House of Representatives
19 October 1961

23rd Parliament · 3rd Session

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

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

page 2237

QUESTION

HOTEL KURRAJONG

Mr MAKIN:
BONYTHON, SOUTH AUSTRALIA

– By way of preface to a question addressed to the Minister for Labour and National Service I point out that the Minister has said that he will not interfere in the administration of the Hotel Kurrajong because that matter is under the control of an independent authority. If the authority to which the honorable gentleman has referred is an independent body, I ask the Minister who is likely to receive financial advantage, or to be liable to make good losses, in regard to the administration of that hotel? If the losses are to be made good from Consolidated Revenue, does not this imply an obligation on the part of some Minister to accept definite responsibility? Will the Minister consider placing the Hotel Kurrajong under the supervision of the Joint House Department?

Mr MCMAHON:
Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

– Naturally, it is a responsibility of the Minister to watch carefully the administration of Commonwealth Hostels Limited, and I do that to the limit of my ability. But if I come to the conclusion, and that conclusion is supported by facts, that the Hotel Kurrajong has been well managed and well run, I see no reason why I should interfere or attempt to dictate what should be done.

As to the second part of the honorable member’s question, as to whether I would consider placing the administration of Hotel Kurrajong under the supervision of the Joint House Department, I can only say that that is not a matter for me; it is a matter for you, Mr. Speaker. If you would like to give this matter your consideration, then by all means do so. I would have no objections, for I derive no great pleasure out of looking after the Hotel Kurrajong myself.

page 2237

QUESTION

EMPLOYMENT

Mr KILLEN:
MORETON, QUEENSLAND

– I ask the Minister for Labour and National Service whether he or his department has made any estimate of what additions to the work force engaged on Government activities throughout Australia may be expected. I have in mind particularly various developmental projects such as the recent letting of fresh contracts for the Snowy Mountains scheme and the railway projects in Queensland and Western Australia.

Mr MCMAHON:
LP

– As the honorable member well knows, this is a matter that has engaged the attention of my department for some time. I think the House will know that the development projects, that have been initiated as the result of action by the Commonwealth Government will lead to a fairly substantial increase in the number of employees who will be required. I have not the figures at my finger-tips, nor do I think my department has made any detailed investigation but, by way of example, I can tell the honorable member that it is expected that,, directly and indirectly, something like 4,000 additional persons will finally beemployed on the Snowy Mountains scheme. It is expected also that large numbers will be employed at Mount Isa and on the Western Australian railway project. Because this is a matter of very great importance and has been the subject of questions which have been asked in this House recently about the absorption of the expected increase in the labour force this year, I shall have a detailed examination made for the honorable member and’ let him have full particulars.

Mr BROWNE:
KALGOORLIE, WESTERN AUSTRALIA

– I direct a question to theMinister for Labour and National Service further to the question asked by the honorable member for Moreton. Can the Minister give me any information on the employment position in Western Australia at the present time and on what is likely to be the positionwhen the work-force increases in the NewYear?

Mr MCMAHON:

– I will get the exact figures relating to Western Australia for the honorable gentleman, but I think he can rest: assured that the prospects for the future employment position in that State are very bright. He can expect that the demand for labour will increase substantially in Western Australia between now and June of next year.

page 2238

QUESTION

BASIC WAGE

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– My question is directed to the Minister for Labour and National Service. Is it a fact that the Minister has declared himself in opposition to all adjustments of the basic wage based on the declared cost of living? If so, does this decision follow from his earlier declaration that the present basic wage is higher than is necessary to maintain the average Australian family? If the Minister now claims that he is not opposed to adjustments of the basic wage to meet increased costs of living will he state at what intervals he believes such adjustments should be made?

Mr McMAHON:
LP

– The .first assumption contained in the honorable gentleman’s question is false. The second assumption is also false; indeed, it is worse. Consequently, both assumptions being false, I see no reason why I should attempt to give an answer to the honorable gentleman.

page 2238

QUESTION

MAIL SERVICES

Mr GRIFFITHS:
SHORTLAND, NEW SOUTH WALES

– I direct a question to the Postmaster-General. Is it a fact that a new system of mail delivery is being evolved, to take effect early next year, in which all incoming mail will by-pass district post offices? Is the new system to be on a contract basis, and does it involve a contractor travelling to a central point where he will first of all sort the mail into district lots and then into street formation? Will the Postmaster-General say whether the new system is being introduced as an economy measure, or is it a cheese-paring one to reduce the income of unofficial postmasters? Will the Minister explain where the bulk mail for a district is to be left while a contractor is delivering mail to another area, and whose responsibility it will be to see that the mail is not tampered with during the contractor’s absence? What is to become of undelivered mail, and what is to be the position regarding delivery of telegrams and the handling of outgoing mail?

Mr SPEAKER:

– Order! The honorable gentleman is now making comment.

Mr GRIFFITHS:

– I shall ask my question. Before any new system of mail delivery is undertaken, will the Minister place on the table of the House the pro posal in detail so that honorable members may be able to study the impact of the proposals on their electorates?

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

- Mr. Speaker, the honorable member has asked me a series of lengthy and detailed questions about matters of administration in the Postal Department. It will be realized that I could not be expected to give him an answer to all the questions of detail. Therefore, I shall consider his questions, and give him a written reply.

page 2238

QUESTION

TELEVISION

Mr KING:
WIMMERA, VICTORIA

– I direct a question to the Postmaster-General in relation to his announcement last night regarding phase 4 of television. As it appears on the surface that parts of the Wimmera, namely the Nhill and Kaniva areas, and also Bordertown in the electorate of the honorable member for Barker, could miss out on reception under the latest phase, I ask the Minister: Will the actual selection of sites be flexible to the degree that if phases 3 and 4 do not cover the areas mentioned, they can be so altered as to allow this gap to be covered? I ask this question as no other new site could be selected without duplicating areas that are already covered under an earlier phase.

Mr DAVIDSON:
CP

– In my statement, 1 said that there were certain other areas not included in last night’s announcement which were still the subject of investigation. One of the reasons was that it was not yet clear what coverage would be provided from certain of the stations now being established, and therefore further investigation would be required to make sure the best coverage would be provided. There are areas in which the question of sites is still being considered, and it will be very important, of course, that the best site be chosen to give the greatest coverage. The investigation is still in progress. The honorable member may rest assured that the greatest possible coverage will be achieved in these areas and that, wherever it is found that the siting of the transmitters will not give the coverage expected, attention will be given to the provision of additional stations.

page 2239

QUESTION

UNEMPLOYMENT STATISTICS

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– I ask the Minister for Labour and National Service a question concerning his monthly review of the employment situation. Why does the Minister not publish the number of migrants who have sought their first employment in Australia through the Commonwealth Employment Service and have not been found employment, and also the number of migrants whom the service has recommended for special benefits because employment has not been found for them? Why does he exclude such migrants from the general statistics of persons registered for employment with the Commonwealth Employment Service and from the statistics relating to persons receiving unemployment benefit on its recommendation?

