy of full employment and it will change the emphasis of its economic actions almost from day to day in order to maintain full employment. Unemployment probably has developed more in my own State of South Australia than in any other State as a result of the dismissal by General Motors-Holden's Limited of about 1,600 people in one day without giving the Commonwealth Employment Service an opportunity or a reasonable time within which to re-employ them. The Government is watching the position very closely. The people of Australia can rest assured that if unemployment develops in any State appropriate action will be taken to ensure that those people are re-employed in other industries. If you intend to maintain a policy of full employment, obviously you have to change the emphasis of the policy from time to time. Sometimes you have to inject additional money into the community; at other times you have to withdraw surplus purchasing power from the community. The policy of this Government, being a policy of full employment, will necessitate action of that nature being taken from time to time. Of course, if to-morrow the Government decides to inject additional money into the community, the Labour Party will say, " The Government has changed its policy again". That is not a change of policy. Our policy is clearly stated in the objectives of the Liberal Party of Australia, lt is set out in clear and unmistakable terms that the policy of our party is the maintenance of full employment, a stable currency, a high rate of development and a high rate of immigration. Those are out four guiding principles, and in order to maintain those four objectives the Government will have to change the credit policy from time to time. I would not be a bit surprised if, in a fortnight or three weeks' time, credit were deliberately made easier than it is at the moment. It may be necessary to take that action. {: .speaker-1V4} ##### Mr Cairns: -- A little bit longer than three weeks. {: .speaker-KBH} ##### Mr WILSON: -- It may be longer; I do not know. {: .speaker-1V4} ##### Mr Cairns: -- The Government will have to get it a bit closer to the election than that. {: .speaker-KBH} ##### Mr WILSON: -- I have sufficient confidence in the Government, the responsible officers of the Treasury and the advisers of the Government to say that they will watch the position from day to day and if in the interests of Australia credit should be expanded they will expand it, or if in the interests of Australia credit should be restricted they will restrict it. That is not a change of policy; it is the implementation of the policy of maintaining development, a progressive economy and full employment. The honorable member for Grayndler **(Mr. Daly)** made one of his humorous speeches, far from the truth and not very relevant to the bill before the House. We expect speeches of that kind from him. They are always amusing. The audience in the gallery and some of the people listening over the air probably enjoyed it, but I do not think that speeches of that nature delivered in this House add anything to the dignity of Her Majesty's Australian Parliament. A serious bill is before the House. It is a bill that concerns the lives of many thousands of Australian people, and I believe that we should deal with it factually and on its merits. I wholeheartedly support the bill. I say that it is in accordance with the promise made by the Government, and T am proud to see the Government which I support honouring its promise so quickly. {: #subdebate-30-0-s3 .speaker-KYS} ##### Mr REYNOLDS:
Barton .- I will support the foreshadowed Opposition amendment seeking a refund of the additional tax that was paid during the operation of the increased sales tax on motor cars. The honorable member for Sturt **(Mr. Wilson)** mentioned that the Government had promised, on the imposition of this increased taxation in November last, that it would be only a temporary measure. He now applauds the Government's action in removing the increased tax, but at the same time chides those people who were, in his words, silly enough to go and buy cars during that period. Of course, back in 1956 this Government increased sales tax on passenger cars not by 10 per cent., but from 16f per cent, to 30 per cent, and called it a temporary increase which would be removed as soon as possible. The Government said in November last year that the tax increase it was about to impose was only a temporary measure. So, can one be surprised that people in the community expected that it would be removed in a matter of a few months, having regard to the previous experience when the tax was increased from 1 6f per cent, to 30 per cent., the rate which, although temporary, is allowed to continue even under the present bill? It is unfortunate that over a period of 92 days about 50,000 or 60,000 people were caught by the vicious increase in the sales tax. When you come to think about it, imagine paying 40 per cent, sales tax on anything! With that impost, a person who bought a car worth £1,000 - I am talking about the price before taxation - had to pay another £400 to this Government. That is what these unfortunate 50,000 or 60.000 persons had to do while the rate of sales tax on motor cars was 40 per cent. Now, members of the Government are applauding themselves for reducing the rate of sales tax from 40 to 30 per cent. The Leader of the Opposition **(Mr. Calwell)** reminded the House to-day that during the Second World War, in a period of our greatest trials and tribulations, the rate of sales tax never reached the level that this Government has set. Certainly it was nothing like 40 per cent. I do not know whether the honorable member for Sturt was really serious when he chided members of the Labour Party with going around and encouraging people to defy the Government by buying motor cars which carried 40 per cent, sales tax. He said that was done to spite the Government. ls that a reasonable proposition? I know that many members of this House received some very strongly worded letters from constituents about the Government's imposition of the higher sales tax on motor cars. Now the additional impost which was introduced without any warning has been just as hastily repealed. Only a few weeks before the panic measures were introduced last November, members of the Government were saying that everything in the garden was lovely. They said that the economy was moving along smoothly. They did not foreshadow any of the economic measures they introduced soon after, including the increase in the sales tax on motor vehicles. I clearly recall the night when the Treasurer **(Mr. Harold Holt)** announced the economic measures in November. They had been conceived so hastily that the Treasurer hardly had time to get a copy of the proposals into the hands of the Leader of the Opposition before he announced them in this House, although normally it is customary to extend such a courtesy to the Leader of the Opposition. That is an indication of the haste with which the Government flung these measures at the people. They were ill-considered and illprepared. Then, on the eve of his departure overseas and almost with, contempt for the people, the Prime Minister **(Mr. Menzies)** slung a little bone to the mob at his heel. He said, " The Government will repeal the additional 10 per cent, sales tax as from to-morrow ". That is the sort of thing that the Government puts before us as a considered, serious, economic measure. In that context, the Government asks the Australian people to accept day-by-day changes in economic policy allegedly in the pursuit of its economic goals. Of course, your economic goals generally are so vague and generalized that it would be possible to pretend that you were pursuing them no matter what policies you put before the Australian people. You talk about the development of Australia but never define the plan of development or give any specifications. You do not co-ordinate development with your objective of immigration. You do not co-ordinate it with any plan to house the Australian people. You remove yourselves from any consideration of education for the people you are bringing into the country, or the increased educational facilities that might be necessary in the pursuit of a genuine policy of national development. None of these things are specified or co-ordinated. You phrase your objective of full employment in such vague terms that it is no wonder you have to make day-by-day adjustments even to reach a state of full employment. Even with this day-by-day, fits-and-starts, stop-and-go policy, it has been impossible for the Government in this great continent, rich in resources and with only 10,000,000 people, to give the security of full employment to the people. Last night, the honorable member for Mackellar **(Mr. Wentworth)** appealed to the Government to note that while unemployment is not very great now, the next six or seven weeks could be highly dangerous to the jobs of many thousands of people. If you will not accept this warning from the Opposition, you should accept it from one of your own members. This appeal was not made by the Labour Party or the newspapers but by supporters of the Government. The statement was made by one of your own back-benchers who is thought by his colleagues to be well informed. He said that you were virtually mad to abolish import restrictions. The problems from which you are trying to rescue the Australian people are the problems you yourselves created. You created them by your precipitate abolition of almost all import restrictions only twelve months ago. You created the problem and now you applaud yourselves for the drastic measures you have introduced to rectify the situation. You have endangered the employment of all these people. In my electorate, hundreds of home units which have been built with the encouragement of the Government are standing empty. Nobody can buy them because credit is not available. You ask the Australian people to be enthusiastic about a government which is allegedly pursuing the goal of prosperity in that context! {: #subdebate-30-0-s4 .speaker-KIH} ##### Mr DEPUTY SPEAKER (Mr Lucock: -- Order! I remind the honorable member that his remarks are directed to the Chair. The Speaker of this House has not done any of the things to which the honorable member has referred. I ask him to bear that in mind, and to direct his speech to the Chair. {: .speaker-KYS} ##### Mr REYNOLDS: -- I am sorry, **Mr. Deputy Speaker,** I did not intend to identify the Chair with my charges. The Government is responsible for these things. We are discussing the application of the sales tax to the motor industry. For some years, the Government has identified itself with the enormous increase in the production of motor cars, refrigerators, television sets and other consumer goods. The election propaganda of the Government mentions these things. The Government has encouraged the people to invest their savings in these goods. Now the time has come when the Government describes these goods as unessential, and has introduced financial measures which are strangling out of existence the ventures that it encouraged. Only recently, the Government applauded the introduction to Australia of yet another product of the motor car industry, the Ford Falcon. The Prime Minister was present at the opening of the works, although the Government was then on the eve of declaring that the production of cars in Australia was out of all proportion. Only a few weeks earlier, the Government applauded the fact that one person in four in Australia had a motor car. The Government cannot have it both ways. The Government encouraged people to go into nonessential industries at the cost of other urgently needed amenities such as homes, schools, hospitals, water conservation and sewerage. If the Government encourages luxury ventures, it has only itself to blame for the present position in which it finds itself. The people of Australia see a socalled free enterprise Government imposing vicious credit restrictions on industrial entrepreneurs whom only a few weeks ago it was encouraging to go full tilt into production. I have such people in my electorate and so also have other honorable members. A person in my electorate was encouraged to set up a freezing works in which he was processing goods, some of them for export. He came to me because he had been hit by the credit restrictions. {: .speaker-KDA} ##### Mr Duthie: -- His funds were frozen! {: .speaker-KYS} ##### Mr REYNOLDS: -- That is so. He had been encouraged to build and to set up killing works in country areas. All the work was supervised. The person concerned had approached me previously to get assistance from the Government to build. Now he has come to me because the bank overdraft he had raised to conduct the business in which he invested his life savings has been reduced to £150. It is not just a matter of the disemployment of people in the community. The Government has hit the business section. The smaller businessman, who has not the resources of share capital that the larger businesses have, has been hit very hard indeed, as have his employees. The Government encouraged him to engage in industry. It encouraged him to invest his savings in his business and then, in the next breath, it tells him that the productive effort in which he is engaged is unessential and that the resources it is using must be diverted to other productive efforts. Then the Government has the temerity to chide the Australian Labour Party with being a control party. {: .speaker-KWP} ##### Mr Turnbull: -- With being a socialist party. {: .speaker-KYS} ##### Mr REYNOLDS: -- If the difference between the Government's control and socialist control is the difference between this, on-and-off sort of thing - these unplanned, unsystematic controls introduced as stop-gaps - and a systematic, overall plan under which the Australian people, businessmen and employees alike have a clear direction on where the country is going, then I am all for socialism. If honorable members opposite want any assurance, I assure them that the 50,000 to 60,000 people who were inveigled into purchasing motor cars at an inordinately high rate of sales tax resent that measure very much, and think that the Government has a moral duty to refund that money. The Government promised that it would not hurt anybody unduly. It has hurt people unduly. Apparently there was no need, as it transpired, for the imposition of the extra sales tax. Credit restriction policies of their own accord would have done what the Government wanted to do. The Government professed that it wanted to reduce employment in the motor industry by about one-quarter. Between November, when the increased sales tax was imposed, and February, when it was lifted, the number of motor vehicles registered dropped from 31,865 to 16,754. There was a fall of 49 per cent, in the number of cars registered in that three months, as against a fall of 29 per cent, in the equivalent period of the previous year. The Prime Minister said that the measure had acted in a more vigorous way than the Government had anticipated and therefore it was prepared to remove this increase. The Prime Minister, as- I understood him, felt that the increased sales tax was unnecessary, or was largely unnecessary, and a lot of other observers in the community also believe that to be so. The purpose of the Government's action was to divert materials and men to more essential industries. lust pausing there, if I may, for a moment, let me say that if a Labour government had talked about ten years ago of diverting goods, resources and labour from what it called unessential industries to essential industries, there would have been a loud outcry in the community. As a matter of fact, I remember that there was an occasion when Labour talked about there being a priority of essentialities as far as production was concerned, and there was a scream from the supporters of this Government about the Labour Governmentsetting out in a dictatorial manner to decide what was essential and what was not essential for the Australian community. We were told that the ordinary market operations in the community should decide this. Consumer sovereignty was supposed to be the be-all. Now the Government finds that this does not work. After all, consumers are only individual people, making decisions in the dark, not knowing what economic drain they are making on Australia's total resources, and not knowing the international implications of their own spending. Of course it is necessary for a government, armed with the facts and armed with the advice of the experts in the field, to give some sort of consideration to the general picture and act for the general welfare of the Australian people. In the same way, producers cannot know all of the implications of their business decisions. Therefore, it is necessary for governments to act on behalf of the Australian people and of the continued welfare of individual businesses by deciding the broad economic policies within which those businesses are to operate. The Government talks about day-to-day changes of policy and day-to-day changes in its plans. Does it not recognize that business also has to plan? Deos it recognize the great problems created for business when the Government goes before the people and says, " These are our plans to-day, but they may not be our plans to-morrow "? Is that the context in which a healthy Australian enterprise can flourish? Of course it is not. Is it any wonder that a conservative organ such as the " Taxpayers' Bulletin " should come out and write of a " time of uncertainty "? An article in the issue of this bulletin dated 4th March, 1961, reads - >The days that have elapsed since **Mr. Menzies'** dramatic eve-of-departure announcement of the reversal of the Government's November emergency financial measures - themselves a complete reversal of professed Government views up to that time - have brought no calming down of the disquiet and uncertainty induced in the community by a series of unpredictable economic moves dictated, many feel, as often by expediency as by carefully weighed considerations. That is putting it, I think, quite fairly. There is this parade of economic virtue and of the high aims of the Government when, in fact, the Government has not any clearly defined aims. It certainly has no clearly defined, integrated and co-ordinated plans for the Australian people. It is only now starting to recognize that it must bring into consideration the north of Australia. We have members of the Country Party, as well as members of the Labour Party, referring to the lack of a decentralization policy in Australia. These are things that Government supporters and Opposition supporters alike are referring to after twelve years of this Government's supposedly planning a coordinated policy of national development for Australia. We have reached the position, where the Government says, " Right! We have reduced the level of motor car production in Australia to what we regard as a desirable level." If the Government, believing that to be so, abolishes the increased sales tax, on what is it going to rely? On the continuance of credit restrictions? If the Government lifts credit restrictions, what will happen to those resources that have been compulsorily diverted to what the Government regards as more essential avenues of production? What will happen when the protective umbrella of credit restrictions i; removed? What will happen if those resources start to come back into the field of motor car production and other kinds of production that the Government now regards as unessential? Does this mean that the Government can maintain its policy of keeping resources where it requires them only by a continuance of credit restrictions indefinitely? Is that the Government's proposition? What other plans has it put before the Australian people to maintain what it now regards as an ideal situation? The