23rd Parliament · 3rd Session
Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.
– I ask the Prime Minister whether he has heard of a statement by Senator Ormonde that the Australian Democratic Labour Party gets the donkey vote. Since most Australian Democratic Labour Party preferences go to the Government, will the Prime Minister give us a performance of the “ Donkey Serenade “ which gathers them together so that we might see how it is done? Will the Prime Minister also tell us where the donkeys get their carrots, particularly the rich election carrot of 108 minutes on television at a cost of £10,000, which was provided at the recent Victorian State election?
– In the world of donkeydom, I concede at once the honorable member’s supremacy.
– I ask the Minister for External Affairs whether any officer of the Department of External Affairs contacted the member of the Foreign Office of red China in Peking who defected to Hong Kong two years ago. If so, was there any confirmation of the report that he said that red China, after her admittance to the United Nations, hoped to become the leader of the Afro-Asian group in that organization and to sponsor a resolution calling on Australia to open her northern gates to red Chinese migration on the ground that the pressure of her population was a threat to peace?
– I hope the honorable member will allow me to have a look into the records so that I can give a proper answer.
– I preface a question addressed to the Postmaster-General by stating that, during the 7 p.m. news session on 12th October, the Australian Broadcasting Commission reported its vice-chairman, Mr.
Dawes, as saying that, despite the growth of television, the commission intended to expand the radio services. In view of that statement, will the Minister advise whether it is proposed to recommence the frequency modulation broadcasting services in New South Wales and elsewhere? I ask this question in view of the recent closure of the frequency modulation station to accommodate television frequencies.
– I did not see the statement referred to by the honorable member for Banks. If I understood the honorable member correctly, he attributed to the vicechairman of the Australian Broadcasting Commission a statement that the development of television would not affect the expansion of radio services. That is quite correct.
The honorable member ties up with that statement an inquiry as to whether it is therefore proposed to go on with the provision of frequency modulation services. The two matters are not related. The reason for the action taken by the department in closing down the frequency modulation services has been stated quite plainly by me in this House. It has also been referred to in the report of the Huxley committee, which has been before the House, and the decision arrived at will stand.
It will be remembered that I said that if a need was expressed for the establishment of a frequency modulation service it could be provided in the ultra-high frequency band and that we would be prepared to look into any requests for such a service which had some weight in them.
– In view of the fact that the report of the Defence Forces Retirement Benefits Board for the year ended 30th June, 1959, was not tabled in this House until May, 1961, will the Treasurer inform honorable members when it is expected that the annual report and balance-sheet of the board for the year ended 30th June, 1960, will be tabled?
– I shall obtain the information for the honorable gentleman and any others who might be interested.
– I direct a question to the Minister for Labour and National Service. What is the estimated number of visitors who are to be catered for at the Hotel Kurrajong in Canberra in the next four months? ls this not the period when tourist travel will be at its peak? Why, then, is it intended practically to close down this government-owned hotel? Is it to give some added advantage to other privately owned or leased hotels? Does not the Minister realize how this completely disorganizes the staff arrangements and to-day threatens to cause the loss of some of the most capable and experienced members of that hotel’s personnel? Will the Minister further consider the wisdom of maintaining this hotel at its present status with a view to catering adequately for visitors to the National Capital and preserving the present efficient standard of service?
– The Hotel Kurrajong is run by an independent authority and the decision it has made for the Hotel Kurrajong over the Christmas season is a matter for the board concerned. However, the board has informed me that the number of people retained at the Hotel Kurrajong will be adequate to cater for what it regards as the ordinary Christmas season flow. As to the probable loss of personnel, I have been informed by the hostel authorities that they have taken whatever steps they regard as reasonable to see that leave is given. To the best of my knowledge, they do not expect a loss of personnel when the hotel resumes full operation next year.
– I direct a question to the Treasurer. Is it true that the total of bank advances has declined recently while deposits have increased? Are the banks now in a position to lend more money in appropriate cases?
– For a variety of reasons, the level of bank advances has fallen. It is a time of the year when that is not unusual. By the same token and for much the same causes, the level of liquidity in the banking system is extra ordinarily high. As honorable members know, the Reserve Bank Board revised its directive some time ago so that banks have very little restraint these days on the manner in which they shall lend if they are willing to do so. It would be difficult to imagine a really worth-while proposition which could be put to a bank at present and which the bank would not be in a position to meet if it so chose. I would add that the question of the remaining restraints, limited though they may be, will be examined by the Reserve Bank Board at its meeting next week.
– My question is directed to the Minister for Social Services. In view of the fact that an unexpected calamity - unemployment - has hit many thousands of homes in Australia so close to Christmas, is it possible to grant extra relief for the Christmas season to the innocent victims of this calamity so that children, at least, may be enabled to enjoy in some measure those pleasantries that are usually associated with the Christmas season? Would the Minister support or have sympathy with any move for a special grant?
– The honorable member will know that the programme for social services, including the payment of unemployment benefit, is determined each year and that no funds are available for the purposes that he suggests. Every case, of course, is considered on its merits, and I assure the honorable member that the question of unemployment benefit was seriously considered by the Government when the last Budget was being prepared.
– My question is directed to the Treasurer. Is it a fact that the Queensland Government receives no money from the Commonwealth to assist in the maintenance of its aboriginal population, although that State, as we know, has one of the major aboriginal populations compared with the other States? Is it a fact, also, that, to the contrary, the States of South Australia and Western Australia receive considerable amounts for this purpose?
– The arrangements between the Commonwealth Government and the State governments are known in general terms, I think, by honorable gentlemen. Those arrangements have resulted in substantially increased payments by the Commonwealth to the States since the present formula was adopted in 1959. The increases in payments each year relate to the increase in population in the States concerned. With regard to the specific point raised by the honorable gentleman, I have checked this matter since seeing some press report which appeared in Queensland. To the best of my knowledge, it is not a fact that the Commonwealth makes some payments to South Australia and Western Australia in respect of aborigines and does not make similar payments to Queensland. We have liberalized payments to aborigines over the years under the social services legislation. It is possible that payments made currently by the Western Australian Government in respect of aborigines as well as other persons are taken into account by the Commonwealth Grants Commission in determining the overall grant which it will recommend for that State. But, subject to that qualification, to the best of my knowledge the position is as I have stated it.
– I direct my question to the Prime Minister in his capacity as Minister for External Affairs. Has Australia expressed any view on the proposed merger of Singapore with the Federation of Malaya? In particular, has Australia taken any attitude about the future of the SouthEast Asia Treaty Organization naval base located at Singapore? Is it proposed to establish a substitute base in Australia?
– The honorable member may rest assured that on both of these matters we have been in the closest communication not only with the Government of the United Kingdom, but also with the distinguished Prime Minister of Malaya. These matters are under discussion at present, as he will understand, and therefore they do not lend themselves to a public statement. But we are in the closest touch, weekly and sometimes daily, on these matters.
– My question, which is directed to the Postmaster-General, relates to telephones. Has the honorable gentleman noted that the Russians are reported to have introduced, in some limited areas, what are described as see-as-you-talk telephones? Will he give an unqualified assurance to the people of Australia that telephone subscribers in this country will not be subjected to the indignity of being viewed in bed, in a dishevelled or otherwise embarrassing situation, by any chance telephone caller? Finally, will he, at the very least, before giving effect to this latest triumph of science, first ensure, as a matter of the highest priority, that all the applicants for ordinary telephones in the delightful suburb of St. Ives in my electorate receive these ordinary facilities as speedily as possible?
– I did see in the press some reference to the matter to which the honorable member has referred. I presume the proposal amounts to an amalgamation of telephone and television services. Upon reading the report I experienced immediately the same feelings of distaste or revulsion which the honorable member’s question suggests, he also felt. Therefore, it is very easy for me to inform him that I certainly would not foster any similar proposal in Australia because there are other essential services in the telephone, telegraph and trunk line spheres which have a far greater priority than anything of that nature.
– I direct my question to the Minister for Labour and National Service. Is it a fact that the Commonwealth Government provides all of the capital requirements of Commonwealth Hostels Limited? Also, is it a fact that the Commonwealth Government appoints all the directors of Commonwealth Hostels Limited? If so, what directional or other authority does the Commonwealth Government exercise over Commonwealth Hostels Limited?
– I think that the details contained in the honorable gentleman’s question are correct, but the Government leaves to the board of Commonwealth
Hostels Limited the day-to-day management of its affairs. 1 certainly have no wish to interfere with the day-to-day management of the company’s business. The only recommendations of the board which I have seen relate to proposed changes in tariff. These are submitted to me. My interest in recommendations relating to tariffs at Commonwealth hostels is to ensure that the tariffs are kept at a minimum.
– My question to the Minister for Trade relates to representations which have been made on behalf of navy bean-growers and the Navy Bean Marketing Board of New South Wales. Some time ago the Minister referred to the Tariff Board the question of tariff protection for this industry which was launched by the Commonwealth during the war as an essential war industry. As the sowing season is about to commence, I ask the Minister whether he has any information from the Tariff Board relating to its attitude to the representations. Can he give any information which will create confidence in the minds of growers?
– I can inform the honorable member, who has constantly interested himself in this industry, that a decision on the matter will be announced before the House goes into recess.
– I address my question to the Minister for Immigration. When German migrants are being screened, is former membership of Hitler’s S.S. Corps classified as a permanent bar to migration? Is the Minister aware that in a Sydney court last week a man who was convicted on eleven charges of embezzlement admitted that he was a former captain in the S.S. Corps? What is the Government’s policy relating to former members of that organization who seek permission to settle in Australia?
– For a very long time the Government has been strict in enforcing a barrier against the entry of persons who were in the S.S. Corps or similar organizations which were actively associated with Hitlerism and German aggression. I think the honorable gentleman will find that, by and large, virtually none of the 88,000 German migrants who have come to Australia since the war has been contaminated by Nazism. 1 shall inquire into the honorable gentleman’s statement but, as I have warned the House on previous occasions, however careful one may be in matters of security it is not always possible for a system to be foolproof. All I can say is that this Government does everything in its power to see that only desirable types of migrants enter Australia and, on the whole, we have been singularly successful.
– I address a question to the Minister for Territories. By way of explanation I should say that certain industrialists in Queensland have complained to me that they are unable to compete with European and Asian countries when tenders are called by the Administration of the Territory of Papua and New Guinea or by private enterprise in the Territory. There are two basic reasons for this: The first is that in Asian countries labour is cheaper than it is in Australia, and the second is that freight rates are cheaper from Europe to New Guinea than from Queensland ports to New Guinea. I ask the Minister whether special consideration is given to Australian manufacturers when tenders are called in the Territory, in view of the fact that the Administration of the Territory is subsidized by the Australian taxpayers, or whether it is to be concluded that many of our industrialists would be unable to meet competition for trade in the Territory.
– As honorable members know, the Territory of Papua and New Guinea is in a different customs system from Australia. The basis of tendering in the Territory is that tenders are quoted, duty paid, at the port of delivery. That puts all tenderers from outside the Territory on the same level. Subject to that established system the position regarding government purchasing and the rules of government purchasing are the same as those that apply in the Department of Supply in Australia.
– I address my question to the Minister for Labour and National Service. Will he state why the Government has deliberately created an unemployment pool of 110,000 persons? Will he also state whether it is because the Government believes in a pool of unemployment designed to bring efficiency and greater profits to industry? Will he also advise what positive action, if any, the Government proposes to take to restore full employment in Australia?
– The honorable gentleman has obviously not lost any of his garrulous approach to life during his recent trip overseas. 1 think he should know that it is the policy of this Government to have the highest practicable level of employment. I stress that this is a very personal problem and should not be looked at in a humorous way by members of the Opposition. As to the last part of the honorable member’s question, I think it is a pity that he has been away for so long. If he had been here during the course of the last three months he would have heard, on the floor of this House, exactly what has been done by this Government and of the favorable trend that has developed within the economy.
– I desire to ask the Minister for Shipping and Transport a question. In keeping with the practice of naming stations on the Trans-Australian railway line after prominent ex-Ministers of the Commonwealth, will the Minister give consideration to naming any new station which may be made necessary by the standardization of railway gauges after Mr. Victor Johnson, thus perpetuating not only his worthy name, but also his ideals and honesty which prevented him from still representing the area through which the “ Trans “ line runs?
– I appreciate the thought and the sentiment that underlie the question. I can assure the honorable member that if a new station is to be established in that area, his proposal will be given every consideration.
– I ask the PostmasterGeneral: Who was the subordinate officer, so far unnamed, mentioned in the second of the three charges preferred against Mr.
Brown, Director of Posts and Telegraphs in Queensland? Was his name Manley? If not, what was his name? Has the Public Service Board yet dealt with the case of Mr. Brown? If so, is it a fact that Mr. Brown has been transferred to Melbourne?
– I can deal quite briefly with the question asked by the Leader of the Opposition. As a matter of fact, such replies should be brief. He asked for the name of the subordinate officer, and then gave a name, which indicates that he is already aware of the position. His second question was whether Mr. Brown was transferred.
– But have you answered the question? Was it Manley?
- Mr. Speaker, I have no information to give the Leader of the Opposition on his second question.
– The Minister in charge of the Commonwealth Scientific and Industrial Research Organization will be aware that some time ago the C.S.I.R.O. was conducting experiments in rain-making and the prevention of hail damage to fruit crops, mainly by the use of silver iodide. Can the Minister say whether these experiments are still being actively pursued? If not, will he consider requesting the C.S.I.R.O. to re-open experimentation in this field, which has great potential in increasing primary production and in protecting fruit crops from severe losses?
– The experiments to which the honorable member refers are still going on. I think it is probable that they will go on for a considerable time, but very valuable results are already being obtained from them.
– Can the Minister for Territories inform the House of the progress being made on the construction of the Mount Wells tin battery in the Northern Territory, and when it will be open for operation? Further, can he say when a start will be made on the construction of the Tennant Creek water supply, a project which has been under consideration for many years?
– I cannot give a precise answer regarding the Mount Wells battery. I went out to the site myself by helicopter a few months ago, and found that construction of the battery was well advanced. I will obtain for the honorable member the exact date on which the Director of Mines hopes to have the battery completed. I should think that it will be very soon.
In regard to the Tennant Creek water supply, again I am assured that the work has started. The money was supplied and tenders have been called. If tenders have not been let, that is something that is within the administration of the Department of Works. There is provision in this year’s Budget for the Tennant Creek water, supply.
– My question is addressed to the Minister in charge of the Commonwealth Scientific and Industrial Research Organization. Is he aware that a wide variety of stock medicines is now available to primary producers, far-reaching claims as to the effectiveness of many of which are being made? Would it be possible for the C.S.I.R.O. to be given authority to analyse these stock medicines in order to ascertain whether they really can achieve the results claimed? Further, would this unbiased expert opinion be made available to primary producers who are interested in purchasing these treatments?
– In each State there is a board known as the Stock Medicines Board which, under the authority of the State government, performs the functions to which the honorable member refers. I understand that, in most States, when new medicines are produced they are submitted for analysis to the Stock Medicines Board. I do not think it would therefore be appropriate for the C.S.I.R.O. to take over this function. I think, Sir, that we should have clearly in our minds the functions of the C.S.I.R.O. It is a research organization and we should, I think, be very careful about giving it functions which are perhaps of an administrative nature, or bordering on an administrative nature. They are the functions of other departments. The C.S.I.R.O. is not an ordinary department of State. It is quite a different kind of orga nization. But all the knowledge and information that its scientists possess, with regard to both stock medicines and stock management in general, are, of course, freely available to the State departments.
– I direct a question to the Minister for Labour and National Service. In view of the Minister’s expressed gratification at the slight decrease recently announced in the numbers of unemployed, can the Minister say whether the improvement in the position in Victoria has been brought about by seasonal employment? Does he think that what is happening now is the usual upsurge in employment for a couple of months before Christmas, and that in the New Year the improvement in the employment figures will not be maintained?
– I cannot speak specifically for Victoria, but I can say that for the whole of Australia the improvement in the employment position is more pronounced than it would be if only seasonal employment were involved. Therefore, Sir, the statement that the improvement is due solely to seasonal employment is quite incorrect. As to the second part of the honorable member’s question, statements have been made that large numbers of youths will enter the work force in the latter part of this year and the early part of next year. As I have said in this House previously, I have given this matter careful consideration and I have grave doubts that the number of youths entering the work force at the end of this year will be much more than 90,000. At the most it will be 95,000. This, Sir, will be only slightly greater than the number that was readily absorbed in the current year. We look upon population growth as one of the dynamics of development. While we appreciate that there is a problem, we do not feel that it is an insuperable one. We believe that it can be readily handled by the department and by Australian industry.
– I address a question to the Minister for Social Services. I refer to the cadetship scheme for social workers recently announced by the Minister. When will this scheme come into operation, and what are its main conditions? What will be the maximum number of cadetships offered each year, and will an allocation be made of a certain number to each State?
– The scheme will come into operation at the beginning of the academic year, the university year, 1962. The normal cadetship provisions of the Commonwealth Public Service will apply and the successful applicants will be required to give an undertaking to remain in the Commonwealth service for a period up to four years after completion of their cadetships. I am not in a position to say with any degree of accuracy how many cadetships will be granted. It is expected that the number will be ten or twelve. It will depend largely on the quality of the applicants and the number of vacancies. I can see no prospect of allocations being made on a State basis. The applicants will be appointed on their merits. I am happy to say that the number of applications is highly satisfactory, and the standard of the applicants is particularly high.
– Is the Minister for Labour and National Service aware that the Joint Coal Board, in its last report, said that it believes more mines will close on the South Maitland coal fields, resulting in further unemployment? Has the Government any plans to meet this expected and cruel situation?
– I did not read through the entire report of the Joint Coal Board but I picked out certain parts dealing with the prospects. Again, I cannot speak in precise terms about the South Maitland field, but the honorable gentleman will know as well as any one that this Government is doing whatever it can in practical terms to increase the export of coal from New South Wales and Queensland. I will endeavour to obtain from my colleague in another place further details of the prospects of the South Maitland field, and I will let the honorable gentleman have whatever facts I can gather.
– Can the Minister for Trade inform the House whether any discussions have yet taken place between representatives of Australia, Canada and New Zealand to concert the approach to the countries of the European Common Market with which the United Kingdom is about to open negotiations, and also to discuss the treatment to be accorded the products of the Common Market countries and Great Britain in our own very large international markets in the various eventualities that may well arise in the coming months?
– There have been discussions, of course, on this matter in which the representatives of Australia and of the other two Commonwealth countries mentioned by the honorable member have engaged over several years, and more particularly over the last several months, in Australia, New Zealand, Canada and London. However, having said that and having established that there is a close understanding of each other’s point of view, I think it would be wrong to suggest that this represents a concerted plan or a conjoint attitude on the part of the Commonwealth countries. Each is separately disclosing its own point of view to the other and in that way making an impact upon the United Kingdom.
– My question is directed to the Treasurer. As the Commonwealth Government is arranging for the financing of the Mount Isa to Townsville railway, is it possible for this Parliament to know the conditions under which the American firm of Ford, Bacon and Davis is employed? I should like to know whether the firm is employed for a straight-out sum, on a percentage basis or on other conditions. Will the report of this firm be made available to the Parliament?
– The legislation covering the agreement between the Commonwealth Government and the State Government will be introduced into the Parliament shortly by the Prime Minister. In the meantime, no doubt the questions asked by the honorable gentleman can be examined to ascertain how far the information sought by him can be supplied in the course of that discussion.
– My question, which is addressed to the Minister for Labour and National Service, is supplementary to that asked by the honorable member for Bonython about the Hotel Kurrajong. Could the Hotel Kurrajong be placed under an independent authority instead of being under the control of Commonwealth Hostels Limited? It is completely unfair to place this hotel on the same business basis as that on which other hostels catering for permanent or semipermanent guests operate. This hotel was built specifically to cater for members of Parliament whose work makes it very difficult-
– Order! I think the honorable member is now giving the information he seeks.
– I want to say that it is very difficult for the hotel to cater for both members of Parliament and the general public on a business-like basis.
– I recognize that there is much in what the honorable gentleman has said, but he will recognize, too, that the hotel is not run strictly on a business-like basis. In fact, it gets considerable help from this Parliament in its running expenses.
– Then it ought to be brought under the Joint House Committee of this Parliament.
– Yes, and what other recommendations would you make?
– That is one that could be made.
– You would treat it as a club? As to the second part of the honorable member’s question, we have a dual function to perform. We have to look after the interests of not only the members who reside in the hotel and of the travelling public but also the members of the general public. The interests of the latter have to be considered just as much as those of any other party.
– I ask the Prime Minister whether he is yet in a position to make a statement to the House concerning the contract for the erection of the new Reserve Bank building in Sydney. If he is not yet in a position to make a statement, when will he be in a position to do so?
– What I said on this matter was that I would have a discussion with my colleague, the Minister for Works. I am afraid I have not had the opportunity of doing that, but I am indebted to the honorable gentleman for his reminder.
– I ask the Minister for Social Services whether he has given any further consideration to a request of long standing by medical specialists, social welfare workers and others, for the establishment of a rehabilitation centre at Townsville for the quite large numbers of physically handicapped young people and adults who find that the 1,000-mile journey to the nearest centre at Brisbane puts beyond their reach all possibility of rehabilitation.
– Subsequent to the representations the honorable member has made to me from time to time, I have given very careful consideration to the question of establishing a Commonwealth rehabilitation centre in north Queensland. Of course, the need for rehabilitation and treatment of the kind in the far north is quite apparent to any one who has visited there and looked into the general question of social services. I assure the honorable member that the Commonwealth rehabilitation centre established in Queensland is one of the finest in the world and that the professional and technical staffs engaged there are of such a character that they can provide a service adequate to meet the needs of those people from north Queensland who require rehabilitation.
– My question to the Prime Minister relates to the discussions concerning the entry of the United Kingdom into the European Common Market. Has the Government made representations to be present to take part in those discussions and to watch Australia’s special interests at any conference that might be held? If so, can the Prime Minister say whether Australia will be represented by a Cabinet Minister, or whether it is intended to leave this vital issue in the hands of a representative of the United Kingdom?
– Perhaps this question might be better addressed to my colleague, the Minister for Trade, but, as I am familiar with the matter, I shall reply to it. From first to last, we have, as the honorable member knows, presented the view - and we stated it to Mr. Sandys when he was here - that nobody could speak so effectively for our particular interests as Australia itself. Whether this will lead to Australia being a direct participant in the negotiations between the United Kingdom and the six nations of the European Common Market is, of course, not a matter that we can decide; nor is it a matter that the United Kingdom can decide for itself. That will depend upon the attitude of The Six.
Realizing that there might be discussions about that kind of thing, we have also been exploring - and I think not unfruitfully - the possibility of sitting in on whatever working committees or working parties might be established, because these negotiations will not be short, and they certainly will not be simple. We are pursuing this matter because we want to feel that the case for Australia is being put in the best possible fashion and with the greatest possible degree of first-hand knowledge.
The question as to what time will be the appropriate time for talks on a ministerial level has not yet been determined, but the honorable member can take it that so long as the matters under discussion are capable of being dealt with by officials with officials, we will pursue that course, and we certainly will not be unwilling to have ministerial representation at the time or times when that can become effective. I am perfectly certain that the honorable member’s outlook on this matter and my own will be identical, and we are pursuing the course I have described for that reason.
– by leave- I wish to make a personal explanation jointly on behalf of my friend, the honorable member for Scullin (Mr. Peters), and myself, because we have been misrepresented. I would not bother to do so but for the fact that this misrepresentation related to a very important matter that attracted a good deal of attention. The House will recall that yesterday, at question time, the honorable member for Scullin very properly asked me a question in these terms -
In view of the purchase by foreign interests ot big parcels of shares in The Broken Hill Proprietary Company Limited and the bids to take over Broken Hill South Limited. . . . and so on, and asked whether I would have something to say about the matter. He was reported in a newspaper called “ The Herald “, in Melbourne last night, as having said exactly the opposite. He is reported as having asked about large transactions in Broken Hill South shares. Actually the question referred to shares in the Broken Hill Proprietary Company Limited. In replying to the honorable member, I said -
I am not aware of the transactions involving shares of The Broken Hill Proprietary Company Limited. . . . They do not fall within my jurisdiction. I am aware of what happened recently in connexion with Broken Hill South Limited.
Then I explained to the House that I had seen the chairman of directors of Broken Hill South Limited. These are two entirely distinct companies. The report of my answer in the Melbourne “ Herald “ was right, except that it was completely wrong, if the House will understand. The honorable member is reported as having asked -
In view of the exchange of “ big parcels “ of Broken Hill South shares- which he had not done. He was referring to shares in the Broken Hill Proprietary Company Limited. The report credits me as having said that I had discussions with the chairman of directors of the Broken Hill Proprietary Company Limited which, of course, I did not say. Nor did I have any discussions. Again, according to this newspaper report, I said I was not aware of any transactions in Broken Hill South Limited shares. That was the very thing that I told the House I had discussed with the chairman of directors of Broken Hill South Limited.
As this report may have given rise to some confusion and might succeed in doing some injustice to my friend, the honorable member for Scullin, as well as myself, I think it ought to be put right.
– by leaveEarlier, during question time, the honorable member for La Trobe (Mr. Jess) asked me when I could table in the House the report of the Defence Forces Retirement Benefits Board for the year ended 30th June, 1961. I have made inquiries and find that, although work is proceeding on the report, it is not likely to be tabled before the end of the current session of Parliament. It will probably be tabled during the autumn session next year.
– I present the following report of the Public Accounts Committee: -
Fifty-sixth Report - Expenditure from Advance to the Treasurer for the year 1960-61.
This fifty-sixth report presents the results of the committee’s investigations into the accuracy of departmental estimating for the year ended 30th June, 1961. Our inquiries were influenced, in the main, by estimating achievements as reflected by the use made of the Advance to the Treasurer in the last financial year. Public hearings were held in connexion with a large number of votes, and our comments appear at the conclusion of the report on each separate vote investigated by the committee. In addition to the votes reported in detail, we list also the relatively large number of votes to which consideration was given by the Public Accounts Committee after departmental explanations had been obtained.
Ordered to be printed.
Debate resumed from 5th October (vide page 1707), on motion by Mr. Opperman -
That the bill be now read a second time.
.- The Opposition supports the bill, which is a simple machinery measure. I take the opportunity, however, of directing attention to clause 3, sub-clause (c) of the bill which will insert new sub-section (6.) in section 4 of the Beaches, Fishing Grounds and Sea Routes Protection Act 1932. I doubt whether this Parliament has the power to pass the proposed sub-section (6.). In directing attention to it, I point to the limitations of this Parliament’s power over matters of navigation in general. The proposed sub-section states -
A person who sinks a vessel at sea, whether in accordance with permission obtained under this section or not, shall, within seven days after the sinking, furnish to a prescribed officer a report, in accordance with the prescribed form, of the sinking.
I would not dispute that this Parliament can require a person on sinking a vessel to report that fact to an officer prescribed by the Commonwealth Government if the sinking were in any way to affect trade or commerce with other countries or among the States, or if it were to affect fisheries in Australian waters beyond territorial limits. If a sinking affected these matters, which are listed in our Constitution, then it would affect a matter on which this Parliament can make laws.
These limitations on the Parliament are admitted in the preamble to the act and also in sub-section (5.) of section 4.
But the proposed sub-section to which I am referring would require persons to notify a sinking if it affected fisheries in Australian waters within territorial limits. This Parliament has no power to pass laws with respect to fisheries in Australian waters- within territorial limits, that being a matter reserved for the States. This Parliament’s fisheries power is one of the greatest oversights and the most inexplicable lapses by the founding fathers.
I can well understand that there is no great difficulty in seeing that the sea routes are kept clear and that they are protected so long as sinkings are forbidden, or are reported, when they would affect trade and commerce with other countries or among the States. A sunken ship which was not a menace to interstate or overseas shipping would not be a menace to intra-state shipping, which would generally have a shallower draught. Therefore, the Commonwealth supervises the sinking of ships and protects sea routes for all purposes as regards navigation.
There is very little point in protecting trawling gear in fishing grounds beyond territorial limits, because trawling does not take place very much, if at all, beyond territorial limits.
The sensible thing would be for this Parliament to have power to safeguard fishing grounds and trawling throughout Australian waters, either beyond territorial limits or within. I would think that subsection (6.) in the act is ultra vires. Nevertheless, it does serve to highlight this Parliament’s very real limitations as regards fisheries.
I might also ask as a matter of further academic interest whether the Gulf of Carpentaria, St. Vincent Gulf and Spencer Gulf are inside or outside territorial limits. The Opposition supports the bill.
Question resolved in the affirmative.
Bill read a second time, and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
Consideration resumed from 5th October (vide page 1707), on motion by Mr. Opperman -
That the bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time, and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
Debate resumed from 12th October (vide page 2039), on motion by Mr. Opperman -
That the bill be now read a second time.
.- Mr. Speaker, the Opposition supports this bill also. The measure is divided into four parts. Only Part III., which deals with the control of Commonwealth explosives areas, is new. The other three parts re-enact three Explosives Acts which were passed in 1952, 1957 and 1960. Those measures were not opposed by the Opposition. The present bill, so far as it re-enacts those measures, is in the same terms as those acts were in the form in which they last left this House.
The only controversial section of the principal act has been section 6, which has become clause 11 of the present bill. The section originally permitted regulations to “ provide, by order, that a vessel in which Commonwealth explosives are, or are to be, loaded may be moored or berthed in a port specified in the order “. Difficulties of interpretation and practice arose with the Permanent Committee of the Australian Port Authorities Association, whose recommendations the Minister is obliged by the act to consider before making regulations.
In 1957, the Parliament amended the act to remove the word “ moored “. Therefore, we could make at least orders concerning berthing. In that year, the Parliament also inserted a new sub-section (1a.) in section 6 to ensure removal of a ship to a berth considered more suitable. Last year, the Parliament removed the definition of “ Commonwealth explosives “ and inserted another definition. In the meantime, Sir, regulation 48a was proposed under the 1957 act. That regulation has never been promulgated, and the 1960 act has never been proclaimed. So, in effect, from 1957 until the present time there has been an act which has been a dead letter. Either a regulation made under an act has not been promulgated or the act itself has not been proclaimed. It is certainly to be hoped that the provisions of this new measure will be implemented satisfactorily with the proclamation of the act, the promulgation of regulations and the support of the port authorities.