Mr McMAHON:
LP

– I regret to say that I lost track of the honorable gentleman’s question because it was too long and too complicated, and that I can remember only the first part of it. I have already answered in this House inquiries similar to that made in the first part of the honorable gentleman’s question, and I shall supply him with the answers that I have already given. I shall treat the second part of the question as being on notice, and, after having read it in “ Hansard “, I shall let the honorable member have a reply.

page 2239

QUESTION

COMMONWEALTH AND STATE FINANCIAL RELATIONS

Mr FALKINDER:
FRANKLIN, TASMANIA

– I direct my question to the Prime Minister. The right honorable gentleman will recall that last week I asked him a question concerning specific financial assistance to Tasmania. He intimated then that two specific proposals had been discussed by the State Premier and himself some time ago, but that since that time he had not heard further in detail from the Premier. Is the right honorable gentleman aware that the Tasmanian Premier has since made a statement to the effect that details of the first proposal had been submitted to the Prime Minister some time ago and that details of the second proposal would be available to him early this week? Can the Prime Minister say whether either of these two communications has, in fact, reached him yet?

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– To the best of my belief, no, but, in view of the statement that, the honorable member attributes to the Premier of Tasmania, I will have a particular search made.

page 2239

QUESTION

MOUNT ISA RAILWAY

Mr CALWELL:
MELBOURNE, VICTORIA

– I wish to ask my distinguished friend, the Prime Minister, a. question.

Mr Cleaver:

– This will be good!

Mr CALWELL:

– lt is good. “ Hansard reports that in November, 1959, the right, honorable gentleman was asked by thehonorable member for Wentworth to use hisbest endeavours with the Queensland Government to have published in full the report by Ford Bacon and Davis Incorporated on: the Mount lsa railway. The right honorablegentleman promised to do his best to see that every honorable member who wished to readthe report was supplied with a copy of it. He said, also, that he saw no reason to doubt that the Queensland Government would bequite agreeable to making the report available. Since the Prime Minister now proposes to ask the Parliament to approve a railway agreement which requires the Queensland Government to continue toengage the services of Ford Bacon and Davis Incorporated, will he obtain copiesof the company’s report for honorable members before the debate on the bill to ratify the agreement takes place?

Mr MENZIES:
LP

– I do not recall offhand what the reply of the Queensland Government was in relation to that matter. As the honorable member will recall, the report by Ford Bacon and Davis Incorporated is, of course, a report to the Queensland Government, not to this one, and is therefore within the control of that Government. But I willhave the matter looked into, and, if it turns out that there has been some hitch, I will’ at once ask the Queensland Government whether it would be willing to make thereport available.

page 2239

QUESTION

EMPLOYMENT OF PHYSICALLY HANDICAPPED PERSONS

Mr McCOLM:
BOWMAN, QUEENSLAND

– Can the Prime Ministergive the House any further information concerning the reports which were submitted1 by the committee looking into the possibility of permanent employment in the Public Service of physically handicapped people?

Mr MENZIES:
LP

– 1 cannot say anything at the moment about this matter. We have had a series of discussions about it, and I will try to put myself into the position to say something about it, possibly next week.

page 2240

QUESTION

STATISTICAL INFORMATION

Mr McIVOR:
GELLIBRAND, VICTORIA

– 1 ask the Treasurer: Is it a fact that commercial and industrial interests throughout Australia are demanding a government inquiry into Australia’s present and future need for statistical information? Is it true that well-informed sources now consider that the Government was wrongly advised on the credit squeeze, due mainly to incorrect statistics, and that the mistake has cost the country £100,000,000 in terms of real national income? Further, does he know that indusii v and commerce claim that the lag in -obtaining essential statistics is damaging to our economy, and that many figures important to economists, market researchers and others are not available in Australia?

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

– Quite obviously that question does not lend itself to the kind of answer which can be given in reply to questions without notice. The honorable gentleman talks about industry and commerce holding certain views. In the course of this year I have received many expressions of opinion from many representatives of industry and commerce, but they have been by no means in unison one with the other. To say that there has been a loss of gross national product of some amount plucked out of the air, because the Government took a certain course of action, is entirely argumentative and supposititious. One could say with equal force that as a result of the action taken by this Government in the course of last year Australia was able to avert a very serious financial and economic crisis, and the economy has now been steered into much calmer waters and is proceeding at a much sounder and steadier rate. That is a judgment which, I believe, is concurred in by as many sensible people in industry and commerce as would express the view stated by the honorable gentleman.

page 2240

QUESTION

ELECTRONIC EQUIPMENT

Mr BARNES:
MCPHERSON, QUEENSLAND

– Is the Minister for Trade aware of a report that an Australian manufacturer of telecommunications equipment has won a substantial order for short-wave radio transmitters in India? If so, can he give the House any further details of this reported export success?

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

– I am glad to confirm the fact that a great Australian company, tendering in open competition with world producers of electronic equipment, has secured a quite substantial contract to supply to India what, I understand, is shortwave transmitting equipment, to the value. I believe, of about £150,000.

Mr Calwell:

– Is that Sir Arthur Warner s company?

Mr McEWEN:

– 1 do not propose to name the company, but I will say that the honorable member has guessed wrongly. I am sure that the whole House and the country will be interested to know that the successful Australian tenderer won this very big contract for this quite complicated type of electronic equipment in open competition with tenderers from the United States, Germany, Japan, the United Kingdom and Switzerland. This is not a unique event. Some time ago another Australian company - and again the Leader of the Opposition would not be correct if he made a guess as to its identity - succeeded in having its tender accepted for the supply in Africa of electronic equipment, to the value of £500,000, in the face of world competition. The interesting point is that the recent contract was secured after the Australian company, knowing the taxation incentive provided to induce companies to go looking for business overseas, had sent its personal representative to India. As a result of thai gentleman’s visit, knowledge was gained and contacts made, which enabled the company to secure this valuable contract.

page 2240

QUESTION

DENTAL TREATMENT

Mr THOMPSON:
PORT ADELAIDE, SOUTH AUSTRALIA

– I ask the Minister for Health whether consideration has been given to extending the provisions of the medical benefits legislation to cover dental treatment. It has been brought to my notice that many dentists in South Australia are complaining that their business has fallen away to a considerable extent because people are unable to pay for necessary dental treatment. As sound health is as dependent on good teeth as on other factors, I ask the honorable gentleman whether anything is being done to have the medical benefits scheme extended to cover dental treatment.

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– A good deal of consideration has been given from time to time to the question raised by the honorable member. Of course, it would be wrong to suppose that an insurance scheme should be devised so that benefits will be in line with fees charged by independent professional practitioners; and there are great difficulties associated with establishing a system of voluntary insurance to cover dental benefits. In Australia, we have a system of voluntary insurance, but it is quite different from a system of compulsory insurance and involves quite different considerations. If dentists are experiencing difficulty because of the height of their fees, I must suggest to the honorable member that there is a very obvious remedy.

page 2241

QUESTION

SOIL ANALYSIS

Mr WHEELER:
MITCHELL, NEW SOUTH WALES

– 1 should like to ask a question of the Minister for Health in his capacity as Minister in charge of the Commonwealth Scientific and Industrial Research Organization. What progress has the C.S.I.R.O. made in soil analysis and soil testing? Does the Minister know that many small farmers and horticulturalists in New South Wales would be greatly benefited if they could ascertain the deficiencies in their soils and what fertilizers or trace elements would be best suited to them? As research of this kind requires a pilot farm for test and experimental plots, will the Minister consider setting up a soil research station in the County of Cumberland, the oldest farming area in the Commonwealth, and will he have regard to the fact that the electorate of Mitchell commends itself as being eminently suited for this purpose? Finally, in considering this matter, will the Minister bear in mind the basis of administration of the Citrus Wastage Laboratory at Gosford, in the electorate of my colleague, the honorable member for

Robertson, where valuable research has been carried out by the C.S.I.R.O.–

Mr SPEAKER:

– Order! I think the honorable member is now going beyond a question.