Government is maintaining this situation only while credit restrictions exist. What will be the position in the future? Will the Government continue these credit restrictions permanently? How does the Government intend to ensure that these resources are maintained in what it regards as desirable production? There is tlo indication of that. What indication has the Government given to the motor industry of the level of development that it desires to be maintained? The motor industry has no indication of that. The Government gave no indication previously to the motor industry of what it regarded as a suitable level of production. In fact, it applauded every increase in production. Now it says that that Was bad, but it does not give any kind of indication to the motor industry or to all the ancillary industries connected With the motor industry of what is a desirable level of production in that sphere for the healthy development of Australia and the provision of the kind of amenities required by the Australian people. These matters are just left in the air, as indefinite as any other item of the Government's policies. It is no wonder that the Government has to make these stop-gap adjustments day by day to the Australian economy. There is no co-ordinated, farseeing plan. There is no such thing as a five-year development plan for Australia. There is no indication of co-operation with private industry about what the Government wants for Australia in the next five years and what private industry thinks the Australian people ought to have. There is no getting together about these things. Private industry is left to go on more or less in the dark hoping that it is not increasing its production to the point at which one day, arbitrarily, and out of a clear blue sky, the Government will come along and say, "That is taboo. You have to get out of that. You have to reduce your production despite what it might mean to individual firms." Of course, I have said nothing about the unhappiness of the thousands of employees. I have been talking about the business entrepreneurs themselves. The welfare of the business entrepreneur is, of course, tied up, intimately, with the Government, and vice versa. The Government says that the employees can transfer to other industries, in a flash as it were. There is no problem, in its view, about the immobility of housing. To the Government, there is no problem about carrying over specific skills, which the employees have acquired in a particular industry, to another industry where the skills they have acquired have no current use. That is the kind of context in which the Government glibly talks about transferring people from one industry to another. I conclude by saying that the community at large resents the half-baked, ill-prepared, injurious and constantly changing economic experiments of this Government. The people resent the way in which the Government arbitrarily extracted vicious increases in sales tax from an unhappy and unlucky group of motorists over a period of about 92 days. They resent the way in which the Government encouraged entrepreneurs to invest their savings in businesses, even taking credit for the increased production they created, ana then, in the next breath, declared the businesses to be unessential and proceeded to slaughter them with financial strangulation, through credit restrictions and unfair competition from low-wage countries. Finally, the Government's hopeless economic policies are likewise resented by the thousands of people whom the Government has already forced out of work, or whose continued employment it has placed in serious jeopardy. {: #subdebate-30-0-s5 .speaker-JWI} ##### Mr FOX:
Henty .- When making his speech to-night the honorable member for Grayndler **(Mr. Daly),** in an endeavour to ridicule the honorable member for McPherson **(Mr. Barnes),** said that last November the honorable member for McPherson had supported the Government's increase in sales tax on motor cars to 40 per cent., then chided him with being happy to support this measure to repeal that increase and, finally, charged him with inconsistency. Actually, what the honorable member for McPherson did last November was to support a temporary increase in sales tax, and to-night he was quite happy to see it being removed. On the other hand, the honorable member for Grayndler opposed the temporary increase in the rate of sales tax last November - for which there was every justification - and to-night, although he concluded by saying he supported the Government's proposal to repeal the increase, probably because he was not game to do otherwise, he spent most of his time grumbling during a debate which is taking place only because the rate of sales tax is being reduced. He also tried to prove that this Government was not a low taxation government, by comparing the rate of taxation per head of population during the regime of the Chifley Government with the rate of per capita taxation applying to-day. He conveniently forgot to point out that whenever it has had the opportunity to do so the Labour Party has gone out of its way to remind the people that the Menzies £1 is worth only 6s. 8d. to-day. If 6s. 8d. is all the Menzies £1 is worth then, presumably, we should be paying to-day three times the rate of taxation we paid under the Chifley Government. Actually, we are not paying even double the amount we paid then. But the honorable member conveniently forgot that. As a matter of fact, the present basic wage has more than doubled during this Government's term of office while the rate of taxation has not even doubled. I wish to deal now with the honorable member for Barton **(Mr. Reynolds).** He quoted figures which indicated that sales of motor cars in November amounted to something over 31,000 and that by January of this year they had fallen to 16,000. What he said was true, and his figures were accurate, but he conveniently omitted to quote other figures which I propose to mention. When honorable members hear them they will appreciate how convenient it was for the honorable member for Barton to ignore them. I have before me figures supplied by the Commonwealth Bureau of Census and Statistics on 14th March of this year. Unfortunately, they do not go back to November, 1959, but they do commence at December, 1959, and they are very interesting. They show that in December, 1959, the number of vehicles sold was 28,275, and that by January, 1960, the number dropped to 18,272. So in that month sales of motor vehicles dropped by 10,000. By December, 1960, sales had increased to 22,368, but by January of this year they dropped to 16,254 - a drop of only 6,000. Before those honorable members opposite who are seeking to interject anticipate my argument, let me state it in another way. Between December, 1959, and January, 1960, there was a drop of 10,000 in the sales of motor vehicles. This drop of 10,000 from a total of 28,000 in the month represented a fall of 36 per cent. In the period between December, 1960, and January, 1961, sales fell by 6,000 from 22,368 to 16,254 - a drop of 30 per cent. I quote these figures to illustrate that figures can be made to show exactly what one wants them to prove. The honorable member for Barton omitted to mention them because to have quoted them would have been to do a disservice to the case he was attempting to make. The purpose of this bill is to reduce to 30 per cent, the rate of sales tax on motor cars which was temporarily increased to 40 per cent, last November, and to reduce to 161 per cent, the rate of sales tax on motor cycles which had been temporarily increased to 25 per cent, at the same time. To appreciate properly the reasons for the introduction of this bill it is necessary to appreciate the reasons for the temporary imposition of the increased rates of sales tax on the two items I have mentioned. The step taken by the Government last November was part of its anti-inflationary policy. It would be outside the scope of this debate for me to traverse all the reasons given at that time by the Treasurer **(Mr. Harold Holt)** for the introduction of these anti-inflationary measures, but it is relevant, and I believe advisable, to reiterate the aspect of the inflationary pressure which was at that time being exerted by the motor industry, and which caused the Treasurer to say - >If restraint has to be imposed it should be concentrated on those areas where demand on resources has increased most. I want to mention a few of these demands which were made at that time by the motor industry, and in doing so I propose to quote from a statement which was issued by the Treasurer, in which he said that the value of retail sales on new and used motor vehicles, parts and petrol in 1959-60 was, at £858,000,000, more than 15 per cent, greater than in 1958-59. The Treasurer also said that registrations of new passenger vehicles for the four months ended October, 1960, were 26 per cent, higher than for the same period in 1959 and 49 per cent, higher than for the same period in 1958. The third thing which the Treasurer said was that registrations of new motor vehicles, including commercial vehicles, reached an annual rate of 338,000 in the first four months of 1960-61. Fourthly, the Treasurer said that more than £212,000,000 was channelled by hirepurchase companies into the financing of retail sales of motor vehicles in 1959-60. and this was more than £35,000,000 greater than the amount for the previous year. Finally, he said that imports of petroleum products and other items which were clearly attributable to the motor industry and motor transportation were running at an annual rate of £200,000,000 in the September quarter of 1960 compared with a rate of £152,000,000 in the September quarter of 1959. He pointed out further that imports of motor vehicles and spare parts increased by almost 50 per cent, in the September quarter of 1960 as compared with the September quarter of 1959. As a matter of fact, the November, 1960, registrations of motor vehicles reached nearly 32,000, which was an all-time record. The Government appreciates the value of the motor industry to Australia, and, during its term of office, it has done everything possible to foster it and to help it become one of the greatest industries in Austraia to-day. To support that assertion, let me say that one of the first acts undertaken by this Government upon its being returned to office in 1949 was to abolish petrol rationing which had been introduced, for very good reasons, by the Chifley Government during the war years, and which that Government had continued in operation for more than four years after the war ended. When the present Prime Minister, in his policy speech, said that he would abolish petrol rationing, the Labour Party said that it could not be done. Once again it was proved that people who say that things cannot he done are continually being interrupted by other people who are actually doing them. During this Government's term of office, six oil refineries have been established in Australia. That is another way in which the Government has set out to help the automobile industry. As evidence of the progress made by the motor industry under the policy of this Government, I point out that the consumption of motor spirit, which was at the rate of 461,000,000 gallons a year in 1949, had increased to 1,141,000,000 gallons in 1959. Employment in the production of motor cars and accessories increased from nearly 30,000 in 1948-49 to nearly 55,000 in 1958-59. All of that advancement has taken place under the administration of the Menzies Government. No one can truthfully say, therefore, that the Government does not appreciate the value of the motor industry to the Australia economy. To the honorable member for Kingsford-Smith **(Mr. Curtin)** who is trying to interject, I simply say that it is sometimes better to remain silent and be thought a fool than to open your mouth and prove that you are one. At a time when the terms of trade have moved against Australia to a far greater extent than they have moved against any other country, the motor industry was adding to our import bill at a steadily increasing rate, and it was also adversely affecting the value of our exports in that steel, which, could have been exported, was being absorbed by the motor industry. It also was creating an unprecedented demand and competition for the services of skilled men, almost to the exclusion of some other manufacturing industries. As I mentioned earlier, it was responsible for the channelling of an excessive amount of finance into the hire-purchase companies for the purchase of motor vehicles. Some action obviously had to be taken if the inflationary trend were to be arrested. An increase in the rate of sales tax was one of the measures introduced by the Government to reduce the demand for motor cars and motor cycles. As honorable members know, the Government increased the rate of tax on motor cars from 30 per cent, to 40 per cent, and on motor cycles from 16i per cent, to 25 per cent. {: .speaker-K8B} ##### Mr Curtin: -- Shocking! {: .speaker-JWI} ##### Mr FOX: -- The honorable member says, " Shocking ", but he should wait to hear what I have to say. He will not be quite so happy shortly. The Government never at any time intended to do any permanent harm to the motor industry. The Treasurer in his speech on 15th November last, said - >I am, of course, well aware that the present rate of sales tax on cars and station wagons is regarded as relatively high. The Government would not now be proposing this increase were it not convinced that some lowering of activity in this field is necessary in the general interest. It holds itself ready to review the sales tax rate when it feels the situation of the industry and the state of the economy looked at together appear to warrant some adjustment. Nothing could have been stated more clearly. The Treasurer gave an assurance that the Government* held itself ready to review the tax. The words " to be ready " mean, to my way of thinking, to be able to do something immediately or at any time. The Treasurer proved his good faith and honored his undertaking by reducing the rate of tax to 30 per cent, on 22nd February. Obviously, had he said at the time, " This rate of 40 per cent, will apply only until 22nd February, 1st March, 30th June, or some other time within the next eight or nine months ", the motor industry would have been at a stand-still. Nobody would have wanted to purchase a motor car which was subject to the 40 per cent, rate of tax. Neither is it sensible to believe that if people thought that the additional rate of sales tax, imposed as a temporary measure, would be refunded to them when the tax was reduced, the measure would have had any effect whatever in reducing the volume of car sales. I have heard it said, " If the rate of sales tax had remained at 40 per cent, for one year I would not have minded." I say that people who went ahead and bought cars after the Treasurer had made it quite clear that the Government held itself ready to review the tax, virtually were backing their own judgment against the assurance given by the Treasurer, and I do not think they are entitled to complain when the Treasurer, after three months, removed what was stated to be a temporary tax. Another person said to me, " I would not have minded if the Government had reduced the tax to 30 per cent, at Budget time, as an election sop ". I said to him, " I should imagine that that would be the very thing that the Treasurer was trying to avoid ". Members of the Opposition have stated that the increase from 30 per cent, to 40 per cent, was a savage one. The honorable member for Barton **(Mr. Reynolds)** chided the Government to-night for having previously increased the rate of sales tax on motor vehicles from 161 per cent, to 30 per cent. He has conveniently forgotten that a New Zealand government of his own political persuasion in 1958 increased sales tax on motor cars from 20 per cent, to 40 per cent. That Government doubled the rate of tax, and to-day, the New Zealand rate is 33i per cent. At the same time, the New Zealand Labour Government introduced other severe economic measures. The honorable member for Melbourne Ports **(Mr. Crean)** said this afternoon that the removal of the additional tax after three months was the Government's admission of a mistake and evidence of its ineptitude and stupidity. I say that it is evidence of the Government's flexibility of mind. Surely one cannot support a line of thought which holds that because a policy is right to-day it is necessarily going to be right in three months' time. Changing circumstances require changing ideas. A government which is not prepared to adapt its policy to the needs of the day has reached stagnation point. A person suggested to me that the Government should have given two weeks' notice of its intention to reduce the rate of sales tax, as it was not fair to people who had purchased cars the day before the tax was reduced. I think that a little reflection would convince that person that even if two weeks' notice had been given it still would have been unfair to people who purchased motor cars on the day previous to the no:ice being given. As the Treasurer stated in his second-reading speech, whenever sales tax is increased some people gain an advantage, and when rates are reduced some people are put at a disadvantage. I cannot see how that state of affairs can ever be changed while people have to pay taxes, in any case, I have never heard of any one, who had purchased a car on the day prior to an increase of sales tax, forwarding a cheque to the Taxation Commissioner because he thought he was not morally entitled to the lower rate of tax. I have pleasure in supporting the bill, **Mr. Deputy Speaker.** {: #subdebate-30-0-s6 .speaker-1V4} ##### Mr CAIRNS:
Yarra .- This afternoon, **Mr. Deputy Speaker,** we heard the Treasurer **(Mr. Harold Holt)** introducing the Government's policy for the quarter beginning in March. The matter before the House is the Government's policy for the quarter beginning last December. If any one believes that that kind of policy is either necessary or desirable in Australia, then I think they need not refer to any one else as lacking brains. There is a very great deficiency of intellect apparent in their attitude. Surely, in a country of this kind we do not need to have significant changes of policy every three months. We do not need to have a change in the level of taxation by 1 0 per cent, in a period of three months. Surely we do not need to have a change every three months in the way in which insurance companies are to be treated. {: .speaker-KKU} ##### Mr Mackinnon: -- We did not have a change in the level- {: .speaker-1V4} ##### Mr CAIRNS: -- Of course you have had a change! The Government announced this proposal last November. Then in December the Government said that insurance companies would be required to invest 30 per cent, of their funds in Commonwealth loans. To-night it is something quite different. How do you expect people to plan with this kind of chopping and changing of policy going on? The Government has not reduced taxation. It has continued to increase taxation over the last ten years that it has been in office. The honorable member for Henty **(Mr.** Fox), who has just resumed his seat, disagreed with the honorable member for Barton **(Mr. Reynolds)** on this point. But I remind him that the aggregate of Commonwealth taxation has risen from £470,000,000 in 1948-49 to £1,244,000,000 to-day, an increase of more than 275 per cent. That means that the ordinary taxpayer, in order to be in the same position to-day as he was in 1948-49, should now have an income of £16 10s. if his income was then £6. If his income was £10 a week in 1948-49, it should be at least £27 10s. to-day. If it was £20 in 1948-49, it should be at least £55 to-day. This has not happened. The lower down in the income scale he is, the more he suffers as a result of this Government's income tax policy over the years. In 1948-49, when this Government came into office, the proportion of indirect taxation that is levied in the price of goods - indirect taxation hits the lower income earner far more than it does the higher income earner - was 35 per cent. It has now risen to 41 per cent., so 6 per cent, more of Commonwealth revenue is coming relatively from the lower income earners. So, whichever way we look at the situation, contrary to the view of the honorable member for Henty, the taxpayer has suffered as a result of this Government's taxation policy. The honorable member for Henty chose to make some political capital out of another old story. He accused the Labour Government of 1949 of not being willing to remove petrol rationing. The position in 1949 was that the Prime Minister, the Right Honorable J. B. Chifley, had a request from the British Government that petrol rationing should not be reduced in Australia because petrol resources were not available in England. But the present Prime Minister **(Mr. Menzies),** this great patriot and lover of Great Britain, was quite prepared to win a few miserable votes in 1949 by promising to abandon petrol rationing, although this meant taking a bigger share out of the pool available to motorists and other users of petrol in England. He won his few miserable votes and he deprived the British industries and other users there of petrol that would have been available to them from the pool if petrol rationing in Australia had not been abandoned. Government supporters have painted a completely one-sided picture, as usual, and they are unwilling to stand up to the truth. **Mr. Chifley** had far more loyalty to, and love for, Great Britain than this pompous Prime Minister, who travels around the world from day to day, has ever had in the whole of his life. Another aspect of this sales tax proposal is worthy of note. For a good many years the Government has said that inflation was a condition in which too much money was chasing too few goods, that it was caused by incomes being too high, and that it was too much spending. The Government has said this as though every one was spending too much and as though every one had too high an income. But the Government has now for the first time made a very great discovery. The Treasurer, in his speech on 15th November, said - >At the present time it can be said that demand is much too high; but that is true only in an aggregate sense. It is not true of all sectors of the economy or of all people. Undoubtedly, some people are spending much more than usual but others are not. Similarly, the demands that industry is making on resources are not universally too great. Some industries are running along quite normally or, if they have expanded, it has not been more than commensurate with the general rate of growth. The excess demand for resources is most evident, and over-expansion has been most pronounced, in certain sectors. So for the first time in ten years this Government has recognized what the Australian Labour Party has been saying for ten years, and it has been difficult, we are often told, for the Australian people to understand the difference between these two approaches. These two approaches are of very great importance in determining what is to be done about inflation. After ten years, the Government has made very important progress in recognizing that spending is not everywhere excessive but rs excessive only in certain places. What follows from this? It follows that the Government must now have a policy of priorities. Instead of relying upon a general taxation measure or upon general credit restriction applying to the whole economy everywhere in the same way, whether there is excess or no excess, the Government rn the last three or four months has for the first time realized that it must introduce selective measures. It is hardly possible to imagine a more conservative gentleman than the honorable member for Sturt **(Mr. Wilson),** but even he spoke about essential, less essential and non-esse'ntial goods and activities. That is something he would never have mentioned even a few months ago and it is a recognition that there are such things as priorities in the economy. So the Government has taken a most important step. In this new approach the Government has said for the first time that in some sectors of the economy there is too much money or too much spending. Where are these sectors? The Government made a dramatic discovery. It said that one of the places where spending was excessive was the motor car industry. The Treasurer on 15th November last said - >The motor industry is another conspicuous example. Registrations of new vehicles have lately reached a rate of 330,000 a year, which is far above the highest point achieved in the 1954-55 boom. The honorable member for Barton did very well in pointing to the contrast between this story and the story of the Government over the past ten years. In that period, the Government told us of the wonderful expansion taking place in the motor vehicle industry. It told us how American capital was coming here by the million, how British capital was coming here by the million, how Australia now had one motor car for every four persons, and how everything was being done to encourage the expansion of the motor vehicle industry. A double taxation agreement was entered into and this gave investors in the industry millions of pounds of relatively tax-free income. Everything >vas done to increase the rate of expansion of the industry, until suddenly on 15th November, 1960, after a fantastic increase, the Treasurer discovered that the great industry of which he was so proud had gone too far. Is it reasonable that he should suddenly have realized this? Was he not aware that the industry was expanding too far and too fast? I think it was the honorable member for Melbourne Ports **(Mr. Crean)** who a few weeks ago in this House quoted from the " Australian Motor Vehicle Industry ", a report put out by the Department of Trade. At page 1 1 of the report, this passage appears - >Excluding vehicles for which demand is insufficient to warrant local production or assembly, the Australian vehicle industry now has adequate capacity in terms of manufacture and/or assembly to meet all demands. Present capacity- This is early in 1959- is approximately 335,000 motor vehicles a year, and plans in hand for the next few years will raise this to about 375,000 with some indication of still further expansion in later years. That was the pattern. It was known to the Government that early in 1959 the industry could turn out 335,000 vehicles a year. Then there were imports on top of that registration of 330,000 vehicles at the end of 1960. The Government found that the industry had expanded far too much. The honorable member for Sturt said that action was necessary. Can any one deny that? Could not it have been seen that the industry was expanding too rapidly? Could not the Government have endeavoured to apply a policy which would have prevented this expansion from taking place rather than, a few months later, forcing the industry to a stop? Could it not have prevented thousands of people from going into an industry and establishing themselves in a particular place, and then a few months later disemploying them, with the result that at the present time we have 73,000 people on the labour market? Is not it possible in this day and age for the Government to devise a better policy than that? The capacity of the motor car industry was well known long before 1960. The Government knew what was happening, but it has always allowed inflation to occur in the economy and has then made a virtue of cutting back the economy and causing unemployment. It has made a virtue of increasing taxation and then made a virtue three months later of removing that taxation. What justification can there be for a policy of that kind? The next question that arises is: What effect did the Government intend this legislation to have? The Opposition found it rather difficult, when the matter was before the House, to find out what the intention of the Government was. I remember saying on 30th November of last year - >The purpose of the Government in imposing additional sales tax on motor cars is to reduce the number of motor cars imported into, or produced and sold in, Australia. If the Government does not succeed in bringing about that reduction, the purpose of the measure will have been defeated. I pointed out how speakers for the Government, on that day and the day before, had said that there would be no unemployment in the industry. They said that what Labour speakers were saying would happen was only calamity howling, for which we are supposed to be noted. Government supporters said that there would be no dislocation in industry, and the Minister for Labour and National Service **(Mr. McMahon)** said that there would be only 170 or 180 persons unemployed, not 5,000 persons as in fact did take place. It was very difficult for the Opposition to entice the Treasurer into the House, but quite late in the debate he made a statement upon this matter. At 5.43 p.m. that afternoon he said - >I made it clear that the intention of the Government's measure was to reduce the volume of sales of new motor cars; that is, to reduce to some degree the abnormal sales. To what degree? That is what we could not find out. However, sales were reduced. Whether they were reduced -by 30 per cent, or 50 per cent, is still not clear, as far as I can make out, but a considerable reduction took place. As soon as the reduction had taken place, presumably, the Government removed the extra tax. As soon as the effect of the legislation became apparent, the Government decided to repeal the legislation. This must be the position. It must be presumed that the Government, by increasing sales tax, has reduced the number of motor cars being purchased and registered. The additional sales tax having been removed, by what means now will the Government reduce the purchases and registrations of motor cars? How can the Government be sure, now that the additional sales tax has been removed, that the number of motor car purchases will not rise again? How can the Government be sure that the people who went out of the motor car industry will not go back into it again? How can it be sure that the condition which it said was abnormal and excessive is not going to become abnormal and excessive again? {: .speaker-KKB} ##### Mr Jess: -- You know that that will not happen. {: .speaker-1V4} ##### Mr CAIRNS: -- I do not expect you to understand because I think your standard of economics is only that of the first or second grade. I do, however, expect you to be interested. The position is, I think, that the credit squeeze is the only thing upon which the Government can rely. If, as the honorable member for Sturt indicated, the credit squeeze will soon be relaxed, what then is going to happen to the motor car industry? Is it not going to expand again? Is not the Government going to completely defeat what it set out to do? I am prepared to forecast that that will be substantially what will occur. If the Government does release credit again and does happen to get the economy going once more, it will not be because it wants to make the economy more healthy but because it wants to get votes in the election at the end of this year. The Government has adopted such a policy before. Having removed import restrictions in February, 1960, the Government was faced with a declining balance of payments and an increasing deficit. The Government then adopted a tight credit squeeze and increased sales tax on motor cars in order to reduce imports. The tight credit squeeze policy has been adopted in order to allow the Government to bring in a give-away budget in August of this year, in the hope of winning votes in December, 1961. I submit that the Government's present manoeuvre has no more justification than that. Honorable members opposite, in talking this evening about the removal of the extra 10 per cent, sales tax, have given the impression that members of the Government all got together - every man Jack of them - and after careful and rational consideration decided to remove the tax. The impression that has been given is that everybody was happy about the extra 10 per cent, tax being removed. Does any one believe that that was the position? The day before the tax was removed the Treasurer justified its retention when speaking to the Australian Council of Trade Unions, and forecast that it would continue. A few days before that he had spoken to representatives of the Royal Automobile Club of Victoria and had given no indication that the Government would even reconsider its position. I suggest that the decision to remove the tax was made by the Prime Minister **(Mr. Menzies)** alone. If I were a supporter of the Government, 1 would want to know a little more of what was behind this decision. It is being widely said in the motor car industry that what happened was that on the Friday before the Prime Minister changed the decision of the Government, members of the Ford motor company and General Motors-Holden's Limited put it four-square to him that if the Government did not remove the additional sales tax those companies would close down their works, and that it was under that pressure that the Prime Minister made his decision Honorable members opposite can say that that is not true, but I would like to have more proof that it is not true than the mere interjection of a Government back-bencher. The purpose of this tax was not to raise revenue, **Mr. Deputy Speaker.** The Treasurer told us that quite clearly in his economic statement on 15th November, 1960. As reported at page 2857 of " Hansard ", he said - >We are doing this, firstly, to cut back the rate of buying of these vehicles, which has become higher than the current condition of our economy can reasonably be expected to support. In levying this tax, the Government was not concerned about raising revenue. It was concerned about priorities. It wanted to cut back the motor industry. The Opposition will move an amendment at the committee stage in order to have the additional revenue which has been collected returned to the people who paid the extra 10 per cent, of the sales tax. If the Government's intention was not to raise revenue, but to achieve the cut-back in the motor industry which has resulted, why cannot the additional tax which has been collected be refunded in accordance with the terms of the amendment which the Opposition will move at the committee stage? But no! The Government wants it both ways. On 15th November last, it said, in effect, "We are not out to raise revenue ". But, having raised about £5,000,000 or so of revenue by means of the additional sales tax, the Government now proposes to retain that revenue. It is worth pointing out again that the Government has at long last recognized that a taxation measure can have some purpose other than the raising of revenue. "We find it refreshing to see that the adherents of laisser-faire taxation policy, which holds, that you should never levy taxes to return a penny more than you need for revenue purposes; realize at long last that taxation can have a social purpose. That social purpose can be that of the additional sales tax, which was intended to cut back the motor industry which the Government itself had encouraged to expand in every conceivable way. The social purpose can be the discouragement of the investment of money in hire-purchase companies in order to direct the flow of funds more into public investment. Taxation can be used also to encourage insurance companies and superannuation funds to put money into the public sector of the economy. In these ways, taxation can have a social purpose. I have spent a good deal of time criticizing what the Government has done; I want now to suggest what could be. done in relation to the sales tax. In recent times the Government has increased the proportion of the gross national product and income which is taken in sales tax and similar taxes by more than 10 per cent, of total revenue. The policy of the Australian Labour Party, when we take office, will be, instead of doing that, to reduce the proportion of the gross national product which is taken in sales tax. The policy of the Labour Party will be, secondly, to use taxation not as a revenue measure but mainly as an agent for effecting social purposes by means . of priorities. We shall see that the sales tax is recognized not as a revenue tax but as a priority tax. This is a matter on which the Australian Labour Party will stand: The sales tax must be applied for the purpose of achieving priorities. Let me now indicate briefly how this tax can be applied towards achieving priorities. First, it can be used to discourage imports. We already have a tax which is supposed to discourage imports. That is a customs tax. But, in relation to imports, the sales tax can be applied on a priority basis to a greater degree to motor cars that use a lot of petrol. The tax should be levied on motor cars in proportion to their size. It should increase in accordance with the greater size of the vehicle and higher consumption of petrol. Thus, we would discourage the import of motor cars that use a lot of petrol. And imports of petrol cause one of the greatest drains on our overseas funds. Next, we can use the sales tax to discriminate against imported goods by imposing on Australian-produced goods which replace imports from now on lower rates of tax or even no sales tax at all. On the other hand, goods which are unessential - which do not replace imports and which contribute nothing to our capital structure or our productive capacity - should be subject to a very high rate of sales tax. This is, of course, implicit in schedules of the sales tax legislation. But I am sure that, from this stand-point, these schedules are so far out of date and so inappropriate that they should be revised from top to bottom. Let me make one more point. I submit that one of the outstanding features of the modern economy which makes a very significant contribution to the growth of inflation is the almost complete disappearance of price competition. The sellers of goods and services do not compete by trying to lower prices. Instead, by advertising and public relations techniques they try to sell the same or slightly different goods at higher prices to consumers who cannot afford to pay for them. So we have a change in the structure of the economy. More and more people are being employed at higher and higher salaries in the activities of advertising, public relations, packaging, elaborating and inventing. All sorts of gimmicks and dodges are resorted to in order to beat the other fellow and sell the same goods at higher prices. As a result, price competition has substantially disappeared from a very wide range of goods and services in the economy This is something to which taxation has to be related. We have to relate the sales tax increasingly to the sale prices of goods. We have to take into account what happens to the prices of goods after they reach the retail store. We should not look only at the price at the factory, where there is an element of efficiency in competition. We must look at the addition to the retail price resulting from the activities of advertising, packaging and elaborating. If we increase the proportion of the sales tax levied in the sector which embraces advertising, packaging and elaborating and reduce the proportion levied in the manufacturing sector, until the tax finally disappears from that sector, we shall make an important contribution to the control of inflation. I conclude with a final general point, **Mr. Deputy Speaker.** The Government is relying on credit policy. It relies on credit restrictions - on what is known as monetary policy. It is supposed to be relying on a balanced Budget, the use of an appropriate tax system, freed imports, and the freezing of wages or opposition before the arbitration tribunals to wage increases, as the means of controlling inflation. Not only the Australian Labour Party has said that measures such as these have failed and should not be tried. As I mentioned to the House only the other night, some of the leading economic thinkers in other parts of the world have come to the conclusion that these methods have failed and should not be used. I bring to the attention of the House once more the views of Professor J. K. Galbraith, an economic adviser to President Kennedy of the United States of America. Referring to monetary policy and fiscal policy - that is, tax policy, he says - >Neither monetary nor fiscal policy make contact with the present form of inflation in an effective and practical way. {: #subdebate-30-0-s7 .speaker-KEP} ##### Mr DEPUTY SPEAKER (Mr Falkinder:
FRANKLIN, TASMANIA -- Order! the honorable member's time has expired. {: #subdebate-30-0-s8 .speaker-KGC} ##### Mr HAMILTON:
Canning **.- Mr. Deputy Speaker,** if I heard the honorable member for Yarra **(Mr. Cairns)** aright, I understood him to say that if the Australian Labour Party were elected to office it would use the sales tax as a priority tax for the purpose of providing social services. He said that Labour would reduce the sales tax, but, nevertheless, would use it as a priority tax for the purpose of providing social services. I have yet to learn of Labour ever doing anything of the kind. A Labour government first adopted the sales tax. I admit quite frankly that the tax was introduced away back in the 1930's as an economic measure. The Labour Party has never adopted the proposal just made by the honorable member when it has had an opportunity to do so. I believe that the Opposition has been thinking of what might happen on Saturday in a by-election for the seat of Liverpool Plains in the New South Wales Legislative Assembly, and has been using the debate on this measure, as it used the discussion on the proposal submitted this morning by the honorable member for Lalor **(Mr. Pollard)** as a matter of urgency, in order to help the Labour Government in New South Wales win this by-election. {: .speaker-KYC} ##### Mr Pollard: -- I never gave it a thought. {: .speaker-KGC} ##### Mr HAMILTON: -- If the honorable member for Lalor never gave the coming by-election a thought he should not be sitting in this House. An important political campaign is being waged at Liverpool Plains and he should be interested in it. I will agree that the honorable member for Macquarie **(Mr. Luchetti)** did refer to that by-election. Members of the Labour Party, not only those who sit in this place but also members throughout the Commonwealth, are so upset that one of their members, who has been a Minister of the Crown, should have had the audacity to accept a position offered by this magnanimous Government that they do not know what to do. They are endeavouring to win the by-election for Liverpool Plains and the arguments that they have used during this debate have been designed to influence the electors there. {: #subdebate-30-0-s9 .speaker-10000} ##### Mr DEPUTY SPEAKER: -Order! I must ask the honorable member to confine his remarks to the bill. {: .speaker-KGC} ##### Mr HAMILTON: -- It is obvious to me that members of the Opposition are somewhat opposed to the Government's action in removing the added sales tax and that they have conjured up arguments in an endeavour to cover up their true feelings in relation to it. On 15th November last the Treasurer **(Mr. Harold Holt)** said - >The Government would not now be proposing this increase were it not convinced that some lowering of activity in this field is necessary in the general interest. The Treasurer was speaking of the motor industry. Everybody knows that at that time the motor industry was attracting all types of labour and all types of material and was upsetting the balance of industry generally throughout the Commonwealth. I think it will be admitted by the Opposition that tradesmen were being offered sums of money far in excess of award rates, which in themselves were most attractive. I know of tradesmen - fitters and turners - who moved from Western Australia to South Australia, Victoria and New South Wales, where they could earn £4 and £6 a week above the award rates by working in the motor industry in those States. The situation was becoming lopsided. In addition, the motor industry needed large amounts of steel and other materials. That is why the Treasurer made the statement that I have just quoted. He also said, referring to the Government - >It holds itself ready to review the sales tax rate when it feels the situation of the industry and the state of the economy, looked at together, appear to warrant some adjustment. The honorable member for Yarra said that the Treasurer suddenly came to various decisions. Anybody who reads " Hansard " will know that on 15th November last the Treasurer said that the Government would watch the position and would be prepared to review it and take whatever steps were necessary, having regard to trends in the motor industry. Of course the motor industry was affected by the Government's measures. Nobody will deny that. The Government set out to affect the motor industry. The honorable member for Yarra claimed that the Government was forced to abandon the increased sales tax because the General Motors-Holden's organization and the Ford company held a gun at the Government's head. I think anybody who has watched the progress of the motor industry in this country will have realized that quite some time ago the two major motor companies had decided on certain projects. Those projects were nearing completion. They would have been completed by the end of February or March of this year. The Government's action saved the motor industry from a very awkward situation. But for the Government's action, the motor industry would have been forced to accept the blame for dispensing with the services of a few thousand men but, happily, rt was able to lay the blame for those dismissals at the door of the Government. {: .speaker-BU4} ##### Mr Anthony: -- That sort of thing is being done every day. {: .speaker-KGC} ##### Mr HAMILTON: -- Yes, the same thing is happening daily in countries with flexible economies. But the Labour Party wants to put our economy in a straitjacket. If the economy were in a straitjacket, so to speak, there would be no development or progress, which should be our main aim. The honorable member for Lalor **(Mr. Pollard)** is smiling and nodding. He must recall what he said one Friday evening in, I think, Ballarat about a planned economy. He must remember that his leader at that time - a Labour Prime Minister - did not come out into the open and support his statement. I am concerned, as must be the majority of Australians, *to* hear the wild remarks uttered by members of the Opposition. Let me f ke honorable members back to about 1952, when certain aspects of the economy had to bs reviewed by the Government. At that time certain restrictions were imposed. 1 can recall that one member of the Opposition then claimed that 10,000 people were unemployed. The next speaker from the Opposition side said that the number was 40.000. but his estimate was capped by th<! honorable member for East Sydney **(Mr. Ward)** who s-id that 100,000 people were out of work. Each of those estimates was given on the one night. To-day we heard the Leader of the Opposition **(Mr. Calwell)** claim that 8.000 people had been laid off from the motor industry. That claim was repeated by the honorable member for Grayndler **(Mr. Daly).** I tried, by way of interjection, to get a breakdown of that figure, but the issue was conveniently dodged I challenge any member of the Opposition to give this House a breakdown of the unemployment figures that have been quoted by the Leader of the Opposition and one of his supporters, who is not a new member by any means. I claim that any member of this Parliament or any public man who makes wild statements of the kind made to-night by the Opposition is doing a disservice, not only to those unfortunate people who are unemployed, but to the future of this country. We see from the newspaper article quoted by the honorable member for McPherson **(Mr. Barnes)** to-day that people overseas are commending what this country is doing. I believe that that newspaper article was brought to light here as a result of the researches of the honorable member for Richmond **(Mr. Anthony).** People overseas are saying that Australia is a young country with the courage and intestinal fortitude to get things done and is a country that is still progressing. Men who rise in this place and decry the progress that is being made here are doing a disservice to future generations of Australians. During this debate many matters other tuan the sales tax have been mentioned. When I commenced my remarks I said that the Opposition was using this forum in an attempt to win the Liverpool Plains byelection next Saturday, and I am prepared to stand by that allegation. We heard the Leader of the Opposition taunt the Government with having refunded sales tax payments to an airline company. If my memory serves me correctly, the Government did not refund the sales tax paid by the company; it waived the sales tax. But that is only half the story. The honorable member for Lalor and the honorable member for Yarra are laughing. People who may be listening to this debate must not be led astray by remarks made by the Opposition. The true position is that the Labour Party, in its desire to nationalize the airlines, refused to allow to a private enterprise company dollars with which to buy spare parts for its aircraft. It placed every encumbrance possible in the way of that private airline, but it left the national airline completely free. I have often stated that I do not believe in monopolies of any kind. I believe that we should have two airlines. Australia is still in its infancy. She will continue to grow and there is plenty of room for two airlines to operate here. {: .speaker-1V4} ##### Mr Cairns: -- Why not have three? {: .speaker-KGC} ##### Mr HAMILTON: -- By all means let us have three airlines, but I do not think that is what the honorable member for Yarra wants. He wants one airline. During that unfortunate period when the people who are now sitting opposite us occupied the Treasury bench, they so starved the private airlines of money to buy spare parts with which to keep aircraft properly maintained that the members of the flying public of this country were flying at their own risk. {: .speaker-KYC} ##### Mr Pollard: -- Don't talk rubbish! {: .speaker-KGC} ##### Mr HAMILTON: -- That is what you did, when it is all boiled down. When this Government came to power and showed a bit of organization and a proper appreciation of the requirements of the two airlines, the members of the Labour Party opposed it right, left and centre in every move that it made. Members of the Opposition are now trying to justify their case, but they have not got a case. I say that they are really opposed to this reduction of sales tax. They would have liked to see the higher rate continue for quite some time in the hope that public opposition to the Government would be built up. The Leader of the Opposition said that when the Labour Government was in office it never increased sales tax, and that it preferred the method of direct taxation. Well, my comment on that is that the Labour Government had no option. There were few commodities to be obtained during its regime, and if it had increased the sales tax on the limited range of goods that was available it would still not have obtained the required revenue. What the Labour Government set about doing was really to kill the goose that laid the golden egg, and before much time had passed that Government found itself out on its ear. That was in 1949. {: .speaker-KWP} ##### Mr Turnbull: -- - And it is still out! {: .speaker-KGC} ##### Mr HAMILTON: -- Yes, the Labour Party is still out, as the honorable member for Mallee says, and it will remain out. I can remember the Leader of the Opposition talking about a Labour government being in power for the next twenty years. Well, it seems that the position which he forecast will be reversed, and the Leader of the Opposition and his followers will be in the wilderness for twenty years while the present Government will remain in power. Opposition speakers in this debate have spoken on the subject of petrol. The honorable member for Yarra tried to tell us some story about the reason why we had petrol rationing. I think everybody will realize why we had it, if they will think back to the time when rationing was in operation. The Labour Party, in its keen desire to hold the Treasury bench, had advertisements inserted in the newspapers, which declared, " Menzies and Fadden will give you free petrol if you vote for them. Pull up at the bowser and get a gallon for nothing." They were falling into a trap laid for them by somebody in the United Kingdom. That person is not on this earth to-day, so I will not repeat old stories. However, our friends opposite fell into a trap. They can talk as much as they like about petrol rationing, but the proof positive of the wisdom of our policy is quite apparent. We have had no petrol rationing since 1949, and despite the increased quantities of petrol coming here we have never faced any difficulties. No one has been short of petrol. The honorable member for Grayndler spoke during this debate, not about sales tax, but merely to make an attack on the Government. Of course, we all know what politics are, and we know that a by-election for the New South Wales Parliament is to be held next Saturday. The honorable member suggested that this Government had been elected on a tax-reduction policy. He held up, for honorable members to see, a copy of the policy speech made by the Prime Minister during the campaign which resulted in the election of the Government. {: .speaker-EE4} ##### Mr Uren: -- He gave the figures. {: .speaker-KGC} ##### Mr HAMILTON: -- I do not deny that. If you like to work with figures, that is all right. I am not so much concerned with figures. I am more concerned with the people of this country, and I am concerned about statements made by members of the Opposition concerning unemployment and other matters. When taxation is being considered I, and many others like me, go to the end result and ask ourselves, " How much have I got left in my pocket or in my purse? " {: .speaker-K8B} ##### Mr Curtin: -- Nothing! {: .speaker-KGC} ##### Mr HAMILTON: -- The honorable member for Kingsford-Smith says " Nothing ". There are more refrigerators and washing machines in use to-day than ever before. Even the Leader of the Opposition said to-day that people on small incomes have motor cars. There are more lawn mowers, and more of all kinds of amenities available to the people of this country than there ever have been previously. But that is not all. Consider the amounts deposited in savings banks. See how they have increased year after year. Yet we have these woolly minded people opposite, led by their doctors of economics or whatever they like to call themselves, saying that people are badly off these days, and that this is not a taxreduction government. It may not appear to be a tax-reduction government from a study of the figures produced by the honorable member for Grayndler, but when we get down to tin tacks the important matter is the livelihood and the happiness of the people. If they have all these amenities and still have money in the savings banks in ever-increasing amounts they cannot be too badly off. That is the kind of situation that meets with the approval of the people, certainly not the one that the honorable member for Grayndler would like to create. The' honorable member also spoke about 8,000 unemployed in the motor vehicle industry, but as soon as he was asked to give a breakdown of that figure he conveniently went on to another subject. I thought I should do a little research into the statements of the honorable member. I have known him for a considerable time. I think at one stage he was associated with the Gladys Moncrieff show, and with the musical comedy " Viktoria and Her Hussar ". He was the funny man. But that is just an aside in the way of a private joke beween him and me. I am told that the honorable member was born at a place in New South Walues called Currabubula, and he talked with his tongue in his cheek about primary producers. What do I find? Lo and behold, before he came here he was a motor car salesman, selling spare parts and accessories! One can appreciate his disgust and annoyance at the fact that this Government has honoured the promise contained in. the speech of the Treasurer on 15th November, when he said, speaking of the Government, " It holds itself ready to review the sales tax when it feels the situation of the industry and the state of the economy, looked at together, appear to warrant some adjustment ". The honorable member for Barton **(Mr. Reynolds)** to-night spoke about the stopandgo government and so on. We have heard the phrase so often that it is becoming a little nauseating. However, we put up with the reiteration quite willingly. I say, however, that the people of this country would rather have a flexible economy, so long as the end result is satisfactory, than the one that the Labour Government desired to force on them in the years from 1946 to 1949. At that time the gentleman who is now Chief Justice of New South Wales, speaking at a summer school in Canberra, is reported to have said that no man has the right to choose his employment, but should go where he is told. A little research in " Hansard " will disclose that the Prime Minister of that day said in this place that in a planned economy workers must be prepared to be moved from here to there to fit into the plan of things. The honorable member for Lalor, who is now trying to interject, said very much the same thing. He said, " We have a great socialistic plan ". I contend that, despite the charges that have been levelled against the Government, over the last twelve years it has done more for the average man and woman in Australia than any previous government did. The people themselves, who have returned this Government at election after election, have more of the amenities of life and have far happier lives than they ever had before. {: .speaker-KYS} ##### Mr Reynolds: -- The Government has been returned to power with the help of the Democratic Labour Party, which is opposed to its economic policies. {: .speaker-KGC} ##### Mr HAMILTON: -- Do not talk to me about the D.L.P., because I have certain opinions of the members of that party, and I would hate to be forced to express them in this place. In any case, we can do without them. When a vote was taken in this chamber yesterday, I think the result was in favour of the Government by 67 to 34. That shows that we have a good majority. In any case, apart from what the D.L.P. or what anybody has to say, although the policies of this Government may at times have appeared to be of the stop-and-go variety to those who do only short-range thinking, it is the final analysis that counts, and the fact is that the people are in a better position than they have been for many years. To-night we have heard members of the Opposition having a go at the Government. Although the Opposition intends to move an amendment, we have not been told what are to be its terms. Honorable members opposite think they will trap the Country Party. They have been talking about that ail the time. We do not mind engaging in a boxon with these people at any time they like. While I think of it, let me say that no one on the other side of the chamber had better accuse me personally of being a traitor to the primary industries. Certain remarks have been uttered during this debate, but let me repeat that Opposition members had better not accuse me of being a traitor. I can assure them through you, **Mr. Speaker,** that they will get it back in their face pretty quickly and lively. {: .speaker-1V4} ##### Mr Cairns: -- You are a bold man. {: .speaker-KGC} ##### Mr HAMILTON: -- I ask the honorable member whether he intends to be bold - this gentleman who tries to lull the listening public into believing that he is an educated man. I do not decry education, of course. Since you, **Mr. Speaker,** became the occupant of your present high office, a certain gentleman, a prominent member of the Labour Party, has stated repeatedly the institutions in this country that should be nationalized. He comes from the same State as you, **Mr. Speaker.** I refer to the honorable member for Hindmarsh **(Mr. Clyde Cameron).** To-night members of the Labour Party are shedding crocodile tears because of what has happened to the motor industry; but, much to their disgrace, we have never seen any members of the Labour Party rise and deny what the honorable member for Hindmarsh has said about the Australian motor industry - that is, that at the first opportunity Labour gets the industry will be nationalized. I believe a statement to that effect can be read in " Hansard ". Do not honorable members opposite as well as their listeners and their supposed supporters, know that when the Labour Party gets an opportunity to nationalize any of these great industries the tragedy will be that the underdog, the fellow whom they are here to represent, will be the unfortunate sufferer? Therefore, I ask the people of Australia, despite what is happening on Saturday in the Liverpool Plains electorate, to think long about this matter. This Government has done the right thing by them over the last twelve years and I am certain it will continue to do so for the next eight or ten years at least. {: #subdebate-30-0-s10 .speaker-K9M} ##### Mr L R JOHNSON:
Hughes -- **Mr. Speaker,** we have just been listening to the honorable member for Canning **(Mr. Hamilton),** who is one of the Australian Country Party members and who has no prospect of being defeated at the next election. That is accounted for by the fact that he has seen the writing on the wall and has decided to leave the sinking ship. In the process of doing so he is prepared to tip the bucket over his mates who for so long have relied on the miserable preference votes of the Australian Democratic Labour Party that they have been able to scrape together. The honorable member for Canning who, with his ilk, has benefited from the dubious support of the D.L.P., is now prepared to jettison his mates and has indicated that he is unable to say in this chamber, and at the same time assist to maintain the decorum of the House, the things he would like to say about the D.L.P. How many of these evil thoughts and prejudices are being harboured by honorable members opposite? How many of them would care to rise and say what they think about the D.L.P., which has led the Australian people down the political garden path for so long, which has caused them to suffer under the yoke of Menziesism, and which has caused them to suffer the embarrassment that has been caused by the legislation we are now considering. For the honorable member for Canning to say that the Government of which he is a supporter has been a low taxation government is ironical and fantastic. I do not know whether he has taken the trouble to look at the latest information that has been supplied by the Treasurer **(Mr. Harold Holt)** on the subject of taxation. This authentic information to which I have referred will appear in the " Hansard " report of to-day's proceedings, if it does not already appear in yesterday's report. Let me remind the honorable gentlemen about the record of this low taxation Government. This Government's collections of sales tax rose from £42,000,000 in 1949-50 to £164,000,000 in 1959-60. It is supposed to be a low taxation Government. I repeat that the information supplied by the Treasurer shows that over the period to which I have referred there has been an increase of 400 per cent, in collections of sales tax. What political humbug and skulduggery is indulged in by the honorable member for Canning. I repeat that there has been an increase of 400 per cent, in collections of sales tax. Yet the honorable member has the temerity to say that he is a member of a low taxation Government. Now let us examine the figures in relation to taxation generally. We find that direct taxes have increased from £39 10s. per capita in 1949-50 to £73 8s. in 1959-60, and that indirect taxes rose from £23 2s. lid. per capita to £49 5s. 4d. Those figures are beyond contradiction, because they have come from the Treasurer himself. We all heard the honorable member for Canning speak about the luxuries that are to be found in people's homes - refrigerators, radios, lounge suites and things of that kind - and about motor cars. Unfortunately, in very many cases those articles have not been paid for and have been bought at extortionate rates of interest, about which this Government has never concerned itself. This Government has never sought to acquire the power - that is, if it needs to do so - to control these extortionate rates of interest. The position is that any one who falls victim to this Government's policy, such as those persons who worked in the motor car industry until unemployment was created artificially a short time ago and who are now out of work, finds that he has been living from hand to mouth. Such persons are up to the neck in debt. Their refrigerators, their radios and the other amenities about which the honorable member for Canning has spoken have not been paid off. They have all been bought on tick, with the result that the overall hire-purchase bill has risen from £79,000,000 to £450,000,000 during the lifetime of this Government. If honorable members opposite are proud of that situation, let them be. Although you may not have thought so, **Mr. Speaker,** we are dealing with the Sales Tax (Exemptions and Classifications) Bill. All sorts of matters have intruded into this debate. The honorable member for Canning had the temerity to talk about the Liverpool Plains by-election. Of course, it is quite inappropriate to speak about such a matter during a debate of this kind. Nevertheless, may I say that we know quite well that members of the Country Party are watching the position in. that electorate with great interest. It is quite significant that whenever Australia gets into difficulties the Government turns to the Australian Labour Party for help. The Northern Territory is languishing because of the need for a proper programme of development, and the Government has turned to a New South Wales Labour Minister for help. Do not let the Government think it can embarrass us by an announcement of such a choice. We are proud of the fact that in the past the Government has always had to look to Labour for help. And it will do so again in the future. We have no doubt that it will be a policy of the kind that the New South Wales Labour Government has pursued vigorously over the years that will put the Northern Territory on the map, that will stimulate development, and which will give Australians an opportunity to establish their birthright to that area. The by-election to which the honorable member for Canning has referred is the result of a recognition of the fact that Labour has in its ranks persons of calibre and capacity who have faith in Australia. Labour will do quite well in the by-election which, as I have already indicated, was incorrectly raised by the honorable member for Canning as a topic for discussion during this debate. I apologize, **Mr. Speaker,** for the fact that the matter has been raised. {: #subdebate-30-0-s11 .speaker-KSC} ##### Mr SPEAKER (Hon John McLeay: Order! I ask the honorable member to return to a discussion of the bill. {: .speaker-K9M} ##### Mr L R JOHNSON: -- The fundamental objective of this bill is a reduction of the rate of sales tax on motor cars, motor cycles and motor scooters. {: .speaker-KDV} ##### Mr Jones: -- What is the name of the Labour candidate in the by-election? {: .speaker-K9M} ##### Mr L R JOHNSON: -- His name is Johnson. {: .speaker-KDV} ##### Mr Jones: -- Is he a relative of yours? {: .speaker-10000} ##### Mr SPEAKER: -Order! Interjections are out of order. {: .speaker-K9M} ##### Mr L R JOHNSON: -- I take advantage of this opportunity to refute any suggestion that, because my name is Johnson, I am contesting the by-election for the electorate of Liverpool Plains. It is true that the name of the Labour candidate is Johnson, but he is not a relative of mine. The suggestion that he is a brother of mine is quite incorrect. I repeat that the person named Johnson who is a candidate in the Liverpool Plains by-election is not related to me. {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member was out of order in suggesting it. He is now out of order in canvassing it. He will speak on sales tax. {: .speaker-K9M} ##### Mr L R JOHNSON: -- Yes, **Mr. Speaker.** It is a very melancholy and sad thing that this bill has been brought to the House to-night. It is indicative of the state of panic and confusion in which the Government finds itself at the present time. It is a most unfortunate thing that so many ordinary people in the community have been taken for a ride because this Government has not known where it is going. Most people, when sales tax was increased, thought that no government could be so silly and inconsistent as to stick a high rate of sales tax on for -a short period and then lift it. It is beyond comprehension. Many people came to me and to other honorable members and said, " Can we buy a motor car? " Members from both sides of the House said: " Yes. This tax is going to last for some time. No government could put this thing on one moment and take it off the next." Those people who bought cars have been taken for a ride. They have been pawns in the game played by a confused Government scratching around recklessly to find an answer for its desperate situation. The Government- has ceated a great crisis. The Government has tried to meet the crisis with a policy of sales tax imposition. The great economic crisis in this country has related substantially to our overseas balances - to the great fall in exports and the great increase in imports. The Government has said: " We have to face up to this crisis in a scientific manner. We will increase the tax on motor scooters." That is what it has done. After a very short time it has discovered that this scheme has not worked and it is in the process of reducing the taxes. This has involved a great number of people in unemployment. The Government's advisers, the long-hairs and the professors, seem to think that this is the sort of exercise in which a government is entitled to manoeuvre. It involves a set of statistics and a drop in the employment rate. What is an increase in the number of people out of work to these people? It is only a statistic. The Government's advisers are incapable of transferring these considerations into the lives of human beings. As the Leader of the Opposition **(Mr. Calwell)** said, about 8,000 people have been thrown out of work as a direct consequence of the increase in sales tax. So the main economic measure of the Government, in the face of this mounting crisis, is being abandoned. This is the main measure which is before the House. There are some associated economic measures, but the increase in sales tax was the salient point of the Government's programme to combat the crisis. Now, as an innovation ordered by the Prime Minister, we are in the process of abandoning these expediencies. The Prime Minister was not terribly interested in this matter. At a time at which the Treasurer was saying to everybody, " We are going to persist with these sales tax impositions ", the Prime Minister as he left the country, looked over his shoulder and said, " You had better get rid of the sales tax ". To the embarrassment of the Treasurer, that instruction had to stand. It was obviously designed to create unemployment. No one can deny that. It was designed to reduce the sales of motor cars; it was designed to reduce the production of motor cars. If you do that, it is fundamental that you reduce employment. If there are no retrenchments and you do not get 5,000 or 8,000 unemployed, commensurate with the drop in production, the plan is not working. The real cause of this problem is neglected by the Government. Over the last five years our deficits in relation to overseas trade have totalled about £1 ,000,000,000. The Government has brought about this situation. It is the real cause of the present problem, and the Government is not looking at this aspect closely enough. A total of £1,000,000,000 has been involved. The Government has made the position look better than it is by raising loans overseas. But in the long run the loans have to be repaid. The Government is not concerning itself very much with this aspect of the matter. This factor is obviously completely and inseparably associated with the import crisis. The Treasurer rightly said that the increased sale tax was not intended to raise revenue. Of course, when the hundreds of people who have been adversely affected by this measure raise this point with the Treasurer, saying that his purpose has been served because he has discouraged the production of motor cars, the Treasurer immediately abandons his ground and refuses to come good with the spoils. Imports in the September quarter of 1960, the Government suddenly discovered, were running at the rate of about £200,000,000 compared with £152,000,000 for the September quarter of the previous year. This was the discovery which suddenly gave the Government cause for such great alarm. This was the result of the lifting of import controls in February last year. The Government itself has created the present situation and is completely responsible for it. The Government lifted import restrictions at a time when the Opposition most certainly advised the Government that this was undesirable. The Government lifted import licensing against the advice of its own experts. Now it has to take its medicine and face the music. Nothing was put in place of import licensing. Imports for the motor car industry spiralled as did most other imports. Since the lifting of import controls, imports have increased by about £200,000,000. But in respect of most of the accelerated imports, the Government has chosen to do nothing. One wonders why the Government has chosen to be so pernicious in its attitude to the motor car industry. The Government is now in the process of endeavouring to shift the productive capacity of this country from motor cars but does not seem to wish that it should be shifted to something more desirable. We have no indication from the Government that the resources which were devoted to the production of motor cars are now going to be devoted, say, to the development of the Northern Territory, to the construction of great dams, weirs, bridges and schools nor to the building of ships for overseas trade. The Government has completely ignored all these things. In order to display a sensible attitude the Government should say. " We are diverting the resources which were being devoted to motor cars to more necessary activities ". The Opposition is opposed to the sales tax. We believe that it fundamentally involves a very bad principle. If sales tax is to be imposed at all, it should be imposed on luxury goods. Our attitude to this matter is entirely different from that of honorable members opposite who clearly take the view that the motor car industry is a luxury industry. Taking into account the geographical features of this country, the isolation of many towns and a thousand and one things which are not common to other parts of the world, we feel that the motor car should be the prerogative of the ordinary working man in Australia. We do not appreciate the Government's endeavour to deprive him of that privilege. The Government has contended that it is not sensible to give people back the amounts they paid by way of increased tax from which it has benefited. The Treasurer said that that had not been done. This afternoon many members on both sides of the House were interested to hear the Leader of the Opposition establish conclusively that there have been two precedents for the refund of taxation. One was in respect of Australian National Airways Proprietary Limited about eight years ago and involved about £400,000 in respect of aeroplanes. The second was a refund of customs duty in respect of timber in 1950. About £500,000 was involved. So there is no reason in the world why the Government should maintain its stubborn attitude. It should say: "We have made a mistake. We have involved a number of people in financial embarrassment. We have caused great injustice to members of a section of the community who have had to purchase motor cars. We will do in 1961 what we did on two previous occasions when big business interests were involved and when big business interests benefited. We will repudiate the whole tax increase and write it off." At the committee stage the Opposition will move an amendment. We will ask the Government to reconsider its decision not to return to the people so adversely affected the extra money that it has gathered from them. This bill is an admission by the Government that it made a mistake on 15th November. No other measure has demonstrated so quickly, so convincingly or so devastatingly that the Government made a first-class blunder. The Government has provoked indignation in every part of the country, and its back-benchers have been antagonistic. Many members of the Liberal Party have gone around the country dissociating themselves from the increase of sales tax, and members of the dear old Country Party have had to do precisely the same thing. When the Government introduces unpopular measures, they say, " We did not have much of a say in the matter ". Of course, the people in the country districts are concerned about the state of the economy. Their income has been falling at a percentage rate equal to the rate of increase in their farm production and, as a result, they have become the victims of inflation. They are tremendously concerned because their living standards are deteriorating at an unprecedented rate. No one can deny the inflationary content of the increase in sales tax. We know that the proprietors and entrepreneurs of the motorcar industry are tremendously concerned, as also are the 8,000 people who have been thrown out of work as the result of a whim of this Government. Sales tax of 40 per cent, is almost unheard of in any other part of the world at the present time. Just imagine tax of £400 being imposed on a motor vehicle costing £1,000. The Government would almost have the right to put an official number-plate on it, in view of the considerable equity involved. This tax obviously is discriminatory against one particular industry, and it cannot be justified. On industry has been selected to carry the whole of the burden brought about by this Government's misdemeanours. I was interested to hear the Treasurer **(Mr. Harold Holt)** say, after examining the position in February, that the Government was satisfied that the general measures it had taken would be sufficient to keep the demands of the industry within reasonable bounds. Of course, the general measures would have been sufficient to bring about a gradual drop in the purchase rate or registration rate of motor cars, because the general economic measures and the curtailment of credit in themselves imposed great handicap on the motor-car buying public. It was most unreasonable to hit the motor-car industry in isolation by imposing on it a burden which no one else was called upon to carry. That this measure has obviously aggravated inflation, no one can deny. I have talked to people in my electorate