The Minister for Shipping and Transport (Mr. Opperman) will remember that, just over a year ago, I asked him a question on this matter, which he answered on 5th October of last year. The relevant part of his answer relating to requests and suggestions by the Australian Port Authorities Association is as follows: -
The action taken by the Minister on those requests was as follows: - the association was advised that at least for the time being section 6 (1a.) would not be omitted from the act but that no action would be taken to have the proposed regulation 48a of the Explosives Regulations promulgated. As the intention of the resolution referred to in the letter of 13th January, 1939, from the association was not clear and as no formal request was made for a special amendment, no action was taken in the matter.
I suppose one could say that, since last year’s act was passed but not proclaimed, no action was in fact taken on the request made by the association, whatever the request may have meant. The Minister has now told us that, at the request of the Director of the Fremantle Harbour Trust, section 6 is being altered again. I hope that this singularily fertile, but abortive act is now about to bear fruit.
I would not like to sit down, Sir, without referring to the general limitations on this Parliament in dealing with explosives at sea or in our ports. This Parliament could pass a wider act than it has passed. It could pass an act dealing with explosives at sea or in ports which were being handled in the process of trade and commerce with other countries or among the States, or which were being handled by the Australian defence forces or by Commonwealth instrumentalities. The Parliament has confined itself, in the previous three acts, as well as in this bill, to Commonwealth explosives in the context of defence. On this occasion, it has also occupied the field concerning explosives areas; that is, presumably, areas suitable for munitions or other explosives dumps. I regret that the opportunity to produce a wider code was not taken. Most of Australia’s sea trade concerns interstate or international commerce. To that extent, this Parliament could regulate most of the handling of explosives in Australian ports. As it is, the Parliament is leaving the control of explosives in Australian ports, except where they are explosives in the very limited field defined by this act, to the State authorities.
Only in New South Wales and South Australia is there one authority which supervises all the ports. The other four
States have a multitude of different authorities. There are more than 30 authorities which have to be dealt with when this Parliament does anything in relation to ports. When it comes to explosives and the many other matters related to ports, we have to deal, through the Australian Port Authorities Association, with more than 30 port authorities. The Australian Stevedoring Industry Authority, again, has to deal with more than 30 authorities. The Commonwealth already handles a great number of other matters relating to all the Australian ports. The customs, taxation, migration, stevedoring, navigation and quarantine authorities of the Commonwealth all deal with some aspects of ports. Under this act, we are dealing with some other quite small aspects of ports. I would think that Australia, as one of the great trading nations of the world and potentially one of the great maritime nations of the world, ought to expect a greater lead from this Parliament in modernizing our ports and co-ordinating their procedures.
This bill is unexceptionable as far as it goes and as far as we can tell. I add the last phrase because of our experience with the three previous acts and the regulations made under them. We support the bill, Sir. We hope that from now on the regulation of explosives in this limited sense will be conducted satisfactorily in our ports.
Question resolved in the affirmative.
Bill read a second time, and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
Debate resumed from 16th August (vide page 111), on motion by Mr. Opperman -
That the bill be now read a second time.
– As was indicated by the Minister for Shipping and Transport (Mr. Opperman), this bill is designed to amend the sections of the Navigation Act which, in the opinion of his department, warrant amendment either to cure existing anomalies or to meet present-day requirements.
I hope that the Minister is not setting a pattern for the future and that we will not be asked to consider over a number of years a series of amendments of the kind which now are before us, without the frequent consolidation of the original act and the amending acts.
The principal act contains some 400 sections, and there are 58 amendments covering 85 pages. Now the Minister has presented a bill which contains 35 clauses. He has foreshadowed a further amendment and a new clause. If the department intends to continue to correct anomalies in this way, by the time the next series of amendments is introduced it will be almost impossible to understand the act. This is becoming increasingly difficult to do now and the position will get completely out of hand if this pattern is followed. The act and the amending acts should be consolidated.
As I have indicated, the bill contains 35 clauses which, the Minister has stated, his department feels are necessary to clear up certain problems which have arisen since the 1958 act was passed. The Minister has said that it is the intention of the department constantly to keep the Navigation Act under review with the object of removing anomalies when they become apparent. Some of the matters with which we have to deal in this series of amendments are matters which properly fall within the meaning of the phrase “ improving the act “. I do not propose to delay the House by referring in detail to the amendments which the Minister has stated are designed to improve the act, but the Minister was not clear in his second-reading speech about the purposes of other amendments. They warrant close attention by the House before assent is given to the amendments.
In his second-reading speech the Minister said that anomalies would be removed when they became apparent, and any amendments made necessary by changing circumstances could be promptly effected by amending legislation such as this. Without going into detail at present, I point out to the Minister that he was not very clear about the reason for clause 33 which deals with the removal of troopship organization from the provisions of the
Navigation Act. I shall refer to this matter later in more detail.
My next question relates to the real intention of section 424 of the act and I should like the Minister to reply to it. This section, which is to be amended again, provides that the Marine Council shall be allowed to express an opinion on amendments proposed to be made from time to time by legislative enactment of this Parliament. From a reading of the section I presume that the intention of the act is that the Marine Council shall examine proposed amendments before they are submitted to the House for consideration. Although the act prescribes that the council is obliged on occasion to advise the Minister, and that the Minister on occasion may seek the council’s advice, in this instance council members, except the chairman, were completely unaware that the bill was to be presented. Perhaps the Minister could be forgiven, if this were the first time that this had occurred, but the House will recall that the Opposition’s voice was raised loudly in protest against the 1958 amendments which were introduced in the House without being considered in detail by the Marine Council.
Either section 424 as amended, and as it is to be amended now, means something or it is valueless. No honorable member will disagree with me when I say that the control of navigation is a very intricate problem and it would be all to the good if we could get complete unanimity between the people who are affected by it and the Minister responsible for administering the legislation.
Section 5 of the act which was amended in 1958, and is to be amended again now, provides that the Marine Council shall inquire into and report to the Minister upon any matter arising out of and in relation to the act which the Minister refers to the council for advice. This is what intrigues me: The Minister has complete control over the legislation which is introduced. If my information is correct the council members, other than the chairman, were not aware until the bill was presented that 35 amendments were to be made to the act. I suggest that advantage is not being taken of the Marine Council which now is not serving the purpose for which it was created. I agree that in the main these 35 amendments will help to clarify the act.
Let me now consider clause 7 of the bill which will amend section 43 of the principal act. Reference to the section will give a clear picture of the reasons why the Marine Council should consider legislation of this kind in draft form before it is presented to the House. Clause 7 deals with amendments to section 43 of the principal act and provides for the crews of ships - not including officers - and their complements. If welook at the way in which the complements are set out we find that if the deck complement is less than ten a ship may sail with one less, and in other cases, with not more than one-fifth of the complement less. I put it to the Minister first of all that in assessing a complement that is below that prescribed by the schedule, boys and apprentices should not be counted in the deck complement. I believe that even when the normal complement is ten persons, boys and apprentices should not be included in the assessment if the deck complement is reduced by one. Now that the Minister is amending the provisions relating to deck complements I put it to him that boys and apprentices should be excluded from the number upon which the calculation is based in determining a reduction.
The minimum engine room complement is even more important. I repeat that this is the type of thing that the Marine Council should examine before any legislation is brought before this House. The amendment contained in clause 7 states - “ The minimum engine room complement “, in relation to a ship, means the persons required by virtue of sub-section (1.) of this section to be carried on the ship for employment in the engineroom, stoke-hold, bunkers or boiler rooms of the ship less -
I point out that coastal ships with engines of 400 or 500 horse-power employ only three greasers, working eight hours on and sixteen hours off. If the amendment is given effect it will mean that ships manned in that fashion can be sent to sea with only two greasers, who would then have six hours on and six hours off. This might go on for four or five days, and my information is that it is not humanly possible to work in that way. Six hours on and six hours off should not be tolerated in manning any section of the engine room or stokehold of a ship unless in an extreme emergency, and it should not be provided for by legislation. I ask the Minister to have a close look at that because I give notice now that, while we do not wish to oppose the measure on the second reading because there are a number of good provisions in it, we will move an amendment at the committee stage to provide that in the case of a prescribed complement of less than ten, the reduction, of one can be made only if the complement is not less than four. That would mean that if the complement were four you could reduce the number to three, which would give eight hours on and sixteen hours off. There could be no reduction from three to two which would mean six hours on and six hours off, and which as I have said would be an inhuman proposition in any legislation in the year 1961. I again suggest to the Minister that in calculating a deck complement for the purposes of a reduction he should exclude boys and apprentices from the minimum of ten - and from the other complements, also, for that matter. I am not so much concerned with that, however, as with the provision under which men might have to work six hours on and six hours off.
The next matter I wish to deal with is clause 9, which seeks to repeal section 90 of the principal act. That section, effected by the amendments of 1958 deals with the attachment of wages. The Minister said in his second-reading speech -
When the Matrimonial Causes Bill was before the Senate it was specially amended to clearly establish the liability of a seaman for compliance with a maintenance order. In principle, the protection afforded to a seaman under the present act is not in accordance with modern practices and is very rarely availed of by seafarers in the present day. It is clearly practicable that a seaman should rely upon the protection ordinarily afforded by the law rather than the unusual provisions contained in the present Navigation Act.
There may be a good deal of substance in what the Minister said, but having regard to the unusual features of employment in the maritime industry, I put it strongly to the Minister that if section 90 is repealed provision should be made for advice of proposed action to be given to a seaman in specify a ship whether it be carrying troops, ordinary passengers or anything else. There is no provision to limit the specification to such a ship actually being used as a troopship. This is the kind of - I would hesitate to use the word “ clumsy “ - drafting that should not come to this House. The Marine Council should have a good look at this kind of thing and be given an opportunity to know the reason for it.
I cannot too strongly impress on the Minister the view that I hold. That view was put from this side of the House in very strong terms in 1958. The Marine Council is established under section 424 of the act with the purpose of advising the Minister. The Minister should have expert advice before such amendment as that contained in clause 33 is brought before this Parliament. I put it to him again that unless there are very sound reasons why an Australian crew of an Australian ship that has been used as a troopship should not be subject to all the provisions of the Navigation Act in time of peace, the provision should not be included. My thought at the moment is that this particular set of amendments should be opposed. In any event it should be provided that the power of specification by the Minister is limited to a ship that is being used exclusively as a troopship and not for any other purpose. The terms of the law must not be left as broad as is proposed under proposed section 421.
I have not yet heard the Minister deal with the additional amendments that he has circulated. It seems to me that they are introduced in order to streamline the work of the Marine Council, and if that is the intention I do not think that any one will offer any objection. Of course, our view on these amendments will be subject to what the Minister has to say about them at the committee stage. However, I ask the Minister to consider what we have said in respect of the proposed amendment to section 43 and the proposed section 421 so that we can get clarity on the matter before we reach the committee stage. If at the committee stage the Minister cannot see his way clear to submit to us some proposition that will satisfy us in connexion with the amendment to section 43, and so guarantee that the workers in the stoke-hold or the; engine-room of any ship will not be subject to working six hours on and six hours off, I will find myself, on behalf of the Opposition, forced to move the amendment that I have foreshadowed.
In respect of proposed new section 421,. I suggest to the Minister in all sincerity that if there are good reasons for the inclusion of the section, having regard to clause 3, he should let us know what they are. Personally I cannot see the reasons. I ask him to agree to the principle I have outlined for the Opposition to provide that. “ troopship “ will mean a ship used exclusively for the transport of membersof the forces, instead of leaving proposed section 421 in its present very general terms.
The bill contains 35 clauses, and I canimagine the kind of confusion that will result from these frequent amendments of the Navigation Act. No one in this House will have forgotten the difficulty that we experienced in 1958 in trying to insert into an act running to 291 pages amendments which themselves covered 85 pages. We will have to read the original act and have regard to all the amendments that have been made to it, up to and including the 1958 amendments, before we can hope to understand the significance of further amendments. I have referred to section 90 of the act as a classic example of a provision likely to cause confusion. Section 90 was not amended in 1958. It was then deemed to be a good provision. Now in 1961 the Government intends to remove the section from the principal act, with which we were dealing in 1958. All the other amendments now proposed will have to be considered in the light of the original provisions and the amendments made to them in 1958 or at some earlier stage.
When these 35 amendments are being dealt with we will have to consider the legislation on various bases. First, we will be dealing with provisions such as section 90, which was in the original act, and which it is proposed to repeal. Secondly, we will have to deal with sections like section 43, in the case of which we will be amending the amendments of 1958.
As I have said, the Navigation Act is a lengthy document, running to nearly 300 sufficient time for a defence to be prepared. I take objection to the legislative provision being deleted and the position being covered by regulations, which of course will not be open to a debate such as we have had in this instance. Care will have to be taken to see that although such cases may be rare, in the odd case which does occur the seaman is advised of the position in time to mount a proper defence.
The remaining provision which I wish to contest rather strongly with the Minister is contained in clause 33 of the bill which provides -
After section four hundred and twenty of the Principal Act the following section is inserted: - 421.-
I remind the House that section 421 was eliminated by the 1958 legislation. Therefore, there being no section 421, the space is conveniently available for the proposed new section which reads - “421. - (].) The Minister may, by instrument in writing under his hand, direct that this Act, or such provisions of this Act as are specified in the instrument, shall not apply to or in relation to a troopship so specified. (2.) In this section, ‘ troopship ‘ means a ship used for the transport of members of the naval, military or air forces of the Commonwealth or of any other country, including a foreign country.”
I do not know the reason for the inclusion of this provision. The Minister did not make the reason clear in his second-reading speech. We keep in mind that he said this, in the very first paragraph of his secondreading speech -
In his second-reading speech in the Senate on the very lengthy Navigation Bill 1958, my predecessor, Senator Shane Paltridge, said that he was not unmindful of the fact that our navigation law needs to remain under continual surveillance. He indicated that the Department of Shipping and Transport would be keeping the Navigation Act under review so that, in future, anomalies would be removed when they became apparent, and any amendments made necessary by changing circumstances could be promptly effected, without allowing numerous amendments to accumulate, making necessary lengthy pieces of legislation.
Putting that statement by the Minister along.sdie clause 33 I wonder what anomaly has occurred or has become apparent, or what change of circumstances has taken place that warrants, at this point of time, the inclusion in the bill of this provision in proposed section 421 that -
The Minister may, by instrument in writing under his hand, direct that this Act, or such provisions of this Act as are specified in the instrument, shall not apply to or in relation to a troopship so specified.
We should not overlook the fact that clause 3 seeks to replace the present section 3 of the principal act with the following section: -
Except where the contrary intention appears, this Act does not apply to or in relation to a vessel belonging to the naval, military or air forces of the Commonwealth or of any other country, including a foreign country.
So far as I can see, Mr. Deputy Speaker, unless the Minister has very good reason for the inclusion of clause 33, proposed new section 3, which I have just read to the House, should give the Government all the protection it requires in respect of the movement of military forces anywhere in time of war for the benefit of this country. Why, in the name of goodness, are we asked now to provide that the Minister may wipe out all the provisions of the act with respect to a troopship which he may specify under the clause to which I have referred? Do not let us kid ourselves that this is a provision which will be necessary in case of war, because immediately a conflict started security regulations would give the Minister all the power he needed to deal with any matter of this kind. As I have said, the opening remarks of the Minister in his second-reading speech cause me to wonder what anomaly or changed circumstance warrants the inclusion now of this particular provision. If the Minister has good reasons for including the provision in the act the House should be informed of them; otherwise the provision should not be included. Very good reasons must be given for the proposal that a troopship, or a ship that is to be specified by the Minister as being a troopship, may be handled without the protection afforded under the provisions of the Navigation Act. I put it to the Minister that in sub-section (2.) of proposed section 421 the word “ exclusively “ should appear so that the sub-section would read -
In this section, ‘ troopship ‘ means a ship used exclusively for the transport of members of the naval, military or air forces of the Commonwealth or of any other country, including a foreign country.
At present there is power under this act for the Minister to specify a ship. As things stand, the Minister is to have the power to pages. If it must be brought up to date from time to time, then I strongly urge that it should be frequently consolidated, so that the work of this House may be simplified.
.- I am glad that the honorable member for Blaxland (Mr. E. James Harrison) has expressed general agreement with the majority of the amendments proposed to the Navigation Act. I think we agreed, when we last looked at the act three and a half years ago, that it was necessary to keep it up to date and to have regular reviews of it. I think honorable members on both sides of the House will congratulate the Minister for Shipping and Transport (Mr. Opperman) on having introduced these amendments to bring the legislation up to date, and on having lost no time in doing so.
There is a lot in what the honorable member for Blaxland said about the need for frequent consolidation of this act. It is a piece of legislation that is constantly in need of review, and, remembering the trials associated with our last consideration of the act, I think we must all agree that the suggestion for consolidation at frequent intervals is a good one.
The honorable member for Blaxland has referred to three or four particular clauses of the bill which will, I feel sure, be dealt with to better effect in the committee stages. He referred, for example, to the duties of a marine council. As I remember the original provision, the duties of a marine council are chiefly to advise the Minister on industrial matters, matters of industrial routine, and not on every aspect of the Navigation Act or even, as the honorable member for Blaxland might go so far as to suggest, on all the activities of the Minister’s department. Even if the duties of the Marine Council were not specifically laid down in the act as I am defining them, I believe the general view was that the council should advise the Minister particularly on matters of discipline and other industrial matters. That is why there are representatives of the employers and employees’ representatives on the Marine Council.
The honorable member also referred to matters concerning ships’ complements, and he also had something to say about troopships. I want to deal in greater detail with the question of complement, because I think it is most important. The honorable member gave examples to support his arguments. He referred, for instance, to numbers of greasers. What we must remember in considering this matter is that a ship can go to sea only at the discretion of a deputy director. He has the overriding authority.
– That provision is to be amended now by a further amendment.
– But there is still this over-riding authority. You have to consider the original act and also these amendments.
– These are the last amendments?
– I agree that the situation is difficult. I have already dealt with the necessity for consolidation. If you consider how the provision will read after this proposed amendment you will find that a deputy director will still have full discretion as to whether a ship shall go to sea or not. Obviously, if a situation is likely to arise in which two employees will have to work six hours on and six hours off, a deputy director will not allow the ship to sail, except in an emergency.
– But why should we make such a provision in our legislation?
– You cannot, I feel, provide in an act for every possible eventuality. You cannot say that in relation to every ship the absence of one person will be sufficient to prevent it from sailing. You must leave such a decision to the man on the spot, the deputy director, who is skilled in such matters. He is a man who has had long experience in the maritime industry, and he knows when it is safe to let a ship sail and when it is not. I believe it is better for us to leave discretion in such matters to the experts than to try to cross every “ t “ and dot every “ i “ in all our legislative provisions.
Let me now turn to rather wider aspects of the matter. When we come to revise the Navigation Act I believe we should consider how it has worked since the last amendments were inserted, and how the various people involved have fared. While no drastic alterations or amendments are proposed on this occasion, I believe we should take a broad view of the coastal shipping industry in Australia, having in mind the changes that have taken place since we looked at the legislation in 1958. Some major changes have occurred in the industry since that time. First, there are no longer any passenger ships operating on the Australian coast. This affects the troopship angle, to which the honorable member for Blaxland adverted. When we had passenger ships operating on the coast it was obvious that tho:e ships could be used as troopships. Now, if we suddenly need troopships we shall have to get them from overseas. This will involve us in some difficult decisions if we insert in the legislation the word “ exclusively “, as has been suggested. We might, for instance, get a ship that will be used only partly as a troopship, while still being used partly to carry civilian passengers. We will then be faced with the problem of converting a ship to comply with all the provisions of the Navigation Act covering such ships, when we may possibly intend to use it for only one or two journeys and then to let it go. That is one problem that has been raised by changes in the coastal trade since 1958.
It is also a fact that the carriage of general cargo has declined to some extent during the last three years, while there has been an increase in bulk cargoes and in the number of ships carrying containers. These developments have altered the pattern of our coastal shipping to a significant extent.
Since the Navigation Act was last amended there has also been an improvement in working conditions in ships, as I am sure the honorable member for Blaxland will agree. Crews’ quarters are being improved in all the new ships being built from year to year. I think the operations of this act have had much to do with this development. Fewer seamen are now being employed on the coast as a result of some of the changes to which I have already referred. lt is interesting to note the number of ships operating on the coast and the number of seamen being employed. In 1959, 129 ships were operating on the Australian coast, but this number has now been reduced to 116. The number of seamen employed has fallen from 4,180 in 1959 to 3,825 to-day. The number of members of the Seamen’s Union employed on ships has fallen from 2,420 in 1955 to 2,060 in 1959 and 1,900 to-day. This shows thai the number of seamen employed is liable to fall constantly. At the same time, the number of waterside workers is also falling. Roughly, the number of waterside workers employed in Australia is falling at the rate of 1,000 per annum. This shows that there is a condition on the coast that should be causing a great deal of worry to all those involved in this industry. It is with this in mind that I want to put a few facts before the House.
This condition is affecting not only the employees - the seamen and the waterside workers - but also the profits of the private companies operating in the industry. This can be seen in the number of take-overs that have been effected in this industry during the last two or three years. Shareholders are dissatisfied with the small profits being earned in the industry and mans have demanded that the ships be sold and the capital transferred to some other field in which it will earn a better return. Therefore, both the employers and employees in the industry have suffered as a result of the changes that have taken place since we last looked at the act. If the Navigation Act is in any way responsible for the changes, we want to ensure that it is frequently amended to keep it abreast of such changes as a change from general cargo ships to bulk cargo or container ships. Accordingly, I direct the attention of the Minister to this matter.
During the past few months, members of the Opposition have spoken on shipping. I point out to them that if the changes to which I have referred are occurring on the coast where we are able to afford some protection to the industry, the changes would be much greater if we were engaged in overseas shipping activities. The Deputy Leader of the Opposition (Mr. Whitlam) and other Opposition members have said that we should engage in an overseas shipping service. Having observed the changes that have taken place on the coast, I think we should see what changes would have been effected if we had adopted the policy advocated by the Opposition from time to time. I can think of no person whose views would have a greater bearing on this subject than the Chairman of the Australian National Line. Presumably, if the Opposition were the government and carried out its policy of engaging in overseas shipping activities, it would use the Australian National Line. Therefore, we should consider the views of the chairman of the line. He presented a paper to the Victorian branch of the Economic Society of Australia and New Zealand in April, 1960, on the problems facing Australian shipping in the next decade. 1 think this is fairly important. He said that so many people had asked why the line did not run its vessels overseas that he would provide an answer.
He gave a most interesting table in which he compared the operating costs of a 10,000-ton motor ship operating under the British flag or the Australian flag. The figures he gave in each instance were in sterling. The crew’s wages per day under the British flag were £83 and under the Australian flag £193. Provisions cost £15 a day under the British flag and £21 under the Australian flag. Stores cost £18 under the British flag and £23 under the Australian flag. Insurance was the same at £29. Surveys and maintenance - this is extremely important - under the British flag cost £58 and under the Australian flag £110. Sundries cost £2 and £12 respectively. The daily cost of a ship under the British flag was £205 and under the Australian flag £388. He pointed out that depreciation, management, administrative or related port costs were not taken into account. All these were materially higher in Australia than in any other country save America.
We would be competing not only with British ships but conceivably with ships of, say, Greece or other nations. The chairman gave some extremely enlightening figures. I have not the time to read them all to the House, but he pointed out that the wages of an able seaman on a Greek ship with overtime would total £41 a month but for an Australian seaman the total would be £128 a month. In 1959, the crew of a Greek ship would earn £1,017 a month compared with £2,138 a month for the crew of an Australian ship. These figures need to be kept in mind. But the wage discrepancy is greater than the figures I have given because Commonwealth manning scales require more seamen to be carried on a ship than is the practice in other countries. We come now to the question of complements which has been mentioned by the honorable member for Blaxland. The chairman said -
For example, an 8,000-ton oil burner on the Australian Register carries a crew of 46 men against one of 28 demanded for the same ship by the British Board of Trade.
Do members of the Opposition who advocate that we should establish an overseas shipping service intend that when competing with the ships of other nations our ships should have the same complements as British ships have or do they intend that we should maintain the manning scale laid down for ships operating on the Australian coast? If we maintain the same complement, it is quite clear that the Australian taxpayer will be called upon to foot a very much higher bill than the taxpayers of other nations are asked to meet. Opposition members should look very closely at the figures given by a man who is actively engaged in Australian shipping.
To learn how we would operate with an overseas service, we could take the time charter rates, which imply the hiring of a ship for so much per dead weight ton per month. The cost of operating an Australian ship would be 32s. on this basis and the charter rates at the time of the article I am referring to were only 14s. Is the Australian taxpayer to meet the difference between 32s. and 14s.? I have been referring to the tramp charter rates. It is important also to look at the liner trade. The liner business operating to Australia at the present time under the control of overseas interests is represented by magnificent fleets of fast refrigerated vessels serving the Australian meat and wool trades. Australia possesses no vessels of this class. If we wanted to go into this trade, it would be necessary to have approximately 150 ships to cater for the business offering, and the capital cost of building those ships would be about £4,000,000 per ship. Captain Williams goes on to say -
As to what number should be under the Australian flag is any one’s guess, but little guesswork is wanted regarding the economic result of such a venture in competition with the overseas ships, if the comparative operating cost figures given earlier are any guide. Running costs, moreover, are but one part of the problem. Another is the control of cargoes. Is it to be expected that a Continental wool-buyer, for example, will favour an Australian vessel against a ship under his own flag? Or, if little cargo is offering for the Australian ship in the Commonwealth in the slack season, is she then to compete in the South American trade? Heavy and continuous subsidization may be considered, but from the economic viewpoint, to what end?
Captain Williams also says -
Such are the prospects facing the Australian owner wishing to participate- in overseas trading under Australian conditions. Failing heavy subsidization, … it seems unlikely that the Australian flag will be observed to any extent in foreign ports in the near future.
The Deputy Leader of the Opposition (Mr. Whitlam) has referred at times to the improvement which could be effected in our balance-of-payments position if we had our own overseas shipping line. Let us examine how our balance-of-payments would be affected. I propose to quote from another document which has been supplied to me. Amongst other things, that document states -
For every £1,000 of freight received by the vessel- that is, a vessel operating from overseas to Australia - about £270 will, under United Kingdom ownership, be spent in Australia; so that the net drain on the balance of payments is £730. For the equivalent Australian vessel, assuming she operates as economically as possible . . . £530 will be spent overseas. The net gain, therefore, to the balance of payments is £200 per £1,000 of freight earned.
This gain per annum would involve an investment of £6,600 assuming the ship is built in Australian yards at Australian prices. This capital would have to be found in Australia . . It will, however, involve a building subsidy of about £2,200 by the taxpayer which presumably has to be serviced - say £170 per annum on a sinking fund basis over the life of the ship.
The difference in operating costs has to be subsidized. We estimate this at £190 per £1,000 of freight earned. Thus, in order to achieve a balance-of-payments saving of £200 per annum the cost to the Australian taxpayer is £360 per annum - a ratio of five to nine.
– Order! The honorable member is wandering a little too far from the bill. I ask him to relate his remarks to the bill.
– I shall come back to the bill. I am dealing with the question of complements, which was raised by the honorable member for Blaxland (Mr. E. James Harrison) and which is covered by clause 7 of the bill under consideration. In considering the amendments proposed in the bill, we must look at what will be the effect of having such large complements for ships operating either on the coast or overseas. In conclusion, let me say that a worth-while saving in the balance of payments of, say, £10,000,000 per annum, would need a subsidy of nearly £18,000,000 per annum and a capital investment of about £330,000,000. Would it not be much better if, instead of investing that large amount of money in an overseas snipping service, we invested it in other avenues where a better return would be achieved? For instance, an estimated expenditure of £35,000,000 on improved berthing and coal-loading facilities in Australian ports could increase our coal exports by £10,000,000, whereas the balance-of-payments gain resulting from investing £35,000,000 in Australianbuilt ships would be only about £1,060,000. It will be seen, therefore, from what I have said about the factors governing this industry, both on the coast and oversea;,, that it is a high-cost industry and that the question of complements is an important factor in that high cost.
I have shown that there have been changing conditions. In the act which it is proposed to amend, there are a number of built-in regulations. The Opposition argues that those regulations should be even more strict and even more detailed. I suggest that it would be wrong to adopt the suggestion put forward by the Opposition because, the more we put into regulations and the less we leave to the discretion of the Deputy-Director of Navigation, the more difficult will it be for us to meet the demands of changing conditions within the industry, especially when those changes take place so rapidly as they are taking place at the present time. Even now new methods of handling cargo are coming into operation. For instance, the coastal shipping trade has evolved a method of providing door-to-door service instead of just operating from wharf to wharf. I am glad to hear that to-day it is possible for shipping companies to quote cheaper rates for the carriage of goods from, say. Sydney to Fremantle, on a door-to-door basis, than road, rail or air transport organizations are able to quote, and that the shipping companies are able to provide a faster service because of increased efficiency in the industry due to changing conditions.
During the past three years, both employers and employees have suffered under changing conditions, and it is to everybody’s interest that a much closer scrutiny be kept over changing conditions than was done in the past. The proposed amendments that we are considering go only part of the way to meet changing conditions. I hope that the Minister will keep a close watch on any changes as they occur and that he will make more frequent amendments to the legislation as they become necessary. It is only by quick action to meet changing conditions that we can hope to establish greater efficiency in Australian coastal shipping. Again, it is only by acting quickly to meet changing conditions in the industry that we can hope to check the present decline in the employment of seamen and, eventually, to reverse the move, and at the same time ensure increased profits to shipowners, so that they will be encouraged to invest more money in the industry and put more ships into the trade. I feel that the proposed amendments are worth while and I hope that it will not be long before it is necessary to make other amendments to the legislation.
.- I welcome the Minister’s declaration of his intention to pursue the policy of his predecessor of keeping the Navigation Act under review so that in future anomalies will be removed when they become apparent, and any amendments made necessary by changing circumstances may be promptly effected without allowing numerous amendments to accumulate, thus making necessary lengthy pieces of legislation.