Mr WHEELER:

– Where valuable research has been carried out by the C.S.I.R.O. in association with the New South Wales State Department of Agriculture?

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– The

C.S.I.R.O. has developed techniques for soil analysis and testing and it has carried out many broad surveys in this field. The results and the techniques are freely available to State departments of agriculture. The activity mentioned by the honorable gentleman is, I think, more appropriately discharged by the State departments than by the C.S.I.R.O., which is a scientific research body. In fact, soil analysis does not solve all the problems of the individual farmer, with which the honorable gentleman is so rightly concerned. In many instances, a great deal more than the mere analysis of the soil is required and some State departments, I understand, send their officers to examine the soil of a farm and to collect other information which they may need.

The honorable gentleman may care to explore the possibility of some instrumentality other than the C.S.I.R.O. carrying out these investigations. Of course, all the knowledge that the organization has will be available to the instrumentality concerned. I think it is also important to point out that the organization has a great many long-range projects in hand in connexion with agriculture. It would not be possible to interrupt any of these in order to provide detailed assistance where some other organization is capable of doing the job. The citrus investigations referred to by the honorable member are not of a horticultural nature so much as investigations into the handling and preservation of citrus fruits. The C.S.I.R.O. is engaged in these investigations on a rather different plane from the activities the honorable gentleman suggests it might undertake.

page 2241

QUESTION

TELEPHONE SERVICES

Mr REYNOLDS:
BARTON, NEW SOUTH WALES

– My question is addressed to the Postmaster-General. Does he know that several applicants for telephones in my electorate of Barton, particularly in the exchange areas of Blakehurst, Brighton-le-Sands and Ramsgate, have been informed that they must wait for at least another twelve months for the service? Does he realize that many of these applicants are business people who are already hard hit by the Government’s economic measures, and who urgently need a telephone service if their business is to survive? That is no exaggeration. Would it be possible for the Postmaster-General’s Department in its present affluent state to use some of the hundreds of job-seekers registered at the Kogarah Employment Office in the district to expedite the work of telephone installation?

Mr DAVIDSON:
CP

– I would say that the steady increase in the number of applications for telephones, which the department must attempt to meet, gives a denial to any suggestion that business firms in the area mentioned by the honorable member are not in a pretty good state. Despite the Opposition’s crying poor mouth, we find a steady increase each year in the number of applications for this essential service.

As for the major point raised by the honorable member, we plan each year to increase steadily the number of telephone installations. In this year, sums have been earmarked from the amount available to the department in the Budget for this purpose. Although the increase in our total allocation for capital works is just over £2,000,000, the department has increased its allocation for the installation of new telephones by nearly £3,000,000. As far as possible, we are providing for an increased number of installations. We expect to reduce the number of outstanding applications by at least 12,000 in this financial year.

page 2242

QUESTION

UNIFORM COMPANY LAW

Mr WILSON:
STURT, SOUTH AUSTRALIA

– I address my question to the Attorney-General. Does the proposed new uniform companies act contain a provision to protect shareholders in the case of take-overs at less than the true value of the shares being acquired? Are the current values of assets required to be disclosed in the balance-sheets of the companies? Will the process of a take-over by means of a bid for shares be made easier or more difficult by the model companies legislation?

Sir GARFIELD BARWICK:
Attorney-General · PARRAMATTA, NEW SOUTH WALES · LP

– The question of take-overs has been investigated from the shareholders’ point of view very thoroughly by the committee which has drawn a model companies bill. The bill provides that shareholders affected by a proposed take-over shall be given a great deal of information which they do not have now. The model companies legislation will require that they be given information as to the position of the take-over company and its shares, and about any changes in their own company since the last balancesheet was published. The legislation will require the directors to disclose any arrangements that they have made in connexion with the proposed take-over, and to give the shareholders the benefit of their advice on the take-over bid. In short, under the model companies bill, shareholders will be given all the information which a person would have when making an investment; indeed, perhaps they will have a little more information than is currently available to the investor.

The honorable member has asked whether the balance-sheets are required to disclose the current value of assets. This matter had some consideration, and it was felt that this requirement could not be enforced on a company. The balancesheet will disclose the basis of the valuation of assets, whether at cost or at valuation, and if any deterioration in value has taken place since the purchase or the last valuation the directors will be required to disclose that fact in their balance-sheet. Otherwise the shareholders, like ordinary investors, will have to make their own estimation of the value of the balance-sheet in this respect.

Finally, the honorable member has asked whether the take-over process will be made easier or more difficult under the model companies legislation than it now is. I can state firmly that it will be more difficult. The information which has to be given and the times which have to elapse will both slow the process and ensure, because of the greater amount of information required to be furnished, that it will be much more difficult to have a take-over effected without the shareholders realizing the value of that which is being taken over by the company making the bid.

page 2243

QUESTION

COMMONWEALTH HOSTELS LIMITED

Mr J R Fraser:
ALP

– I ask the Minister for Labour and National Service, as the Minister responsible for the administration of Commonwealth Hostels Limited: Has he caused any inquiry to be instituted into the protests made by fourteen mothers of families living in the Ainslie Hostel about conditions generally at the hostel, and particularly about the quality of food? Does he know that many families are required to live in that hostel for more than three years before becoming entitled to a house of their own? Will he recognize that women of this type do not lightly take the kind of concerted action that they found necessary on this occasion?

Mr McMAHON:
LP

– As to the information contained in the second last part of the honorable gentleman’s question, I was well aware of what he has stated. As to the last part of his question, naturally enough if complaints are made we always treat them as having been made bona fide and as requiring examination. As to the first part of his question, yes, I have had reports from Commonwealth Hostels Limited. The complaints are not in respect of all the food at the hostel but in respect of only parts of it. I believe that Commonwealth Hostels Limited is attempting to correct any deficiences that may exist. I expect to get another report on the matter to-day, or at least within a few days, and I will let the honorable gentleman know what its contents are.

page 2243

QUESTION

TELEVISION

Mr BANDIDT:
WIDE BAY, QUEENSLAND

– I address a question to the Postmaster-General. The Minister has given us the very agreeable information that the Wide Bay area will be given television during the fourth stage. I ask him: When is it expected that the site for the transmitter will be chosen? Will the site and the equipment be such that first-class reception will be available to the cities of Bundaberg and Maryborough and to a wide area in the Burnett and Mary districts?