who have been forced to buy motor cars. If one talks to the local grocer, butcher, plumber, electrician, builder or the taxi driver, he says " It is too bad. We simply have to load the additional expenses on to the cost structure of the business." How does the Government think the local taxi driver runs his business? Of course, the taxi fare is increased. By this inflationary measure, the Government has aggravated and accelerated the demands of workers in factories, workshops and elsewhere for an increase of the basic wage. Of course, when they ask for an increase, it will be refused. The Government has brought down this trouble upon its own head. The current measures would have been unnecessary if this Government had shown a bit of intelligence and had watched the economic trend. We, on this side of the House, have been telling the Government for a long time precisely what would happen as a consequence of its complete reliance upon primary industries. It relied on good seasons and capitalized here and there on international crises, such as the Korean war. There has never been a sustained effort by the Government to stimulate secondary industries in this country. The stage of crisis in the economy should not have been allowed to develop. Corrective measures should be applied over a period and in a manner that will not bring about disruption of business and cause hardship and unemployment to the working people in the community. They should be of a nature that will not cause havoc to people who have invested money. We on this side do not think that the increased sales tax on motor cars, in addition to the credit squeeze, can be justified. The motor car industry has really been hit by the credit squeeze. Many people have been compelled to acquire another car. When one's vehicle is breaking down, it is uneconomic to keep it, and he has to buy another vehicle. It is all very well for members on the Government side to say that people should have had the good sense not to buy a motor car when the sales tax was increased, but sometimes they are forced to do so. I sent a lot of letters to the Treasurer a long time ago, on behalf of these people, asking for the additional sales tax to be refunded to them, but he has not replied to those letters. I know he must have a very large mailing list to cope with in this respect. As I mentioned previously, these people take the view that this measure was not introduced for the purpose of raising revenue and, justifiably, they expect the extra sales tax to be refunded to them. The motor industry, of course, as the Treasurer and as all the experts have said, has taken a great toll of our overseas balances, but it is interesting to see that so many other things did, too - things which have not been the subject of any concern by the Government. These other import categories have not been a matter of concern to the Government. Steel imports have been a worrying aspect of the matter, and we are at a loss to understand why the Government has not encouraged a far greater Australian content of steel components in the motor car industry. If we look at the Australian content of the motor car industry, we see that it is close to 50 per cent. I do not know why the Government has not embarked upon some method to reduce petroleum costs in this country. Suggestions have been made over the years that there should be established a Commonwealth petroleum corporation, a people's refinery. It would not be a bad idea for the Government to look around for the cheapest oil in the world in order to reduce the cost of imported petroleum. I has been content to look only at the motor car side of the business and to disregard the oil part of the problem. Motor car imports rose by 40 per cent, when import controls were lifted last February, and iron and steel imports rose by 257 per cent., but no action has been taken by the Government in that regard. If the Government had a look at the output of the Broken Hill Proprietary Company Limited, it would see for itself that that company has failed to maintain a developmental rate in the steel industry which is necessary if Australia is to expand and develop. Tt might be necessary for the Government to establish a nationalized steel industry in this country to enter into competition with the Broken Hill Proprietary Company Limited. The Government has adopted a narrow view and has been content to penalize the car industry. There are many other aspects which could have been looked into. Imports of aluminium and base alloys rose by 122 per cent, and only a short time ago the Government sold the Bell Bay works to an American concern, although those works could have processed our bauxite from Weipa, where we have 150 years' supply for the whole world. Instead of setting about establishing a secondary industry in respect of aluminium products, we find that imports of these things have risen by 122 per cent. The Government chose to hit the motor car industry. Let us recall for a moment that motor car industry imports rose by 40 per cent, in February last, iron and steel imports by 257 per cent, and aluminium imports by 70 per cent. The Government has done nothing about these things. It has concerned itself only with the motor car industry. How the Government can justify its policy is beyond my comprehension. Imports of wearing apparel increased by 60 per cent. Where in the Government's economic programme has corrective action in this regard been taken? No penalties have been placed on a great variety of industries other than the motor car industry. It is clear that the Government has not looked too broadly at this problem. There is no doubt that its measures have taken a great toll of the motor car industry. I was interested to read some figures supplied recently by the Chamber of Commerce, which is alarmed at the present state of the motor vehicle industry in Australia. Then they set down the figures which showed that the average monthly registrations between August and October, 1960, were 28,898, but in December, 1960, the number fell to 22,367, a fall of 22.6 per cent. In January, 1961, the registrations fell to 16,556, a decline, when compared with the August-October average, of 42.7 per cent. Of course, the Treasurer likes to contend that the position is not as bad as it appears. He likes to give the impression that the effect was not as drastic as the figures indicate. He likes to compare the registrations for January, 1960, with those for January, 1961, because they suit his purpose. But that is not a fair comparison. He likes to say that in January, 1960, there were 18,271 registrations and that this number fell to only 16,556 in January, 1961, a 9 per cent, reduction. But he is not being fair dinkum with the Australian people when he uses that argument, because we have been able to establish that in January, 1960, a new model Holden was about to come off the assembly line and people were not buying Holdens at that time. The new model was released at the end of March. If one wishes to obtain an accurate picture of the situation, one has to add another 5,000 Holdens to the number of registrations, so that, in fact, there would have been 23,271 registrations in January, 1960. On that basis there was a decline of 28.9 per cent., not 9 per cent., as the Treasurer has claimed. He has really dealt a very savage blow at the motor car industry in this country. It is most unfortunate that the Government has treated the industry in such a callous manner. {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member's time has expired. Question resolved in the affirmative. Bill read a second time, and committed pro forma; progress reported. {: .page-start } page 603 {:#debate-31} ### ADJOURNMENT {:#subdebate-31-0} #### Wire Netting - Athens War Memorial - River Murray Waters Motion (by **Mr. Harold** Holt) proposed - >That the House do now adjourn. {: #subdebate-31-0-s0 .speaker-KDV} ##### Mr JONES:
Newcastle .- I wish to mention a matter of importance to primary producers, particularly those in the oyster industry. On 15th March the right honorable member for Cowper **(Sir Earle Page)** addressed a question to the Minister for Primary Industry **(Mr. Adermann)** relating to the supply of wire netting as used in the tray production of oysters by oyster farmers. This Australian-made meshing is almost unprocurable and large quantities have to be imported from overseas, with a consequent drain on our overseas balances. In his reply the Minister stated, amongst other things - >Of course, the manufacturers could not forgo their contracts- This followed the Minister's statement that the manufacturers had already entered into certain contracts with overseas interests for the supply of wire mesh. He continued - but they have been speeding up production and trying to make up the lee-way so that they can supply the Australian consumers. I do not think they have yet achieved that objective; but the Department of Primary Industry has investigated this matter and will do everything possible to help primary producers as well as oyster farmers to obtain the necessary wire. On the same day the honorable member for Eden-Monaro **(Mr. Alan Fraser)** asked the Minister a supplementary question in these terms - >Is it a fact that both Lysaght Proprietary Limited and Rylands Brothers (Australia) Proprietary Limited have declined this year to supply the netting of small mesh required by the oyster industry since the tray production of oysters was instituted? In his reply the Minister stated - >I have no knowledge that the firms mentioned by the honorable member are not interested in this type of production, but I do know that there has been a shortage of this netting. The honorable member asked me whether I am prepared to bring pressure to bear on these firms. Of course, I have no intention of issuing any direction, because I have no power to do so. However, as I intimated to the right honorable member for Cowper, I will bring the matter before the firms to see whether I can do anything to assist oyster producers to obtain their requirements from Australian sources. Who was being fooled? When this matter became public, members of the Australian Workers Union directed my attention to the fact that although Rylands Brothers in Newcastle have 49 looms that are capable of producing the wire that is required, only 23 are in production and many skilled men who normally operate these machines - they are skilled men and they have not acquired their skill overnight - are now cleaning up the yard of the factory and doing other labouring work. I see that the Minister is now in the chamber, and I should like him to tell me who was being fooled on the 15th March when he said that these firms are doing their best to overcome the shortage. If Rylands Brothers are doing their best to meet the requirements of the oyster farmers and other primary producers by operating only 23 of their 49 machines, thank heaven they are not putting forward their worst effort! The Minister should have a real look at this matter to find out what is going on. He should not try to pull the wool over the eyes of honorable members, particularly when a member of his own party asks him a question. When the honorable member for Eden-Monaro suggested that Lysaghts and Rylands were not doing their best, the Minister tried to talk him down and to make out that he did not know what he was talking about. But these are facts and I challenge any Government member to prove that they are incorrect. I have based my statements on figures that were given to me yesterday by the organizer of the Australian Workers Union who is concerned with this particular industry. {: .speaker-KDA} ##### Mr Duthie: -- From which country do we import the wire? {: .speaker-KDV} ##### Mr JONES: -- I could not ascertain that. According to the January, 1961 issue of the Monthly Bulletin of Overseas Trade Statistics, imports of wire manufactures - iron and steel - in the first seven months of this year were almost double the imports in the corresponding period last year. I assume that much of the imported wire would be coming from Japan because most of the imports of this kind of wire and of galvanized iron in the past have come from that country. I am not having any crack at Japan about this. We have the machinery and the raw materials but the industry has not been able to meet the requirements of the primary producers of this country. {: .speaker-KYC} ##### Mr Pollard: -- They cannot get fencing wire. {: .speaker-KDV} ##### Mr JONES: -- The Broken Hill Proprietary Company Limited has had a complete monopoly on the production of steel and it has failed this country badly by its inability to meet the demand. If a Statecontrolled electricity commission were falling down on its job and there were continuing blackouts, there would he great headlines in the press. We all remember the criticism of "calamity Cramer" and members of the New South Wales Government a few years ago during the electricity shortage. But that Government, by its planning, was able to overcome the shortage of electricity in New South Wales. However the B.H.P. organization - .that great monopoly - has not had the foresight and the ability to plan sufficiently far ahead to meet the requirements of the primary producers and industry as a whole. These products have to be imported into this country. The value of the imports of iron and steel single-strand wire increased from £406,000 in the first seven months of 1959-60 to £2,244,000 in the same period of the year 1960-61. These imports, which are a drain on Australia's overseas balances, are necessary because the monopoly interest in the steel industry cannot meet Australia's requirements. I wonder whether the company is deliberately keeping down its production of these products. I wonder whether production has been retarded and kept to a minimum level so that when the harebrained bonus system that was outlined by the Acting Prime Minister **(Mr. McEwen)** is introduced, the company, by increasing production then, will receive a greater bonus. I believe that these are matters that should be examined. But, most important of all, I think the Minister for Primary Industry **(Mr. Ader mann)** should have another look at his answers and find out who has been advising him and where they obtained their information. He should also find out whether it is a fact that only 23 of the 49 looms at the Rylands works in Newcastle - works which are capable of producing the wire that people want - are operating and that skilled labour is being dispersed around the works. The men are concerned about this because rumours are rife that there will be a lay-off. The company has assured the men in the industry, through the union, that there will not be a lay-off, but where there is smoke there is fire. {: .speaker-1V4} ##### Mr Cairns: -- But there is no wire. {: .speaker-KDV} ##### Mr JONES: -- No. I hope that these men will not be displaced and that the Government will bring some pressure to bear on this company to put the other 26 looms back into production. If the company produced all the wire that it is able to produce, then, instead of having to import wire, Australia would be in a position to export it. {: #subdebate-31-0-s1 .speaker-JWI} ##### Mr FOX:
Henty .- To-night, I wish to direct the attention of the House to a matter which has, I believe unintentionally, caused distress to some Australian war widows. I refer to an undated letter sent by the Commonwealth War Graves Commission to close relatives of Australian servicemen buried in the Phaleron War Cemetery in Greece. The letter reads - {:#subdebate-31-1} #### Dear Sir or Madam, On the 21st of October last, I forwarded to you a letter in which I advised you of the forthcoming ceremony of the unveiling of the Athens Memorial in the Phaleron War Cemetery, Greece, by His Royal Highness the Duke of Gloucester on the 10th May, 1961. I can now inform you that arrangements have been made by the Australian Commonwealth Government for a small Official Party, including close relatives, to be present at the ceremony. All costs of transport and hotel accommodation will be borne by the Government, including travel from places of residence to Sydney and return for those relatives who are selected to comprise this Party. The Official Party will depart from Sydney by Qantas Empire Airways on Sunday, 7th May, 1961, and will return to Sydney on Monday, 15th May, 1961. This Commission has been requested by the Commonwealth Government to co-ordinate the arrangements and to ascertain the names of those relatives who desire to be considered in the selection of the Official Party. If you desire to submit your name for consideration, I should be glad if you would complete the enclosed form and return it to this office not later than 20th February, 1961. Naturally, every widow and every mother who received one of those letters and who submitted her name for consideration hoped that she would be one of the official party, although the letter concluded in the following manner: - >It should be clearly understood that the submission of the application form is not a guarantee of selection to be a member of the Official Party. It is intended that the return of the completed form will serve to ascertain the names of those who could make the pilgrimage, if they should be selected. One widow in my electorate, who had applied for selection and had heard nothing, made inquiries last week and was told that the party had already been selected and that her application has not been successful. She was most upset. From the inquiries I have made, I understand that the official party comprises only four persons - first, a government representative, whom I understand to be a military officer; secondly, a member of the Returned Sailors, Soldiers and Airmen's Imperial League of Australia, who served in Greece; thirdly and fourthly, one widow and one parent of a serviceman whose name appears on the Athens Memorial. I have been told that the names of 782 Australian servicemen appear on that memorial. So honorable members will appreciate that the chances of selection were very slim indeed. I raise this matter to-night for only two reasons; first, so that the widow who approached me will not feel quite so badly when she realizes that only one widow was selected, not 20 or 30 as she might have imagined; and secondly, in the hope that in similar circumstances in the future a better method will be worked out to handle the situation. I believe that a ballot could have been conducted first and perhaps twenty names selected, in order to allow for people who could not take advantage of the offer, and only the successful applicants notified. I realize that whatever method is adopted some difficulties could arise, but I believe that the commission could have given publicity to its intention to conduct a ballot through the medium of the press and the Australian Broadcasting Commission and that it could have informed the relatives of the servicemen that only two names would be chosen. If that had been done, it might have avoided distress to some of these people. {: #subdebate-31-1-s0 .speaker-BV8} ##### Mr CALWELL:
Leader of the Opposition · Melbourne -- I shall not detain the House for very long. I have been requested by the Wakool Shire Council in New South Wales to bring to the attention of the House the matter of the Marraboor Weir on the river Murray. I have in my hand a copy of the " Riverina Recorder and Moulamein Times " of 17th November, 1960, which contains the following article under the heading " Marraboor question referred to Calwell": - >Failing to get satisfaction in communications with the Government through the Member for Riverina **(Mr. Roberton)** Wakool Shire Council on Tuesday decided to refer all relative correspondence to the Leader of the Opposition **(Mr. Calwell)** with a view to having the matter aired in the House. > >The matter was brought before council when a letter was received from **Mr. Roberton** stating that a copy of council's letter directed to the Prime Minister had been passed on to him. He said that he was available to handle such matters and make representations to the Prime Minister and Minister for National Development **(Mr. Spooner).** > >Commenting upon this, Cr. T. Lockhart said: " **Mr. President,** have we need for an errand boy? In this portion of the State we have Federal and State Parliamentary representatives and the people of this area welcome their assistance. In the case of the West Murrakool area this council has been very concerned with the plight of the settlers where stock and domestic water supplies have been affected by river regulation. Our State represenative has always appreciated the position and has spared no effort to help his people. Our Federal parliamentarian is not familiar with the problem confronting the settlers although he claims to have visited his electorate (JRiverina) 22 or 23 times since he was elected 10 years ago. I would say here and now that **Mr. Roberton** knows much less about the area he claims to have visited so much than any member of parliament who previously represented us." I hope that the Minister for Social Services **(Mr. Roberton)** will make some reply to those observations, which were made, not by electors who just happen to be on the electoral roll in his electorate, but by a leading citizen, a former president and councillor of an important municipality which he represents. As I have read the correspondence, the story is simply this: The people of the Wakool area want a weir on the river Murray at Marraboor. They say that the damming of the river upstream has deprived them of their riparian rights and they think that the Commonwealth Government should join with the New South Wales Government and the Victorian Government in sharing the cost of putting a weir across the river. Recently we have heard much about a plan of the Premier of South Australia for the building of a big reservoir near the confluence of the Darling and the Murray Rivers near Renmark in South Australia at a cost of £9,000,000. The Victorian and New South Wales governments have given their consent to that scheme. The Commonwealth Government is being asked to assist, and I think that some day the Commonwealth Government will have to give assistance to South Australia in this regard, because unless this water is impounded where the Premier of South Australia wants it impounded, South Australia's development will be impeded, if not completely prevented. The people in the Wakool area say that the river is drying up in their districts. They have had correspondence for months and months past commencing from 30th July, 1959, and continuing to date. I have photostat copies of all the correspondence kindly presented to me in Melbourne by Councillor T. Lockhart when he waited on me and did me the very great honour of asking me to raise the matter here on behalf of himself and the shire council. They have worked through their member of Parliament. The honorable member for Wimmera **(Mr. King)** is affected, too. {: .speaker-KWP} ##### Mr Turnbull: -- No, he is not. {: .speaker-BV8} ##### Mr CALWELL: -- The honorable member for Mallee is affected, too, but he is not even mentioned in these despatches. He is on the other side of the river and I suppose he is interested in the building of the dam because it affects the interests of the Victorian electors. I did the honorable gentleman the honour of listening to him the other night and I heard his questions too, but the complaint of the people of Wakool is against their present representative in this House. It is against him because he cannot get results from the Government of which he is a member, so that the plans they have in hand for the completion of the dam cannot be carried to fruition. They want the Commonwealth Government to assist. The letters have gone backwards and forwards from the shire council to the Prime Minister **(Mr. Menzies)** and the Minister for Social Services. They have gone through the department controlling water supplies in Victoria and to the corresponding department in New South Wales. It all ends up the same way, with the Prime Minister or his deputy telling the shire clerk at Wakool that the Commonwealth Government has decided that it cannot give any assistance at all. The last letter of 18th August, 1960, was signed by **Mr. E.** J. Bunting, Secretary of the Prime Minister's Department, and he stated - >I can but repeat that the Commonwealth Government has on several occasions carefully examined this proposal and has concluded that as only two States would benefit from the construction of the weir, these two States should bear any cost of its construction under clause 30 of the River Murray Agreement. {: .speaker-KDA} ##### Mr Duthie: -- What is the cost? {: .speaker-BV8} ##### Mr CALWELL: -- I have no idea, but it would not be so great. It would not be of the order of £9,000,000 or even £1,000,000. The Government is seeking to avoid its obligations to these people who feel that they have been denied the normal supply of water they would have had if the flow of water had not been interfered with. The Government has evaded its responsibility by saying, " Only two States are affected, not three. If only South Australia were affected perhaps we could help, but the River Murray Waters Agreement does not oblige us to make any contribution and therefore we will not make one. {: .speaker-KDA} ##### Mr Duthie: -- What about the Snowy scheme? {: .speaker-BV8} ##### Mr CALWELL: -- I do not know how the Snowy scheme will affect them, but when this Government stated that it would not give South Australia its rights under the Snowy Mountains scheme the Premier of South Australia filed a writ in the High Court of Australia. As a result, he got the same rights to the Snowy River waters as he had under the original River Murray Waters Agreement for the waters of the Hume dam. He got three-thirteenths of the flow of the waters of the Snowy River for South Australia, and New South Wales and Victoria received five-thirteenths each. I think this Government should be a little more sympathetic to the people in the parched districts of western New South Wales, and northwestern Victoria. {: .speaker-JWU} ##### Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP -- Has the member for the district never raised this matter in the House? {: .speaker-BV8} ##### Mr CALWELL: -- Of course not, and it was not until the other day that the honorable member for Mallee raised it. {: .speaker-KWP} ##### Mr Turnbull: -- That is untrue. {: .speaker-BV8} ##### Mr CALWELL: -- When did you raise it? {: .speaker-KWP} ##### Mr Turnbull: -- On three or four occasions. {: .speaker-BV8} ##### Mr CALWELL: -- I think I did the honorable member for Mallee an injustice earlier to-day, and I would not want to do him two injustices in the same day. I did not hear him raise it before the other day, but he must have raised it because somebody told him that I was going to raise it. I have been asked to do so, and if any other shire councils around Australia want me to raise any matter that would embarrass this Government, I shall be only too happy to do it. {: #subdebate-31-1-s1 .speaker-KZE} ##### Mr ROBERTON:
Minister for Social Services · Riverina · CP -- I am indebted to the Leader of the Opposition **(Mr. Calwell)** for raising this question on the motion for the adjournment of the House because it gives me a unique opportunity to reply to criticism which would not have been available to me under any other auspices. Let me inform the Leader of the Opposition that the water in all our rivers without exception, **Mr. Speaker,** belongs in its entirety to the people of the States through which the rivers flow. The people of the States through which these rivers flow have taken adequate precautions to protect their riparian rights. Tn each State there are organizations set up for the conservation and distribution of water, and so, in the first place, the question of the conservation and distribution of water is exclusively one for the States. Because the river Murray flows through more than one State it is obvious that the State instrumentalities - the State Rivers and Water Supply Commission in Victoria, the Water Conservation and Irrigation Commission in New South Wales, and the State authority of the same kind in South Australia - have the power to take whatever steps are necessary to conserve the waters of that river and make it available for a variety of purposes. But they cannot do that in one State without prejudice to the people of another. That situation caused the creation of an authority which would cover the river Murray and rivers flowing through more than one State. The River Murray Commission was set up to meet that very situation where one State, two States or three States wanted to avail themselves of the water flowing through their territory. Originally, the commission was charged with doing certain water works within the area affecting all three States, and the commission did that. When the original works provided for under the River Murray Agreement were completed, the agreement provided that in the case of any subsequent or future works affecting two or more States the Commonwealth would share a proportion of the cost. Where works affected only two States, it was laid down in precise terms in the agreement that the two States exclusively would share the cost of the works. It was provided in the agreement that the Minister Ibr National Development, whoever he might be from time to time, should be the chairman of the committee. It was early in 1950 that this matter was brought to my attention for the first time. I have no doubt that it was brought to the attention, of the Acting Prime Minister **(Mr. McEwen)** before then. It was probably brought to the attention of the honorable member for Mallee **(Mr. Turnbull)** before then, but so far as I personally am concerned, it was brought to my attention by no less a person than **Mr. Neil** McLeod of " Ardshiel ' ", Koraleigh, on the Murray River. I went into the proposal with him very thoroughly and I immediately, as is my custom, discussed this matter with the proper federal authority, the Minister for National Development **(Senator Spooner),** who is the chairman of the River Murray Commission. The Minister for National Development, as is his custom, in turn discussed the matter with both the Water Conservation and Irrigation Commission of New South Wales and the appropriate authority in Victoria. It was determined as early as that that responsibility for the construction of the Marraboor weir, since it was a work that would affect and benefit only two States, lay exclusively with the State of New South Wales and the State of Victoria. From that point, representations were then made to me by other people. Representations were made from time to time to the Acting Prime Minister and to the honorable member for Mallee, and each in turn tried to explain the position, as it has established itself over the years during the operation of the River Murray Commission. The situation is that on the Murray River there is a proposal for the construction of a weir that will be beneficial to both the State of New South Wales and the State of Victoria. I have pleaded with all those who are associated with advocating the construction of this weir that their first advance should be to the Water Conservation and Irrigation Commission of New South Wales and to the appropriate authority in Victoria. Unanimity having been reached by those two parties, it would obviously be for the Premier of New South Wales and the Premier of Victoria to meet and reach agreement on the construction, and even on the desirability of the construction, of the Marraboor weir. If it is beyond their capacity to do that, it is competent for the two Premiers to make approaches to the Commonwealth Government through the Minister for National Development. But they have never done that, and they do not propose to do that now. They prefer to put the proposition to the Leader of the Opposition in the pious hope that he will throw the weight of the socialist party behind the proposal. If the proposal needed any assistance from the socialist party, it ought to have been provided without this exhibition in the debate on the motion for the adjournment. Representations have been made to the Prime Minister **(Mr. Menzies).** He has discussed the matter with me and I have discussed it with him; and we have jointly discussed it with the Minister for National Development. But the position is crystal clear. It is for the two State Premiers to reach agreement as to what should be done, and having reached agreement that the construction of the weir is not only desirable but also necessary, and having decided what ought to be done, it is for the Premiers to say whether it is within their competence to do the work. If it is beyond their competence, they ought to make a direct approach to the Prime Minister or the Minister for National Development. Only in that way can a work of this description be favorably considered. Only in that way can this proposal reach the point where progress can be made and the work can actually begin. Until that is done, it is impossible for me or any other member of this Parliament, or any other Minister of this Parliament, or the Prime Minister, or the Acting Prime Minister, to sweep away the Premier of New South Wales, to sweep away the Premier of Victoria, and construct the weir regardless of the riparian rights of the people in those two States. If we attempted to do that, or if the Leader of the Opposition attempted to do that, an injunction would be taken out by the Premier of Victoria, as, of course, the water of the river Murray would be diverted to the degree necessary for the construction of the weir, the damning of the river, and the distribution of the water. {: #subdebate-31-1-s2 .speaker-10000} ##### Mr SPEAKER: -- Order! The Minister's time has expired. {: .speaker-KWP} ##### Mr Turnbull: -- I desire to make a personal explanation. {: .speaker-10000} ##### Mr SPEAKER: -- Order! Does the honorable member claim to have been misrepresented? {: .speaker-KWP} ##### Mr Turnbull: -- Yes. {: .speaker-10000} ##### Mr SPEAKER: -- As the honorable member has not yet spoken in this debate I suggest that he, in his turn, avail himself of the call. {: #subdebate-31-1-s3 .speaker-6U4} ##### Mr WHITLAM:
Werriwa .- If the Commonwealth had hidden behind technicalities such as those relied on by the Minister for Social Services **(Mr. Roberton),** in the initiation of the Snowy Mountains scheme, the scheme would not be in operation yet. Of course, the Chifley Government did not wait for the initiative of the governments of New South Wales and Victoria to initiate the Snowy Mountains scheme, which, of course, diverts water from the Snowy River into the Murray directly, or into the Murrumbidgee and thence into the Murray. There is no doubt that if there is a will for the Commonwealth to assist in the development of any part of Australia or the conserving of any of Australia's rivers, there is a way to do it. But if there is not a will to develop any of Australia's resources or to conserve any of its rivers, we can depend on members of the Government parties, such as the Minister for Social Services, to find some technicality behind which to hide. The Minister for Social Services remains the junior Country Party Minister in this Government; he has never secured any promotion in the Government from his own party. It is fortunate for this country that the right honorable member for Cowper **(Sir Earle Page)** takes so different an attitude concerning rivers and national development. Only this week, **Sir, the** right honorable member for Cowper was pointing out that the conservation of rivers and the development of all our national resources depended on the Commonwealth's participation. The Minister is not correct in saying, except in the most narrow technical sense, that the conservation of our rivers is exclusively a matter for the States. In actual fact, of course, the Commonwealth can interest itself in any of these matters by grant to the States under section 96 of the Constitution. {: .speaker-JXI} ##### Mr Freeth: -- What nonsense! It is covered by agreement. {: .speaker-6U4} ##### Mr WHITLAM: -- Of course, the Snowy Mountains scheme was initiated without any such agreement. If the Commonwealth made an offer to develop any river in Australia, no State, or no combination of two or more States, would refuse that offer. The Snowy Mountains scheme has conclusively shown that to be the case. The right honorable member for Cowper has pointed out that no Australian rivers will be put to a use other than that which they are already fulfilling unless the Commonwealth comes into the field. That is not just the experience of the Australian federation. It is the experience of the American federation also. There are not nearly as great disparities between the national resources and the financial strength of the American States as there are between those of the Australian States; but every bit of development on the American rivers in the last 30 years has taken place on American federal initiative. The Tennessee valley area, and the Columbia and other rivers were developed in that way. So it will be in Australia. Does anybody believe that the Murray would have been developed as it has been and enriched by Snowy Mountains waters in the past ten years if it had not been for the Com monwealth's initiative? Does anybody believe that the Ord River will be developed except with Commonwealth finance? Most of the sizeable rivers in Australia run through more than one State. The rivers which are not welldeveloped are in the States which are less populous and financially weak. {: .speaker-KXW} ##### Mr Pearce: -- To which rivers are you referring? {: .speaker-6U4} ##### Mr WHITLAM: -- Look at all the rivers in the north-western part of Australia. The honorable member for Herbert **(Mr. Murray)** has mentioned them again and again. I have mentioned them again and again, and the right honorable member for Cowper **(Sir Earle Page)** has mentioned them again and again. If the honorable member does not know, I do not propose to take up my ten minutes in educating him on these matters. But the largest river in Australia, the Murray, could not be developed by New South Wales and Victoria, the most wealthy and the most populous of the Australian States, until the Commonwealth came into the River Murray Waters Agreement. The further significant development which has taken place under the Snowy Mountains scheme took place only because the Commonwealth seized the initiative and provided all the money. {: .speaker-KXW} ##### Mr Pearce: -- By agreement. {: .speaker-6U4} ##### Mr WHITLAM: -- There was no agreement until the scheme was well under way. {: .speaker-KXW} ##### Mr Pearce: -- It is now operating under an agreement. {: .speaker-6U4} ##### Mr WHITLAM: -- It is now operating under an agreement, yes, but it got under way without an agreement, and no river in Australia will be developed nor can any honorable member refer to any sizeable river which will be developed until the Commonwealth finds the money and takes the initiative. Until the Commonwealth takes the initiative in developing the Murray further in the way that these riparian dwellers had to ask the Leader of the Opposition to request, no development will take place in the Murray. Australia will be developed as the American federation was developed- by Commonwealth financial resources and by Commonwealth initiative. Australia has not been developed in the last few decades by State initiative or State financial resources alone. There is a way under the Constitution to enable the Commonwealth to do these things. The right honorable member for Cowper referred to it as recently as last week, and he has discussed it a number of times in the last few years. I believe he is completely correct in this matter, and I hope that the senior members of the Country Party who still have faith in this country and know how to develop it will bring their junior Minister into line on this subject. {:#subdebate-31-2} #### Friday, 24 March 1961 {: #subdebate-31-2-s0 .speaker-KWP} ##### Mr TURNBULL:
Mallee **. -Mr. Speaker,** when the Leader of the Opposition **(Mr. Calwell)** rose, I thought he was getting up to apologize for the misstatement he made about me this evening. {: .speaker-KZE} ##### Mr Roberton: -- You are a dirty old man! {: .speaker-6U4} ##### Mr Whitlam: -- You old remittance lag! {: .speaker-JXI} ##### Mr Freeth: -- You lout! {: .speaker-KZE} ##### Mr Roberton: -- **Mr. Speaker,** I draw your attention to the remark that the honorable member for Werriwa made a moment ago. I take the strongest possible exception to it, and if I had the opportunity I would deal with him in an appropriate fashion. {: #subdebate-31-2-s1 .speaker-10000} ##### Mr SPEAKER: -- Order! What is the remark? {: .speaker-KZE} ##### Mr Roberton: -- I refuse to repeat it. I take the strongest exception to it. It was disgraceful; it was shameful; it was thoroughly dishonest and if the man had a sense of honour he would withdraw it. {: .speaker-6U4} ##### Mr Whitlam: -- Did you hear what he said? {: .speaker-ZL6} ##### Mr Hasluck: -- The Deputy Leader of the Opposition made use of a most offensive expression with respect to my colleague. The expression was heard by many members on this side and I think he should be asked to withdraw it. {: .speaker-10000} ##### Mr SPEAKER: -- I accept that. I ask the Deputy Leader of the Opposition to withdraw it. {: .speaker-6U4} ##### Mr Whitlam: -- **Mr. Speaker,** I withdraw the remark and I would ask that the Minister also withdraw the remark he made across the table to me, the first offensive remarks which were exchanged between us to-night. He was the aggressor and I ask him to withdraw. {: .speaker-K7J} ##### Mr Cramer: -- What did he say? {: .speaker-6U4} ##### Mr Whitlam: -- I have the same delicacy about repeating it that the Minister had. I ask that you ask the Minister to withdraw the remarks which he was the first to cast in the chamber on this subject. {: .speaker-10000} ##### Mr SPEAKER: -- Yes, I ask the Minister for Social Services to withdraw the remark he made that brought a retort. {: .speaker-KZE} ##### Mr Roberton: -- With very great respect to you, I made no remark that drew the retort. I said to the honorable member, as soon as he resumed his seat, " You ought to be ashamed of yourself ". {: .speaker-10000} ##### Mr SPEAKER: -- The Minister said, " You are a dirty old man ", and I ask you to withdraw the remark. {: .speaker-KZE} ##### Mr Roberton: -- I beg your pardon! {: .speaker-10000} ##### Mr SPEAKER: -- I heard it. {: .speaker-KZE} ##### Mr Roberton: -- That I said that? {: .speaker-10000} ##### Mr SPEAKER: -- Yes. {: .speaker-6U4} ##### Mr Whitlam: -- Yes, of course you said it! {: .speaker-KZE} ##### Mr Roberton: -- **Mr. Speaker,** it would be utterly impossible for me to use those words. {: .speaker-10000} ##### Mr SPEAKER: -- I have asked the Minister to withdraw the remark. {: .speaker-JXI} ##### Mr Freeth: -- **Mr. Speaker,** I want to explain this. {: .speaker-10000} ##### Mr SPEAKER: -- This cannot be brushed aside in that way. {: .speaker-JXI} ##### Mr Freeth: -- **Mr. Speaker,** I think I can correct the situation. I called the Deputy Leader of the Opposition an ill-mannered lout after he had addressed that remark to the Minister for Social Services. {: .speaker-6U4} ##### Mr Whitlam: -- I did not seek your withdrawal. {: .speaker-JXI} ##### Mr Freeth: -- In view of his withdrawal, I withdraw my remark. {: .speaker-10000} ##### Mr SPEAKER: -- Order! I heard the remark made by the Minister for Social Services and I have repeated it. I ask the Minister to withdraw it. {: .speaker-KZE} ##### Mr Roberton: -- It would be utterly impossible for me to use the words, and because of that it would be impossible for me to withdraw them. {: .speaker-10000} ##### Mr SPEAKER: -- I do not want the Minister to canvass my request. I ask him to withdraw, or action will have to be taken to deal with him. {: .speaker-KZE} ##### Mr Roberton: -- It would be impossible for me to withdraw something that I never said nor ever could say. {: .speaker-10000} ##### Mr SPEAKER: -- I regret to say that you said it and I heard it. If you are not prepared to withdraw it and obey the Chair, I am compelled to name you. {: .speaker-ZL6} ##### Mr Hasluck: -- **Mr. Speaker,** before I do my duty- {: .speaker-10000} ##### Mr SPEAKER: -- Order! There is only one procedure now. {: .speaker-ZL6} ##### Mr Hasluck: -- May I appeal to you to give the honorable member for Riverina, who is a person of honour and probity, the opportunity of saying that he did not say it. There may have been some mistake because of the acoustics of the chamber. He assures us, and I think the honorable member would be prepared to say, although he is not conscious of having made that remark, that if offence has been given he is sorry for that offence. {: .speaker-10000} ##### Mr SPEAKER: -- I must point out to the House that I indicated to the Minister what I heard. Now you are reflecting on the accuracy of what I said and you are discourteous to the Chair. I have no alternative, having given him the opportunity, which he refused, but to name him. {: .speaker-ZL6} ##### Mr Hasluck: -- With regret, I move - >That the honorable member for Riverina be suspended from the service of the House. Question resolved rn the affirmative. {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member for Riverina is suspended from the service of the House for 24 hours. (The honorable member for Riverina thereupon withdrew from the chamber.) {: .speaker-KWP} ##### Mr TURNBULL: -- You will remember, **Mr. Speaker,** that I was just making a speech on this question of the Marraboor weir. {: .speaker-K7J} ##### Mr Cramer: -- **Mr. Speaker,** did the Deputy Leader of the Opposition withdraw his remark? {: .speaker-10000} ##### Mr SPEAKER: -- Yes, the Deputy Leader of the Opposition withdrew his remark. {: .speaker-KWP} ##### Mr TURNBULL: -- Have I got the call now? {: .speaker-10000} ##### Mr SPEAKER: -- You have the call. {: .speaker-KWP} ##### Mr TURNBULL: -- I thought so. After all this confusion, let me start again. When the Leader of the Opposition rose to-night, I thought he was rising to apologize for the statement he made about me this afternoon and which was absolutely untrue. But when he got up and made his speech he made another misstatement about me. I do not know why I am the butt of the inaccuracies of the Leader of the Opposition, but surely the only answer he can make when I explain the position is, " I did not know ". When speaking about the Marraboor weir, the Leader of the Opposition said, "The honorable member for Mallee has only brought this matter up in the House within the last few weeks for . the first time ". I have copies of " Hansard " here to show that I mentioned it as far back as 1954. The Leader of the Opposition said that I brought the matter up the week before last, I think it was, for the first time. I have brought this matter up year after year, and I can show it to the Leader of the Opposition in " Hansard ". His only excuse now can be, " I did not know ". But is that a fair excuse for the Leader of the Labour Party to make for uttering inaccurate statements about another man, especially when he comes up into that man's electorate to make them? If it had been something concerning his own electorate, there might have been some point in it. The Marraboor weir is partly in my electorate, although, as has been stated, the river Murray is not in my electorate. My electorate adjoins the river. Actually, the river is in New South Wales, but that is only a technical point. The statements that have been made should be withdrawn, particularly as they have been made by the leader of a party. What confidence can the men behind him have in him if he makes such statements? He says that he is a friend of mine, and on occasions I have risen in this House to protect him from statements that have been made from the other side of the House. Despite that, he has on two occasions to-day made baseless attacks on me. Surely to goodness I am justified in being a little annoyed about it. {: .speaker-BV8} ##### Mr Calwell: -- Are you really annoyed? {: .speaker-KWP} ##### Mr TURNBULL: -- I am very annoyed about it. The Leader of the Opposition did not do himself much honour to-night when he got up and made an attack on the Minister for Social Services **(Mr. Roberton).** The Minister has been as keen as I have been about the construction of the Marraboor weir. I have brought the matter to the attention of the Parliament many times, as I can prove by reference to " Hansard ". If the Leader of the Opposition wishes to see the " Hansard " volumes in which those references appear, I shall let him have a look at them. {: .speaker-BV8} ##### Mr Calwell: -- Will you give them to me? {: .speaker-KWP} ##### Mr TURNBULL: -- Of course! The honorable member may have them now if he comes over here. Honorable members should appreciate, **Mr. Speaker,** that the State of New South Wales is the main stumbling block in the way of the construction of the Marraboor weir. I have advocated that the two States should find out what money they can put into the project, and after that, give us in this House a chance to ask the Federal Government to make a grant of the balance. I submitted that proposal in this Parliament only the week before last. Apparently, that was the first time that the Leader of the Opposition had heard me do so and the first time that he took an interest in this great water conservation scheme. The real position is that the State of New South Wales will not have anything to do with it. We heard the Deputy Leader of the Opposition **(Mr. Whitlam)** speaking in a grandiose way about what the State could do. Why does he not go to the Premier of New South Wales, who is a member of his own party, and ask him about it? {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable gentleman's time has expired. {: .speaker-BV8} ##### Mr Calwell: -- I wish to make a personal explanation, **Mr. Speaker.** The honorable member for Mallee **(Mr. Turnbull)** has said that I have misrepresented him, and if I have done so, I apologize. But honestly, I could not think back to 1954. {: .speaker-KWP} ##### Mr Turnbull: -- I raised the matter in 1957 and again in 1958. {: .speaker-BV8} ##### Mr Calwell: -- I could not even think back to those years, either. If I have done the honorable member an injustice, I apologise to him. He is a very good friend of mine. In fact, he is one of my best offenders. In respect of the other matter, **Sir, when** I said earlier to-day that he had never voted with the Labour Party, I found that I had made a mistake in that regard too, and I again apologize to him. I should like to see him vote with us on vital issues. Question resolved in the affirmative. House adjourned at 12.13 a.m. (Friday). {: .page-start } page 612 {:#debate-32} ### ANSWERS TO QUESTIONS The following answers to questions were circulated: - {:#subdebate-32-0} #### Pharmaceutical Benefits {: #subdebate-32-0-s0 .speaker-6U4} ##### Mr Whitlam: m asked the Minister for Health, upon notice - {: type="1" start="1"} 0. At which of its meetings did the Pharmaceutical Benefits Advisory Committee advise that androstanolone be (a) provided as a pharmaceutical benefit and (b) transferred to the restricted use category? 1. When will the change (a) be notified in the "Gazette" and (b) come into operation? {: #subdebate-32-0-s1 .speaker-JU8} ##### Dr Donald Cameron:
OXLEY, QUEENSLAND · LP -- The answers to the honorable member's questions are as follows: - {: type="1" start="1"} 0. In accordance with the policy of treating the committee's recommendations as confidential to the Minister, this information is regarded as confidential. 1. An amendment to the National Health (Pharmaceutical Benefits) Regulations, whereby the prescribing of androstanolone as a pharmaceutical benefit was restricted to certain specified purposes, was notified in" Gazette" No. 85a of 19th December, 1960, and came into operation on 1st January, 1961. {:#subdebate-32-1} #### International Monetary Fund {: #subdebate-32-1-s0 .speaker-KX7} ##### Mr Ward: d asked the Treasurer, upon notice - {: type="1" start="1"} 0. Has he on a number of occasions classified Australia's drawing rights of £211,000,000 from the International Monetary Fund as being part of our overseas financial reserves? 1. Are these unconditional drawing rights, and is the £211,000,000 available to Australia immediately upon request? 2. If not, will he state the conditions that must be satisfied by Australia before this nation's full drawing rights from the International Monetary Fund can be exercised? {: #subdebate-32-1-s1 .speaker-009MC} ##### Mr Harold Holt:
LP -- The answers to the honorable member's questions are as follows: - {: type="1" start="1"} 0. I have referred to Australia's maximum drawing rights of £A. 2 11, 000,000 on the International Monetary Fund as Australia's " second line " of international reserves. They are in addition to and not part of Australia's own international reserves. 1. No. 2. The fund makes its resources available to meet temporary balance of payments difficulties and its requirements in relation to requests for use of its resources vary according to the size of the requested drawing and the circumstances of the country concerned. A description of the fund's policy is contained on page 22 of its 1959 annual report which is available in the Parliamentary Library. In recent times the fund has shown increasing willingness to make its reserves available to meet the needs of its members. {:#subdebate-32-2} #### Taxation {: #subdebate-32-2-s0 .speaker-KX7} ##### Mr Ward: d asked the Treasurer, upon notice - {: type="1" start="1"} 0. Are all advertising costs incurred by companies engaged in trade or business of any description an allowable deduction for taxation purposes? 1. If not, in what circumstances are these costs not allowable as a deduction? {: #subdebate-32-2-s1 .speaker-009MC} ##### Mr Harold Holt:
LP -- The answers to the honorable member's questions are as follows: - {: type="1" start="1"} 0. No. 1. An income tax deduction is available for advertising costs only to the extent that they are incurred in gaining or producing assessable income or are necessarily incurred in carrying on a business for the purpose of producing such income. Expenses of a capital, private or domestic nature are not allowable deductions. {:#subdebate-32-3} #### Sales Tax {: #subdebate-32-3-s0 .speaker-6V4} ##### Mr Daly: y asked the Treasurer, upon notice - {: type="1" start="1"} 0. What amount of sales tax was collected in each year from 1949-50 to 1959-60, inclusive? 1. What amount of (a) direct and (b) indirect taxation was collected per head of population in each of these years? {: #subdebate-32-3-s1 .speaker-009MC} ##### Mr Harold Holt:
LP -- The answers to the honorable member's questions are as follows: - {: type="1" start="1"} 0. Collections of sales tax during the financial years 1949-50 to 1959-60 were as follows: - {: type="1" start="2"} 0. The amounts of (a) direct and (b) indirect taxation per head of population collected by the Commonwealth in each of these years are shown in the Budget papers as follows: - {:#subdebate-32-4} #### Security {: #subdebate-32-4-s0 .speaker-KX7} ##### Mr Ward: d asked the Attorney-General, upon notice - >To what persons or authorities is information in the hands of the Australian Security Intelligence Organization made available, and to whom is it available upon request? {: #subdebate-32-4-s1 .speaker-126} ##### Sir Garfield Barwick:
LP -- The answer to the honorable member's question is as follows: - >The functions of the Security Service are set out in section 5 of the Australian Security Intelligence Organization Act 1956. The discretions given to the Director-General by section 5 (1.) of that act are exercised by the Director-General in the particular circumstances of any given case according to the requirements of security, and not otherwise. {: #subdebate-32-4-s2 .speaker-KX7} ##### Mr Ward: d asked the Attorney-General, upon notice - {: type="1" start="1"} 0. Has his attention been drawn to a declaration signed by **Mr. R.** M. Hartwell, a member of the teaching staff of the Oxford University and formerly attached to the Technological University of New South Wales, to the effect that in 19S6 he was told by the then Chancellor of the Technological University of New South Wales, the late **Mr. Wallace** Wurth, the Vice-Chancellor, Professor J. P. Baxter, and the Bursar, **Mr. J.** O. A. Bourke, that a **Mr. Russel** Ward, who has been recommended for appointment' as a Lecturer in History by the University's Academic Selection Committee, was not appointed because of an unfavorable Commonwealth security report? 1. Will he state whether the Australian Security Intelligence Organization did in fact, officially or otherwise, furnish information regarding the past or present activities of **Mr. Russel** Ward to anybody connected in any way whatsoever with the university? 2. Did the Australian Security Intelligence Organization furnish any report to any person or organization at any time regarding **Mr. Russel** Ward? 3. If so, to what person or organization, and at whose request, was the report submitted? 4. Are the contents of **Mr. Hartwell's** declaration a statement of fact? 5. If the declaration was false, has the attention of the Oxford University authorities been directed to this falsified statement by a member of its teaching staff? 6. Were any statements secured from Professor Baxter and **Mr. Bourke** as to whether the nonappointment of **Mr. Russel** Ward was the result of a Commonwealth Security report? 7. If so, will he make the contents of those statements available for the information of honorable members? {: #subdebate-32-4-s3 .speaker-126} ##### Sir Garfield Barwick:
LP -- The answer to the honorable member's questions is - >I have nothing either to add to or to subtract from the statements made to the House on the matter by the Prime Minister on 6th and 7th December last. So far as the honorable member's questions relate to matters of concern to the Commonwealth at all, the answer is in the negative. {: #subdebate-32-4-s4 .speaker-KX7} ##### Mr Ward: d asked the Attorney-General, upon notice - {: type="1" start="1"} 0. Has the direct office telephone of the Shire Clerk, Gosford - 21 209 - been tapped with the authority of the Commonwealth security service? 1. If so, was authority for the tapping delegated by the Director-General of Security to the officerincharge of civil defence in that area? 2. If authority was not delegated to this officer, to whom was it delegated? 3. Was the tapping of the telephone unrelated to any matter even remotely connected with national security? {: #subdebate-32-4-s5 .speaker-126} ##### Sir Garfield Barwick:
LP -- The answer to the honorable member's questions is - >I thought I had already made clear to the House, but I make clear now, that I will not, either by confirmation or by denial, disclose what action I have, or have not, authorized in individual cases under the Telephonic Communications (Interception) Act. Let me make clear also that authority for an interception is given by warrant for purposes of security and not otherwise, and by the AttorneyGeneral; not by the Security service, except for a very brief period and under restrictive conditions in an emergency. See sections 6 and 7 of the act

Cite as: Australia, House of Representatives, Debates, 23 March 1961, viewed 22 October 2017, <http://historichansard.net/hofreps/1961/19610323_reps_23_hor30/>.

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