I wish to direct my remarks to the difficulty of implementing legislation which this Parliament passes and ratifying treaties which the Commonwealth Government signs. This is the fifth Navigation Bill with which this Parliament has had to deal daring the term of this Government. The act passed in 1952 was assented to in December of that year. Some sections of it were proclaimed to come into force in the same month, others in June, 1953, and yet others in March, 1957. The 1953 act was assented to in December, 1953, but it was not proclaimed to come into operation until June, 1959. The 1956 act was assented to in June of that year and was proclaimed in August, 1956. The 1958 act was assented to in May of that year. It comprised 208 sections. Four of these sections were not proclaimed until August, 1960, and 30 of them are not yet proclaimed.
Some of the delay in proclaiming these sections is due to the delay in making the regulations. The instances I shall quote concern the ratification of six Internationa] Labour Organization conventions abou which I have asked the Minister for Shipping and Transport (Mr. Opperman) some questions from time to time. The earliest dates from 1923, the next from 1936, three from 1946 and one from 1949. All of these conventions could be ratified, first, if this Government were to make regulations under the Commonwealth Navigation Aci and, secondly, if the State Parliaments were to pass complementary legislation. Convention No. 23 - Repatriation of Seamen, 1923 - concerns the Commonwealth only. It is not in force because the Commonwealth did not pass legislation to implement it until 1958 and the regulations to implement the act have not yet been made. The next batch of conventions were Convention No. 58 - Minimum Age (Sea) Revised, 1936; Convention No. 69 - Certification of Ships’ Cooks, 1946; Convention No. 73 - Medical Examination (Seafarers), 1946; and Convention No. 74 - ^Certification of Able Seamen, 1946. These could not be implemented until the 1958 act was passed, but the relevant sections of that act cannot be proclaimed until the regulations are made. Only in one case - Convention No. 92 - Accommodation of Crews (Revised), 1949 - is the Commonwealth legislation already in effect. It came into effect under the 1958 act. We have to wait for the other five. Our own legislation cannot come into force until regulations are made; but even so, the last five conventions in point of date cannot be ratified by Australia until the State Governments have passed complementary legislation.
I shall quote the replies of the Minister to show how difficult it is to modernize
Australia’s navigation laws so long as we have divided legislative power over navigation in Australia. The 1936 convention was sent to the States in June, 1937. The three conventions which we supported in 1946 were sent to the States in April, 1948. The 1949 convention was sent to them in March, 1950. None of the States has yet passed the legislation which it is necessary for them to pass before Australia can ratify these conventions. This matter has been dealt with in correspondence and at conferences between the Commonwealth and the States on some occasions since then. The States originally replied that ratification was not possible under their existing legislation. The conventions were all considered again as part of the comprehensive review of all Australia’s unratified International Labour Office conventions by the Departments of Labour Advisory Committee in April, 1960. It was again agreed that ratification was not yet possible. Since then, there have been consultations with the I.L.O. on the requirements of the conventions including the manner and extent of their application to intra-state shipping. The Minister for Shipping and Transport told me, as recorded in “ Hansard “ of 31st August last -
The advice from the I.L.O. is currently being studied.
The relevance of these conventions which I have quoted is that in five cases out of the six, the sections of the act which were passed in 1958 dealing with these conventions cannot be proclaimed until the regulations have been made. In respect of another five of the six conventions I have referred to, Australia cannot ratify the conventions until the States have passed complementary legislation. I feel that this illustrates very clearly the handicaps which Australia imposes on itself until this Parliament takes the necessary steps to modernize the Constitution. The Constitution cannot be modernized in this respect until the Commonwealth Parliament passes an act for a referendum and the people approve that referendum. The Constitutional Review Committee unanimously recommended over three years ago that this Parliament should put a referendum to the people on this subject.
Earlier to-day, I referred to the gap in this Parliament’s powers concerning fisheries because of an extraordinary lapse by the founding fathers. Here is another case of a lapse by the founding fathers which has impeded this country in subsequent decades. The position at the time of federation is set out thus by the first Commonwealth Solicitor-General, Sir Robert Garran, in a paper prepared for the conference of Commonwealth and State Ministers on constitutional matters in 1934 -
It is due to an oversight in the hurried last stages of the drafting of the Constitution that the Federal Parliament has not express and plenary power to make laws with respect to navigation and shipping. Canada has that power. In the Australian draft Constitution of 1891 “Navigation and Shipping “ were included among the specific subject matters of Federal legislative powers. Al the Federal Convention of 1897-8 the same provision was inserted. At a late stage of the sittings of the Convention it was pointed out that in the United States Constitution navigation and shipping were deemed to be implied from the trade and commerce power and the Admiralty jurisdiction and it was suggested that the express mention of navigation and shipping in the Australian Constitution might be construed to limit the trade and commerce power. Accordingly, the subject-matter, navigation and shipping, was omitted and by the declaratory words of section 98 the trade and commerce power was expressed to extend to navigation and shipping. The fac was overlooked that the trade and commerce power was limited to interstate and external trade and that this limitation also would extend to navigation.
I have illustrated, 1 hope, with respect to International Labour Organization conventions, how difficult it is for this Parliamen to carry out its international engagements, extending back for 38 years. Each of these conventions was supported by the Australian Government representatives at the various conferences of the organization. The Australian Government at the time wanted to apply these laws to Australian shipping. We have waited all this time and we still cannot ratify these conventions, because the Commonwealth Parliament has not the power to do so and because the States either have not the power or will not exercise it. I do not say that this excuses us for not having made, in the last two and one-half years, regulations to carry out the provisions of our 1958 act which would at least have applied these laws to shipping in interstate trade.
There is one other feature of the disabilities concerning intra-state shipping which I should mention. It appears that ships which are engaged in intra-state trade only are still registered and still operate under a British act - the Merchant Shipping Act of 1 894. That act was amended by the United Kingdom Parliament in 1958, but the amendment has not been expressed to apply to British ships registered in the Australian States. This Parliament cannot pass laws concerning these intra-state ships. The State parliaments may not be able to pass laws concerning these ships, since they are British ships. The position may be that the State parliaments, which are still the parliaments of colonies - they are not self-governing territories - have to ask the United Kingdom Parliament to amend this act so as to cover the British ships which are engaged in intra-state trade in this country.
The relevance of this is that if a person loses his life or is personally injured in an intra-state shipping accident his relatives’, or his own, compensation will be limited to the British scale applying in 1894. That scale provided that compensation to all those affected should be limited to £15 sterling per registered ton for personal injury or loss of life and £8 sterling per ton for damage to property. The British act of 1958 increased these amounts to £73 sterling per registered ton and £24 sterling per registered ton respectively, and these are the rates which now apply to United Kingdom shipping. The Commonwealth Parliament can do nothing about intra-state shipping. The United Kingdom Parliament has chosen to do nothing about it. It may be that the State parliaments can do nothing about it. The only way to deal with it may be for the State governments to ask the United Kingdom Parliament to apply its act to intra-state shipping in this country. Clearly, Sir, if this Parliament had the plenary power over shipping which the Canadian Parliament and the United States Congress have, and which the founding fathers intended this Parliament to have, we could modernize and co-ordinate the law with respect to these matters.
About three years ago, one of the 60-milers, the “ Birchgrove Park “, engaged in the trade between Newcastle and Sydney, was lost. The widows of the seamen had to be content with compensation limited to the scale of £15 sterling per registered ton of that very small ship. This is not, therefore, an academic matter.
It is a matter which has arisen in recent years, and it is something about which the Commonwealth Parliament can do nothing at present.
I have referred to the regulations which are made under the Navigation Act. I want to direct attention, as I did in 1958. when the act was last before us, to an anomaly in the loading and unloading regulations made under this act which has been disclosed by decisions of the High Court of Australia. There was a case of very real hardship concerning a Mr. Long, one of the constituents of my friend, the honorable member for East Sydney (Mr. Ward). The High Court held that the duties created by the loading and unloading regulations are imposed on the person actually exercising control on the spot where loading and unloading operations are being carried out, and not on the employer of that person. If a man is injured at work now because the obligations imposed by the regulations have not been carried out, the man can in fact sue only the man who was superintending the job on the spot.
– He may be as poor as is the victim.
– Yes. The man who is injured can sue only another man whose salary and possessions possibly are not very much greater than are his own. The employer who provided the machinery - who has to buy it, maintain it and replace it - goes completely scot-free under the regulations. I asked a question about this matter of the Attorney-General (Sir Garfield Barwick), who had appeared for the employer of Mr. Long in the various court proceedings. The Attorney-General said -
That may be a good way of making the foreman vigilant, but it is no compensation to the injured man if the foreman is not vigilant. The injured man can obtain reasonable compensation only if the employing company is made liable.
The Attorney-General said that the intention of the legislature was to make the man in charge of the hatch responsible, but I would not attribute that intention to the legislature. In fact, the regulations were made by the Government. I do not believe that that was the intention of the Government which made the regulations. I do no. think that it would be the intention of most members of the present Government. This is the Government which, at my instigation, introduced legislation which accepted for the Commonwealth liability with respect to the negligence of its car drivers. Honorable members will recall that, previously, Commonwealth drivers themselves could be sued, but the Commonwealth could not be sued unless the plaintiff could establish that the driver was driving in the course of his employment. If the driver was nol driving in the course of his employment, his income and possessions were the sum total of the resources available to compen- sate a person whom he had injured. 1 think that this Government, in the few weeks of office remaining to it, ought to see that justice is done in the future to persons who are injured in loading and unloading operations on wharfs. The regulations made under the act with which we are now dealing should be modernized. They ought to be brought into line with the ideas of culpability which we apply in relation to our roads.
– I assure the honorable member that that matter is being well looked at now.
– 1 compliment the Minister on the review which he is making.
I have referred to international conventions made at successive conferences of the International Labour Organization. 1 want to refer now to two other conventions concerning navigation and, in particular, this act. The first is the International Convention relating to the Limitation of the Liability of Owners of Sea-going Ships, which was done at Brussels on 10th October, 1957. The Minister told me on 6th September last year that legislation was necessary before the convention could have effect in Australia. He added -
There are some constitutional problems involved and these are at present being considered.
On 19th October last year, in reply to a further question he told me -
The States have indicated that they are generally in favour of ratification of the convention. . . . The current consideration that is being given to the matter relates to the possibility of giving effect to the principles of the convention before the convention itself comes into force. This has given rise to some complex legal problems which are receiving the attention of the Attorney-General’s Department.
If this Parliament had the powers over navigation which the founding fathers intended that it should have, and if it had the powers which the Constitutional Review Committee unanimously recommended over three years ago that it should seek from the people by referendum, unquestionably it could amend this act now in relation to all Australian shipping - intra-state, interstate and international - to make our laws comply with the convention concerning the liability of owners of sea-going ships. The 1958 British act to which I referred previously implements the convention in relation to British ships registered in Great Britain.
Since then there has been another convention, the International Convention for the Unification of Certain Rules Relating to the Carriage of Passengers by Sea, done at Brussels on 29th April last. In this case also this Parliament would be able to carry out its international obligations if it had the complete powers to which I have referred. 1 now want to mention briefly the matter of international shipping in Australian hands, public or private, to which the honorable member for Fawkner (Mr. Howson) made such interesting reference in his speech. The problems which worry honorable members on this side of the House and, we believe, increasing numbers of people in Australia, are, first, that Australia has to spend more money every year on foreign shipping, and, secondly, that the producers of our export income are penalized by that fact. I should not think it would be disputed that the complement of Australian ships would be more expensive than the complement of British ships.
By the same token, it is plain that Australian seamen are not and would not be paid wages as high as those which are paid to the crews of American ships or of ships operated by companies owned by Americans but which are registered under flags of convenience. But even if Australia: had to pay more to the crews of her ships, and even if Australia had to subsidize those shipping operations, Australia nevertheless would save foreign exchange and would gain a higher income for her export products.
To-day’s report of the Australian Canned Fruits Board for the year 1960-61 contains this statement relating to freight rates -
Since 1951, the rates have advanced by 58 per cent., and as canned fruits traditionally are offered for sale to the United Kingdom on a c.i.f. basis, the freight charges are carried by the Australian exporter, lt is a situation which cannot be viewed with equanimity within the fruit-canning industry, especially as certain major competitor countries substantially interested in the United Kingdom market appear to be more leniently treated in respect of marine freight rate adjustments.
A couple of weeks ago the Australian Meat Board reported in this way -
Freight rates to the United Kingdom from New Zealand and Argentina have increased by slightly more than 25 per cent, since June, 1955, whereas corresponding rates for Australia have risen 62 per cent, for frozen beef, 40 per cent, for frozen lamb and 34 per cent, for frozen mutton.
The final reference to this matter is contained in the 1961 annual report of the Australian Coastal Shipping Commission, tabled three weeks ago. It is in these terms -
The five years of operation have been marked by steadily rising wages and other costs. Iti the main, it has been possible to absorb these increased costs without corresponding advances in freight rates. Apart from an upward adjustment following the basic wage decision in 1958, there has been no general rise in freights charged. In some cases, indeed, it has been possible for the Line-
That is the Australian National Line - to reduce its charges.
In contrast to that, the Minister for Trade (Mr. McEwen), in reply to questions in relation to this matter, has told us that in those five years there have been five increases in freight rates charged on Australian exports by overseas shipping lines.
A couple of weeks ago I stated in the House that Australian exporters of steel - there is only one - to Hong Kong, Singapore, Indonesia and the west coast of America have to pay 50 per cent, more freight than is paid by European or British exporters of steel to those destinations.
– We have had a letter from the chairman of Broken Hill Proprietary Company Limited in relation to that matter in which he denies certain remarks which have been attributed to him.
– I was reading from a letter dated 29th September which the chairman of B.H.P. had sent to me. I have not time now to read all the figures contained in it but I shall show it to the honorable gentleman if he wants to see it. Better still, with the concurrence of honorable members I shall have the whole letter incorporated in “ Hansard “.
The Deputy Leader of the Opposition is not very definite about the details of the letter.
– It contains details of freight rates from Australia to Singapore, Hong Kong, Malaya, Indonesia and the west coast of the United States of America and Canada, and from the United Kingdom and Europe to the same ports.
– Would you incorporate the whole letter?
– Is leave granted?
– No, I think not.
– I have not time to read the whole letter, but according to the chairman of B.H.P. , stevedoring and loading rates are more favorable in Port Kembla and Newcastle than they are in British and European ports. The point I want to make is this: If we had Australian overseas ships we would be able to compete with other countries in the matter of freight rates, which would mean that our overseas income would be augmented and the drain on our overseas reserves would be reduced. For that reason, we strongly believe that Australia should have some international ships. We are the only trading country of any size in the world which depends entirely on foreign shipping for all its imports and exports. That is why our freight rates are rising constantly and our export income is falling constantly.
– Order! The honorable member’s time has expired.
– I do not intend to speak at great length on the measure which is before the House, more particularly as the Deputy Leader of the Opposition (Mr. Whitlam) has dealt with the legislation relating to navigation and shipping so exhaustively and has given such lucid explanations of the defects and weaknesses of the legislation which has been enacted in the past. I do not think that any valid objection can be raised to the measure which is now before us.
The Deputy Leader of the Opposition referred to the findings of the Constitutional Review Committee which made an exhaustive inquiry into the operation of legislation relating to shipping and navigation and its impact on the relationship between the Commonwealth and the States on the one hand, and the Commonwealth and the nations of the world, on the other hand. I find myself entirely in accord with his statement that here is a subject which, on all the evidence placed before us, was intended to be handled by the Commonwealth Parliament of Australia, and that we have suffered various disabilities because, apparently through an oversight, that intention was not carried into effect. One extraordinary fact which emerges from that situation, and which the Deputy Leader of the Opposition (Mr. Whitlam) did not refer to, is that while the powers of the Commonwealth provide for the control of shipping generally, when a ship from a foreign port enters say the port of Sydney, for instance, the Commonwealth has no power over it because it is neither an interstate nor an intra-state vessel. The situation is Gilbertian. I do not put this forward as my own statement of the position, because it was placed before us by learned men of law who understood the working of the Navigation Act. This weakness contains the seeds of considerable trouble for this country.
Another point raised was that in certain respects, jurisdiction over British ships engaged in intra-state services is exercised under legislation of the Imperial Parliament and not by the Commonwealth or the States.
I suggest that it is extraordinary that a country such as Australia, which plays a very prominent part in world affairs, should find itself in such a position.
In one extraordinary case that came under my notice, a British seaman, who - if I may put it this way - had left his employment on a ship without consulting the captain, went up country to my electorate and obtained work on a fairly remote property. He did so well that the owner, who had a second property, made him manager of it. This man was rendering first-class service and his character was excellent, but then somebody who had a grudge against him suddenly discovered that he was a seaman who had left his ship two or three years previously. He was apprehended, placed in gaol under what I consider to be an archaic act, and then compulsorily returned to Great Britain. It is about time that Australia had an act to control such matters instead of being compelled to rely upon acts of the Imperial Parliament which are relics of a different day and age. If every man of British origin who had left his ship in Australia were to be haled before the authorities and sent overseas, there would be some curious reverberations.
Under the navigation and shipping powers of the United States of America - powers which, I think, we should have in Australia - it has been possible for the Government of that country to develop its inland rivers because navigation is involved whether the river stretches 1 mile or 1,000 miles from the coast. With a minimum of constitution trouble, the United States has been able to carry out such important developments as the Tennessee valley scheme. Yet we are blundering along! Between Brisbane and Newcastle, in a stretch of about 700 miles, there is not one port that can regularly take even interstate ships. In Tasmania, on the other hand, freight is sent directly overseas from both Burnie and Devonport, which are quite close to one another. Because there is no co-ordinated policy it has been necessary for the Commonwealth to go almost cap in hand to the Government of New South Wales and say, “ Here is the money to make Newcastle and Port Kembla ports that ships of the size that our customers want can use”. This work, which ought to have been done years ago, has been neglected. The Commonwealth cannot act directly unless it can say, as it did in the case of the Snowy Mountains scheme, that defence is involved.
I do not want to delay the House, but I am entirely in accord with the deputy Leader of the Opposition’s view that now that the defects in our shipping powers have become so apparent, we should adopt the unanimous recommendation of the Constitutional Review Committee that power over navigation and shipping be vested entirely in the Commonwealth Parliament, as was intended by the founding fathers. I hope that when the next session of Parliament begins, this Government, if still in office, will carry out the recommendations of that committee and let the people decide this question by referendum. If we are not in office - which is hardly likely - I trust that the incoming government, whose spokesmen have so eloquently put the case to-day, will take the necessary action.
Question resolved in the affirmative.
Bill read a second time.
Clauses1 to 6 - by leave - taken together, and agreed to.
Section forty-three of the Principal Act is amended -
– As I indicated to the Minister for Shipping and Transport (Mr. Opperman) and to the House, clause 7 provides first of all for the minimum complement of deck hands. I told the Minister that I hoped he would say something in reply to what I said and that it was our view that in calculating the complement apprentices and boys should not be included in the number. The point I was concerned with is that under proposed new sub-section (12.) it is possible for the boiler-room staff, and particularly the greasers, to be reduced to two. In the case of a ship with an engine power of 400 to 500 horse-power this could entail the vessel going to sea with only two greasers in the boiler room. That, in turn, would entail the greasers working six hours on and six hours off, and in some of our coastal ships they would have to do that for four or five days. The Opposition regards this as being unreasonable. I know that it has been said - not by the Minister, but by one of his supporters - that some flexibility should be permitted the authority, but I believe that when this Parliament is dealing with important legislation we should be clear in our own minds as to the industrial conditions that might result. I have said, and I repeat, that if we adopt this clause in its present form we make it possible for the authority to decide that a ship may go to sea with only two greasers, who would be required to work six hours on and six hours off. We, as a committee of this House, by adopting this clause would have said in advance that this was in order. So far as we on this side are concerned, such a thing would not be in order.
When we are prescribing the minimum conditions that shall apply in accordance with legislation we must be careful to see that the intentions of the Parliament are safeguarded, and that the minimum conditions prescribed will not cut across standards in which we all believe. I say that if the committee agrees to the clause as it stands, and the authority is thereby permitted to reduce to two the number of greasers in one of our coastal ships, these men may be required to work for four or five days on the basis of six hours on and six hours off - and that is not a condition which ‘bis committee should tolerate.
It is no answer to say that it is a matter for the authority to determine. It is we who are responsible for amending the Navigation Act to provide for the minimum complement that may be carried, so surely the responsibility to see that the minimum is not such a low minimum as is provided in this clause rests on our shoulders. Under the clause the complement of three can be reduced to a complement of two, which would entail the two men working the hours that I have said.
My proposition is a simple one, and I suggest in all sincerity that the Minister accept it. If he and this committee believe that the authority would not dare to reduce the complement below three - a reduction which, as I have said, would entail the two men working six hours on and six hours off - then let us say so. We can do so quite simply by providing that the complement which may be reduced by one shall not in the first place be in itself less than four. Surely neither the Minister nor the committee can take exception to that. If the committee does take exception to it that will mean that we are not facing up to our responsibilities.
I do not propose to press for any amendment so far as deck complement is concerned, because it may well be that the authority could deal with that matter and take into account what boys or apprentices were involved. In relation to the engine room complement, however, I think that we should have complete clarity in our minds as to what we are doing. We should ensure that what we do here will not permit the complement of, for instance, greasers to be brought down to two, which would involve each of them working six hours on and six hours off instead of the eight hours on and sixteen hours off which is possible when the complement is three. I know that the Minister can say that if there are only two greasers they split the missing man’s wages and benefit that way, but that is not an answer. We are making a legislative enactment which permits the possibility of men being required to work six hours on and six hours off in the engine room of a vessel. In this year, 1961, that is not good enough in the view of the Opposition.
I leave the matter at that, but I ask the Minister to agree to my proposition. I know that it will work out all right. I also know - and I say this with the greatest emphasis - that we should not tolerate the enactment of legislation that will enable a complement of three to be reduced to a complement of two. In the first place, we have to take into account the possibility of some injury during a trip. This can happen whether the vehicle be a ship, a railway train or a motor vehicle. These risks exist, and we should not agree to any provision so unreasonable as the provision in this clause.
– Does the honorable member wish to move an amendment in this regard?
– I will wait and see whether the Minister agrees with my proposition.
– I suppose the honorable member’s proposition will have to be moved as an amendment. I should like to bring before the honorable member’s notice that the purpose of these amendments is based on the desire for co-operation and a reasonable adjustment for the benefit of the smooth running of the shipping industry to the satisfaction of the men engaged in it. I think it will be evident, from a reading of all the amendments, that study has been given to the matter, and I regret that we are at variance with the Opposition in our opinions on the amendments, especially when the honorable member for Blaxland (Mr. E. James Harrison) has so obviously given a good deal of study to them, as his introductory remarks show.
– The Australian Council of Trade Unions did too.
– Of course, I do not know whence the honorable member received co-operation in the study of the bill, but I expect it came from the A.C.T.U. I should like to say that 1 picked up the very point on which the honorable member has spoken, during the discussions concerning the measure. After we had looked over the clause I was quite sure that as it stands it met requirements regarding the minimum complement. I agree entirely that it would be most undesirable for ships to be worked in the way mentioned by the honorable member, but the safeguard is that the Deputy-Director of Navigation does hold the responsibility for the safety of a ship, and that is by no means an unimportant point. No Deputy-Director of Navigation would allow a ship to go to sea that would be compromised on the safety side in respect of the strength of its complement.
– Then why not cover that in the legislation?
– There are probably occasions where three would be necessary. This amendment, of course, was discussed at some length before it was presented to the Parliament. Having heard what the honorable member has had to say on the matter I can assure him that the provision will never be enforced in such a way as to cause dissatisfaction amongst men working on ships. Their interests will be safeguarded by the deputy-director. Having these considerations in mind, I cannot accept an amendment.
– I am not satisfied, Mr. Chairman. Ministers come and go, and so do persons in whom authority of various kinds is vested. This matter has been considered, according to my information, at the highest trade union level. As a matter of fact, I always consult the Australian Council of Trade Unions on matters of this kind. On this occasion the A.C.T.U. has voiced its considered opinion that the Parliament should not legislate in this way. It should not leave open such a question of principle. The Minister for Shipping and Transport (Mr. Opperman) has told us that nothing detrimental to the seamen concerned would happen, because a deputy director would not allow it to happen. If. the Minister is convinced that such a thing will not happen, why do we not make sure of it by providing, by legislative enactment, that it will not happen? Why place the responsibility on a deputy director to make a decision that we should be making? After all, we are the legislators.
– The Minister has given his decision.
– Well, 1 do not accept the proposition that every Minister is. always right. I shall move my amendment. I believe it is most important that when we are dealing with legislation having to do with minimum requirements, in any field whatsoever, we should lay down those minimum requirements with clarity. I believe we should correct the weakness that the Minister admits is present in this provision. I therefore move -
In the definition of “ the minimum engineroom complement “ in proposed sub-section (12.), after “ ten “ insert “ , but not less than four “*.
I think it is necessary for us to ensure that there must always be enough men in the engine-room to provide for them working eight hours on and sixteen off. If there is anybody in this committee who believes that we should lay down any lower standard, then, of course, he will vote with the Minister. I say, however, that any lower standard would cut right across the accepted ideas of minimum industrial standards. After all, this is a bill dealing with navigation, a matter in which the lives of people are involved. If we decided to make no provision ai all, and left the matter for determination by the Commonwealth Conciliation and Arbitration Commission or some other authority, the minimum standard laid down would be certainly not lower than the standard I have suggested.
For my part, I will never accept the proposition that we should enact legislation as a result of which the lives of persons who travel in ships may be endangered. That is what may result if we leave decisions of the kind envisaged in the Minister’s amendment to a deputy director who would always want to get ships to sea, and might send them to sea, in all good faith, when they should not be sent. Goodness knows, the life of a seafarer is precarious enough as it is! Do not let us, by legislative enactment, depart from a principle that should always be maintained. Let us lay down clearly what we consider are minimum requirements.
Question put -
That the words proposed to be inserted (Mr. E. James Harrison’s amendment) be so inserted.
The committee divided. (The Chairman - Mr. P. E. Lucock.)
Majority . . . . 29
Question so resolved in the negative.
Clause agreed to.
Clauses 8 to 32 - by leave - taken together, and agreed to.
After section four hundred and twenty of the Principal Act the following section is inserted: -
” (2.) In this section, ‘ troopship ‘ means a ship used for the transport of members of the naval, military or air forces of the Commonwealth or of any other country, including a foreign country.”.
Mr. E. JAMES HARRISON (Blaxland) reasons for the inclusion of this clause in the bill. It inserts a new section 421, which reads as follows: - (1.) The Minister may, by instrument in writing under his hand, direct that this Act, or such provisions of this Act as are specified in the instrument, shall not apply to or in relation to a troopship so specified. (2.) In this section, ‘ troopship ‘ means a ship used for the transport of members of the naval, military or air forces of the Commonwealth or of any other country, including a foreign country.
Proposed new section 3, which is contained in clause 3 of the bill, already deals with this matter. It provides -
Except where the contrary intention appears, this Act does not apply to or in relation to a vessel belonging to the naval, military or air forces of the Commonwealth or of any other country, including a foreign country.
If there is a good reason for the inclusion of clause 33 in the bill, the committee should be informed of it. The Minister did not give any reason in his second-reading speech and we have not been told why proposed new section 3 should be extended in this way. This is a broad provision. In its present form, it could apply to a ship carrying some naval, military or air force personnel but otherwise operating as an ordinary cargo or passenger ship. The Minister has the power under this clause to exclude such a ship from the provisions of the act merely because it is carrying some military personnel.
The Minister should explain why this clause has been inserted. It is quite new. It has never been in the Navigation Act before. As all honorable members know, if we are engaged in some operation which requires the movement of troops, war-time regulations would provide ample power to the Minister. But this clause gives the Minister the power to exclude any vessel from the provisions of the act merely because it is carrying some military personnel. We think it is completely wrong. At the worst, it should apply only to the exclusive use of a ship as a troopship. If the Minister proposes to proceed with the clause in its present form, I shall move as an amendment that the word “ exclusively “ be inserted after “ used “ in proposed new sub-section (2.). If the Minister is to have power to decree that all the requirements of the Navigation Act shall be set aside because a ship is being used to carry troops, then his power should be restricted to ships which carry troops only. 1 ask the Minister to explain why this clause has been inserted in the bill, and I advise him that if we are not given such an explanation, I will move the amendment I have foreshadowed.
– I appreciate the points made by the honorable member for Blaxland (Mr. E. James Harrison). The two clauses that he mentioned, however, are not related. The provision which excludes vessels belonging to the naval, military or air forces is inserted because of the developing use of ships by the services. It applies to crash launches, supply vessels, landing ships and so on used by the services. Clause 3 is not related in any way to clause 33. The honorable member for Blaxland said that clause 33 could exclude a passenger ship carrying some servicemen.
– I did not say it would be excluded. I said the provision gives the Minister power to exclude it.
– The honorable member is presuming that it would give the Minister power to exclude such a ship. That is not the intention at all. The provision is intended to apply to a cargo or passenger vessel that may be converted to a troop-carrying vessel. In these circumstances of emergency, which may always arise, it may be necessary with a great many troops on board to alter provisions such as those relating to inflatable rafts, lifeboats and the use of emergency cooking. These matters are dealt with under the Navigation Act for cargo and passenger vessels, but they could not apply if the vessel were used as a troopship, and the ministerial direction would be needed to suspend the operation of the relevant provisions. It is not intended to apply to a vessel which may have some troops on board.
– Would you agree to the insertion of the word “ exclusively “?
– No. If that were done, every person on a ship converted to a troopship would need to be a serviceman and in some circumstances of emergency it may be necessary for these vessels to carry civilians. That would prohibit the
Minister from applying it in that way. For that reason, it is necessary that it refer to a troopship with some civilians on board, if proposed section 421 is to apply. I repeat that it refers not to a passenger ship with some troops abroad but to a troopship with some civilians aboard, and for that reason I cannot agree to the inclusion of the word “ exclusively “. All these matters have been given due consideration by our legal advisers and because the purpose is to cover the case of a troopship carrying some civilians, the word “ exclusively “ cannot be included.
– Let us analyse what the Minister has said. He has said that it might be necessary for a ship which is carrying some troops also to carry civilians. Let us take that argument to its logical conclusion. If not necessarily this Minister, but some Minister who administers this legislation, should decide at any time that it is necessary to remove some civilians from some place, he can classify the ship carrying those civilians a troopship.