Mr DAVIDSON:
CP

– I cannot tell the honorable member for Wide Bay at this stage exactly when the transmitter site is likely to be chosen, but I can inform him that a considerable amount of preliminary work has been done, not only in this area, but also in other areas in which it has been obvious that the service will be required later on. The engineers will therefore have a more or less general knowledge of the best sites, but it will take a fair amount of field testing and so on before the sites can be finally pinpointed. Nevertheless, although no site has been finally chosen in the area in which the honorable member is interested, I can assure him that it will be such that the transmitter will give an excellent service to the centres on the coast which he mentioned, Bundaberg and Maryborough, and I am sure it will also throw a good signal into the adjacent inland areas.

page 2243

QUESTION

TIMBER

Mr BARNARD:
BASS, TASMANIA

– My question is addressed to the Minister for Trade. I refer to a statement made by the chairman of the Tasmanian Timber Association only a few days ago, in which he said that the State timber industry was in a very perilous position. I now ask the Minister: Has he considered the proposals that were placed before him by representatives of the industry during recent discussions in Canberra? Is he now in a position to say what action, if any, is contemplated by his department to assist the industry generally?

Mr McEWEN:
CP

– I and the officers of my department have under study certain specific proposals which were advanced to me by representatives of the timber industry at a deputation which originated primarily from the initiative of the honorable member for Bass, but at which many members of the House were present. I am not in a position to say that decisions have been finally reached on those representations, but I will undertake to see that there is a minimum of delay in reaching decisions.

page 2243

QUESTION

EUROPEAN COMMON MARKET

Mr HAWORTH:
ISAACS, VICTORIA

– My question about the European Common Market is addressed to the right honorable the Prime Minister. It refers to the statement made by the Lord Privy Seal, Mr. Edward Heath, in the House of Commons on Tuesday last, that the Australian Government has been supplied with full details of Britain’s Common Market requirements and the safeguards as outlined to the Council of Ministers recently. Has the Government yet examined these details and, if so, is the Prime Minister in a position to tell the House what the details are?

Mr MENZIES:
LP

– The position is that we, in common with other Commonwealth countries, have been provided by the Lord Privy Seal, through our High Commissioner, with a summary of the opening statements made by him to The Six when commencing negotiations. The statements are not of a kind which lend themselves to publication, nor are they so advanced in point of detail as to amount to any decision or commitment. These are very early days, and the statements so far made have been quite general. We are in close contact with the matter, following out the machinery Which I announced to the House recently, and we have had official discussions frequently. I think that this afternoon we have another meeting of the Cabinet committee which is following these matters with close attention. I do not think there is anything to be gained at this stage by endeavouring to go into details from an outline which is not yet clear.

page 2244

QUESTION

BUSINESS STATISTICS

Mr POLLARD:
LALOR, VICTORIA

– I ask the Treasurer why the “ Monthly Review of Business Statistics “, which is prepared under his instruction, omitted in June last and in subsequent months reference to the number of persons admitted to unemployment benefit and the amount paid in benefits during the month?

Mr HAROLD HOLT:
LP

– If this is a document which is released under my authority, I can assure the honorable gentleman that no instruction has been given by me which would in any way alter its content. I shall have some inquiries made, but I can only assume that it is the product of a decision by the Commonwealth Statistician. I can assure the honorable member that there is no sinister influence working behind the scenes in the production of this document.

page 2244

QUESTION

CRIMES ACT

Mr ASTON:
PHILLIP, NEW SOUTH WALES

– I ask the AttorneyGeneral whether he has seen an article on the Crimes Act in relation to public servants and disclosures by public servants? If he has, is the article accurate when it suggests that the Government widened the operation of the Crimes Act to impose a fear of gaol upon public servants and place an obnoxious onus of proof on them, when charged with an offence under the act, to show lawful authority or excuse? What is the position under the Crimes Act?

Sir GARFIELD BARWICK:
LP

– I did see the article in the “ Sydney Morning Herald “ this morning. I noticed with a little surprise that it was attributed to a legal correspondent. It bore none of the objective impartiality of a lawyer, and it had a good deal of inaccuracy in it.

In the first place, I think it proper that I should say again - I think others have said it in this House - that section 70 of the Crimes Act, which makes it an offence for a public servant to disclose information which it is his duty to keep secret, has been in the Crimes Act since the Fisher Government put it there in 1914. The recent amendments to the Crimes Act did not touch that section in any point of substance at all. The provision, wisely put in by the Fisher Government, covers not merely public servants, but also servants of public authorities - statutory bodies - and has always been there.

Mr Menzies:

– And was wisely maintained by the Chifley Government.

Sir GARFIELD BARWICK:

– Yes. As I am reminded, it was maintained by the Chifley Government. There was never any attempt to amend it.

It needs only a small amount of reflection to realize that a public service regulation which is enforced by no more than dismissal from the Public Service is not an adequate deterrent to the disclosure by a public servant of matter which it is his duty to keep secret. Therefore, the Fisher Government, the Chifley Government and this Government have seen fit to maintain the offence in the

Crimes Act, the penalty for the commission of which is a gaol sentence. Of course, as in the case of all other crimes, the sentence nominated in the act is the maximum sentence. The court, no doubt, tailors the sentence to the gravity of the matter before it on the conviction of the public servant.

What the Government did with respect to this section in the Crimes Act was to introduce a new sub-section which imposed the same obligation of non-disclosure on a retired public servant. In other words, there seemed to be no reason why a public servant who had retired became, at that moment, free to disclose a matter which it had been his duty to keep secret. In that connexion, the amendment was tempered, I might say, by providing that, to be an offence, the disclosure had to be without lawful occasion or excuse. This afforded the retired public servant an opportunity, I suppose, to write his memoirs at some point of time; and he might be able to show he had proper excuse at that point of time for making some disclosure.

In that sub-section introduced by this Government, there is a provision that the onus of proving the lawful excuse is on the defendant. That does not represent any change in onus whatever, because the common law, which has been notable for protecting the individual, always provided that, where it was an offence to do a thing without lawful excuse, it rested on the accused to show the lawful excuse. That is only common sense, because the accused would be the only person who would know why and for what purpose he did that which was otherwise proscribed. The provision in the Crimes Act putting the onus of proving lawful excuse on the defendant does not, in truth, alter the whole question of onus in any case, because the Crown still has to satisfy the jury beyond reasonable doubt that the offence was committed.

The article in question is singularly inaccurate in saying that the Government has widened the Crimes Act in relation to its application to public servants. As to the public servant in office, it has done nothing of the kind; as to the retired public servant, it has done what I have just described.

Mr Cope:

– Seven minutes to answer a question!

Sir GARFIELD BARWICK:

– Yes. 1 know when things hurt. Lastly, let me say that I would have thought, as I said in answer to a question in this House a day or so ago, that no one in this community would condone the disclosure of information which it was the duty of the public servant not to disclose. Of course, in the administration of the law, provisions such as these are only used when the offence is of sufficient gravity to warrant their being used, and it is very notable that, since the Fisher Government introduced this provision in 1914, no public servant has been proceeded against under it. That is because most public servants understand their duty, and also because the Government administering the law has used good sense. If the matter is something that can be dealt with under the Public Service Act, that is the commensurate way in which to deal with it, but when a serious offence is committed the Crimes Act is available, and, I would have thought we all agreed, properly available.

page 2245

PERSONAL EXPLANATION

Mr WARD:

– I wish to make a personal explanation.

Mr SPEAKER:

– Order! Does the honorable member claim that he has been misrepresented?

Mr WARD:

– I have been grossly misrepresented.

Mr SPEAKER:

– Order! Is it a press misrepresentation?

Mr WARD:

– No, a misrepresentation by the Minister for Labour and National Service.

Mr SPEAKER:

– Order! Is it in relation to a question which the honorable member asked?

Mr WARD:

– Yes. The Minister said that a question which I asked was based on false premises. In order that the House will understand my point, the purport of the question I asked the Minister was whether he had declared himself in opposition to all adjustments of the basic wage based on the declared cost of living. Then I asked him whether this decision followed on his earlier declaration that the basic wage is higher than is necessary to maintain the average Australian family. The Minister said that both statements were false.

Mr SPEAKER:

– Order! The honorable member will not be in order in debating the matter.

Mr WARD:

– I propose to show that what I said is not false.

Mr SPEAKER:

– -Order! The honorable member will not be in order. He has directed attention to where he has been misrepresented.

Mr Calwell:

– I rise to order. Is not the honorable gentleman entitled to refer to a press statement, or to “ Hansard “, where at the Minister is reported as having said precisely what the honorable member for East Sydney says he said?

Mr SPEAKER:

– Order! The honorable member is entitled, by the indulgence of he House, to direct attention to where the Minister for Labour and National Service misrepresented him, but he would not be in order in debating the point. I think the honorable member has exercised his right.

Mr WARD:

– I have heard many personal explanations made in the House. 1 have heard them made repeatedly. If 1 had the opportunity of going through “ Hansard “ I could quote innumerable instances in which honorable members, after having declared that they were misrepresented, were allowed to produce evidence to show that they had been misrepresented. All I wanted to do was to quote two short statements that have been made by the Minister for Labour and National Service which would prove that his allegation against me that my question was based on false premises was inaccurate.

Mr SPEAKER:

– Order! The honorable gentleman has already directed attention to that point. He has explained the question he asked, and therefore he has exercised his right and would not be in order in debating it.

Mr WARD:

– Could I ask this one question?

Mr SPEAKER:

– Order! The honorable member is now canvassing my ruling.

Mr WARD:

– No, I am not. All I want to know is this: Is a Minister entitled to declare that a question asked by an honorable member is based on false premises? He might declare it to be inaccurate, but is the word “ false “ a parliamentary term?

Mr SPEAKER:

– Order! There is no substance in the point of order. A Minister is entitled to reply to a question as he thinks fit so long as his language is parliamentary.

page 2246

SUPPLEMENTARY REPORT OF THE AUDITOR-GENERAL

Mr SPEAKER:

– I lay on the table the following paper: -

Audit Act - Finance - Supplementary Report by the Auditor-General upon other accounts, for year 1960-61.

Ordered to be printed.

page 2246

VOTING RIGHTS OF ABORIGINES

Report of Select Committee

Mr PEARCE:
Capricornia

– Mr. Speaker, I present the following paper: -

Report from the Select Committee appointed to inquire into Voting Rights of Aborigines, together with the Minutes of Proceedings of the Committee and Minutes of Evidence.

Ordered to be printed.

Mr PEARCE:

– by leave - In addition to the matters considered under the terms of reference given by the House to this committee, the committee had perforce to look into the whole range of activities of aborigines in Australia. The minutes of evidence that have been produced contain what we consider to be the most comprehensive survey of aborigines conducted by a committee in the Commonwealth of Australia. The evidence has been gathered from more than 300 witnesses, of whom more than 140 were people of aboriginal descent, and it expresses in the words of those people their views on many problems, outside the committee’s terms of reference, that confront the aboriginal people to-day. We have not reported on these matters. We commit the report to the House - and we ask too that the State governments should study carefully the evidence because it concerns such matters as education, housing, employment, the drink problem and questions relating to policies in respect of missions and settlements and the welfare of the natives generally. In their own words, the natives placed before the committee the hopes and aspirations not only of men but also of women of the aboriginal people. lt is the committee’s hope, Sir, that this record of evidence shall not be lost but win be read carefully. We hope that the thoughts contained in it will be studied and will be put into effect by those people in authority over the aborigines in the States and the Commonwealth and by those who have the welfare of the aborigines at heart. We also direct attention to the fact that the report, which comes from an all-party committee set up this House, was unanimous; and, therefore, we express the hope that legislation will be introduced into this House to implement the recommendations.

You will remember, Mr. Speaker, that the terms of reference required the committee to bring down its report before the end of this month. That limited the time in which the committee could make its inquiries. At the back of the report, a map shows the travels of the committee as it journeyed around Australia to investigate thoroughly the matters before it. This limitation of time made extraordinary demands on the members of the committee in a time of leisure and also made extra demands on them during a period of travel. As chairman of the committee, I should like to record my appreciation of the willingness of members of the committee and officers associated with it, including the “ Hansard “ staff, to give up their time, not only in lengths of days and weeks but also in the long hours that we devoted to this cause.

There are illustrations in the report. These are from photographs taken by honorable members themselves and the secretary of the committee during the course of our investigations. Under each of the photographs there is a caption, and if these captions are read in order, they comprise an extract from a very powerful passage in a book by Quick and Garran which we have tried to highlight. It reads -

One united people; possessed of common rights and interests; one in their entitlement to equality before the law; one in their claim to fair and beneficient treatment; one in destiny.

It is the hope of this committee that our efforts in gathering this evidence and bringing down the report will be a large step forward in the assimilation and integration of the aboriginal people in the Commonwealth of Australia.

page 2247

ORDER OF BUSINESS

Motion (by Mr. Harold Holt) proposed -

That Order of the Day No. 1, Government Business, be postponed until a later hour this day.

Mr CALWELL:
Leader of the Opposition · Melbourne

– The Opposition opposes this motion. We have had six previous days this year under the heading of Grievance Day, but only three of them were used for that purpose. One was used by the honorable member for Mackellar (Mr. Wentworth) to discuss his famous resolution on Soviet immigration control. We have had eight days on which it was possible to discuss general business, but the House has had general business on only five of those days. On one day. the Opposition presented for discussion a matter of urgent public importance.

This is the last Grievance Day of this Parliament and honorable members on this side of the House have a number of matters that they wish to bring forward particularly concerning unemployment. They believe that the Government should afford them an opportunity to put their points of view and that it should not deprive them of this opportunity particularly as the House will be sitting very late to-night probably and also next week so that there will not be many opportunities next week, if any at all, to speak on the adjournment. This might be the last opportunity that honorable members will have to raise any matters of importance to their electorates or of general importance. So we will not agree to wiping out Grievance Day at this stage just to facilitate the passage of business.

A lot of the legislation that is being rushed through at this time could have been introduced earlier. As has happened over recent years, legislation has been brought down in the dying hours of the session - large volumes of it - so that both Houses have been asked to sit very late and can give the legislation very little consideration. A time-table is put down and bills have been forced through without much consideration at all.

Mr Harold Holt:

– You have never had a more orderly arrangement of the business than you have had this session.

Mr CALWELL:

– I would not say that.

Mr Harold Holt:

– I am saying it.