– It is all very well for the Minister to say, “ No “, but if all the requirements of the Navigation Act regarding a ship carrying some troops as well as civilians are to be thrown overboard, the Minister must go all the way and say, “ I want the ship for civilians in these particular circumstances, therefore I will call it a troopship “. That is what the provision means, and if the Minister’s interpretation is to be accepted, it is all the more imperative that the word “ exclusively “ be inserted in the clause. A ship may be used in connexion with a civilian evacuation programme. I remind honorable members, however, that when such an evacuation programme becomes necessary it is usually during a period when the country is at war, and at that time the Government has power under national security regulations to enable it to do what it likes. We are dealing with a peace-time provision of a peace-time act and this attempt to include in the Navigation Act a provision of this character after the act has operated successfully without it for so many years, makes all the more imperative the need to include the word “ exclusively “. More especially is this so when the Minister tells us that he seeks this provision because at some time he may want a ship to transport some civilians. For those reasons, I move -
In sub-section (2.) of proposed section 421, after “ used “ insert “ exclusively “.
Question put -
That the word proposed to be inserted (Mr. E. James Harrison’s amendment) be so inserted.
The committee divided. (The Chairman- Mr. P. E. Lucock.)
Majority . . 25
Question so resolved in the negative.
Clause agreed to.
Clause 34 -
Section four hundred and twenty-four of the Principal Act is amended -
by omitting sub-section (4.) and inserting in its stead the following subjections: - “ (4.) The Director shall be the Chairman of the Marine Council.
Section proposed to be amended - 424.- (1.) There shall be a Marine Council. (2.) The Marine Council shall consistof - (a) the Director;
– I move -
Omit “ The Director “, insert “ The member of the Marine Council referred to in paragraph (a) of sub-section (2.) of this section “.
The existing references in the act to the director and deputy-director refer to officers who hold the Public Service offices of Director of Navigation and DeputyDirector of Lighthouses and Navigation within my department. To give meaning to those references in the act, it is necessary to retain these specific titles, and this has the effect of hampering the processes of review and improvement in the departmental organization and procedures. Such references in the act are not essential, and a recent review of the departmental organization by a joint committee of Public Service Board and departmental officers has drawn attention to the necessity to have the greater flexibility in this regard which will follow from this amendment. This amendment, with others which have been circulated, and which I propose to move, will have the effect of removing reference to these officers wherever they occur in the Navigation Act, and in the unproclaimed sections of the Navigation Act 1958. The references are replaced either by a reference to the Minister or to an officer or other person authorized or appointed by the Minister.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 35 agreed to.
Proposed new clause.
Amendment (by Mr. Opperman) agreed to -
Thatthe following new clause be inserted in the bill:- “ 34a. - (1.) The Principal Act is amendedas set out in the Schedule to this Act. “ (2.) Section twelve of the Navigation Act 1958 is amended -
by omitting from paragraph (b) of subsection (7.) of section fourteen set out in that section the words ‘a Deputy Director, or a proper authority at the port,’ and inserting in their stead the words ‘ a proper authority at the port ‘;
by omitting from sub-section (7.) of section fourteen set out in that section the words ‘ the Deputy Director or the proper authority, as the case may be,’ and inserting in their stead the words theproper authority ‘;
by omitting from sub-sections (8.) and (9.) of section fourteen set out in that section the words ‘a Deputy Director or’;
by omitting from paragraph (d) of subsection (1.) of section fourteen a set out in that section the words ‘ a Deputy Director or ‘; and
by omitting from sub-section (2.) of section fourteen a set out in that section the words ‘ Deputy Director or ‘ (wherever occurring). “ (3.) Section one hundred and eighty-two of the Navigation Act 1958 is amended -
by omitting from sub-section (3.) of section three hundred and eighty-nine a set out in that section the words ‘ Deputy Director or a superintendent’ and inserting in their stead the words prescribed officer ‘;
by omitting from sub-section (5.) of section three hundred and eighty-nine a set out in that section the words ‘ Deputy Director or a superintendent ‘ and inserting in their stead the words prescribed officer ‘; and
by omitting from paragraph (a) of sub section (5.) of section three hundred and eighty-nine a set out in that section the words ‘ Deputy Director or superintendent, as the case may be,’ and inserting in their stead the words prescribed officer ‘. “ (4.) Section one hundred and ninety-eight of the. Navigation Act 1958 is amended -
by omitting from sub-section (3.) of section four hundred and seventeen set out in that section the word ‘ Director ‘ (wherever occurring) and inserting in its stead the word ‘ Minister ‘; and
by omitting from sub-section (4.) of section four hundred and seventeen set out in that section the words ‘ the Director ‘ and inserting in their stead the words a prescribed officer ‘.”.
Proposed new schedule.
Amendment (by Mr. Opperman) agreed to -
That the following new Schedule be added to the bill:-
Title agreed to.
Bill reported with amendments; report - by leave - adopted.
Bill - by leave - read a third time.
Sitting suspended from 6.3 to 8 p.m.
Message recommending appropriation reported.
In committee (Consideration of GovernorGeneral’s message):
Motion (by Mr. Menzies) agreed to -
That is is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant Financial Assistance to the State of Queensland for Works in connexion with certain Roads to be used for the transport of Beef Cattle.
Standing Orders suspended; resolution adopted.
That Mr. Menzies and Mr. McMahon do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Menzies, and read a first time.
– I move -
That the bill be now read a second time.
The purpose of this bill is to seek the approval of the Parliament to a grant of financial assistance to the State of Queensland for the purpose of the construction of beef cattle roads in that State. In February last, 1 announced the Government’s interest in a number of large enterprises which would assist with development and increase export earnings. Included in the list was “road development in the north, including north and west Queensland, the Northern Territory, and the north of Western Australia “. Following a very careful examination of the whole question of road requirements in the north, and consultation with the States concerned, the Government decided on an immediate programme of assistance in all three areas. The current Budget includes a special allocation of £350,000 designed to speed up road de velopment in the Northern Territory, and we have also agreed to a special grant to Western Australia which is the subject of a bill to be introduced following this measure. The present measure covers the assistance we plan for the State of Queensland.
It is perhaps unnecessary for me to stress the great importance of transport to the development of our sparsely populated northern areas, or to dwell too long on the part played by the beef cattle industry in those areas and the significance of beef as an export earner. These facts are well known; and there is also general acknowledgment of the further fact that droving as a means of moving cattle from place to place is rapidly being superseded, where suitable roads are available, by the use of motorized road trains. The use of road trains speeds up movement. More importantly, its general availability has the side effect of promoting quite significant changes in animal husbandry, allowing cattle to be “ turned off “ at much younger ages and thus increasing the productivity and overall efficiency of individual properties, as well as producing, in most instances, an end product of higher quality.
Expert economic studies, designed largely to measure the cost of roads against the value of the benefits expected to flow from their construction, have shown that there is great scope in Queensland for roads expenditure which should produce really worth-while, and in some cases spectacular, results. Apart from the Queensland section of the Barkly Highway between Camooweal and Mount Isa, there is practically no road in the west and north-west of the State suitable for the regular transport of cattle.
Earlier this year, I announced that, as a first step - and I remind honorable members that it was so stated as a first step - we had agreed to provide £650,000 of the first £1,000,000 spent on the construction of a road between Normanton and the Townsville-Mount Isa railway at Julia Creek. This work is now well under way, and the 1961-62 Budget has made provision for the Commonwealth contribution of £650,000. However, at Budget time it was announced that we were ready and willing to go much further than this, and in subsequent discussions with the Queensland Government we have agreed to an all-inclusive grant of £5,000,000 to be made over a period of five years for expenditure on approved road works
In effect, we have left the NormantonJulia Creek arrangement as it stands, and have added a further £4,350,000 as a straight-out grant which need not be matched by corresponding expenditure on the part of the State. Put in another way, if the State spends a total of £5,350,000 on approved roads during the prescribed period, it can qualify for “a Commonwealth grant of £5,000,000 towards this expenditure; that is, £5,000,000 of £5,350,000. This, of course, would be made available progressively over the period and so provide for financing of the work as well as ultimate assistance.
The actual roads on which expenditure will qualify for reimbusement will be selected in the first instance by the State, but must be approved by the Treasurer. Naturally, from a Commonwealth viewpoint we want the funds to be applied to the best advantage, and thus the Treasurer is required to have regard to certain criteria - essentially the effect on beef production and the relationship between cost and benefits - -before giving an approval.
The bill also provides that the Treasurer may approve standards of design or construction, and that if he does so approve, then the State must comply with those standards in order to be eligible for a grant in respect of the work concerned. On this aspect I can say - to relieve anybody of anxiety - that there is already a very substantial measure of agreement on standards. I feel sure that there will be general support for this measure, which, in conjunction with other assistance measures already before the House or to be introduced, should contribute greatly to that development of this country and its resources in which we all believe. I commend the bill to the House.
Debate (on motion by Mr. Clyde Cameron) adjourned.
Message recommending appropriation reported.
In committee (Consideration of GovernorGeneral’s message):
Motion (by Mr. Menzies) agreed to -
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant Financial Assistance to the State of Western Australia for Works in connexion with certain Roads to be used for the transport of Beef Cattle.
Standing Orders suspended; resolution adopted.
That Mr. Menzies and Mr. McMahon do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Menzies, and read a first time.
– I move -
That the bill be now read a second time.
The purpose of this bill is to seek the approval of the Parliament to a grant of financial assistance to the State of Western Australia for the carrying out of certain road and bridge works in the northern part of that State connected with the transport by road of beef cattle. In my secondreading speech on a similar measure relating to roads in Queensland I mentioned the several steps being taken by the Government to assist in the development of roads across the north of Australia. I referred also to the importance of general development and expansion of the beef industry, and the significant role which roads could play. I need not repeat what I then said, as the remarks have general application to Western Australia as well as to Queensland and the Northern Territory.
The assistance proposed for Western Australia is a grant of £500,000 in respect of expenditure by the State in the financial year 1961-62 on two specified roads and two specified bridges in the Kimberleys. The four projects are inter-related in that both roads lead from beef cattle areas to the meat works and port at Wyndham - from Nicholson in one case and from Hall’s Creek via Turkey Creek in the other - while the two bridges will allow the WyndhamNicholson road to be taken across the Ord and Dunham rivers and so eliminate an existing low-level crossing over the Ord which puts this road out of commission in times of flood. Incidentally, the bridges - one of which is to be superimposed on the Ord River dam at Bandicoot Bar, which itself is being constructed with the assistance of Commonwealth funds - and the improved road between the Ord dam and Wyndham, will be of great assistance in the development of the areas opened up for settlement by the Ord project.
When we discussed the question of roads with the Western Australian Government, we were impressed by the amount of selfhelp in developing communications in the north being undertaken by the State from its existing road funds. As I announced at the time we agreed to assist the State, the Commonwealth grant is “ matching corresponding provisions by Western Australia in relation to roads in the Kimberleys “. That is for the reason that I have just mentioned: Splendid work has been done. This concept is written into the bill, which requires the State to undertake to spend not less than £500,000 from other sources on road works in the northern part of the State - defined as north of 20 degrees of south latitude - during 1961-62. I might add that this is by no means an onerous provision, as the information provided by the State indicated that its 1961-62 programme of road works included an allocation of more than £1,000,000 to that area, including over £800,000 in the Kimberleys.
The detailed arrangement is that the Commonwealth will provide 50 per cent. of expenditure on the two bridges in 1961-62, which is estimated at £320,000, calling for a Commonwealth contribution of £160,000, and the whole of the expenditure in 1961-62 on improving the two roads. If the expenditure on the bridges accords with the estimate, this will mean that £340,000 will be available for the road works. However, within the agreed limit of £500,000 we have not specified expenditure limits on either of the two groups. I might mention also that the availability of the Commonwealth grant will allow the State to release for other road works in the area the funds already allocated in its programme to the two roads, plus half of the amount allocated to the construction of the two bridges. Honorable members from Western Australia will be interested in that rather significant fact.
Other provisions in the bill are similar to those in the Queensland measure, including the power of approval of standards of design or construction which the Treasurer may exercise. Western Australia is receiving very substantial assistance from the Commonwealth in its railway plans, which essentially will benefit the southern part of the State. This measure provides for a considerably smaller, but nevertheless significant, grant of assistance for the development of the beef cattle industry in the far north. I commend the bill to the House.
Debate (on motion by Mr. Clyde Cameron) adjourned.
Motion (by Mr. Menzies) - by leave - agreed to -
That leave be given to bring in a bill for an act relating to an Agreement between the Commonwealth and the State of Queensland with respect to the Collinsville-Townsville-Mount Isa Railway.
Bill presented, and read a first time.
Consideration resumed from 12th October (vide page 2037), on motion by Mr. Hasluck -
That the bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time, and committed pro forma; progress reported.
Message recommending appropriation reported.
In committee (Consideration of Governor-General’s message):
Motion (by Mr. Hasluck) agreed to -
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Northern Territory (Administration) Act 1910-1959.
Resolution reported and adopted.
In committee: Consideration resumed.
Bill - by leave - taken as a whole, and agreed to.
Bill reported without amendment; report adopted.
Bill - by leave - read a third time.
Debate resumed from 30th August (vide page 610), on motion by Mr. Harold Holt -
That the bill be now read a second time.
.^ When the Treasurer (Mr. Harold Holt) introduced this bill he explained that for the purpose of the gold subsidy scheme gold producers are now divided into two classes, large producers and small producers. Large producers exceed 500 ounces of gold production a year. They may claim a subsidy if their average cost of production exceeds £13 10s. an ounce. The maximum subsidy is £3 5s. an ounce. No subsidy is payable if payment will raise profits above 10 per cent, of the capital used by a producer in producing and selling gold.
Under the existing legislation a small producer is one whose annual output of gold is 500 ounces or less. Such producers receive a subsidy of £2 8s. an ounce without having to prove their costs of production and without being subject to a profit limitation test. A production of 500 ounces of gold would return to the producer a gross income of £7,800. In the past the Government felt it was reasonable that the producer with an income in excess of that amount should be required to prove his costs of production and should not have an automatic right to subsidy payments.
The Treasurer then proceeded to explain that the purpose of this bill is to eliminate the unfairness involved in what he called the “ sudden cut-off “ at 500 ounces. Under the terms of the bill, those producing between 501 and 1,075 ounces of gold may choose to be treated as small producers. If they do so choose, the subsidy payable will be determined at the rate of £2 8s. an ounce, less Id. for each ounce by which the output exceeds 500 ounces. The Treasurer said that the flat rate subsidy will taper off and disappear at the top of the range. It is difficult to see that many producers will be affected by this amendment. The Government is not expecting that it will cost much. Estimates for 1961-62 show that the Commonwealth considers that it will have to pay £660,000 in gold subsidies. But in 1960-61 the amount was £698,658. There is thus a reduction of nearly £39,000 in the subsidy. I might add that last year’s Estimates indicated that the subsidy would amount to £700,000. In fact, it amounted to £698,000. In addition, the estimate of £700,000 was itself a drop of £138,000 on what had been paid in subsidy the previous year.
The latest report of the Department of Mines in Western Australia - that for 1959 - gives us a fairly clear indication of how many producers will be affected by this change. In 1959 there were three producers who produced between 500 and 1,000 ounces for the year. There were 26 who produced between 100 and 500 ounces, and there were 121 who produced up to 100 ounces. There were five who produced between 1,000 and 2,000 ounces each, and twelve others who produced between 2,000 and up to 100,000 ounces. In addition to those 167 producers, there were a number who recovered very small amounts, including alluvial finds. Some of the 26 producers in the 100 to 500 ounces group may have been able to produce more than 500 ounces had the limitation on the small producer not been set at a maximum of 500 ounces, but a study of the report of the Department of Mines suggests that there would not have been more than three in that position. The report also indicates that in the 100 to 2,000 ounces group there would not have been more than two who produced more than 1,000 ounces but less than 1,075 ounces. On the 1959 figures, then, it seems that out of 167 producers there would not have been more than ten who could have benefited by the present amendment.
If it is claimed that the amendment will help the small producer, these figures show that of 105 producers in the small-producer group only ten would or could perhaps have received some additional assistance. A decline of £38,655 in subsidy is the Government’s estimate of what all this will cost. The Leader of the Opposition (Mr. Calwell) has suggested that some £500,000 a year for a set number of years be made available to the gold-mining industry for developmental purposes. This would allow producers to open up and mine lowgrade ore bodies which otherwise they may be forced to by-pass. This would’ mean increased employment and give the mines and mining towns a much longer life. I wish to concentrate upon Western Australia, although I am mindful of the fact that the Gold Mining Industry Assistance Act applies to Papua-New Guinea and to other parts of Australia.
The price of gold has remained almost stationary for the last twelve years. In November, 1949, the Commonwealth metropolitan basic wage in Western Australia was 129s. and the price of gold at mints in Australia was £12 3s. 2d. per oz. In July, 1961, the metropolitan basic wage in Western Australia was 288s. and the price of gold was £15 12s. 6d. per oz. The price of 1 oz. of gold would, in 1949, pay the metropolitan basic wage in Western Australia for almost two weeks. The price of 1 oz. of gold to-day will scarcely pay the metropolitan basic wage in Western Australia for one week. Thus, gold-mining, in common with some other Australian primary export industries, is suffering from a fixed export price, in conjunction with continually rising costs. The price has remained unchanged since 1950. A comment on the position of the gold-mining industry made by Dr J. A. Dunn, chief Mineral Economist of the Bureau of Mineral Resources, in the “ Chemical Engineering and Mining Review” for 15th October. 1958, said-
The precious metal which was the basis of our mining industry up to SO years ago, has fallen on anxious times, but is still one of the most Important of our minerals. We are still the fourth largest producer in the so-called Free World.
The industry was in a bad way after the War, production was only 890,802 ounces in 1948. Devaluation of sterling in 1949 helped it along for a time, but by 19S4 costs had caught up again.
However, the industry is receiving a yearly pickmeup in the form of a subsidy, paid under the Gold Mining Industry Assistance Act, and for several years now despite some recent casualties the yield has remained over 1 mill. oz. - 1,083,941 in 1947.
What of the future?
Much depends on whether the U.S. Government will agree to raise the price above 35 dollars. Until then it will be something of an effort to maintain production at present levels, which certainly could not be maintained without the subsidy.
However, our gold mining companies by rationalization of company administration, plant modernization, and close attention to technique are second to none in making the best out of a fixed price mineral, staggering along under rising costs, even squeezing a few pennies out of exchange advantages by selling gold oversea when the opportunity offers.
The steady old timers like Lake View and Star, Great Boulder, North Kalgoorlie and so on have many years’ life. And rich Eldorados like Hill 50 (W.A.) and Nobles Nob (Northern Territory) help nicely. How many realise that, because of Nobles Nob, Northern Territory has, since 1954, been the next important gold producer to Western Australia?
The gold industry is worth assisting as an earner for the Commonwealth of foreign exchange in every sort of currency. The present stipulation that a subsidy may be claimed by large producers if their average cost of production exceeds £13 10s. per oz. could be altered to provide a lower figure than £13 10s. This would provide increased assistance to companies experiencing difficulties. It is true that it would also provide increased assistance for some well-to-do companies, but it has been a feature of goldmining companies in Western Australia that, in anticipation of the working out of gold, they are investing in exploration and development of other minerals. Their goldmining experience makes them well fitted for this. Secondly, 1,075 oz. is not a suitable upper limit, lt affects so few additional producers that it is clear that the lift in the limit is not sufficient.
The third method is to finance development in the manner suggested by the Leader of the Opposition (Mr. Calwell). While this would cost the Commonwealth £500,000 a year, it would, in effect, be converting Australian currency into needed overseas currency. It is a relatively small amount which would lengthen the life of the industry and would preserve population and assets in such mining towns as Kalgoorlie and Boulder. It would enable the continuation of mining operations and sufficient development to take place.
The industry in Western Australia believes that the present scale of assistance, though deeply appreciated, is not in any way really contributing towards significantly increased gold production, although it is keeping some marginal mines in operation. I invite the House’s attention to section 12 of the principal act as amended by act No. 23 of 1956. This is too lengthy for me to quote. It deals with the reduction of subsidy where profits exceed 10 per cent, per annum, and it empowers the Treasurer to determine the amount of any capital or net profit required to be taken into account for the purposes set out in sub-section (2.) of section
The Chamber of Mines in Western Australia points to the fact that anomalous situations can arise. It states -
Two adjacent mines with identical plants and installations and treating comparable tonnages of ore, could be treated quite differently merely because their theoretical structures are influenced by the age of the mine. The older-established mine, most likely to be in need of assistance, is placed at a disadvantage.
For the sum of £500,000 per annum mentioned by the Leader of the Opposition, a development allowance of 4s. per ton of ore treated for extra development expenditure above a base year to be determined, could be paid. Mines are finding it more and more difficult each year to finance adequate developmental work, because costs are continually increasing against fixed prices for gold. A vicious spiral is then set up. The Chamber of Mines points out that effort is made to counter rising costs by increasing ore production to the maximum capacity of the mining plant and equipment. The additional development required to chase greater production adds again to the cost structure. All sorts of economies have been carried out by the gold-mining industry in the modernization of power plants, the electrification of ore hoisting and the modernization of treatment plants, and if there is any remaining scope for economy it is only for minor economies.
The principal act defines development in relation to a mining property as “ work carried out with the object of ascertaining the existence and extent of gold in the mining property, and includes preparation of that property for the continuous production of gold-mining minerals by diamond drilling “. This has the effect of granting a subsidy for normal development diamond drilling, but not for exploratory diamond drilling. The Chamber of Mines believes that a subsidy on a £1 for £1 basis for exploratory diamond drilling would be a valuable means of assisting the industry. As well as subsidies, there is a case for Government loans to selected properties which would be good risks. The purposes of such loans would be to bring the mines into production or to increase efficiency.
Western Australia produced 860,969 fine ounces in 1959 and, subject to revision, the estimate for 1960 is 869,967 fine ounces. From January to July of this year it has produced 483,819 fine ounces. It is for the State an industry yielding £13,500,000 to £14,500,000 a year. The major companies in Western Australia which receive a subsidy under the Gold Mining Industry Assistance Act are Gold Mines of Kalgoorlie (Australia) Limited, operating at Kalgoorlie and Coolgardie, Great Western Consolidated, operating in Bullfinch. Southern Cross and Marvel Loch, and Sons of Gwalia Limited, operating in the Gwalia and Leonora areas.
As an example of the significance of the industry, four mines, Lake View and Star Limited, Gold Mines of Kalgoorlie (Australia) Limited, Great Boulder Gold Mines Limited, and North Kalgurli (1912) Limited, which operate in the KalgoorlieBoulder area, pay an average amount of “ take home “ pay to employees, over a four-week period, of £252,250.
The census figures tend to show stagnation in the Kalgoorlie and Boulder areas, and there is a case for reconsidering the way to assist the industry. It is inevitable that at some time the gold-mining industry will work itself out, but it is increasingly becoming an important source of capital for other minerals upon which the future of Western Australia - or at any rate the arid areas of Western Australia - may well depend. I therefore urge the Treasurer, while supporting this present extremely limited measure, that he reconsider the assistance given to the industry. First, lower the cost of production figure which is used to test whether a larger producer may claim a subsidy, from the present test figure of £13 10s. an ounce cost of production to some lower figure. Secondly, widen the range of production within which a producer may have the option of being treated as a small producer or a large producer from the proposed range of 501 ounces to 1,075 ounces to a greater upper limit, to bring in more producers. Thirdly, make a Commonwealth grant to finance development along the lines proposed by the Leader of the Opposition, who nominated a sum of some £500,000. Fourthly, give consideration to a method by which Canada has stimulated all mineral industries - not merely gold - namely, the granting of a three-year tax holiday to all new mines in the first three years of their existence. A holiday of that period from every form of tax would enable all sorts of mineral industries to develop rapidly.
The Opposition supports the bill.
.- The’ honorable member for Fremantle (Mr. Beazley) referred to the measure as being very limited in its character. Nobody denies that it is limited. The honorable member spoke on the measure as though it affected the whole of the goldmining industry. But, of course, it does not affect the whole of the gold-mining industry. It is designed to remedy what was obviously an anomaly in the act with respect to the 500-ounces cut-off figure which determines whether or not a man is a small producer. I brought this matter to the notice of the Treasurer (Mr. Harold Holt) some time ago, and mentioned that there were certain harshnesses connected with the act which, I submitted, should be removed. This bill is designed, I take it, to remove these harshnesses.
The honorable member for Fremantle went on to say that only 26 producers were affected by the raising of the 500-ounce limit. He further sought to belittle the measure by producing certain figures. He said that only two producers actually produced between 1,000 and 2,000 ounces, and that only ten producers will benefit from the measure. Those figures in themselves do not mean anything at all. The fact that only ten producers will benefit from the measure does not mean much, because practically all of the gold produced in Australia is won by only six producers. So it would hardly be a good argument to decry a measure on the ground that it would affect only six producers. So the honorable member for Fremantle’s contention, based on the ground that the measure would affect only 26 producers and benefit only ten, really does not mean anything. lt is not a logical argument.
I come now to the anomaly to which I referred. As the act now stands an output of 500 ounces fine of gold is worth £9,012 10s. to the producer, and on an output of 501 ounces - 1 ounce more - is worth only £7,128 to the producer. That is the kind of anomaly which this bill is designed to remove.
The amendment will give encouragement and will also enable prospectors to devote more of their time to prospecting, because very few prospectors now prospect full time. The measure will enable more of them to devote their full time to their very important activities, which I regard as the sine qua non of the whole of the gold-mining industry, as I have repeatedly told this House.
I think that prospectors and small mine owners and operators will find that the sliding scale nature of the subsidy provided for in the bill will prove to be a very sats factory answer to the difficulties that they experience under the old act. It means, in essence, that the subsidy will decrease as the need for it decreases. That principle is, of course, fundamental to all subsidies. The subsidy, decreasing by one penny for each ounce by which the number of ounces of fine gold exceeds 500 will cut out, as the honorable member for Fremantle said, at a production of 1,075 ounces. Now, 1,075 ounces of gold was worth nearly £16,800. Generally speaking, a prospector or small mine owner with that kind of a show would be the first to admit that no subsidy was warranted. Nevertheless it is possible, because of the circumstances of a mine, that the cost of producing those 1,075 ounces could be higher than it would be in other cases. One very good illustration of such an instance would be a mine owned by, say, six working partners. The partners could find themselves netting £1,500 a year each. When one considers that they might have spent a great deal of time and capital on their operations before they found gold, and the great risk involved, £1,500 each a year is not much return, particularly when the source of their income may disappear at any moment. I should point out in this respect that such a syndicate whose output is above the subsidy cut-off figure for small producers may benefit by the subsidy payable to large producers, which is calculated on a cost of production basis. To be eligible for this subsidy the producers cost of production must be in excess of £13 10s. a fine ounce, and the amount of subsidy payable is 75 per cent, of the amount by which the cost of production exceeds £13 10s. an ounce, with a limit of subsidy of £3 5s. an ounce. I understand that if six men work a show normal wages for each man would be included in calculating the cost of production.
I suggest, therefore, that the bill provides for a realistic subsidy to be available to all engaged in the gold-mining industry, within the limits of the accepted principles applying to subsidies. Some time ago the Treasurer told me in the House that the Government would review its attitude towards gold with the object of determining its value to the economy. I trust that this review is taking place, or has taken place, because the Department of the Treasury should naturally be in a position at any given time to evaluate the worth of one fiscal policy against any other. It is necessary from all points of view that the Government should know whether the gold-mining industry should be boosted, should be kept at a level and, if so, of course, at what level, or whether it should be allowed to die. Many aspects of the matter must be considered when such a determination is being made. Among the more important are the effect on export earnings, the direct employment of people living in gold-mining areas, who would number about 10,000 in Western Australia, the maintenance of employment in allied industries away from the goldfields, and the great importance of keeping claims open so that future extraction may be effected. All these points must be weighed very carefully when a policy determination is being made.
This Government has demonstrated very effectively, I suggest, that it believes in the industry. In fact, it has kept the goldfields alive, and I do not think there is any doubt that it will continue to safeguard the interests of the industry. But to what extent does the Government intend to regard the gold-mining industry as an important factor in our economy? Upon the answer to that question rests the fate of the principal act which is to expire next year. When the principal act comes up for review, I will, if I am in the happy position of being able to do so, speak about the industry as a whole. I repeat that this measure was brought in at a time when the principal act had but a short while to live, and it was brought in simply to remove what was thought by the Govern ment to be an anomaly. I congratulate the Government on bringing it in before the expiry of the act. But I strongly urge the Government to examine its whole attitude towards gold before the act comes up for review some time before 30th June next year, because I think it is most necessary for the Government to know exactly where it is going with respect to gold.
I support the bill and I compliment the Government on having brought it in.
.- It has been suggested that this bill is only a small one. I contend, however, that it is a very important one. It is designed to encourage small producers to extend their activities and to keep together the dwindling band of prospectors who may, at any time, uncover new fields that could be well worth developing into high-production mines.
It is now two years since the honorable member for Kalgoorlie (Mr. Browne) invited the members of the Government parties’ mining committee to visit the goldproducing area in Western Australia and to see for themselves just what the problems of the gold-mining industry consisted of. The honorable member has been most assiduous in seeking relief for the industry. During our visit we had on-the-spot talks with members of the prospectors’ association, and we learned from them the importance of the small producer in keeping alive the search for new fields. Unfortunately, too few young men go prospecting these days, because of the lack of incentive. It is becoming an increasingly costly business to outfit a party, and worth-while deposits are becoming very much harder to find. The subsidy limit of 500 ounces might perhaps be regarded as fairly satisfactory for a single operator. After all, it allows for a gross income of £7,800, and perhaps a young man working on his own could do fairly well on a gross income of that kind. But a single-operator mine is a pretty lonely proposition. In most cases two or more men are required to cope with the work and make the venture worth while. The limit of 500 ounces is too low to enable a syndicate to operate satisfactorily.
There has been a wide gap between this level of activity and that of the large producers. A large producer must actively assess his costs. To qualify for the subsidy of £3 5s. an ounce he must prove costs of more than £13 10s. This calls for full records and the services of an office staff such as few of the syndicates would find it worth while to employ.