Mr CALWELL:

– Of course you would. My argument is not about the arrangements, but about the rush with which the legislation is being considered. If there is any order left in the right honorable gentleman’s mind regarding the business of the House, why does he need to be so disorderly with a resolution of this sort and prevent honorable members from grieving at their last opportunity?

Mr WENTWORTH:
Mackellar

, - Mr. Speaker, I take the strongest possible exception to the tone of the remarks made by the Leader of the Opposition (Mr. Calwell) in regard to a motion that I moved in this House. He made a sneering, jeering reference to it. The motion that I moved and that he described, I think, in the phrase, “ the famous motion “, was one that I hoped all decent Australians would support. As the Leader of the Opposition knows, I went to him before the motion was proposed and I asked that it be regarded as a non-party motion, because I believed that all decent Australians would have been behind it. I found that certain members of the Opposition, when the motion came on-

Mr SPEAKER:

– Order! The honorable member is straying from the subject-matter before the chair, which is the motion by the Leader of the House -

That Order of the Day No. 1, Government Business, be postponed until a later hour this day.

I suggest that the honorable member avail himself of the opportunity which I give him now to confine his remarks to that motion.

Mr WENTWORTH:

– Indeed, Sir, I have now done what I wanted to do. I simply wanted to direct the attention of the House and the country to the pro-Communist attitude of certain members of the Opposition.

Mr Calwell:

– Mr. Speaker, did you hear what the honorable member for Mackellar said?

Mr SPEAKER:

– No, I did not.

Mr Calwell:

– He said he was satisfied that he had done what he wanted to do, and that what he wanted to do was to direct the attention of the House and the country to the pro-Communist attitude of the Leader of the Opposition.

Mr SPEAKER:

– Order! I ask the honorable member for Mackellar to withdraw that remark.

Mr Wentworth:

– I said “certain members of the Opposition “, Sir, not “ the Leader of the Opposition “.

Mr SPEAKER:

– Order! I ask the honorable member to withdraw the remark.

Mr WENTWORTH:
MACKELLAR, NEW SOUTH WALES · LP; IND LIB from Oct 1977

– Very well, Sir.

Mr SPEAKER:

– I point out to the honorable member that he cast a very grave reflection on the Leader of the Opposition.

Mr WENTWORTH:
MACKELLAR, NEW SOUTH WALES · LP; IND LIB from Oct 1977

– I simply let the facts speak for themselves, Sir.

Mr SPEAKER:

– Order! I ask the honorable member to withdraw the remark.

Mr Wentworth:

– I have done so, Sir.

Mr SPEAKER:

– I cannot hear the honorable member.

Mr Wentworth:

– I have withdrawn the remark, Sir. I am quite satisfied to let the facts speak for themselves.

Mr Calwell:

– I ask for an unqualified withdrawal and apology. I ask for nothing less than that.

Mr SPEAKER:

– Order! I ask the honorable member for Mackellar for an unqualified withdrawal.

Mr Wentworth:

– I have withdrawn the remark, Sir.

Mr SPEAKER:

– I ask the honorable member to withdraw the remark completely without any qualification.

Mr Wentworth:

– I have done so already. Sir. I do it again.

Mr SPEAKER:

– Order! The honorable member must unreservedly withdraw the charge that he made against the Leader of the Opposition.

Mr Wentworth:

– I do so, Sir.

Mr Calwell:

– I asked for an apology, Sir. Do you rule that I have no right to ask for an apology?

Mr SPEAKER:

– Order! I have asked the honorable member for Mackellar to withdraw. I think that is sufficient.

Mr Calwell:

– No. Have I no right under the Standing Orders to ask for an apology when I have been accused of being proCommunist? I ask for a ruling.

Mr SPEAKER:

– Order! The honorable member for Mackellar has withdrawn the remark to the satisfaction of the Chair.

Mr BRYANT:
Wills

– Mr. Speaker, I wish to address myself to the question before the Chair, which concerns the depriving of the members of this House of what I think is their traditional and very valuable right to raise matters on behalf of the people of Australia as they see fit as individuals representing their electorates. The Parliament does not meet often enough as it is. The total of sitting days of this House for this year has reached only 51 so far. I recall that in 1956, the first year in which I sat in this Parliament, we met for something like 70 days. There has been a tendency for the Parliament to meet less and less in successive years. With each diminution of the meetings of the Parliament, there has been a reduction in the opportunities of honorable members to raise matters here. It is a serious matter when the executive of the country so completely dominates parliamentary procedures as to deprive the ordinary members of the Parliament, with such frequency, of what may be termed the reasonably humble privileges which they ought to have on behalf of their constituents. Only three times this year has Grievance Day been called on out of a possible six occasions. The same sort of thing has happened in respect of General Business.

I do not think that this is a subject to which honorable members opposite ought to address themselves so light-heartedly. After 9th December, they may well find themselves in the same kind of position that we on this side of the chamber are in now. As a parliamentarian with a great deal of regard for the rights of individual members, I point out that the report of the Select Committee on Voting Rights of Aborigines, which has just been presented by the chairman of that committee, is a record of the activities of people who do not sit on the front benches on the Government side of the House. It is a record of the work of private members who come here as direct representatives of the people. Private members on both the Opposition side and the Government side have something to contribute in this place, and Grievance Day debates provide a traditional way in which to use the Parliament as a forum for the people.

I hope that the Leader of the House (Mr. Harold Holt) will have second thoughts about this motion. If the question is simply one of time, why can we not sit for an additional day or so in order to meet the wishes of the Government? It has handled its own business, the business of the Parliament and the business of the nation in so haphazard a way as to convince me that it is incapable of organizing anything. However, I hope that the Leader of the House will re-organize the Government’s affairs so that we can reclaim Grievance Day, on this occasion at least.

Mr WARD:
East Sydney

.- Mr. Speaker, private members in this House have not a great number of rights, but one that they have is the right to raise, in Grievance Day debates, matters which they believe ought to be ventilated in the Parliament. They have an opportunity to raise such matters also during debate on the motion for the adjournment of the House at the end of each day’s proceedings. However, we are frequently prevented, by the Government’s repeated use of the gag, fron raising such matters. One thing is quit! obvious. There are two kinds of discus sion in this place during which the Govern ment cannot actually control the busines before the House except by applying the gag. In Grievance Day debates, the Government cannot determine which matters shall be raised. Neither can it do so in debates on the motion for the adjournment of the House. In both kinds of debates, any honorable member is entitled to raise a matter which he thinks is of sufficient importance to require ventilation in the Parliament. Everybody who has witnessed the proceedings of the Parliament in recent weeks must have been impressed by the fact that, obviously, the Government has been greatly embarrassed by the raising of a number of matters by Opposition members and has been anxious to close down the Parliament and thereby silence the voice of democracy.

Let me give honorable members opposite one or two illustrations. In recent times, we have seen in this Parliament indications of the growth of the police state in Australia. But, unfortunately for those who favour this growth, we still have parliamentary democracy.

Mr SPEAKER:

– Order! I ask the honorable member not to stray too far from the subject-matter before the Chair.

Mr WARD:

– I am not doing so, Sir. I am giving reasons why this motion ought to be rejected, and illustrating those reasons hy reference to matters that honorable members may want to raise in Grievance Day discussions. This Parliament is the one place in Australia in which the Government cannot use the threat of the Crimes Act to prevent the representatives of the people from raising matters that they consider ought to be raised. Here, the Government cannot silence the voice of the people. Of recent times, in my opinion, there has been a great waste of time with respect to the Government’s legislative programme. We would normally regard a motion of the kind proposed last Thursday by the right honorable member for Cowper (Sir Earle Page) as being an important one that ought to be discussed in this Parliament. However, at the time when it was discussed, he and the Government knew that the discussion was worthless, because it could result in no effective decision. Yet we were kept here discussing that motion for hour after hour when we could have been discussing the many other matters that honorable members want to raise in this Parliament on behalf of the people. We have had the various scandals revealed by Mr. Roberts. We have questioned Ministers, we have sought from Ministers a reply to the question whether Mr. Roberts had committed any offence against the Crimes Act, and we have been met only with sheer evasion.

Mr SPEAKER:

– Order! I ask the honorable member to come back to the subject of the debate.

Mr WARD:

– Now I will come back to it. I want to say here and now that it is quite obvious to me that the reason the Government does not want a Grievance Day debate to-day is that there are certain matters that it does not want discussed in this Parliament before the election. Is it not quite obvious? On the adjournment motion of an evening, when the Government can use the gag, the broadcast of proceedings ends as soon as the motion is made that the House do now adjourn. But on Grievance Day - to-day - the Parliament is on the air, which explains the greater urgency on the part of the Government to keep the Opposition quiet, and to prevent it from saying the things that ought to be said. Without canvassing them I could mention many of them if honorable members wanted me to. The Government does not want any further discussion of the Roberts case. It does not want any further discussion of the abuse of security powers in this country. It does not want further discussion of the letting of the contract for the Reserve Bank in Sydney, which smells to high heaven. It does not want any-

Mr SPEAKER:

– Order! The honorable member is transgressing again. I ask him to confine his remarks to the matter before the Chair.

Mr WARD:

– Very well, Mr. Speaker, I shall do so in deference to your ruling. I think that 1 have made quite clear to the public of this country the reason why the Government does not want a Grievance Day debate on this occasion.

Mr HAROLD HOLT:
HigginsTreasurer · LP

– The honorable member for East Sydney (Mr. Ward) has just given a very good illustration of the way in which the rights of private members can be used, and can be abused, in this place. Sir, in the course of this sessional period of the Parliament there has probably been, proportionately, more time available to private members to roam on any subject they may choose than in any earlier period in the life of the Parliament which is now about to close. We have had a general debate on the Budget. We have had a very long and extensive debate on the whole of the Estimates. We have had Grievance Day debates, which have been availed of on the number of occasions referred to by the Leader of the Opposition (Mr. Calwell). We have had general business. Indeed, the honorable gentleman himself produced an illustration of the way in which the Government has eaten into the time normally available for Government business in order to expend it on a subject of very great national interest and importance. I refer to the debate that was originated by the right honorable member for Cowper (Sir Earle Page).

What is the purpose of our action here this morning? No one who has any awareness of what has been going on in this place is impressed by this rhodomontade of the honorable member for East Sydney that we are trying to stifle discussion on this topic or on that topic. In three debates he has used this vehicle in order to ventilate again this worn, threadbare topic, and he is just trying to plug something in which the public does not have the same morbid interest that he evinces.

What are we trying to do? To-night, it we time our business, as I would hope, in a sensible and orderly manner, there would be an opportunity for debate on the adjournment, and the reason for giving time now to business on the notice-paper is to avoid the uncomfortably late hours which irk all members wherever they may sit in the Parliament, I feel that yesterday the Parliament managed to make excellent progress and, by virtually breaking the back of the business before us between now and the end of the session, has avoided the necessity of sitting to excessively late hours, or of any rush consideration of legislation before us. I have had no other motive in bringing this motion forward than that of meeting the convenience of honorable members. There will be, before the Parliament rises, a series of opportunities for private members to ventilate matters of interest to them. I think that we might usefully get on with the business of the House now. and I hope that further time will not be wasted by the forcing of a division on this motion.

Question put -

That Order of the Day No. 1, Government Business, be postponed until a later hour this day.

The House divided. (Mr. Speaker - Hon. John McLeay.)

AYES: 66

NOES: 31

Majority 35

AYES

NOES

Question so resolved in the affirmative.

page 2251

RAILWAY AGREEMENT (QUEENSLAND) BILL 1961

Mr MENZIES:
Prime Minister and Minister for External Affairs · Kooyong · LP

, - 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 an agreement between the Commonwealth and the State of Queensland covering the provision of financial assistance to that State in the work of increasing and improving the facilities of the Collinsville-Townsville-Mount Isa railway. Mount Isa is just over 600 miles by rail from the coast at Townsville, and the total distance from the Collinsville coal mines to Mount lsa is more than 750 miles. For many years this line has been the main transport link serving the whole of northwestern Queensland, and in more recent times it has acquired greatly increased importance because of the discovery and development of rich and extensive mineral deposits in the Mount lsa area.

The transport task here is primarily a railway operation, but the existing railway has become increasingly deficient in many respects, so that it could not possibly provide the capacity to move the tonnage in prospect from the developments likely to occur in that region. Rehabilitation of the railway to the standard now required includes extensive reconstruction of the permanent way to achieve better grades and curves, replacement of one major bridge and a host of minor bridges, considerable replacement of rails and sleepers, new marshalling yards and crossing loops, improved methods of control and administration, the provision of modern locomotives and rolling-stock, and so on. This vast project, which is already under way and is scheduled for completion by December, 1964, has been estimated to cost £30,000,000. The provision of financial assistance to Queensland by the Commonwealth, as in the agreement to which approval is now sought, will enable this Work to be carried out.

At this point I must emphasize that the reconstructed line will retain the existing gauge of 3-ft. 6-in. so that the question of gauge standardization is not involved. It could be argued, of course, that the rehabilitation of a section of a State railway system is purely a matter for the State concerned, and that there is no parallel with other cases where, in the interests of moving towards a uniform gauge link between the principal mainland railways, the Commonwealth has provided financial assistance to certain States. But in this instance the very nature and magnitude of the project compels a different approach. It was obvious from the start that the State of Queensland would need some outside help if the complete job was to be done properly and within a reasonable time. Furthermore, the increase in export earnings that will undoubtedly flow from the expansion of metal production at Mount Isa, made possible by an improved railway, gave the Commonwealth good reason for using its best endeavours to ensure that the rehabilitation project would be vigorously pursued. From the outset we expressed a keen interest in the project, and this interest, plus an amount of hard work, has now culminated in the present agreement.

Our approach to the form of the assistance to Queensland has, however, been conditioned at all times by the fact, which I repeat, that this is not a standardization work, and so should not attract the same measure of direct support as has been accorded by the Commonwealth to standardization projects. I might add that this view was strengthened when it was demonstrated by the most expert investigations that the revitalized line should have no difficulty in paying its way, including the complete amortization of its capital cost over a period of twenty years, and making a profit. It was a singularly sound economic proposition.