We were asked, during our visit, to consider a suggestion that each member of a syndicate should be given the benefit of the limit of 500 ounces, but we considered that this could lend itself to a certain amount of juggling and would inevitably result in dummying. After a full examination of the position at that time it was decided to seek an extension of the limit. It is very pleasing now to see the efforts of the honorable member for Kalgoorlie and of the mining committee, of which he has been a member for so long, receiving recognition. The arrangement now proposed, of raising the limit to 1,075 ounces, but with a scaling down of subsidy by one penny for every ounce over 500, should give a much-needed lift to the output of many small producers in Western Australia.
During the last year for which we have figures, the year ended June, 1961 - and I remind the House that the honorable member for Fremantle (Mr. Beazley) suggested that very few people would benefit from this legislation - 558 applications were received from small producers, with a carry-over of 51 applications from the previous year. The total subsidy paid was £53,775, which represents a total production of nearly 22,500 ounces of fine gold, which is quite considerable, being valued at about £350,000.
– Now you are suggesting that I said only ten people would get the subsidy. Of course I said no such thing.
– I am not implying that. I am merely demonstrating the fact that this proposal will cover a wider field than the honorable member appeared to suggest. Quite a lot of the production I have mentioned would be by producers whose output would be well and truly under the 500 ounces. But the point I was making is that although it may appear on the surface that this measure will affect only a very few people, the Government hopes that the new basis of payment will encourage some of the smaller small producers to become what the Treasurer (Mr. Harold Holt) called small large producers.
The honorable member for Fremantle said that gold mining is suffering from fixed export prices in the face of rising costs. We realize that this is so, but because of the industry’s valuable contribution to our overseas balances the Government has been most willing to provide assistance to companies experiencing difficulties. Any suggestion that increasing the limit to 1,075 ounces will be of little value because it will not benefit many of the present producers is without foundation. What is overlooked is the part played by the small producers in locating new fields, and the inducement that they will now be given to extend prospecting activities.
The honorable member for Fremantle mentioned one other matter, which perhaps has little relevance to the bill before us, but about which something should be said. He referred to the three-year tax holiday that is available under Canadian laws. While it may sound very desirable for mines to have a tax holiday for three years once they find ore, sell it and start to make profits, I believe a much better way to encourage prospecting would be to allow a complete tax deduction of 100 per cent, of the money subscribed for prospecting purposes. Honorable members will recall that at present one-third of the amount of calls on mining shares is deductible for taxation purposes. If the allowance were 100 per cent. I am certain that very many people would try to discover new fields which could be developed. Once the fields were discovered and the money subscribed for the development of the mines, people would not mind paying taxes on the profits from the mines’ operations.
I conclude by pointing out that as this is an export product, it is to be hoped that the added incentive offered in this bill will have the effect of increasing output by at least 50 per cent.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from 17th October (vide page 2093), on motion by Mr. Harold Holt-
That the bill be now read a second time.
.- The Opposition opposes this measure first, because we opposed the passage of the original legislation in 1955, and secondly, because this measure proposes to introduce a feature which the then Treasurer in 1955 suggested would have been bad had it been in the original legislation.
It is perhaps necessary to look a little more closely at the charter of the International Finance Corporation. We now have quite an array of international banking organizations. We have the International Bank for Reconstruction and Development, the International Monetary Fund, the International Finance Corporation and the International Development Association, which is colloquially called Ida. All these agencies aim to promote economic activity of one kind or another on the principle that those who have surpluses of certain currencies and have the capacity technically to help others, should do so. In the schedule to the International Finance Corporation Act of 1955, the purpose of the corporation is stated as being -
The purpose of the Corporation is to further economic development by encouraging the growth of productive private enterprise in member countries, particularly in the less developed areas. . . .
When that measure was before the House, it was opposed by the Australian Labour Party. We agreed that there was need to develop the less-developed areas, the underdeveloped areas or the undeveloped areas, they have been called. We recognized that there were disparities in wealth, particularly as between various parts of the world. But in our view, the disparities were of a kind that would not be narrowed by the promotion of what was called productive private enterprise; they would be narrowed by the development of basic public enterprise. That was primarily the basis on which we launched our opposition then.
In the First National City Bank Monthly Letter of October, 1960, there is an article entitled “Foreign Aid- 1960 Style”. It refers to a statement made by Mr. Randolph Burgess in these terms -
Providing capital for the less-developed nations is “ the challenge of our time “, as a special committee headed by Mr. W. Randolph Burgess, U.S. Permanent Representative to the North Atlantic Council, recently stated in a report dealing with future economic cooperation among the United States, Canada and Western Europe.
The report contained this statement -
We are convinced that none of the problems facing our countries collectively is more important than that of assisting the under-developed countries in their progress towards higher living standards, greater freedom and a fuller life for their peoples.
No one could cavil with that as an objective.
Recently honorable members received the latest annual report of the International Finance Corporation. It is the fourth annual report for 1959-60 and is dated 29th September, I960, at Washington. As far as I am aware, it is the most recent report of that body. It shows that the organization has assets of 106,000,000 dollars. Its original capital subscriptions were 100,000,000 dollars. Australia’s subscription was, I think, somewhere about 2,200,000 dollars. In the four or five years of the corporation’s existence, its total advances to meet part of this “ challenge of our time “ aggregated only about 40,000,000 dollars. When honorable members read some of the comments in the annual report and have in mind the nature of the amendment now before the House, they will begin to see that if the problem of promoting economic development in under-developed or less-developed areas is the challenge of our time, organizations such as this do not do very much to fill the need. I suggest that honorable members read the annual report because it provides one or two interesting comments on the difficulties that face countries. The countries to which aid has been given include Argentina and Australia, although 1 find it rather difficult to understand how Australia comes within the category of those requiring the kind of assistance that this organization offers. Whether, for instance, Duncan’s Holdings Limited, dealer in lumber and mill products, needed to avail themselves of 660,000 dollars seems to me to be at least open to some question, especially when we consider the needs of other parts of the world. Again, Rubbertex (Australia) Proprietary Limited, dealer in rubber products, availed itself of assistance from this organization to the tune of 315,000 dollars, making Australia’s total access to this organization 975,000 dollars so far. Other countries, such as Brazil. Chile, Colombia, El Salvadore - all Latin American countries - India, Iran, Mexico.
Pakistan and Peru, as well as Tanganyika, Thailand and Venezuela are, basically, the kind of countries to whom the challenge of our time has to be brought home. I suggest that the kind of agency we are discussing is not meeting the need at all.
An interesting point about the annual report of this organization is that it highlights, as it were, the difficulties which can be met when an attempt is made to establish private enterprise on what honorable members on the Government side would call its classical form - if there is such an animal. When an attempt is made to graft the principles of private enterprise on to countries such as those I have mentioned, fundamental difficulties arise. Some of them arise just out of the sheer application of capitalist techniques to begin with. For instance, they have no executive strata. Presumably, they have no bodies like the Institute of Management, and no advertising agencies or any of those trappings which are supposed to be essential to private enterprise. Again, one does not find in those countries the same kind of enthusiasm or the same kind of basic loyalty for what are supposed to be the virtues of private enterprise as apparently exists in countries like our own. It seems to me that, in terms of the real needs of the less developed areas, there has to be a far more fundamental approach, an approach framed in terms of harsh economic realities, where those countries are concerned.
Of course, what will probably accentuate the challenge of our times, as the American gentleman called it, in future years, is that a conflict is now developing between the East and the West. I think most people would like to see that conflict develop in terms of emulation in the provision of economic assistance rather than into an arms race which has been the spectacle over recent years. On page 118 of the “Monthly Letter “ of the First National City Bank of New York, reference is made to what is happening in that particular field.
Order! I think the honorable member is getting away from the purposes of the bill.
– With all respect, I doubt it. The fundamental purpose of the bill is to alter the provisions of the International Finance Corporation Act in which it is set out that the purpose of the corporation is to create productive private enterprise, particularly in the less developed countries. I am suggesting that this problem of the less developed areas to which I have referred is looked upon in some places as the challenge of our time, and that the measure under discussion is inadequate to meet that challenge. This bill proposes to make an amendment which I have not yet had time to develop, and I submit that at least, as the honorable member leading for the Opposition on this occasion, I should be able to develop my points in my own way without transgressing too far on your good nature, Mr. Deputy Speaker. Economic assistance to less developed nations by certain industrialized free world countries includes aid that is provided in the way outlined by the bill under consideration. For the five-year period between 1954 and 1959, the total provision - I suggest that is a fairly elastic term - of assistance by free world countries other than the United States of America was 5,904,000,000 dollars. In that same period, the United States of America, through agencies of one kind or another which I mentioned earlier, including the one under discussion, has provided economic assistance to the value of 12,025,000,000 dollars, making the total assistance from those sources 17,929,000,000 dollars. The first National City Bank of New York goes on to point out in its “ Monthly Letter “ that there is now arising competition from the Soviet side of the world in the provision of economic aid, and that up to April, 1960, the total provision of aid by the Russian side amounted to 3,000,000,000 dollars and that this aid is now being given at the rate of 1,000,000,000 dollars in a year. When we compare that amount of aid with the performances of the International Finance Corporation over the five-year period when only 40,000,000 dollars worth of aid was given, the efforts of the corporation seem trifling in the extreme.
The bill under discussion proposes to amend the principal act by adding a Second Schedule which reads, in part -
Whereas the Articles of Agreement of the Corporation do not permit the Corporation to make investments of its funds in capital stock;
Whereas the Corporation would more effectively fulfil the purposes for which it has been established if it were empowered to make such investments;
Whereas, having regard to its nature and purposes, the Corporation has considered it appropriate to declare its policy that, if given such power, it would refrain from exercising the voting rights of a stockholder unless, in its opinion, it were necessary for it to exercise such rights;
I suggest that is the kernel of the bill and it represents a reversal by this Government of the attitude that was adopted by the former Treasurer, Sir Arthur Fadden, who, when introducing the International Finance Corporation Bill on 25th October, 1955, is reported on page 1839 of “Hansard” of that date as having said -
That is, the corporation - is therefore prevented from investing in common stock carrying voting rights-
In his view, that was the reason why that action was taken and why he thought the provision a wise one. He went on to say -
Investments by the corporation may take various forms and will be adjusted to meet the needs of particular projects. In particular, it will be able to invest in securities which could be converted into common stock carrying voting rights on disposal by the corporation to private investors. But it was the general view of countries participating in the drafting of the articles that it would be wrong for an international institution-
The International Finance Corporation - to become involved in the managerial responsibilities of private firms, and I must say that I share and support this view.
Apparently in those days the view held was that if you could not engage in management you should not engage in ownership. And that was the view taken by the majority of nations in 1955 when this act was first passed. But now the view is being changed. While the objection to management intervention is staying, the objection to ownership is being removed.
I suggest that at least that is a rather peculiar philosophy for those zealots of the principles of private enterprise. Apparently you are going to promote private enterprise in these countries by way of an international organization which can own but cannot manage and which owns but has no control. I shall be interested to hear some of the comments of honorable members opposite. I suggest the Treasurer ought to have given us some explanation of how this peculiar change has taken place. In our view, the objections that were raised originally still prevail - that is, that this is an inadequate and, in essence, falsely based organization to be promoting the welfare of less developed countries.
It cannot be provided on the basis of private enterprise assistance. Surely, nobody could justify the proposition that it is to be provided on the basis of this peculiar doctrine that you can own but you cannot manage. I should like to hear an explanation from honorable members on the Government side of why this change has taken place and why this peculiar doctrine is being perpetrated. We continue our adherence to the view that in terms of what has well been called the challenge of our times, it is piffling to approach the thing in this way. Assistance is required by the less fortunate nations of the world, and, in all, they have some two-thirds of the world’s population. They will not be much assisted if the rate of progress of this organization is any indication.
If honorable members read the series of reservations that are given in the annual report itself, they will discover how absurd it is to try to graft on to the economies of these countries, in their particular stage of economic development, any theory of capitalist private enterprise development. That is not the way to face up to the deficiencies as they exist between the West and the East at the moment. What is required in those countries is not private development in terms of millions of dollars but public development in terms of billions of dollars. That can come only from an entirely different approach to this matter. What is proposed seems to my mind to be little more than an economic curiosity, and, as an exercise, I would be interested to hear somebody justify it; but the reports over a period of five years show plainly, in terms of their inadequacy, the inability to remedy this way the problems that beset the people of this world. We oppose the measure.
.- We have heard a most extraordinary speech from the honorable member for Melbourne Ports (Mr. Crean), who led for the Australian Labour Party. He stated that the need to assist underdeveloped countries was the challenge of our time. He gave authorities in support of that contention. After he had stated that proposition, it became perfectly clear that his intense dislike for private enterprise is such that the Labour
Party opposes this measure, which is designed to meet the challenge he referred to, purely because of the party’s hatred and dislike of private enterprise. It seems to me that the Labour Party, like the Communists and Soviets, talks about aid to underdeveloped countries but opposes every measure designed to help them.
The honorable member then proceeded to object to the aid that has been given to Australia. Does the honorable member forget that we have taken a quarter of a million refugees into Australia? Does he suggest that Australia is fully developed? To hear from an honorable member leading for the Australian Labour Party an objection to this international body providing capital for the development of Australia must amaze every Australian.
Then the honorable member objected to the investment of funds in equity stock. Surely when money is being provided for industry in an underdeveloped country, it is much better to provide it in the form of equity capital which is not a dead weight charge upon the industry concerned and which receives its profit or its return according to the profitability of the industry.
The bill provides that the lending authority shall not interfere with the management, and that is very proper. The lending authority under this amendment will have power to provide capital for industry but will not in any way interfere with the management. It is quite apparent that the Labour Party is prepared for assistance to be granted only to socialist countries. It wants assistance provided only in the socialist manner. I think that this bill is worthy of support. It has been requested by the responsible body and I trust that it will have the support of this House.
.- I think it is necessary to correct some of the impressions that the honorable member for Sturt (Mr. Wilson) has given in the past few minutes. The honorable member for Melbourne Ports (Mr. Crean) examined this bill consistently with the determined position of the Australian Labour Party about it. This opposition was not determined just the other day or last week, but, in fact, was a decision made away back in 1955 and re-examined and re-emphasized since then. I want to summarize these objections at the same time as I discuss the points made by the honorable member for Sturt in his attempt to answer them.
First of all, the honorable member for Melbourne Ports made the point, and agreed with it, that one of the great challenges of our time, if not the main challenge, is the economic development of countries which are to-day under-developed. He did this because increasingly in recent years observers of the situation have found that the continuation of law and order, the maintenance of peaceful conditions and the prevention of disturbance as well as the advance of communism - all matters which are the concern of the Western powers and supporters of the Government - can be met and prevented only if there is a rapid and effective rate of economic development in the countries where these incidents occur. They cannot be met and prevented by military methods or by conspiratorial political methods of keeping in office those groups of people whose interests are rooted in the under-developed economic status quo. This is a lesson that supporters of this Government and conservatives in all parts of the world have been very slow to learn. Nowadays, conservative opinion in the United States of America, Great Britain and this country is expressing this proposition about the challenge of our time in relation to economic development as if the conservatives had just discovered it.
The honorable member for Melbourne Ports went on to say that this challenge in relation to the under-developed countries, in respect of which it is vital, is a challenge which can be met only by economic development at the basic level. These countries, first of all, must obtain the kind of economic facilities which are basic to their development - roads, water supplies, sewerage, power supplies, railways and so on.
– The honorable member suggests that they be obtained only by socialist means.
– Wait until I come to that point. The honorable member has already misinterpreted the situation once, and I hope that he will not do it again. I am speaking of these basic facilities which, even in Western countries, have been developed only by what the honorable member describes as socialist methods. The reason for this, even in Western countries, is that there is returnable on investment in these basic economic requirements insufficient profit to encourage the people who invest for profit to put their money into those requirements. Therefore, in one country after another over the last 200 years these services and facilities have had to be developed by public authorities - by governments. If the honorable member wants to describe that as socialism, then, of course, he will say that socialist methods are required. It still remains to be demonstrated that in this respect the conditions in the under-developed countries are in any way different from the conditions in Australia.
– Would the honorable member limit heLp to those kinds of things?
– I would not limit help to those kinds of things. What the honorable member for Melbourne Ports made clear, and what the honorable member for Sturt apparently misunderstood, was that these things should come first. These things are the requirements upon which this kind of frippery, as the honorable member for Melbourne Ports described the bill, could best be later based. This Government, however, wants to put up the building before it completes the foundations, but the building that it wants to put up will be a pretty unconvincing sort of thing,
– The Government wants to have a cocktail party before it has the building.
– Yes, it wants to have a cocktail party. I think that the policy of this Government, as demonstrated here and elsewhere, can be summed up by saying that it wants to have a cocktail party.
– Even before it has a building to open.
– Even before it has the building. That is the point that the honorable member for Melbourne Ports made. He made it quite clear, and I think the honorable member for Sturt is intelligent enough to have understood him. But, of course, we know the advantages that can be gained by misinterpreting matters in an endeavour to associate the Opposition with the kind of thing that the honorable member for Sturt misrepresented the honorable member for Melbourne Ports as having said. I think that the honorable member for Sturt is intelligent enough to have understood the honorable member for Melbourne Ports, and the misrepresentation of the position by the honorable member for Sturt was just a shrewd piece of political manoeuvring.
– Is the honorable member ashamed of socialism now?-
– I have already told the Minister of the importance of socialism. I am not moving one inch away from socialism. I am a socialist, and I have said so many times in this House.
In respect to this proposition that is the great challenge of our time, what is needed are the basic economic requirements - the essential services which can be provided in the underdeveloped countries only by methods which the kind of proposal envisaged in this bill does not even touch on. That is the first point.
I turn now to the second point. The honorable member for Sturt said that the honorable member for Melbourne Ports had exhibited an intense dislike of private enterprise and, as a consequence of that dislike, opposed the bill. The honorable member for Melbourne Ports made it quite clear that he opposed the bill because the International Finance Corporation would not in any way go to the root of the trouble. He opposed it because the Australian Government cannot do very much, as it merely runs along behind the countries that determine these matters. What he was saying was that the Australian Government, instead of just running behind the United States all the time, ought to follow a line which was somewhat independent of the policy being adhered to by that country. The Government of this country ought to support much more vigorously than it has done over the last ten years things such as the Special United Nations Fund for Economic Development and the United Nations Economic Development Administration - machinery which, ten or eleven years ago, was being designed more to meet the fundamental economic requirements of these countries that are underdeveloped, whether or not they are socialist, and particularly those that are not socialist.
This Government, of course, has never really supported those United Nations funds and organizations which could have met the need in large measure. This Government, rather than support that United Nations machinery, has run along with the United States into these various international financial organizations which are realty American instrumentalities and which centre on New York or Washington. This Government, instead of assisting the development of underdeveloped countries by means of United Nations machinery which could have supplied more effectively the fundamental economic requirements of those countries, has moved more and more into the American orbit. I wonder why that is. I think that, there are two fairly obvious reasons. One is that it suited the Australian Government to come into organizations like the International Finance Corporation, because, although we have put 2,250,000 dollars into it, we have already got 1,000,000 dollars out of it. I sometimes wonder whether the Australian Government’s support for organizations of this sort is conditioned more by what we are getting out of them than by what we are putting into them. Or is. the Government’s attitude conditioned by the belief that, in our shaky balance-of-payments situation, having organizations such as this up our sleeve could be of advantage in case of need?
The honorable member for Melbourne Ports said that Australia was not one of the under-developed countries that have been envisaged as being likely to seek and obtain assistance from these international finance organizations. He pointed out that Australia was the kind of country that was seen as a contributor and not as a country that would draw on the funds of these organizations. The honorable member made the point that he objected to Australia drawing on aid from this organization. He said that there were many other countries that were in far greater need of aid than Australia was in the present situation. I think that a number of the drawings that we have made from these international financial bodies have not really been for the assistance of Australia, but have been for the assistance of a number of private organizations. I should like to see a little further behind the scenes in these matters, if possible. All these things are hidden from the people of Australia, just as they are hidden from the Opposition.
The third point that was raised by the honorable member for Melbourne Ports and commented on by the honorable member for Sturt concerned the objection to the investment of funds in equity stocks - the thing with which this bill is specifically concerned, Mr. Deputy Speaker. As the Treasurer (Mr. Harold Holt) told us -
The purpose of this bill is to amend the International Finance Corporation Act 1955 to take account of recent amendments to the articles of agreement of the International Finance Corporation, which have the effect of permitting it to invest in the common stock of firms it proposes to finance.
That is the essence of this measure. The honorable member for Melbourne Ports objected to that purpose. The honorable member for Sturt asked, “ Why object? “ The Right Honorable Sir Arthur Fadden, a former Treasurer, had an objection, too. In 1955, in his second-reading speech on the International Finance Corporation Bill 1955, he dealt with the powers of the International Finance Corporation and said -
It is therefore prevented from investing in common stock carrying voting rights. Investments by the corporation may take various forms and will be adjusted to meet the needs of particluar projects. In particular, it will be able to invest in securities which could be converted into common stock carrying voting rights on disposal by the corporation to private investors. But it was the general view of the countries participating in the drafting of the articles that it would be wrong for an international institution to become involved in the managerial responsibilities of private firms, and I must say that I share and support this view.
– This bill does not depart from that.
– This bill does depart from that. It gives the corporation the right to invest in the common stock of the firm which it proposes to finance, and it did not have that power previously. Why is this amendment necessary? If this bill does not change the situation, what is its purpose? If differs from the view of the former Treasurer on this matter. In his second-reading speech, the Treasurer gave this explanation -
This restriction on the form of its investments was found by the corporation’s management to be a serious handicap to the growth of its operations. Being prohibited from making normal equity investments, the International Finance Corporation was forced to make use of forms or techniques of financing which sometimes appeared complicated and unusual. Its terms normally provided for unsecured loans at a moderate fixed interest rate but also carrying some additonal income related to profits or options on shares.
So, presumably, in the five years that have elapsed since 1955, the corporation’s management has found that this disability is a disadvantage. Therefore, it has introduced changes in its articles of association which allow these things to take place. This is being followed now by legislation in this Parliament which brings the proposal into effect. So there has been a change, but apart from the indication in the Treasurer’s speech that the management has found the previous practice to be a disadvantage in some way - we are not told in what way - we have been told very little. The Opposition is entitled to know more than is contained in the speech. Apparently no one in the House at present can tell us any more about it. The Treasurer, of course, is not here.
The honorable member for Sturt concluded with the peroration that it is apparent that the Labour Party is prepared to support only socialist assistance to socialist countries. The Labour Party, over a period of ten years, has been unequivocal in its stand, beginning by decisions taken when Dr. Evatt was its leader, to back every move to assist the economic development of every country, socialist or otherwise. We have taken a far more effective lead in this respect than any one on the Government side can claim to have taken at any stage. We have been prepared to recognize from the very beginning that the economic development of non-socialist countries is the only thing to prevent social and political disorder there which would bring about the possibility of war and further disorder. Honorable members on the Government side have failed to understand this situation, and for far too long have relied mainly upon military methods and on propping up governments founded on the old status quo. No one can suggest that the Labour Party has been slow to recognize the need for the economic development of non-socialist countries. The criticism which we have heard from the honorable member for Sturt is not in accordance with the facts.
Let me now make one final point in relation to the International Finance Corporation. It is an organization which has a limited amount of capital to invest in private enterprise in various parts of the world which, according to its report, is the kind of enterprise which might hold some risks or give less profitable returns than others and, therefore, would not normally attract commercial investment. So far the corporation, has made no impact upon any economy in any part of the world. What it has been able to do to date has had no appreciable effect upon the economic development of any country into which it has entered. Where it has done this, it has done so in relation to certain limited fields of private investment. Now we have a change in the law. Now the corporation is able to acquire ownership rights - but not managerial rights - in the industries concerned. Its ownership rights can be converted easily into managerial rights.
Recent developments in Australia have not left us completely comfortable about concerns, international or otherwise, in other parts of the world which are able to obtain, or seek to obtain, ownership rights in Australian enterprise. It is very significant that only yesterday for the first time the Prime Minister (Mr. Menzies) saw fit to show some change of attitude to overseas investment in Australian industry. Apparently he was not happy about the prospects of some overseas concerns buying Broken Hill South Limited. I suggest that yesterday might be a significant date in the economic history of Australia because to date the Government has welcomed the flow of capital, whether it has come from the United States of America, Hong Kong or any other place, into the Australian economy. Presumably there was a proposal for some organization, located in Hong Kong, to take over Broken Hill South Limited. For some reason or other the Prime Minister became concerned about this. Did he ask the managing director of Broken Hill South Limited to come to see him in Canberra, or did the managing director of Broken Hill South take that decision on his own initiative? Whatever the reason, the managing director came to Canberra and saw the Prime Minister. Presumably now there will be no takeover of Broken Hill South by this Hong Kong group.
Is this the first time that the Menzies Government has become concerned at the possibility of foreign takeover of Australian companies? Is this the turning point? If it is, it has relevance to this bill, because the bill provides precisely for that kind of thing to occur - for an international corporation to acquire ownership rights in private enterprise in other countries.
– Without management rights.
– The honorable gentleman from Queensland will know that management is based upon ownership. If you have enough ownership of a concern you will manage it. The separation of management and ownership is only something which suits the shareholders and the managers at the time. Even the Treasurer stated in his second-reading speech that if the corporation considers that any risk to its capital is involved it can assume the power of management if it owns enough of the company to be able to do this. The proposed division is completely artificial. If American, Hong Kong, Japanese or Chinese interests own sufficient of Australian organizations, do not forget that those foreign interests will control them. The step taken by the Prime Minister or the managing director of Broken Hill South Limited is a significant straw in the wind. The Australian Labour Party, if not the honorable member for Mackellar (Mr. Wentworth), who apparently is not listening to what I have to say-
– Why should he?
– Why should he? His state of mind is such that he does not think he can learn anything from any one. There is evidence of concern even from him at the way in which foreign capital can control enterprises in other countries. The criticisms of the bill which were made by the honorable member for Melbourne Ports are not short of a point in relation to this matter. The Opposition opposes this bill because we believe that the International Finance Corporation is an unimportant superficial means of contributing something, little though it may be, to the economic development of under-developed countries. We believe that the proposal, of which this bill is the main instrument, to vest in the International Finance Corporation power to invest in the common stock of a company adds nothing. Insofar as it adds something, it is a backward step.
.-] shall not occupy the House for very long, but I do not feel inclined to allow the speech of the honorable member for Yarra (Mr. Cairns) to go unanswered. It is one of his typical speeches. The real reason why the Labour Party does not like this bill is that it deals with capitalism and capitalist propositions. Let me remind the Opposition that capitalism is the philosophy of the free world. And the socialist world is not a free world. That is why the Opposition opposes this bill. That is why the honorable member for Yarra (Mr. Cairns) suggested the whole time that this is all wrong and that the International Finance Corporation does no good work whatever. Did he produce one shred of evidence to support his argument? Not one shred! He just suggested that we should accept the arguments of the Opposition. The honorable member for Sturt (Mr. Wilson) was very sound in his criticism of the honorable member for Melbourne Ports (Mr. Crean).
The honorable member for Yarra asked why we supported the International Finance Corporation which he said was financed largely by American capital, rather than United Nations organizations for economic help to under-developed countries. But who provides most of the money for United Nations help to uneconomic countries? ls it not the United States of America? The policy of the honorable member for Yarra is to say everything possible derogatory about the United States of America. That is his theme song. Another bit of propaganda that is constantly put over in this House is that because the peoples of under-developed countries are short of food and have little economic strength they are a ground for communism. Let me remind the honorable member for Yarra that East Germany was not an uneconomic country nor were the East Germans a backward people. Bui East Germany like Poland and other older countries of Europe, was forced into communism. The honorable member forgets that, because it does not suit his argument. All his argument is on the side of the Russians; that is all it comes to. Who controls the economy in the socialist countries? Russia! The honorable member tries to make out that the United States of America controls the economy of the free world, but that is not true. The reason for this bill being brought down is that experience has shown that the methods so far adopted have not been working satisfactorily. This measure is designed to ensure the smoother working of the International Finance Corporation. 1 support the bill.
Question put -
That the bill be now read a second time.
The House divided. (Mr. Deputy Speaker - Mr. Wight.)
Majority . . . . 34
Question so resolved in the affirmative.
Bill read a second time.
– I would like to direct the attention of the committee to the fact that this bill amends section 3 of the International Finance Corporation Act, which in turn alters the agreement which is the main part of that act. I would like to read to the committee part of article III. of the agreement. Section 1 of Article III. of the Articles of Agreement provides -
The corporation may make investments of its funds in productive private enterprises in the territories of its members.
That provision is not changed. I point out, primarily for the benefit of the honorable member for Sturt (Mr. Wilson), who chose to try to score some cheap political advantage - which rather surprised me coming from him - that that presumes the two kinds of investments of which we all know. There may be investments of the debenture kind where the person who invests is not an equity holder of the organization. Section 2 of Article III. provides -
It is the gospel of private enterprise of which I want a definition, and not what some people interpret socialism to be. When I was a student of economics many years ago I was taught something that was called, rather euphemistically, the golden rule of capitalism, and that was that whoever owns should also control. At least that has applied to the obligation of equity holding in a company. If you own shares you have certain voting rights which you are supposed to exercise. That is the sort of thing that honorable gentlemen opposite want to see applied to members of trade unions. They suggest that it be made compulsory for trade union members to vote in trade union elections. But here honorable gentlemen opposite are now putting in the self-denying ordinance that you shall own but you shall not exercise the right to vote. I would be interested to hear - and I put the challenge out primarily to the Treasurer (Mr. Harold Holt) - any honorable gentleman on that side of the House, an apostle of private enterprise, define for me this sort of private enterprise that the Government espouses, where you will own shares in an undertaking but will not exercise the vote. I will be particularly interested to hear the explanation that vitiates what I was once told was the golden rule of capitalism. I am not extolling capitalism, but you are, and I should like to hear the explanation from the mouths of the neophytes or anybody else opposite.
.- The explanation of this is quite simple, and I thought it was given earlier by the Treasurer (Mr. Harold Holt). It is that this corporation can acquire equities and thus enjoy profits, while avoiding the complicated mechanisms employed previously of issuing notes which were then convertible. Only equity owners can share in the profits, but at the same time it is not suitable in normal circumstances that an international body should come in and take control and dictate policy to the management. However, the international body reserves the right to take appropriate action in certain circumstances if the management is not functioning properly, when the corporation is liable to lose money that has been put up by member governments. The reason why it does not exercise its voting rights is a very proper one. This should not normally interfere with the corporation in helping countries.
– I am most interested to hear the explanation that this is in the name of profits. At least that may get back to the main theme in my speech, which was that the purpose of this organization is to promote economic development in less developed countries. The honorable gentleman says that profit is the criterion. I should like to quote again from this annual report of the corporation the kinds of promotion on which loans have been made to some of these less developed countries, and ask the House whether, in all conscience, this is the answer to the challenge of the times as far as Australia is concerned. I suggest that Australia ought not to be availing itself pf assistance from this organization at all. At least one organization - Rubbertex (Australia) Proprietary Limited, in January, 1959, borrowed 225,000 dollars on terms of 6 per cent, interest, additional payments to be contingent on profits, with maturities in 1961-70 and an option on shares. There was no suggestion as to the degree of ownership there. A further 90,000 dollars was borrowed by the same organization in June, 1960, at 6 per cent, interest, additional payments to be contingent on profits, with maturity in 1961-71 and an option on shares. That is a company which perhaps can afford development on those terms. But look at a case in Mexico - and, after all, that is getting on the border of where mere is some problem in the future. An industrial equipment concern borrowed 600,000 dollars in August, 1957, and these are the terms - 9 per cent, interest and additional payments - above the 9 per cent. - contingent on profits, with maturities in 1961-67. In Peru, a synthetic ammonias and fertilizer factory borrowed 3,886,000 dollars at 7 per cent, interest with additional payments contingent on profits. I do not want to labour the point any further, but I want honorable members to ask themselves whether this is the sort of aid that they want for less developed countries.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill - by leave - read a third time.
– by leave - When I announced on 30th April, 1959, the Government’s decision to extend television services to the major provincial and rural areas of the Commonwealth I said that the remaining provincial and rural areas would be given consideration when that stage was well under way. On a number of occasions since then I have made it quite clear that, as soon as it was considered practicable to do so, in the light of progress made with the present stage of development the service would be extended to additional areas.
Rapid progress is now being made with the establishment of stations which were authorized in the present stage of development. It is expected that the thirteen commercial stations will, with two exceptions, commence service progressively between December, 1961 and June, 1962, while the national stations will be brought into operation during the period December, 1962 and June, 1964.
The further extension of television services presents many problems as, in the main, the areas which remain to be served are less densely populated than those to which services are now being provided. The Australian Broadcasting Control Board, in association with the Postmaster-General’s Department and the Australian Broadcasting Commission, has thoroughly investigated these problems, particularly the population densities of the remaining areas, and has submitted a report and recommendation to the Government. Following consideration of the board’s report the Government has decided that television services will be extended to the following twenty areas: -
Southern Agricultural Area (KatanningAlbany).
The specific mention of a town is intended only to provide some indication of the location of the areas involved, but does not necessarily mean that the station will be established in that city or town. It should be understood that the proposed stations will cover wide areas, including not only those towns but also many others. The particular areas chosen arise from technical considerations which involve the location of the stations and population considerations. Taking these criteria jointly into account, the board has recommended the places named.
As to future areas, television is a service which, because of the large expenditure involved, cannot be developed all at once.
The Government has proceeded by stages and is now proceeding to a new stage. The door is not closed for future stages. Indeed, there are a number of other areas of relatively substantial population concerning which it has not been possible to make final decisions at this stage. All these will, however, receive continuing attention, and I have asked the Australian Broadcasting Control Board to make a further report to me as soon as it is possible to reach some firm conclusion as the result of experience with the new stations. Representations will be received by the board from interests which may desire to provide services in such areas, or, for that matter, in other areas. The board, after full investigation, will make its recommendations to the Government through the Minister.
It is proposed that national stations be established in each of the areas named, and that applications be invited for the grant of one commercial licence in each such area. This course conforms with the Government’s policy of providing dual national and commercial services throughout the Commonwealth.
Last week I made a progress report on the third phase of development which indicated that the last national station in that phase would come into operation in June, 1964. This early decision regarding the national stations to be established in phase 4 will enable the planning and preparatory work to proceed coincidentally with the remaining work in phase 3, so that the first station in phase 4 will be ready for operation shortly after the completion of phase 3. Stations will then be brought into operation on an average of two per quarter, and the whole project should be completed during 1966-67.
The whole of phase 4 of this national project will cost approximately £9,500,000 and upon its completion television services will be available to some 91 per cent. of the population.
As I have said, applications will be invited for the grant of a licence for, at the present time, one commercial station in each of the areas named. Whether or not every one of those areas warrants a commercial station is a matter for decision in the first place by those who may wish to make application for a licence. It will, of course, be necessary for them to present an acceptable case to the board. I feel I can say, however, that where population densities are relatively low, arrangements by an applicant with an adjacent licensee for some form of relay or programme sharing, or even financial assistance, might prove acceptable to the board, every case depending upon its own circumstances.
As in the case of stations which were licensed in the third stage of development, it has been decided that, as far as practicable, priority for the grant of a licence will be given to applicants which are local companies not associated with metropolitan stations, and which are able to provide a service in conformity with the technical and programme standards laid down by the Australian Broadcasting Control Board.
I will discuss as soon as possible with the board the formalities involved in respect of inviting applications and the conduct of the inquiries. I hope, Mr. Speaker, that the amendments which were made to the act last year, certain of which gave the board greater control of the conduct of the proceedings, will have the result of greatly shortening the inquiries themselves. Prospective applicants will be given ample time to investigate the position in each area and to prepare subsequent applications.
The question of the establishment of additional stations in the capital cities is to be further considered at a later stage.
I lay on the table the following paper: -
Extension of television services - Ministerial statement. and move -
That the paper be printed.
Debate (on motion by Mr. Crean) adjourned.
Debate resumed from 11th May (vide page 1779), on motion by Mr. Harold Holt-
That the bill be now read a second time.
– This bill has been on the notice-paper for a considerable time; in fact, I think, since about March or April of this year. For the most part it encompasses technical amendments of the Audit. Act. It does not represent what has been promised for a long time - a consolidation and re-writing of the Audit Act. Machinery difficulties have arisen over recent years, and this bill is an attempt to remedy some of them. Some of the amendments result from suggestions made by the Public Accounts Committee. At one time I was a member of that committee, and I do not intend to say anything about its recommendations. I have not been a member of it for some years, and I know that its respected former chairman - not that the present chairman is not also respected - intends to say a few words a little later.
I would just like to direct attention to clause 11, dealing with the handling of what are called commercial accounts. As honorable members know, in our financial proposals and in the various forms of the House, we treat receipts and expenditure on what is called a cash basis. This is not the basis currently used in outside commercial accounting for businesses. For a considerable number of years, the Post Office, in addition to its cash proposals which we consider in the Estimates, hai brought down in its own annual report a separate set of accounts which it calls its commercial accounts. Certain items of a capital nature are excluded from these accounts or only the annual component is brought in. The commercial results of the Post Office are a very different proposition from the results shown in the cash accounts. It has been customary over the years to set the tariffs of the Post Office in relation primarily to the commercial accounts rather than on the basis of the cash accounts that come before the Parliament.
There has been some degree of friction over the years between the Post Office and the Auditor-General concerning the audit of the commercial accounts. The argument revolves around what the AuditorGeneral thinks ought to be in the commercial accounts and what the financial officers of the Post Office think ought noi to be in them. Clause 11 of the bill has been introduced in an effort to iron out some of the difficulties. The clause reads as follows: -
After section forty-one c of the Principal Act the following section is inserted: - “41d. - (1.) A Department, being a Department of State of the Commonwealth, shall, if so required by the Treasurer, keep such accounts and prepare such financial statements in respect of such of its operations, and in such form, as the Treasurer determines.
This means, apparently, that in this argument between the Post Office and the Auditor-General, the Treasurer shall be the arbitrator as it were. What he prescribes as the way in which accounts shall be kept presumably is the basis on which the Auditor-General will make his audit. I am not quite sure whether that is the final meaning of the provision, but at least it highlights some of the difficulties that face a government. In the total Commonwealth expenditure of about £1,600,000,000 or £1,800,000,000 a year, we have a variety of activities. We have some purely administrative departments, some departments in the nature of business undertakings and even separate trust accounts and statutory corporations, and sometimes it is pretty difficult to determine how they account finally to Parliament.
The Parliament all along has been zealous of the right to control the purse. Parliament and not the Treasurer does this. But, of course, the magnitude and the proportions of the accounts that come to the Parliament are determined by the Government and the Treasurer. Nevertheless, parliamentary control is real and I am sure that honorable members wish to preserve it. Traditionally, the Auditor-General has been regarded as a person not quite in the position of a judge - I do not think he could have that kind of role - but a person at any rate who has no fear when making criticisms that he will be called to heel by the Government or by some department. Admittedly his role calls for great tact and tolerance. These virtues must be exercised more by the AuditorGeneral than by the Government.
Some difficulties still face us on this question of the ultimate control by Parliament in relation to the commercial accounts. Recently we debated the estimates for the Postmaster-General’s Department. Because they are on the cash basis and not the commercial basis, it is difficult to find what my colleague, the honorable member for Barton (Mr. Reynolds) was looking for and that is where in the accounts of the Post Office this notional charge now imposed on the capital supposed to be invested in the
Post Office can be found. It cannot be found in the cash accounts as they are presented to Parliament and I would suggest that some action must be taken to bring the commercial accounts before Parliament if Parliament is to get a true picture of the financial position of the Post Office. I think the total expenditure of the Post Office this year is estimated to be about £150,000,000, but one-sixth of this or £25,000,000 cannot be found, or cannot easily be found, in the estimates. Some action must be taken to remedy that deficiency. It may be that agreement has been reached about the commercial accounts’, but if Parliament is still to act responsibly in criticizing or even examining the overall position of the Post Office, the whole story must be put in the documents that come before it.
I am sorry that I have not had the time to look a little more closely at the bill and to ask some of the departmental officers a little more about it. For the most part, the amendments are highly technical and I happen to-night to have five bills in succession on which I must speak. It is asking a bit much to try to encompass all the technicalities of all these pieces of legislation, one after the other. However, some tidying up has been done in this bill. The fact that the need for some of these amendments has been brought to light by the Public Accounts Committee simply furnishes another illustration of the value of the committee.
This is probably the last opportunity 1 shall have to speak on this bill and I would like to put on record my appreciation of the valuable experience I had when as a young member of this House I served on the first resuscitated Public Accounts Committee - I think historically there was one thirty or forty years ago - under the chairmanship of the honorable member for Warringah (Mr. Bland). I understand he will not be returning to the House after the next general election and I would like to thank him for the pioneer work that he did in setting the committee on the road that it has followed. I trust that he may have many years in which to watch the way that the committee keeps the Parliament on the road that he chose.
.- Honorable members will remember that last year, when the Treasurer (Mr. Harold Holt) brought down a bill to amend the Audit Act he indicated that the Treasury had before it a number of other contemplated amendments but he was not prepared at that stage to delay the bill he was introducing until the other amendments could be formulated. The bill before us gives effect to all the other suggestions which the Treasurer said he had received from the Public Accounts Committee and which he wanted to incorporate in the one bill. I think that the measures will have to be treated separately. The first bill deals with outstanding claims against the Consolidated Revenue Fund and the other contains the amendments which the Treasurer said he proposed to incorporate in the one measure.
The reason why the amendments under consideration come before us at all is that the Public Accounts Committee made investigations and found that certain practices that were being followed by the Treasury were undesirable and recommended that they be discontinued. As this was what the Treasurer wanted also, the bill has been drafted in this manner. Honorable members might ask why it is that the Public Accounts Committee dealt with the Audit Act at all. The reason is that the committee suggested to the Treasurer that it ought to have complete control over the way in which the accounts of the Government were kept; in other words that no alteration in the form of the accounts or in the contents of the Audit Act should be made without the matter first being considered by the Public Accounts Committee. We have not entirely achieved that objective because in this bill the Treasurer has incorporated certain things which have not been considered by the committee. It is important, however, if real authority is to be vested in the committee, that no department or authority shall have the right to make changes in the form of the public accounts or in the contents of the Audit Act, without first consulting the committee. I put that forward as one of the last things I want to say about this matter. These are important points which go to the real root of the power and authority of the Public Accounts Committee. Up to the present time, the committee has had most generous co-operation from the Treasury and our Treasurers and the things it has been able to do have resulted largely from that co-operation.
The bill itself is not a very impressive document and one has to look to see why some of the amendments are necessary at all. There is in the Audit Act a requirement that the Auditor-General shall publish .in his annual report a list of all the accounts which represent outstanding claims upon the Consolidated Revenue Fund. These accounts number hundreds and hundreds, and the Auditor-General has informed the Public Accounts Committee that he has never been able to present a complete list of the accounts as there were always some outstanding items that he had not been able to include, and there was really no value in publishing a statement which was not complete. After examining the matter, the Public Accounts Committee agreed that no good purpose could be served by continuing to present this list of outstanding claims, and it was omitted. The important point is not that this was something which the committee found to be desirable and that the Auditor-General stopped preparing the report in the manner in which the law required him to prepare it. The fundamental consideration in this instance was that the law was not being carried out because the Treasury agreed with the Auditor-General that it was not necessary to do so. The matter then came before the Public Accounts Committee which agreed with the Auditor-General as to what should be done. The Public Accounts Committee found that what some people in control of public finances were doing was in effect undermining parliamentary control. It is entirely wrong that people should be doing things which the law does not allow them to do, or were not doing things which the law requires them to do. Honorable members will know that during the Stuart period in England the Crown was constantly neglecting to carry out the law or to do the things it was required to do. This resulted in conflict between the Executive and the Parliament, and with the revolution of 1688, the Parliament framed the Act of Settlement which set out clearly and emphatically what the Parliament wanted.
One of the provisions of the Act of Settlement stated that the pretended suspension of the law is of no effect. That principle of the Act of Settlement has since been carried out here and embodied in our parliamentary procedure. And we regard ourselves as being in a somewhat similar position to that in which the Stuarts were at the end of the seventeenth century, “ The pretended suspension of the law is of no effect.” We look upon every defection from that principle as important. That departments are doing things which they have no statutory authority to do or not doing things which they are required by law to do is of some importance in the context of these alterations to the Audit Act. As the honorable member for Melbourne Ports (Mr. Crean) has said, many of the provisions contained in the bill are obviously the result of recommendations by the Public Accounts Committee while other matters covered were not the subject of recommendations from that committee. 1 wish to direct attention to the alterations with which the committee was concerned as against those with which it was not concerned. Let me take first the preparation of outstanding claims against the Consolidated Revenue Fund. As I have said, that was something upon which the committee and the Auditor-General agreed. I come now to the commercial accounts with which the honorable member for Melbourne Ports (Mr. Crean) has dealt and about which the Public Accounts Committee did have something to say. It suggested to the Treasury that it was not sufficiently clear that there was legislative authority to do these things which the departments were doing, and it urged that the act should be amended to include power to follow the method of commercial accounting as well as the ordinary departmental cash accounting.
Clause 10 seeks to clarify the practice that was followed by the Treasury and relates to a provision for a special appropriation from Consolidated Revenue for the refund of revenue not covered by other acts. It relates also to loan funds. Section 63 of the principal act is being repealed and a new section inserted. This deals with the control of moneys outside the Commonwealth. That again is a matter to which the Public Accounts Committee gave some consideration. It felt that there
F.8842/61 - .R-rSl] was some doubt as to whether the Audit Act covered the audit of the accounts of Commonwealth departments in external Territories or the auditing of accounts relating to moneys outside the Commonwealth. In order to clarify the position and to ensure that the Auditor-General has power to audit these accounts, a new section 63 is being enacted. One with which we did not have anything to do and in which honorable members should be interested is the amendment which makes provision for the audit of the parliamentary accounts. As you know, Sir, there had been some objection by other Speakers to the Auditor-General examining the accounts of the Parliament, but this bill makes it clear that the Auditor-General is to have that power and is to report to the Parliament on the results of his audit.
From the point of view of efficiency, the committee had definite views on the desirability or otherwise of showing sums of money in the public accounts in pounds, shillings and pence. The amount of labour involved in including shillings and pence was simply immense, and the committee agreed with the Treasury that it would be beneficial to abandon shillings and pence and express the sums of money in round figures. That provision is made in the amending bill.
Another matter concerns the more effective audit of the accounts. Since the Public Accounts Committee was able to get the Treasury to agree to bring down the Budget earlier than previously, the Auditor-General was in a different position in relation to the accounts. Years ago, when I first studied these matters, the Auditor-General’s report would be presented towards the end of the financial year after the year with which he was dealing. The report was brought down six, nine or twelve months later. Now the Auditor-General brings down his report on the main accounts early in the year - about 1st September - and honorable members can have recourse to the report when looking at the payments and accounts for the year. That is not to say that they pay enough attention to them; but the position is that members can obtain the AuditorGeneral’s report and study it at the same time as the Estimates are being considered by the Parliament. However, the big commercial accounts that the honorable member for Melbourne Ports mentioned require entirely different treatment. They are brought down as a supplementary report after the main report has been submitted.
Then there was a question as to whether the regulation-making power covered a number of things on which the Treasury had been making regulations. Here again, when the Public Accounts Committee looked into the matter, it agreed with the Treasury that alterations should be made in the regulations so as to make it quite clear that the Treasury did have power to make regulations governing these particular matters which came under its jurisdiction.
There are a number of other sections which were dealt with by the Public Accounts Committee and the Treasury. Some of the amendments are made as a result of the recommendations of the committee and some have been decided upon by the Treasury itself; but they are matters dealing with administrative efficiency and are the things that the Parliament would be glad to have done.
The Prime Minister (Mr. Menzies) has circulated an amendment which I gather will be included in this bill. I do not regard that amendment as containing anything objectionable at all, and I include it among the things with which I am sure the Public Accounts Committee would agree. I commend the bill to the House.
– 1 was interested in the speech of the honorable member for Warringah (Mr. Bland). As the honorable member for Melbourne Ports (Mr. Crean) has said, the honorable member for Warringah was chairman of the Public Accounts Committee from the time it was re-established some ten years ago until several years ago. I was one of those who was appointed to the committee with the honorable member for Warringah and I know the interest he had in maintaining Parliament’s control of the spending of public money. From the beginning, the committee found that certain alterations were needed in the Audit Act if the Auditor-General was to be able to fulfil his duties. The liaison between the Treasury and the Public Accounts Committee has always been very good. Two or three different representatives of the Treasury have been sent to us, and our relations with them have been very happy indeed. Whoever was responsible, whether it was the Treasurer or the Treasury, has been most helpful to the committee in sending men of the calibre of those who were selected.
I do not know whether all honorable members appreciate just what the Audit Act means to the country. It is one of the major measures designed to guard the expenditure of public money. Each year, the Auditor-General submits a report. Years ago when I was in the South Australian Parliament, we had difficulty in obtaining the Auditor-General’s report about the time the Budget was presented and, of course, the time when we could deal with the matters mentioned in the report. The honorable member for Warringah referred to that matter when he spoke about getting the Auditor-General’s report submitted as early as possible in the financial year. That has been helpful to the Parliament.
I agree with the honorable member for Melbourne Ports that the committee has profited from the knowledge of the honorable member for Warringah. He has been very helpful to honorable members. Several members of the committee, including myself, were interested in the Budget and Treasury matters over a period of years, and we received great assistance from the honorable member’s practical knowledge of the subject. The Government also appreciated how necessary it was to bring the Audit Act up to date. When Mr. Brophy was Auditor-General, he indicated general amendments that should be made to the Audit Act but if I remember rightly his retirement from the Public Service was postponed for some months so that he could go fully into the matter and advise the Government accordingly. Some years have elapsed since many of these recommendations or suggestions were made, not only by the Public Accounts Committee but also by the AuditorGeneral. I am pleased that we have before us now an amending bill to deal with these matters.
Candidly, I was under the impression two or three years ago - when we were told that an amending bill would not be brought down until a comprehensive report had been submitted - that we would have more before us than we have in this bill. At the same time, I feel that the Treasurer (Mr. Harold Holt) and the Treasury have co-operated in achieving what was considered to be necessary. I shall not go into detail as the honorable member for Warringah has done, but I can assure honorable members that the Public Accounts Committee has devoted a lot of time to its investigation of these matters.
I noticed with interest yesterday that the honorable member for Barton (Mr. Reynolds), .when speaking about the PostmasterGeneral’s Department and the interest bill on the commercial accounts, could not find just what he wanted. That very question of the commercial accounts in the Postal Department was a matter which received close attention from the Public Accounts Committee. We devoted a lot of time to that matter. We heard officers of the Postal Department who submitted their views. We discussed whether the Postal Department actually made the profit or loss that it was reported to make. We considered whether moneys that were shown as a big profit made by the Post Office and were paid into general revenue and shown as such should be debited as the amount of capital on which the Postal Department operated. We considered whether the department should be charged interest on that money.
The honorable member for Barton has expressed some interest in postal charges. We have to consider the question of whether the general public ought to be asked, to contribute through the commercial accounts of the Post Office in order to meet the cost of buildings financed, not out of loan funds or other borrowed money, but out of revenue allocated to the PostmasterGeneral’s Department. I was pleased to hear the Postmaster-General (Mr. Davidson), yesterday, I think, deal with the proportion of the expenditure on buildings that could be charged to funds other than Post Office revenue. That is something that honorable members could well go into if they want to get a real understanding of the charges that ought to be made for the services provided by the Post Office at the present time. 1 do not want to extend the debate on this measure into a debate on the finances of the Post Office. I am just trying to describe to honorable members some of the many difficulties that arise under the act concerning the things that the AuditorGeneral asks departments to do. The result of an account as determined by the AuditorGeneral on a cash basis may be different from the result worked out on a commercial basis. A department may say, “We have shown a profit on a commercial basis”. The Auditor-General may say, “ On a cash basis, you have not shown a profit “. The matter is very complex, and I am very glad that the debate on this measure has afforded honorable members an oportunity to discuss these matters so that perhaps they may be understood a little more fully and so that we may appreciate what is involved in these problems and how much the Parliament owes to the Auditor-General and his staff for the discharge of their functions under the act.
The honorable member for Warringah has mentioned the changes in procedure with respect to the Advance to the Treasurer. Under the terms of the Public Accounts Committee Act, it is the duty of the committee to follow up the Auditor-General’s reports and to consider matters in respect of which he reports that accounts have not been kept strictly in accordance with requirements or that money has been spent in an unauthorized manner or in excess of the limit approved by the Parliament. Where that happens, an amount often has to be made up out of the Advance to the Treasurer. Such matters demonstrate the need for a good Audit Act and an efficient Audit Office staff under a good AuditorGeneral in order that these matters may be reported on so as to give a lead into these things to the Public Accounts Committee, which may be described as the watchdog of the country’s finances. The committee cannot make a detailed investigation of all the accounts of every department in order to ascertain the why and the wherefore of everything that takes place. It must be given a lead on which to base its inquiries, and the Auditor-General provides the lead in a very effective manner by making reports that the committee can follow up.
I express my pleasure at the introduction of this bill, Mr. Speaker. I was about to go overseas when it was introduced in May last, and I returned to this country only a couple of weeks ago. As a consequence, I have not been able to give to the measure as much attention as I would have liked to give it in order to consider the effect of the amendments to the act proposed and the degree to which they will meet suggestions made by the Public Accounts Committee through the years. I am pleased at the extent to which the proposed amendments seem to go.
I have no doubt that anything that is necessary later can be dealt with at the right time. I for one do not like interfering with the Audit Act even as frequently as once during the life of every parliament. I suggest to the Treasurer that too frequent interference with it would not be wise. The departments, the Auditor-General, the Public Accounts Committee and the Parliament all want to know where they stand. Nobody wants to be ordered about and kicked around all the time. I am sure that if any further amendments to the act are found to be necessary they will be dealt with in due time. No doubt further amendments will become necessary, because financial procedures are changing all the time. Over the last ten years, for instance, there have been big changes in the financial side of business undertakings, with particular emphasis on the manner in which expenditure is financed. The honorable member for Melbourne Ports and the honorable member for Yarra (Mr. Cairns) have told us this evening something of changes in financial matters from year to year. We may find it necessary to give greater power to the Auditor-General before very long. However, I propose nothing definite at present.
I suggest that honorable members may very readily accept this bill, which has been so carefully considered by the Treasurer and the Department of the Treasury, and much of which has been carefully considered by the Public Accounts Committee also. The committee has not gone through the bill as a committee and made a definite pronouncement on it, but the bill will do a number of things that the committee and the Auditor-General consider to be necessary. The officers of the Treasury who have been associated with the working of the Public Accounts Committee have been very ready to confer on these matters and have made recommendations that the committee considered to be sound. I support the bill, Mr. Speaker.
Question resolved in the affirmative.
Bill read a second time, and committed pro forma; progress reported.
Message recommending appropriation reported.
In committee (Consideration of GovernorGeneral’s message):
Motion (by Mr. Cramer) agreed to -
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Audit Act 1901-1960.
Resolution reported and adopted.
In committee: Consideration resumed.
Clauses 1 to 22 - by leave - taken together, and agreed to.
Clause 23 -
Section seventy-one of the Principal Act is amended - (a)…………….
Amendment (by Mr. Cramer) agreed to -
At the end of the clause, add the following paragraph: - “ (d) by omitting sub-section (2.) and inserting in its stead the following sub-section: - (2.) The regulations may -
authorize the Secretary to the Department of the Treasury to give to persons employed in the service of the Commonwealth or to any other persons who are subject to the provisions of this Act directions, not inconsistent with this or any other Act or with any regulations under this or any other Act, for or in relation to any of the matters referred to in paragraphs (a) to (0. inclusive, of the last preceding sub-section;
authorize a prescribed officer of a Department to give to officers of, or persons employed in, that Department directions, not inconsistent with this or any other Act, with any regulations under this or any other Act or with any direction referred to in the last preceding paragraph, for or in relation to any of the matters referred to in paragraphs (a) to (f), inclusive, of the last preceding subsection; and
provide that a contravention of, or failure to comply with, a direction referred to in either of the last two preceding paragraphs shall be deemed to be a breach of the regulations.’.”.
Clause, as amended, agreed to.
Title agreed to.
Bill reported with an amendment; report - by leave - adopted.
Bill - by leave - read a third time.
Debate resumed from 29th August (vide page 539), on motion by Mr. Harold Holt -
That the bill be now read a second time.
.- Opposition members support this bill although we feel that the increase in capital could have been greater than is proposed. As honorable members know, the bill proposes to increase the capital of the Commonwealth Development Bank by £5,000,000. The Opposition can say to the Government, “ We told you so “. Some four years ago when the bank was established we claimed that the capitalization was inadequate. This seems to have proved to be the case. When the organization was established there were all kinds of imaginings as to the role that it would play in the future. It had an interesting variation from existing banking practice. Advances were not granted on the basis of existing security, as is the pattern followed traditionally by banks. The annual report of the bank states -
The main purpose of the Commonwealth Development Bank is to provide finance for the purposes of primary production and for the establishment or development of industrial undertakings, particularly small undertakings, in cases where, in the opinion of the Bank, the granting of assistance is desirable and finance would not otherwise be available on reasonable and suitable terms and conditions.
In other words, advances were granted on the basis of faith in the capacity of the person to whom they were made rather than on the basis of his existing assets.
To some extent the bank was crippled initially because of the fears of some people who wanted most from it that it would be a challenge to existing private banking institutions. Some interesting figures relating to its activities are contained in the handsome report of the Commonwealth Banking Corporation. I am not one of those who criticize the form in which the report is presented. The main value of such reports is that they are made attractive and intelligible to those who want to use them.
I commend the chairman of the corporation for the fine format in which the report has been presented. I have noticed some rather curious criticisms by financial editors who, on one hand, ask private firms to present their annual reports in an attractive and informative way and, on the other hand, criticize the Commonwealth Banking Corporation for doing just that.
The additional expense involved in presenting a report in this attractive manner is justified if the information contained in it is more likely to be read than otherwise would be the case. A similar change in format - a welcome change, in my view - has taken place in reports of a number of Government departments. Instead of the traditional black and white report, charts, diagrams and illustrations have been used. I suggest that more of those reports are read now than was the case previously.
Page 31 of the report, which relates to the activities of the Commonwealth Development Bank contains a classification of loans approved by the organization according to the amount of the loan. The table is divided into three parts, one showing the total, one showing the assistance given in the rural field and the other showing the assistance given in the industrial field. During the year 2,060 separate loans were approved involving a total advance of £10,832,000. By number, more than nine out of ten of those advances were for rural endeavour and 184, or slightly less than one-tenth of the total, were for industrial activities. An analysis of the figures reveals that they fall into two divisions within the classifications. Of a total of 1,876 grants for rural assistance, 1,401 - slightly more than three-quarters of the total - were for loans of £5,000 and less. This shows the need which existed in the community to assist small-scale farmers.
As most people know, £5,000 does not go very far these days in the establishment and development of a farm. In fact, one of the great difficulties which face individuals in Australia who want to undertake farming is the high capital cost involved. In theory, we are told sometimes that any individual can follow an occupation or career of his own choosing. That is easy to say but a little more difficult to achieve. The establishment of a farm on a basis which will give an adequate living these days involves, if you start from scratch, capital expenditure of at least £25,000. It is not easy to start up from nothing, as it were. There is still a great tendency for the passage of rural holdings to be by inheritance rather than by aptitude or willingness to go on the land in the first place. In fact, there must be many thousands of people who would like to go into rural activity but who are prevented from doing so by the sheer economics of the position. As I have said, about three-quarters of the loans granted were for £5,000 and less.
Turning to the industrial side, I find that of a total of 184 loans for industrial purposes, 39 - about one-fifth of the total - were for sums of £20,000 or more. That involves something like two-thirds of the total amount advanced for industrial purposes. It also seems to show a different kind of pattern so far as the progress of this bank is concerned. In Australia, as in other parts of the world, there is now great emphasis on what economists call growth. It is suggested that the economy of a country ought to be able gradually or progressively to raise the standards of living of its population. In Australia, owing to increasing prices, more must be produced each year in order to maintain existing standards. But we also have an annual increase of between 2 per cent, and 3 per cent, in our population, so that simply to maintain standards, even if there is no inflation of prices, our total output must increase by something like 2 per cent, or 3 per cent, per annum. If there is to be growth, and an overall increase in standards, the increase of production year by year must be more than sufficient to cover the increase of population.
If an examination is made of this subject of growth, it is found that in the last analysis growth depends upon the amount of private or public investment which takes place in the community. There was talk early this evening about what is broadly termed a private enterprise economy. That is a rather loose term which I do not wish to debate at the moment, but the major impulse for growth in a private enterprise economy must come from investment in the private field. Prior to the existence of the Development Bank the tendency in the promotion of growth was to enable the stronger to grow even bigger rather than to enable those who most deserved to grow to do so. In that way we did not necessarily get the best pattern of development. I suppose that one of the peculiarities of our system is that it is sometimes easier to purchase things which can hardly be placed very high on the scale of social priorities, simply because capital is available to finance those purchases, than it is to purchase things which would be a more desirable social choice. Because private enterprise channels its investment in this way there is a tendency for ancillary and tertiary sectors of the economy to be erected on an unsound foundation.
In theory, the Development Bank goes to the basis of things. If certain economic enterprises are deemed to be desirable they are to be promoted, not on the basis of their existing assets, but on the capacity of the individuals concerned to achieve what they set out to achieve. If we are ultimately to get a better pattern in our investment, and therefore in production, we have to go much more extensively into this field than we have gone so far. If we look at the most recent statement of bank advances in Australia, classified according to economic activity, we find that at June, 1961, advances to all borrowers totalled £1,039,000,000. Against that the £40,000,000 of advances made by the Development Bank is not a very significant amount. Something like 4 per cent, of the total bank advances- were in channels chosen by the Development Bank, and I suggest that there has to be a far greater emphasis on promoting activities of this kind rather than on the encouragement of already established undertakings. When you cannot do two things at once and a choice has to be made, the sensible course is to have a scale of social priorities of some kind. At page 31 of the “ Reports and Balance Sheets 1961, Commonwealth Banking Corporation,” the chairman of the Corporation, under the heading of “ Reserve Bank Advance Policy “ stated -
During the year the bank was required to observe qualitative and quantitative restrictions imposed by the Reserve Bank of Australia in its supervision of the banking system as a whole, for it must be realized that the law, as it stands, requires that the Development Bank shall be subject to controls similar to those applicable to any other bank.
The suggestion there is that the chairman does not think the Development Bank ought to be subject to controls of that kind, because after all you are imposing a social choice, as it were, in granting advances along those lines. It may also be that while he, as chairman of the corporation, has to accept restrictions, he knows that there is a vast field outside what has so far been accepted as the scope of banking, which is not subject to any controls at all. I refer to what are now generally called the fringe institutions, whose transactions aggregate something like £400,000,000 a year. At least we have an indication from the Chairman of the Commonwealth Banking Corporation that he feels he should not be subject to the sort of overall restrictions which are imposed upon the banking system as a whole, because this is a special field which perhaps should receive special treatment. By contrast there are these fringe institutions which, if they are not restricted and are allowed to exceed a proper rate of growth, basically cripple developmental activity, because they promote the use in less essential production of resources, machinery and techniques which could better be put into small basic industries or farms.
We do not oppose the measure, but we suggest that the Government could have been a bit more ambitious and far-sighted. It should not have limited the growth of this institution to a mere additional £5,000,000. It is true that a certain part of the finance circulates, but in the aggregate £40,000,000 is not a very spectacular amount in terms of the development which every one agrees is required. 1 have no doubt that we all have complaints from time to time from constituents who say that they have gone to the Development Bank expecting to receive assistance but have been told either that their proposals did not fall within the ambit of the Development Bank’s operations, or that there were no funds available at that time. No doubt some of the people who go to the Development Bank have misconstrued its character. This may be due to a lack of proper advertising of the facilities and purposes of the bank.
I would think also that many cases that should be able to be served could not be so served because of the inadequacy of capitalization. At least, increasing the capital by a further £5,000,000 is an admis sion that the Government feels that there could be some further growth in that direction. We1 on our side say, “We told you so some years ago “. But we think now in terms of the’ years ahead, and think that we ought to lie more venturesome. After December somebody else may have the opportunity to remedy the deficiency. This increase of capital is one of the few things iri relation to which the Government is going along the right lines, but it is doing too little too late. r;
Mr. FORBES (Barker) 111.21].- I thoroughly support this bill to increase the capital of the Commonwealth Development Bank-by £5,000,000. I am unable to understand the argument put forward by the honorable member for Melbourne Ports (Mr: Crean), which I have also heard voiced by other members of the Opposition, that this increase is too small and is a confirmation of the argument put by the Opposition when the bank was established some years ago - that the capitalization was inadequate. Whether, in fact, at any particular time the capital of the bank is adequate for its purposes, within its charter, is a matter of fact, and my understanding of the fact is that at no time since the bank came into being has it been limited in its capacity to make loans by not having sufficient capital.
At the time the Government decided to increase the capital of the bank the bank was getting near that point, but surely the important thing is that the Government, recognizing the value of the bank, and seeing the situation that was coming, made the move to increase its capital to the point where it would not be limited by a shortage of capital in fulfilling the purposes for which it exists.
The honorable member for Melbourne Ports has brought forward no proof to support his argument that the bank has inadequate capital. I have never been able to understand why, with the immense calls on the finance available in this country, we should be asked to take a sum larger than £5,000,000 - that we should be asked to take, say, £10,000,000, £15,000,000 or £20,000,000 which might be spent on other things - and poke it away in the Development Bank, perhaps not to be used for some years hence. The honorable member said that the total advances made by the Development Bank amount to only about 4 per cent, of total bank advances, which is a rather relatively small percentage. He was mildly critical of this. His theme seemed to be that we should push the Development Bank forward so that it would be making a larger proportion of total bank advances. I think that in saying this he ignores the purpose for which the Development Bank was established, which is to provide development capital in cases where finance is not readily available on reasonable terms elsewhere. In other words, the Development Bank is required to operate on the margin. In a country where there are enough demands anyway, on government finance - the taxpayer’s money - it has always seemed to me to be absurd that we should use taxpayers’ money for purposes for which money is available from private sources.
I think that the Development Bank fulfils the very important purpose it was established to fulfil, and will continue to operate on the margin - the margin where there is a good developmental opportunity but where, for one reason or another, mainly because the prospective borrower has not the usual financial security that is required for the borrowing of long-term finance on reasonable terms, finance is not available. There is no doubt in my mind that the Development Bank is fulfilling its predestined role. I watch its operation closely in my own electorate. I can speak only from experience in South Australia, but I point out that in the first eighteen months of its operation the Development Bank lent £2,750,000 in South Australia. As the honorable member for Melbourne Ports pointed out, the great bulk of these loans, particularly in the rural field, have been below £10,000 each. This means that the bank has assisted a tremendous number of people.
– I said that they were below £5,000.
– That makes my argument even stronger. In South Australia four out of five of all formal applications made to the Development Bank for loans have been approved. The one-fifth that have not been approved have included those which were made in error for purposes which did not fall within the bank’s charter. As I said, I have seen a fair bit of the operations of the Development Bank in my electorate, which is where most of the bank’s loans in the rural field in South Australia have been channelled, because my electorate is where most of the rural development there is going on. Following my observations of the operations of the bank I have nothing but praise for the way in which it is carrying out its task. It has provided new hope for many people on the slender line that divides success and failure, and new hope to people who would not have failed but who would have struggled on in a sub-standard existence on the land for the rest of their lives. With the advent of the Development Bank they have been able to obtain finance to carry out development in a reasonable period, which enables them to bring their properties up to full capacity in quicker time and thus afford them a much higher standard of living.
Because the bank has more regard for the prospects of success of enterprises than it has for the normal security that is required by trading banks the bank’s investigations of the affairs of prospective borrowers are necessarily more searching than are similar investigations carried out by other financial institutions. I have been astonished and delighted to observe the searching nature of the inquiries which the Development Bank’s officers make into the financial position and potential of applicants before loans are granted. I have known investigating officers of the bank to spend as much as a week on an individual property and on one farmer’s problems.
One point I want to make in passing is that this particular process, which is the determining factor as to whether or not a loan will be granted, has a value. Until one finds this sort of thing happening one does not realize the defects which exist in this respect in the activities of other financial institutions and, indeed, in the extension services of the States. In many ways the Development Bank is helping to provide the kind of economic extension service that is very much needed in Australia. The State Departments of Agriculture provide excellent extension services in the technical field, but not in the economic and management field. Many farmers have been able, for the first time, to appreciate properly the economic and financial position of their properties, as a direct result of investigations which have been made by officers of the Development Bank. This can do nothing but good. It must help to place Australian primary industries on an efficient and a sound financial basis. I support the bill.
.- The honorable member for Melbourne Ports (Mr. Crean), in leading the debate for the Opposition on this bill, made our main point, that we consider the increase of £5,000,000 in the capital of the Development Bank insufficient. When the bank was established in its present form we said that it did not have enough capital, and our position to-day is consistent with the position we adopted then. We think that the addition of £5,000,000 is not enough.
The honorable member for Barker (Mr. Forbes) said that the honorable member for Melbourne Ports had not told the House why he contended that the addition was not large enough. The fact is that the honorable member did give reasons. One need not take the pessimistic, depression point of view, holding that unemployment will rise to a fantastic level. Nor need one take the very optimistic point of view that I think is being expressed by Government supporters and particularly by the Minister for Labour and National Service (Mr. McMahon), in the hope that the expression of this view will create a favourable effect amongst voters on 9th December. Both those points of view are out, so far as I am concerned, and, I think, so far as any person making a reasonable examination of the Australian economy to-day is concerned.
However, without taking either of those points of view, one must still conclude that there is something wrong with the Australian economy to-day. This is shown not simply by the fact that 109,000 people are unemployed, but by the fact that the rate of economic development and of recovery is extraordinarily slow. That is what is wrong with the economy, and that is why the amounts of money provided by the Government under this and other legislation should be greater.
– Can you point to one case in which-
– I will point to quite a number in a few minutes. First let me say that the latest figures that have been made available covering operations of the trading banks show that their loans in the agricultural sector of the economy have declined by £11,800,000. This shows that the trading banks, applying the standards and conditions which are common to them, have not only failed to increase their lending, as they have done in previous years when the economy was one of full employment and growth; the total amount of their loans has actually fallen by £11,800,000, at the same time as deposits held by them have increased.
– In recent months their approvals of overdrafts have increased substantially.
– That still remains to be seen. We still have to find out what “ substantially “ means, and if this statement is consistent with other statements made by Government speakers, we will find that there is not very much in it. As I have said, the figures just released show that loans by trading banks in the agricultural sector of the economy have fallen by £11,800,000.
The Treasurer said, I think this morning, that this has not occurred because the trading banks were illiquid. He said their liquidity was high. He said it had not occurred because they were restricted by any central bank directives. The fact remains, however, that the amount of money lent to primary producers fell in the period mentioned by £11,800,000. If this was nol because of restrictions or because of lack of liquidity, what was the reason for iti Is it that there were no borrowers? I cannot accept that proposition. It seems to me pretty clear that there are many people today, particularly in agriculture, seeking to borrow. The only reason why they cannot get money is that they are not acceptable to the lenders.
It is well to recall that in all periods of recession or depression many people who seek to get money cannot do so, not because their propositions are not acceptable under normal conditions, but simply because those propositions are put forward in conditions of recession. In other words, a borrower with a certain farm or industry is not always considered in the same way. He may be acceptable in periods of progress and expansion, but not acceptable in periods of recession or depression. Many observers of the scene in Australia.in the 1930’s found it difficult to understand why the banks, although very liquid and ready to lend, were not lending. They were not lending because the propositions put forward were not considered economic because of the overall economic policies being followed. This, 1 think, is the position to-day. It is not that there are not people wanting to borrow; it is just that those who want to borrow cannot measure up to the standards that are applied in the contemporary economic situation.
It is clear, therefore, that a more rapid rate of economic development is necessary than the rate that is currently being achieved. There are a few continuing indications of this need. The Government has taken some pride in the fact that during the last two months there have been slight falls in the numbers of registered unemployed. Even if we accept the Government’s figures - and the Opposition never has accepted them - as an accurate measure of the number of unemployed, we can see that all that had occurred has been nothing more than the normal seasonal fall in unemployment, and that fall has been considerably less than the usual seasonal fall.
Let me give figures covering the last few years for purposes of comparison. The fall in the numbers of unemployed in August of 1961 was 2,700. In August of 1960 there was a fall of 5,400, while in August of 1959 the figure was 4,400. In 1958 there was a fall of 2,900, and we have to go back to the dull year of 1957 to find a fall less than this year’s seasonal fall. In 1957 the unemployment figures fell by 2,000. In September of 1961 there was a drop of 1,500 in the numbers of unemployed. In September of 1960 it was 4,300, while in 1959 it was 6,900.
– There were special factors connected with the figures for this year.
– There were special factors in the year before and in the year before that.
– What were they?
– They were factors similar to the ones that influenced the figures for this year. I also remind the House that the fall of 1,500 in September of this year is in a total of . about 110,000. That fall of 4,300 last year was from a figure considerably less than this year’s total. Taking the comparison on a proportionate basis, we had a fall in September of this year less than 25 per cent, of the fall in September of last year. It is pretty clear that not only is the economy stagnant and lagging but also that the seasonal improvement this month is far less than the seasonal improvement in previous years. The Government may be satisfied with this improvement, but the Australian community will not be satisfied with it. The complacency and self-confidence that the Government seems to be exhibiting in the present situation will not last for very long. The Opposition considers that the capital of the Commonwealth Development Bank should be increased by more than £5,000,000. I have given the general situation, but let us look at the particular situation.
In the last few months, I have seen a good deal of the tobacco industry. It is not an important industry in the national situation but it is going through an experience which may be more aggravated than, but is similar to, the experience of other sections of agriculture. In the past few weeks, I have had continuous telephone calls from tobacco growers in the Wangaratta area of Victoria. They have told me that action is being taken to repossess their tractors, trucks and other equipment or to sue them for money borrowed to pay for irrigation works or for amounts owing on their land. This has happened in not one or two instances but I have had fifteen such cases in the past fortnight. The economic situation of these people is normally sound, but it is unsound this year because of a condition which itself is very much a product of the credit squeeze and restrictions imposed by the Government.
– That is nonsense.
– It is not nonsense; it is very much the result of the credit squeeze.
– No. What about the quality of the leaf?
– The quality of the leaf in case after case is exactly the same as it was last year and the year before. The Minister for Supply (Mr. Hulme) may have made the point that the quantity has increased; but there has been no significant change in the quality in a great many instances. The Minister may be able to argue that there is a non-credit squeeze factor in that output increased. The quantity of leaf put on the market this year increased and it could not have been expected to be cleared, but the present condition is not explained by quality. The honorable member for Wide Bay (Mr. Bandidt), who is on the Minister’s side of the House, said that the problem was caused by the manufacturers’ refusal to buy the leaf. The Minister for Trade (Mr. McEwen) confirmed this in a statement he made about three weeks ago. The Minister for Supply is far behind honorable members on his own side of the House in his evaluation of the situation.
The restricted total aggregate demand in the economy has contributed considerably to the difficulties in the tobacco industry. I am pleased that the Minister for Primary Industry (Mr. Adermann) is present to hear what I have to say. Many cases of repossession have been brought to my notice in the last fortnight, but these represent only a small part of the total number. What I seek to say to the hire purchase companies - they are the big companies and include Esanda Limited and Customs Credit Corporation Limited - is this: “ Here are propositions which last year were considered to be sound economic propositions. You lent money on the tractors and the trucks used by the growers and on the irrigation works they were carrying out. This year the propositions are not sound. What is the explanation for the sudden change? “
I have pointed out that the Government has given it blessing to a committee to inquire into the tobacco industry. The committee has been inquiring in the Wangaratta district. The hire purchase companies have said to me: “ What will this committee do for the growers? When you ask us to postpone our repossessions until next month or the month after, you should tell us what substance there is in the committee.” I cannot say what substance there is in the committee because I do not know. However, I have persuaded the hire purchase companies in fifteen instances not to go ahead with repossessions but to await the decision of the committee. I wish I had as much faith in the committee as I could have in it, but I fear that the prospects of the growers getting assistance from it are pretty remote.
This is where such an organization as the Development Bank could give assistance. In a number of instances, the rural finance department of a Victorian bank has lent some money to a number of growers, but its resources do not allow it to go far enough. This is a project that the Development Bank could assist, if the Government were prepared to equip it for the purpose. Many tobacco growers in the district have a sound economic situation, and some effort should be made to keep them in the industry. I know the industry has over-expanded, but I am speaking about growers whose position is sound, whose soil is suitable to grow good leaf, who have grown good leaf for ten years and who will grow good leaf again. The difficulties they have had in selling the leaf this year may not recur. Some of these people will be forced out of the industry this year, and the Development Bank could help them if it was equipped for the purpose. But has any one ever heard of the Development Bank in the Wangaratta district? Has any one ever known the Development Bank to examine a proposition put by these growers?
The condition I have found from practical experience to be present in the tobacco growing situation in the Wangaratta district is the condition I believe to be present throughout agriculture generally. In the first speech he made in this House, the honorable member for Calare (Mr. England) said that many farmers were being forced to obtain money at high rates of interest from the hire purchase departments of trading banks which could lend them money at a lower rate of interest if they were prepared to do so. People are forced to borrow from lenders who charge a high rate of interest, and this occurs as much in agriculture as it does anywhere else. It occurs amongst those who elect the party in the corner to represent them in this House. This is a party that is prepared to vote constantly with the other Government party, which puts the farmers in the hands of big business and high interest rate money lenders. Members of the Australian Country Party cannot deny this; it is the truth. They are doing it continuously. They are like the bell wethers. They lead the farmers into the pens to be fleeced by the financial organizations represented by members of the Liberal Party. They are the greatest deceivers ever known in the political history of this country. Their purpose is to deceive electors into thinking they are voting for a country party when they are voting for a city party. Of course, the wealthy squatters who openly represent Liberals are two or three degrees worse than are the members of the Country Party.
The Development Bank has an important opportunity here. It cannot be met merely by increasing its capital by £5,000,000. The criticism of the Opposition is levelled particularly at this point, and I hope I have been able to illustrate this, first, by the general proposition that what is wrong with the Australian economy to-day is stagnation of economic development, a degree of unemployment
– And let us have socialism; that is your point.
– Let us deal with the practical problems in a realistic way and keep the foolish ideas on which you exist out of it for a while. Stop thinking for a little while in terms of socialism against free enterprise and all the rest of the jargon you fool yourself with and confuse others with. Here is an opportunity to get away from the practice of dealing with these matters with the kind of language that hides the real problem.
You have here an opportunity to increase the capital of the Development Bank by more than £5,000,000 so that it can help in the general situation and stop the stagnation that is causing decay and rot in our economy. Specifically, it would be able to help those who have acceptable commercial propositions but who are experiencing some difficulties for temporary or minor reasons which will soon pass. I have illustrated this both in the general and in the particular. I hope that in doing so I have managed to clear away the few passing criticisms made by the honorable member for Barker before he went to have his supper. I hope we have taken the case of the Opposition one stage further.
.- We have just listened to a tirade from the honorable member for Yarra (Mr. Cairns) which I would not attempt to answer. I prefer to deal with this bill which seeks to make more money available to the Commonwealth Development Bank to carry out the functions for which it was established. The introduction of this measure gives honorable members an opportunity to examine the functions of the Development Bank, and I wish to address my remarks to the rural credit activities of that bank and to examine briefly what need there might be for an expansion of those activities. I do not think we should allow the bill to go through without taking a close look at the subject of rural finance and at how far we intend to go with the Development Bank. The honorable member for Yarra would have us go the whole hog and have nothing but government institutions. And that is the desire of many honorable members opposite.
One of the principal reasons for the establishment of the Development Bank was the existence of a great deal of evidence to suggest that rural finance for capital improvements was needed if the primary-producing sector was to play its vital part in the Australian economy - that of feeding a growing population and producing a sufficient volume of exports to pay for the imports required by the growing population. Therefore, we might well ask just how far we should go in enlarging the activities of the Development Bank and whether there should be any major expansion of those activities.
In the past, the principal source of rural finance has been, first, personal income. It is estimated that most of the capital investment in rural industry over the last decade, and particularly in the first half of that decade, has come from farmers’ incomes and not from borrowing. The narrowing of the gap between costs and prices has reduced the amount available from private income, but the need for capital investment has not been similarly reduced.
A second source of rural finance was the trading banks, although there are varying estimates of the amount of money available for the development of rural properties from trading banks. There seems to be fairly general agreement that the trading banks are restricted even if they should wish to lend more money for longterm development. The general impression seems to be that they are restricted mainly by the statutory requirement to place portion of their funds on deposit with the Reserve Bank of Australia as a sort of anti-inflationary measure. Then we have had the Commonwealth Development Bank, but, as it is at present constituted, even with the proposed increase of £5,000,000, this bank can only supplement, and certainly not supplant, other financial institutions. If it were greatly expanded, it would become really a State institution under which we would have rural credit nationalized, as advocated by the honorable member for Yarra. Finance has been made available also from stock and station agents and wool brokers. Within their limitations, they have done a very good job indeed, but again they can only supplement, and not supplant, the other financial organizations. J do not think we can expect any major increases in finance from them. Then we have had State banks. Various States have different types of banks catering for rural finance. For instance, in Queensland, there is the Agricultural Bank; in New South Wales there is the Rural Bank; and in Western Australia there is the Rural and Industries Bank. In Victoria there is the Rural Finance Corporation. There are two types of State banks dealing with rural finance. One type is that which exists in Queensland and Victoria, where the institutions rely on finance from the Treasury. The other is the type that exists in New South Wales and Western Australia where the banks are somewhat similar to trading banks in that they receive deposits and lend out that money in addition to funds obtained from the Treasury. But again, the setting up of a bank similar to the Rural Bank of New South Wales involves the establishment of a socialistic type of enterprise, but this may be necessary if other private finance is not available or cannot be found. It does not seem desirable that we should set up any more socialist enterprises than we have to, but if alternative finance is not available then this is one socialistic enterprise at which we may have to look.
Before any major expansion in the rural activities of the Development Bank is considered, I think every effort should be made to see whether more adequate rural finance can be made available from the trading banks. I do not doubt that the Treasurer (Mr. Harold Holt) has given a great deal of consideration to methods of inducing the trading banks either to keep in or to enter the rural credit field, but, if the right honorable gentleman has not done so already, I suggest that he might give consideration to arranging a conference between himself, the trading banks and the Governor of the Reserve Bank of Australia, with a view to ascertaining whether the trading banks can or are willing to make more finance available for rural development, possibly on the condition that some of the funds now held in statutory reserve may be released for purposes associated with development which is in accordance with the Commonwealth’s policy of expansion of exports.
The trading banks are well equipped indeed to handle rural finance. They are well experienced and versed in the assessing of propositions. They have all the machinery for administration and, generally speaking, are far better equipped than the rather cold and remote Development Bank that sits in the background and does not really come in contact with the individual. We know that the trading banks are agents for the Development Bank but, as agents for that bank, they have a great opportunity for passing the buck, if I might use that term, to the Development Bank. I believe that they are doing that at the moment and have been doing it for some time. They have this opportunity in that the manager of a trading bank can say: “ Yes, I believe this is a very good proposition, but at the moment trading banks are limited in this particular field of finance by the instruction from the Reserve Bank of Australia. This is obviously a proposition for the Development Bank “. I believe that because they are agents for the Development Bank the trading banks are to a very large extent being let out of propositions that should normally be well and truly within their field.
I think it is desirable to limit the undue expansion of government banks, either State or Commonwealth, but if the finance deemed necessary for the required rate of expansion of rural production is not forthcoming, it would appear very desirable indeed to examine ways in which government banks can make the best possible contribution to rural finance. The honorable member for Yarra would have the Development Bank enter every field. Instead of just assisting the struggling farmer, he would have it adopt the role of assistant in all development. I do not think it is doing nearly enough in the field of development. I believe that it is missing out on many opportunities or that it is losing a good opportunity because it is not approaching certain particular fields of finance which could make a very great impact on our rural export economy. I believe, for instance, that even though we may be reinforcing inefficiency by lending through the Development Bank - and there has been a great deal of that with trading bank finance, for that matter - the Development Bank in particular should be in a position to reinforce inefficiency. There is a great deal of inefficiency in primary industry.
Most honorable members would agree that the majority of primary producers have had no formal training whatever in their work and, therefore, there is a great deal of inefficiency. Knowledge has been handed down from father to son. Sometimes it is improved slightly as they go along, but very often the son’s knowledge is not much greater than that of his father. We are very short of extension officers and extension services generally to pass on the results of scientific investigation and so there is a great deal of inefficiency in rural industry.
We do not tackle this problem strongly enough. I believe that the Development Bank could well have an agricultural service or use agricultural services to a greater extent to promote the findings of agricultural science and technology. It would thus make sure that when money was lent to a primary producer, he was up-to-date with modern techniques. The bank would know that the money lent to the farmer was used for the best purposes. I am sure that in lending money to secondary industry, the Development Bank would demand a level of efficiency far greater than it demands from primary industry. This field should be studied more closely. We need much greater efficiency and the Development Bank could insist upon it in its lending policy.
I believe that the Development Bank could help also with schools and agricultural courses to make sure that its money is used properly. Certain private organizations run schools and courses for the young men under their jurisdiction who work in their industry. I know of one pastoral firm which runs schools, and those who attend them benefit greatly from them. We have junior farmers’ organizations, field days, rural broadcasts and other methods of getting information across, but I do not think that we are going nearly far enough.
The Development Bank could finance any approved man who was prepared to use the results of scientific research. I have in mind a number of avenues of production. There is the spear-grass country of about 40,000,000 acres waiting to be developed. The methods of developing this land and increasing carrying capacity are well known. Carrying capacity can be increased three times by following simple techniques, and any farmer wanting to apply this knowledge, which is well known to the Commonwealth Scientific and Industrial Research Organization, should have money made available to him readily. We could make a tremendous impact on production in that way.
Another matter worthy of consideration is tick control. We have the findings of the C.S.I.R.O. in pasture improvement and rotation which can reduce the incidence of tick tremendously. Tick can be virtually eliminated simply by the erection of more fencing and the application of known techniques. Any man who wanted funds for fencing and to apply these proved techniques should get a loan. I do not think we do this nearly enough.
I suggest that we might also streamline the machinery for lending money from the Development Bank. There is a big time lag at present. I know of a young man who applied just a year ago for a loan for an approved project. He received the loan only a few weeks ago. The loan took twelve months to go through because the machinery is mostly slow and timeconsuming. In effect, his property has been kept out of production for a year. The money that we put into the Development Bank could be used to far greater advantage in many fields if we looked more closely at the problems of primary industry, used the science and techniques that we have available to us and tried to gain greater efficiency. We should demand greater efficiency in the application of the money we lend.
The Development Bank has an important role to play. I do not want to see it become a monster; I want to see the trading banks enter more into this field of rural finance. They have been sliding out from under for a long time because they can pass their responsibilities on to the Development Bank. I suggest to the Treasurer that some positive steps should be taken to get the trading banks more solidly into the field of rural finance. They are equipped to do this work. Admittedly, they should not be asked to take the risks that we set up the Development Bank to meet. Nevertheless, the field of straight out rural finance has been vacated largely by the trading banks. I believe that they have done this because so much of the business can be passed on to the Development Bank. Because of this, many good propositions are being knocked back. The Development Bank will not enter into the proposition because the bank believes it is not within its scope but is more suitable for the trading banks. The trading banks are quite happy to pass the business on to the Development Bank. So we have a stalemate. We have loss of production and dissatisfied clients.
There is an uninformed clamour from a large section of the community for the Development Bank to finance everything. That is quite wrong. Sufficient has been published to set out clearly the scope of the Development Bank but there is a tendency for many people, including many members of Parliament, to suggest that this or that should be a job for the Development Bank when it is clearly outside the bank’s scope.
Thursday, 19th October 1961.
.- We have listened to an interesting speech from the honorable member for Herbert (Mr. Murray). I wish the honorable member had let himself go. I had the impression that he was holding himself back for some reason. He was walking a political tightrope. I would like to get the honorable member on his own and ask him his real views on some of these matters. The Treasurer (Mr. Harold Holt) was listening to him and he wanted to be sure that he was playing the right line with the right honorable gentleman. The honorable member was not sure that things were going right with the Commonwealth Development Bank. He expressed guarded criticism of the bank but gave unguarded praise to the private trading banks in the field of lending to primary industry.
The honorable member for Herbert was very worried about the monster of socialism and whether it was tucked away in the legislation setting up the Development Bank. He did not want too much of that either. The honorable member was having a very bad time trying to feel his way between the monster of socialism and the benefits of the trading bank empire.
I appreciate his difficulties. I think that he has shown forthrightness in many speeches in this House, but this evening he was on very dangerous ground. The honorable member wants the Commonwealth Development Bank’s charter to be extended so that it may lend for purposes for which it does not lend at present. He spoke of the trading banks passing the buck to the Development Bank. That is a point on which we on this side of the chamber certainly agree with him.
I did not hear the honorable member mention the credit squeeze once, Mr. Deputy Speaker. The trading banks have been greatly restricted by the vicious credit squeeze in their lending for the purposes of both primary production and secondary industry. They are still in the vice of the credit squeeze. Yet the Prime Minister (Mr. Menzies) blandly told a Liberal Party of Australia rally in Sydney early in August that the credit squeeze had ended. In September, I asked the right honorable gentleman a question about that statement, and he said, “ I will send the honorable member a copy of my speech to the Liberal Party rally so that he can see what I did say “. I received the copy and I have read it. The right honorable gentleman definitely said, when addressing the rally, that the credit squeeze as we know it had ended. That was back in August. Yet the manager of a bank in Tasmania told one of my farmer friends recently that the trading banks have not yet had any instruction about removing the credit squeeze. So all this poppycock that we hear about the credit squeeze having ended is purely political propaganda put out by this coalition government which represents a shotgun marriage between the Liberal Party and the Australian Country Party. I am sure that the people at the grass-roots of the community who want money know very well that the credit squeeze has not yet ended. It has certainly not ended for them.
During this difficult period of the credit squeeze, the private banks have no doubt passed the buck to the Commonwealth Development Bank in many instances. The story given to a farmer applicant for financial assistance very often runs as follows: - “ I am sorry, Mr. Jones. We cannot possibly lend you the £5,000 that you want for the development of your property. The proposition is a good one. We agree that it is good and we would like to lend you the money. But a development bank has been established for that purpose. We advise you to get in touch with it”. That sort of story has been told to applicants for assistance all over Australia. The poor old farmers have been chased from the trading banks to the hirepurchase firms and on to the Development Bank. Many of them have worn out much shoe leather and worn a good deal of tread off the tires of their cars in their search for finance that they genuinely need for necessary development of properties.
The Commonwealth Development Bank is definitely restricted in its functions. I am not prepared to say at this stage whether the Australian Labour Party would have restricted it so greatly had Labour been responsible for establishing it. The act under which the bank operates states quite specifically that it is not to compete with the private banks and that before a farmer may obtain financial assistance from it he must produce a letter from the manager of his own bank to establish that he cannot get from that bank the assistance that he seeks.
– That is not stated in the act.
– Well, that is the way the bank works. An applicant for assistance has to have from the manager of his own bank a guarantee that that bank cannot lend the money that the farmer seeks. Unless such a guarantee is given, a farmer cannot get financial assistance from the Development Bank. Perhaps the guarantee is not necessarily required in the form of a letter, but the farmer at least has to have an assurance that his own bank cannot lend him the money.
The Commonwealth Development Bank was not established to compete with the private trading banks in the lending of money for farm purposes. One cannot deny that. The honorable member for Herbert stated that that was so. Naturally, there will be disappointments in view of the restrictive charter under which the Development Bank functions. That is the fault not so much of the bank as of the act under which it is constituted. The bank’s charter ought to be widened, because there is a great deal of development going on in this country at the present time. As I travel about Tasmania, my own State, I am greatly impressed by the amount of forest land which is being cleared by bulldozing and put into production.
– Where is the finance for that coming from?
– I am not sure. I have not inquired from the farmers about it. I am trying to be honest about this matter. What is the honorable member yelling about? I am just telling him what I have seen. The farmers have obtained the money from somewhere. I am merely pointing out that a great deal of development is being undertaken by farmers. Many of them, no doubt, are greatly increasing their mortgages in order to undertake it. Doubtless, in many instances private banks are helping, because the big men are going in for this development. Not many small men are engaging in it. The big farmer can get money from the private trading banks a lot more quickly than the small farmer can. One cannot deny that. The big men are getting money from the Commonwealth Development Bank, too. Indeed, I am not so sure that the Development Bank was not originally intended to provide money for the big men.
The need for money for development is evident all over the country. In my opinion, the Development Bank has been very conservative in its lending up to date. The honorable member for Herbert criticized it on this score. I have seen evidence of the bank’s conservatism. My experience is that when it checks on propositions it goes into every conceivable detail. The honorable member for Herbert said that the private trading banks are closer to the farmers than is the Development Bank. If he means that there is a traditional friendship of long standing between the private banks and their clients, and that those banks have a knowledge of their clients extending over many years, that may be so. But the Development Bank analyses and investigates every proposition very, very carefully indeed - just as thoroughly as a private bank would do. I give the Development Bank credit for that. However, it is terribly conservative in making up its mind about whether or not it will help certain farmers to undertake development. All kinds of questions are asked. The bank goes well back into the history of the farmer and his property. Indeed, it almost goes so far as to get a security report on him. Some of the investigations made by the bank are completely overdone. Far too often, its answer is: “ No. We cannot help you.”
The socialization aspect of the Commonwealth Development Bank is a thing that hurts members of the Liberal Party and the Australian Country Party. When everything is going well, Mr. Deputy Speaker, they hate to think of the Government help ing farmers. Many farmers want to individualize their gains and socialize their losses. So, when they are really in trouble, they ask for government assistance. That may be all right. It may be quite legitimate. But why do members of the Country Party want to have the best of both worlds all the time? Why do they continually criticize everything that savours of socialism, although they want great big chunks of socialism when they are really in financial trouble? Why are they not consistent on this point? Why do they say that at certain times in certain situations only big chunks of socialism will save them? We all know very well that a full-blooded capitalist system breaks down under its own weight and the stress of its own anomalies. We in thiscountry to-day have seen great big chunksof socialism introduced by the present Government, although the members of the Government parties scream against socialism on the election platform. I have no doubt that, over the next few weeks, I shall hear Government supporters say repeatedly that socialism is a monstrous thing, despite the fact that this Government has brought into being very many pieces of socialistic legislation, especially in relation to primary production. The Commonwealth Development Bank is the result of just one of its pieces of socialistic legislation. As the honorable member for Yarra (Mr. Cairns) asked: How utterly hypocritical can one get in relation to this matter?
– The honorable member has a strange idea of socialism if he says that the Commonwealth Development Bank is socialistic.
– Well, it is a governmental body.
– That does not make it socialistic.
– Of course it is socialistic. The honorable member only wants to split straws. Anything that is organized and controlled by a government is socialistic. The Development Bank is one good illustration of that fact. The Commonwealth Banking Corporation is another, TransAustralian Airlines is another; the Australian National Line is another. Those are about the only ones left as a result of this Government’s policy of smashing down government projects in Australia.
When we begin to discuss a subject such as primary production it is strange how the Country Party jumps in with both hands and feet to support private enterprise - free enterprise as it is called to-day, but that is a misnomer - and screams about socialism being dangerous to the country. But the Development Bank has helped many farmers to the tune of millions of pounds. This bill will increase the bank’s lending power to £21,000,000, so apparently £15,000,000 at least has been used to assist the expansion of primary production which is so essential. If this piece of socialist legislation was not necessary, why did the Government establish the Development Bank? Why did it not put all of its faith in these so-called free enterprise banks which advertise so much these days on television? This famous free enterprise - this great misnomer - is not free enterprise at all. It is monopoly and cartel control and the small free enterprise man is becoming increasingly smaller. The Government’s action in introducing the Development Bank into the structure of our economy proves to me that the private trading banks could not do the job they were supposed to do.
– The trading banks lend over £1,000,000,000 a year.
– I know they do, but look how many there are. The Development Bank was restricted to £15,000,000 in the first place, which is just a teaspoonful in the banking world.
– The Development Bank lends money to people to whom the other banks will not lend it.
– That is right. Why will the other banks not lend the money to them? That is the point! This proves that when the pressure is on the private banks break down, as they broke down during the depression and forced 20,000 farmers to leave their farms. We cannot afford to have the economy entirely in the hands of private banking interests. That is why the Commonwealth Banking Corporation structure has several tiers.
That is why we have the Commonwealth Development Bank to augment and supplement the private banking structure. That is perfectly logical reasoning about the relationship between the private banks and the government bank.
If the Country Party had its way would it destroy every government project, including the Development Bank? Or does it support the present proposal with its tongue in its cheek? The hypocrisy of the Country Party is seen in this place time and time again. As I said before, the Country Party wants to individualize the farmers’ gains and to socialize the farmers’ losses. It follows the same pattern every time.
The final point I want to raise about this legislation relates to interest rates. It was scandalous to fix an interest rate of 6 per cent, on lending of this kind. Remember that the money is for development, and development is expensive. It means bulldozers and additional workers. Development in this modern age is expensive, as any man who is developing property to-day will tell you. But 6 per cent, interest is charged on money lent by the Development Bank. It is outrageous. When the bill was introduced we criticized the proposed interest rate. Suppose the Development Bank advanced a man £10,000 at 6 per cent, interest. That means that he has to pay £600 a year in interest. Why could not the rate have been fixed at 3 per cent.? Why has the rate been fixed so high? Interest at 6 per cent, is not necessary to enable the bank to function. It could operate without difficulty if the rate were 3 per cent. The Government is slugging the farmers who need assistance by charging them 6 per cent, interest on advances. If the interest on a £10,000 advance was only 3 per cent., the farmer would be faced with an annual interest bill of only £300 instead of the £600 which he has to meet with the rate at 6 per cent.
The Country Party is always screaming about the cost of production. Let me now nail the Country Party’s hypocrisy on another point - the high interest rate which the bank charges on advances. I have never heard any Country Party member ask for the interest rate to be reduced.
– I have spoken about it several times.
– You have?
– Yes, I have.
– Well, you must have whispered it, because I have never heard it.
– You were away.
– I have heard the only two speeches that you have made in this place.
– You are away most of the time.
– I attend this House more than most other honorable members. I am in this chamber more than 90 per cent, of my time and hear more than 90 per cent, of the speeches.
– That is utter rot.
– lt is not utter rot.
– Order! The honorable member will continue his speech.
– Very well, Mr. Deputy Speaker. I have been attacked by some of your Country Party colleagues. The interest rate is a big factor in the cost of production about which the Country Party is always screaming. The Country Party claims that the cost of production is too high; that wages are too high; that the cost of machinery is too high; that the cost of superphosphate is too high; that the cost of fencing is too high and so ad infinitum. But has the Country Party ever fought for lower interest rates? Of course not! It has not moved one motion in this House, in the fifteen years that I have been here, demanding a lower interest rate. I have never seen an amendment to this kind of legislation, sponsored by the Country Party, proposing that the interest rate be reduced to 3 per cent., 4 per cent., or even 5 per cent.
Let me put the records straight about this party which is supposed to support the farmers. The interest rate, which is one of the biggest factors in the present high cost of production, must be reduced. If it were, it would save the farmers thousands of pounds a year. That is why I believe that the Country Party which has such power over the Liberal Party should apply some pressure to have the interest rate reduced at least for the sake of the younger, newer farmers who are trying to develop their property.
– You seem to forget about the pressure that the Chamber of Manufacturers puts on it.
– It may be true that the Chamber of Manufacturers puts pressure on the Country Party. The farmers who are suffering because of this interest rate racket should receive more help than they are receiving. Millions of pounds are being poured down the drain each year in interest charges. Some of the interest charges are fattening shareholders in large organizations, but in this case who is being fattened? The money which is paid by the farmers goes to the Treasury and, I hope, is being re-loaned.
– That is right. It is being re-loaned.
– Yes, but why should the rate be 6 per cent.? Is the Government out to make profit too? Of course it is! If it were not, why does it lend to the States at 41 per cent, money which we pay in income tax? The Prime Minister and the Treasurer have made the, magnanimous gesture of lending money to the States at Ai per cent, interest. They make Ned Kelly seem like the leader of a Sunday school class. Compared to the Ned Kellyism which is going on with rackets in Australia now, Ned Kelly was a gentleman and if he were alive to-day he would be welcomed into any drawing-room in this country. The Government is lending to the farmers at 6 per cent, interest money which the farmers themselves have paid in income tax. The Government is fleecing the farmers, the businessmen and the poor old State governments in an outrageous manner. Through the years interest has helped to kill the farmers and slow-down production and progress. We have a Country Party which professes to support the farmers but it has been silent on this vital matter of high interest rates. I conclude on that note.
I feel very depressed after hearing the honorable member for Wilmot (Mr. Duthie). He claims to have heard all the speeches I have made in this House but apparently they have made so little impact on him that he is still in the pre-teenage state. He drew very heavily on his imagination. He said that small farmers did not get the same opportunities to obtain money as the big man did. If he had looked at the report of the Development Bank he would have seen he was wrong because of the 2,060 loans made, 75 per cent, were under £5,000. On these figures you can work out quite simply that the small man has been getting a good proportion of the money.
The Opposition is not opposing the bill but says that the extra £5,000,000 is not enough. I remind the House that year after year the Opposition has claimed that this Government is trying to destroy the Commonwealth Bank but if we look at the report of that institution we will see the tremendous strides that the Commonwealth Bank has made under this Government. The figures at page 17 of the report of the Commonwealth Trading Bank show that the number of accounts has risen from 300,000 to 719,000 in the last ten years and that over the same period advances by the bank have increased from £56,000,000 to £148,000,000 and the number of branches and agencies has increased from 430 to 788. It has been one series of tremendous advances and the latest achievement is the first completed year of operation of the Commonwealth Development Bank. In its report it has stressed that the steady increase in the demand for new loans shows that there is a great demand for this type of banking.
The Commonwealth Development Bank has had some trouble because to-day farming is a scientific industry and the problem is to get staff who can go on to a property where money is wanted for development and assess its economic needs. You cannot advance money to any borrower unless he is able to service the loan. Had the honorable member for Wilmot continued speaking long enough he would have talked himself into understanding the reason why interest rates are as high as they are.
– Why are they?
– I have not time at this hour to explain that to the honorable member, but to-day there is an increasing need to examine the financial side of agriculture. Agriculture requires long-term loans and low-interest rates. Had the honorable member for Wilmot read some of my previous speeches or remembered them, he would have realized that I have often said that. The Commonwealth Development Bank is a vital and important source of finance, but I feel it is not sufficient by itself. I would like to see all trading banks have a similar branch attached to them. I would like to see rural finance taken out of the general banking structure entirely and each private bank have an agricultural branch. I say this because the modern system of controlling the economy in Australia relies largely on controlling finance through the Reserve Bank. There are times when bank credit is reduced by the transfer of funds to the special deposits. At other times, in order to increase the tempo of the economy, money is released from the special deposit. When money is tightened up it may be all right for general banking, but is harmful to rural banking.
When a rural industry undertakes development it is usually a long-term project. If a farmer decides to go in for beef raising it takes time to build up a herd. Such industries cannot stand the tightening and slackening of credit. Every form of rural agriculture is a long-term matter. If you start on pasture improvement it is three or four years before you get the full benefit of it and consequently any tightening or slackening of credit is harmful. That is why I would like to see rural credit taken out of the general banking structure and each private bank have its rural section. If the Government wants to increase the tempo of the private section of the economy it can do so by diverting funds from the special deposits or the Commonwealth Savings Bank into this form of investment which would be attractive to the trading institutions because they get a comparatively high interest rate, whereas they get only 15s. per cent, on statutory deposits. I want to stress that point. As to the needs of the future, if we are going to expand our exports, the quickest results will come from primary industry and primary industry must have more finance if it is to expand. In the last ten years our rural industries have expanded their production by over 40 per cent.
– Is that in value or quantity?
– Their production has expanded by over 40 per cent, in volume from the 1948-49 level and by 63 per cent, compared with the pre-war level. These are formidable figures which show what can be done in rural production in Australia. I would like to see it go past that stage because I believe we have to increase our production in order to maintain our rate of migration. As we increase our population we lessen our exports of primary products because more and more is used in this country.
I feel that the banking institutions of Australia have a very important part to play. I am certain that during the last credit squeeze the directive of the Reserve Bank was intended to leave the export industries and rural industries free from pressure. But it is evident that despite that directive quite a lot of pressure has been brought to bear on farmers.
Whether the banks got into trouble because they could not meet their obligation to reduce their advances to certain figures by 31st March, I do not know, but I have no doubt that there was pressure on some rural accounts. That is one of the reasons why I would like to see finance for agricultural and primary industries taken out of the general banking structure. It would then be possible for the Government to control that side of our expansion.
I would like to compliment the Development Bank on the result of its first year’s trading. This is a new venture. It has got over the rough spots and I believe that the proposed increase in finance will help the bank make better use of its facilities and that in a very short time there will be calls for still more finance. The present Treasurer (Mr. Harold Holt), like his predecessor, has always assured the House that if funds for the Development Bank were not sufficient more would be made available.
Labour members of Parliament always suggest that if an institution is a government institution that is socialism. That shows that they do not understand the rudiments of socialism. Socialism means State ownership. There is nothing contrary to the Liberal philosophy in having institutions run by the State, because there are some things that private enterprise cannot do. If the police force was given over to private enterprise would that be successful? Some branches of government require government institutions and there is nothing whatever wrong in having a government bank.
Nothing whatever! It is functioning in competition with the ordinary private trading banks. Honorable members opposite claim that we are out to destroy this bank, but the figures that I gave at the beginning of my speech show how wrong they are. We believe in the two kinds of banking institutions - private and government. We believe that in an economy where there is a national shipping line and nationally-owned railways - which is still a free enterprise economy - there is no reason on earth why there should not be a government financial institution. But that is not the kind of socialism that the Russians have. The Russian kind of socialism means a complete state ownership. To call the operation in this country of a government-owned bank a form of socialism is sheer nonsense.
– I think that when this bill to increase the capital of the Commonwealth Development Bank by £5,000,000 comes to a vote all honorable members will support it. The bill itself is very simple, but many aspects of banking which do not come within the ambit of the measure have been imported into the debate by honorable members. I am most anxious that the Development Bank shall have sufficient finance available for all its activities. I have read very closely the speech made by the Treasurer (Mr. Harold Holt) when he introduced the bill. He said that when the bank was first established the amount of finance at its disposal was just under £16,000,000. He said that the Government recognized, however, that it would be necessary to watch the position closely from the point of view of a possible need for a further increase in the bank’s capital later, in the light of the bank’s operating experience. Of course, this addition of £5,000,000 is being made available as a result of that watching, by the Government, of the bank’s activities.
The Treasurer has pointed out that with this additional £5,000,000 the actual capital of the bank will be almost £21,000,000, to which must be added the bank’s substantial reserves, which each year are increased by the amount of the bank’s net profit. I agree with all of that except the last part about the bank’s net profit. I do not think that this bank should be run with the idea of making a net profit. It is a development bank, and should be run as such.
I do not think that any honorable member who has spoken in the debate has touched on the real point that is of interest to people seeking loans. That is, whether or not the bank has enough finance depends on how much money it lends. If it lends a lot of money then it has to have more money made available to it for that purpose. What is governing the position as to whether or not the bank has the money it needs? Section 73 (1.) of the Commonwealth Banks Act reads -
In determining whether or not finance shall be provided for a person, the Development Bank shall have regard primarily to the prospects of the operations of that person becoming, or continuing to be, successful and shall not necessarily have regard to the value of the security available in respect of that finance.
I am anxious to know whether this provision is being implemented in the way envisaged when the legislation to establish this bank was introduced in this House. At that time quite a lot was made of that provision. It was said that it would give a young man, or an older man for that matter, a chance to go on the land or establish a secondary industry, even though he had not much security to offer provided he was a_ man considered by those who should know to be one who would make a success of the project he had in view, or would continueto operate successfully the business in which he was already engaged. I am not sure whether this provision is being implemented, and that is why on 17th August I asked the Treasurer whether it was being fully implemented. The Treasurer has undertaken to supply me, if possible, with a list of the people who have secured loans in primary industry fields and the amount of deposit that has been accepted by the bank from’ them.
– Individual people?
– Yes, individuals.
– But he is not going totell you everybody’s private business?
– He is not telling their private business. He would not give the names of the people. He would list them as A, B, C and so on, and state the percentage of deposit required from each one.
The matter to which I am referring has been worrying me. Honorable members opposite say that £5,000,000 is not enough as an increase of the bank’s capital. That is not a very cogent argument because, as the Treasurer has said on several occasions, if there is not enough money available to the bank for its activities it is not hard to get loan moneys or other money to put to the credit of the bank so that it may carry on its functions.
The honorable member for Yarra (Mr. Cairns), said among other things that the Australian economy was at present in a very bad position. He said propositions were rejected because they were not economical under this present Government. Of course, the honorable member for Yarra looks at things in a quite different light from the light in which the average Australian looks at them. He certainly looks at them differently from the way that honorable members on this side of the House look at them. That was evident to-day when he said: “ I am a socialist. I have never denied that I am a socialist.” And, of course, a socialist looks at things quite differently from the way the average Australian looks at them. What my colleague, from Hume (Mr. Anderson) pointed out about socialism is tremendously true - that we may have certain government instrumentalities, but they are used by people in private enterprise, whereas the socialist, under a state of socialism as such, decides who will use certain things that socialism makes available, and how they will be used.
I saw in the “ Donald Times “, a newspaper published in the Wimmera district, one or two statements that are the opposite of what the honorable member for Wilmot (Mr. Duthie) said. That newspaper said -
Capitalism is the established system of most modern civilized countries in which people arc free.
I do not think that this country would be free for very long if we instituted the opposite of capitalism - which is socialism.
What is democratic socialism. As far as I am concerned, if the people of this country were asked at a referendum, “ Do you want this country governed under a socialist system?”, and the majority of them voted “ Yes “, that would be democratic socialism. Of course, if such a question were put to the people by way of referendum it would be overwhelmingly defeated, because the people of Australia do not want socialism. That is why the honorable member for Yarra said, when I interjected during his speech, “ Forget about this socialist jargon you are talking “. He did not forget about it this morning, but probably after he had said this morning that he was a socialist some of his Labour colleagues reminded him that it is getting near election time and so he now says, “ Forget about this socialist jargon “. Members of the Opposition are now calling out and trying to interject, but the fact is that we will not hear anything about Labour’s socialist policy during the coming election campaign. The newspaper article to which I have referred went on to say that 100 years ago Karl Marx forecast the end of capitalism.
Order! The honorable member is getting away from the measure before the House.
– This debate, Mr. Speaker, has been chiefly concerned with the bank, the Australian economy and socialism, and I am dealing with those matters in that order - with your permission.
– Order! If the honorable member keeps to the bill it will be more satisfactory to all concerned.
– In passing, let me say that in Australia to-day, instead of the available goods falling into few hands they have fallen into many hands. Motor cars, washing machines and many other amenities have fallen into many hands. 1 notice that honorable members, particularly on the Opposition side, evidently wish to go home. I do not blame them. I am not in favour of late sittings, and I have said so in this House. Let me just say that I think this bill is a very good one.
– Incorporate your speech in “ Hansard “ and take it as read.
– We will incorporate all your future speeches in “ Hansard “ too. While disagreeing in this debate with many of the points put forward by the Opposition, I want to be quite fair and say that I disagree with something that the honorable member for Herbert (Mr. Murray) said. The honorable member stated that there is great inefficiency in primary industry. Well, there may be great inefficiency in the electorate of Herbert, but there is little inefficiency in my electorate. We have wheat-growers, wool-growers, fat lamb raisers and dried vine fruits growers, as well as dairymen, and they are all specialists in their various lines. I believe that our primary producers in Australia are the best in the world, but even then I realize that they could be more efficient.
– Would you like me to say that they could be more efficient?
– They could be more efficient. I did not like to hear you saying that there was marked inefficiency in primary industry in Australia.
I support this bill. If the particular clause to which I have directed special attention is properly implemented I believe that the extra £5,000,000 to be provided will help many young men to go into business or primary industries who would not otherwise get the chance to do so.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Motion (by Mr. Hulme) proposed -
That the House do now adjourn.
– Kennedy [12.55 a.m.]. - I rise, Mr. Speaker, to protest most emphatically against the action of the Government in refusing to pay the unemployment benefit to the workers at Mount Isa who are at present unemployed. They feel pretty bitter about it. The Minister for Social Services (Mr. Roberton) said during question time last Thursday that these men are ineligible for the unemployment benefit because of a ruling given in 1946 during the metal trades dispute. The Minister said that at that time the members of the union were informed by the Government that when union members imposed a darg and were stood down, the uneployment benefit could not be paid if the employer was willing to re-engage them subject to the performance of their normal duties. No question of a darg is involved in this dispute. The men were not stood down because of any darg; the gates were closed against them.
This dispute concerns fifteen unions which applied for an increase in the bonus. The men have consistently offered themselves for employment, and on each occasion the gates have been locked against them. I ask the Minister to have another look at this matter. There is no question of a darg involved in the dispute. An examination of the facts reveals that the dispute arose as a direct result of applications by the Australian Workers Union and fourteen craft unions for an increase in the bonus paid by the company to its employees. The bonus was first granted as a result of a decision of the Queensland
Industrial Court in 1931, but it was not made effective until 1946. Since that date the bonus has been paid by order of the court to employees of the company. At first it was called a lead bonus, and it fluctuated according to the price of lead. When the company also became a producer of copper the word “ lead “ was dropped from the definition and it became known simply as the “bonus”. The last amount fixed by the court was ?8 a week in 1959.
In October last year the unions applied for an increase in the bonus because of the prosperity of the company. While the applications were being heard by the court on 7th March, 1961, the Nicklin-Morris Country-Liberal Party Government in Queensland decided to amend the industrial legislation, at the very time when the court was hearing the union’s claims. The court took notice of the fact that an amendment to the act was proposed, and it heard no argument on the union’s claims for an increase of the bonus.
The new act was assented to on 11th April, 1961. The Industrial Commission, which replaced the Industrial Court as a result of the new act, was prevented by section 12 of the act from hearing any application for an increase in the bonus, although it was given power to reduce the bonus or cancel it completely.
This question has been an industrial matter in Queensland for 30 years. It is now taken out of the field of arbitration, and it is left to a conference of unions and employers to fix the amount of the bonus. Agreement must be reached between them if an increase is to be granted. The Industrial Commission cannot intervene unless invited to do so by the parties. In amending the act so that the bonus becomes no longer an industrial matter, the Nicklin Government has put back the industrial clock in Queensland 30 years. Any wealthy company in a position similar to the company in question can amass additional millions by sitting tight and refusing to increase or even to grant a bonus.
The bonus has always been recognized as. a means whereby the worker can share in the prosperity of Mount Isa. The unions conferred with the company in an endeavour to secure an increase in the bonus, but the conferences failed. The company took full advantage of its position of strength and refused to grant any increase. The unions then decided to take industrial action. Complying with the new arbitration legislation, they conducted a secret ballot to determine the issue of industrial action. The craft unions put a total ban on overtime and the Australian Workers Union limited overtime to four hours a week and not more than two hours on any one day. Workers on contract rates, in accordance with the terms of their award, reverted to wages. No breach of the award occurred in eliminating or putting a ban on overtime. The unions took a secret ballot on the question of a strike. I have the result of the ballots of the craft unions. Every one of them favoured a strike. The A.W.U. carried the secret ballot by a three to one majority and it notified the registrar of the commission in accordance with the act.
But before any strike took place, the company took direct action and closed the copper mill and smelter from midnight on Friday, 22nd September, until midnight on Sunday, 24th September. The craft unions decided to hold a four-hour stop work meeting on the afternoon of Monday, 25th September, to discuss the action of the company. The A.W.U. members did not participate in this stoppage. But on Monday morning, the company advised representatives of the craft unions that if their unions held the stoppage, the plant would close. The craft unions held the stop work meeting. The A.W.U. members did not participate in the stoppage. The plant was closed and all the men were locked out.
Mr. Egerton, secretary of the Boilermakers Society of Australia, has stated that there was a legal opinion that the dispute is a lock-out. The workers are not on strike; they have fixed no darg and they were not laid off because of any such action. They were locked out by the company. The Industrial Commission has not declared the company innocent of any lock-out, but the Conciliation Commissioner, Mr. Harvey, expressed an opinion - I have every respect for his opinion - that it was not a lock-out. The question has never been argued. If it was not a lockout, it was a strike; and if it was a strike, the Nicklin Government would have taken action against the union long ago. These men are unemployed. They have no income.
What is the position with this dispute? The A.W.U. members at a change of shift at 3.30 p.m. on the Monday afternoon reported for work. The gates were closed and security officers told the men the plant was closed. This proves that there was a lockout. The A.W.U. and the craft union members have consistently reported for work since that date, tout the gates are still closed and the lock-out continues. The members of the A.W.U. and the craft unions are entitled to unemployment benefits under the Social Services Act. They are in no way direct participants in an industrial strike. If they were under the new Arbitration Act of the Nicklin Government, the unions would have been dealt with long ago.
I ask the Minister: How can these men be participants in a strike if no strike exists? I would like him to explain what he means toy the words he used, that these unions in one way or another are direct participants in an industrial strike. The dispute is the direct result of the NicklinMorris act, which prevents the Industrial Commission from increasing the amount of the bonus. All the workers asked for at the conferences was an increase in the amount of the bonus or a share in the prosperity or the profits they helped the company to make. In 1959, when the company had a net income of just over £4,000,000, the Industrial Commission fixed the bonus at £8 a week. The balance sheet for the year ended 30th June last shows a net income of nearly £6,000,000 or an increase of about 50 per cent. The output of ore has increased by 18 per cent, in the ten year period from 1950 to 1960. The results show that an increase in the bonus is warranted.
The men are locked out and I ask the Minister to reconsider his decision in the light of all the facts and to ensure that the benefits are paid to the unemployed applicants. They are entitled to them.
The Minister for Labour and National Service (Mr. McMahon) several weeks ago said that the dispute was political, and for once he was right; it is political. If the Arbitration Act continues as at present, it will mean the end of the Queensland industrial arbitration system, and that could be the objective of the anti-Labour Government in this dispute.
Question resolved in the affirmative.
House adjourned at 1.5 a.m. (Thursday).
The following answers to questions were circulated: -
s asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follows: -
s asked the Minister for Labour and National Service, upon notice -
– The answers to the honorable member’s questions are as follows: - 1 to 4. Statistics of persons registeredfor employment are compiled by my department by relation to its district office areas and not to municipalities. The numbers registered for employment at the Coburg and Collingwood district offices at Friday, 1st September, 1961. were -
These were persons who claimed when registering that they were not employed and who were recorded as unplaced. The statistics include those who had been referred to employers, those who may have obtained employment without notifying the Commonwealth Employment Service and recipients of unemployment benefit. No dissection by district office is made of recipients of unemployment benefit in metropolitan areas. Payments of unemployment benefit are made by the Department of Social Services, which does not maintain its data about payments made in a form which would permit an answer to be given readily. Indeed, I understand that this information could not be obtained without an unreasonable amount of work.
t.- On 10th October, the honorable member for Fremantle (Mr. Beazley) asked a question without notice relating to the 1954 census. The honorable member asked the reason for the delay in issuing the Commonwealth Statistician’s report on the 1954 census. I now furnish the following reply: -
As indicated in my reply to your recent question, 1 have gone into the matter raised. I am informed that the Commonwealth Statistician’s Report on the Census of 1954 has been prepared and that its printing will be expedited. As you are doubtless aware, the whole of the Census
Bulletins and other tabular data compiled for the census were issued between September, 1934, and May, 1958. Not only were they available more promptly than for preceding censuses, but they also contained “ distributed “ tables and other matter previously published only at a late stage in the Statistician’s Report. For this reason and others, the customary document hitherto known as the “ Statistician’s Report on the Census “ is now in very limited5 demand and it is envisaged that it will not necessarily be issued in its usual form for future censuses. The Commonwealth Statistician informs me that he has supplied universities with much special data from the 1954 census and that anything customarily included in the Statistician’s report was available on request.
Cite as: Australia, House of Representatives, Debates, 18 October 1961, viewed 22 October 2017, <http://historichansard.net/hofreps/1961/19611018_reps_23_hor33/>.