The first approach for Commonwealth assistance was made in 1956 by the then Queensland Premier, Mr. Gair, and arose from the declared intention of Mount Isa Mines Limited to increase greatly its production of metals and concentrates, provided that the necessary increased railway capacity could be made available. Deposits of silverleadzinc ores were discovered at Mount Isa in 1923, and the present company commenced production in 1931, mainly of lead. Subsequently a high-grade copper ore body was discovered alongside the silver-lead-zinc ore zones, and for several years during World War II. the mine switched to copper production, later reverting to lead and zinc. Thereafter the world price of copper increased to an attractive level, and since 1953 the company has been producing, from the one mine, copper, silver-lead, and zinc. It is by far our largest producer of copper, and second only to the Broken Hill area as a producer of lead and zinc.

Some six years ago the company discovered additional deposits of both silverleadzinc and copper ores of almost incredible magnitude. The extent to which the metal can be extracted economically depends to a large extent on the scale of production, which, in turn, largely determines unit production cost, and hence the grade of ore which it pays to treat. A low rate of production would require adoption of a relatively high “ cut-off grade “, and hence the by-passing of the lower grade ores which in all probability would then be left in the ground for all time. As the production rate increases, the “ cut-off grade “ percentage decreases, so that, in addition to producing more metal in a given period, the adoption of more intensive production also increases the extent to which this tremendous source of underground wealth can bc brought to the surface.

Very naturally, the directors of Mount Isa Mines Limited decided on an expansion programme, the latest version of which is to increase, within the next few years, the rate of ore production to 14,400 tons a day, as against the 4,000 tons a day being treated in 1956. Such a programme involves the enlargement of facilities at all stages and a very large further capital investment by the company, of the order of £40,000,000. Some idea of what is involved can be gauged from the fact that the Mount Isa programme includes construction of a new access shaft 3,200 feet deep by 24 feet in diameter, a new power station, a new copper smelter, a new dam on the Leichhardt River to assure adequate water supply, extensions to ore mills, a copper refinery at Townsville, a coke plant at Bowen, and the thousand and one other things needed to cope with a more than threefold increase in the scale of production. I am happy to say that the company has in fact embarked on such a programme, and that its first target of 8,100 tons of ore a day was reported to have been reached, ahead of schedule, in November, 1959.

Expansion of production from 4,000 to 14,400 tons of ore a day requires an increase, in round numbers, from 320,000 to 950,000 tons in the annual rail transportation task. The planned mine expansion was just not possible unless accompanied by the necessary expansion of railway capacity. The com pany put the problem to the Queensland Government, which evolved a minimum rehabilitation plan estimated to cost £10,000,000, and, as I mentioned before, approached the Commonwealth for assistance.

We looked at the State’s proposals. We made a critical study of the company’s extension plans, and an assessment of the value of the overall project as an export earner. Weighing all the facts, we were forced to the conclusion that the limited work proposed by the State on the railway did not go far enough, and that the mining project was of such importance as to call for a first-class railway, properly equipped with modern rolling-stock, and capable of carrying in an economic and efficient manner not only the traffic needed for the announced increase in production but also such further traffic as would be offering were the huge Mount Isa deposits to be developed at a still faster rate. Beyond this, of course, were the prospective needs of the great north-western area of Queensland, with its rich grazing lands and its undoubted potential for other mineral developments.

Our views were made known to the then Premier, who forthwith arranged for a more elaborate plan to be drafted. The new proposal required an expenditure of upwards of £30,000,000, and the State made it clear that such an expenditure could be contemplated only if very substantial outside assistance was forthcoming. For our part, we indicated a keen interest in the project, and set about the task of finding the necessary finance.

From the outset we contemplated an overseas borrowing, and with this in mind suggested, and the State agreed, that independent experts should be engaged to look at the rehabilitation plan and report on its economic feasibility. This led to the appointment of the eminent American firm of consulting engineers, Ford, Bacon and Davis, which made very thorough investigations and reported, initially in November, 1957, and finally in August, 1958, that the project was in fact economically feasible. Their calculations showed that the rehabilitated railway should be able to pay its way, and, as I said before, completely amortize its capital cost from earnings over a period of twenty years.

I mention that Ford, Bacon and Davis have been retained by the State to supervise the project, and to undertake various other tasks associated with it and with the general operation of the Queensland Railways.

On the financing side, we had been able to interest the International Bank for Reconstruction and Development, and at the 1958 meeting of the Australian Loan Council we s iught and obtained unanimous agreement tor the Commonwealth to borrow moneys for the Mount Isa project. This opened the way for a formal request to the bank for a loan.

Quite a lot has been said on this subject, and it is well known that the negotiations with the bank, which at the start, I thought, gave great promise of success, finally broke down because the Mount Isa company was not prepared to provide guarantees of freight revenues from the railway of a kind required by the bank. This was disappointing to us because in nearly all respects the railway was a project admirably suited to finance by the International Bank. I said at the time, and I now repeat, that we in the Commonwealth used our very best endeavours to ensure success. I did not then, nor do I now, criticize in any way the bank, the Mount Isa company, or the Queensland Government. It is understandable, of course, that the International Bank must abide by whatever rules it lays down governing the loans it makes and that, having regard to the numerous demands upon it from many countries, it cannot readily make exceptions in particular cases, no matter how credit-worthy it regards a particular project or a particular borrower. On the other hand, the Mount Isa company made its own business judgment as to how far it could go in guaranteeing the railway freight earnings.

When, however, the negotiations with the bank ended in mid-1959, one thing was perfectly clear. Money had to be found for the job. Neither we nor the Queensland Government were prepared to let the matter rest where it stood. We intended to try - and did try - to secure loan finance from overseas sources other than the International Bank. Meeting, however, with no immediate success in that direction and believing that the project was of the greatest urgency and importance, we, the Commonwealth Government, decided to offer to guarantee the Queensland Government the money for it ourselves, even if our effortsto secure overseas finance should fail.

Towards the end of 1959, I therefore wrote to Mr. Nicklin, the Queensland Premier, to tell him the Commonwealth was prepared to underwrite the provision’ of the additional £20,000,000 required - that is, the amount over and above the £10,000,000 which the State had indicated it could finance itself - on virtually the same terms and conditions as would have applied had the loan from the International Bank been forthcoming - terms and conditions which, I might add, Queensland had always indicated it would be quite happy to accept. In effect, despite the burden that it would place on our resources, we undertook to put ourselves in the position that the International Bank would have occupied if it had provided a loan of £20,000,000. The Premier of Queensland wrote to me a few days after I had made the offer, expressing pleasure and accepting it without qualification. It was for both Mr. Nicklin and me a very notable event.

With one exception which I shall mention presently, the terms and conditions which were offered to and accepted by Queensland were the terms and conditions which have now been embodied in the agreement which this bill seeks to approve.

As we intended, this offer assuring the State of the finance enabled proper planning of the work to proceed immediately, and the work went forward, without having to wait the results of any further efforts we made to borrow overseas for the project. The Queensland Government wasted no time, and the actual work commenced some time ago. I am pleased to say that, on the information I have, it is proceeding very satisfactorily. Queensland has been able to meet expenditure so far from its own agreed contribution to the project. However, the time is now approaching when the Commonwealth will have to start making its contribution, and it is, of course, necessary for this agreement to be approved before that can be done. I may say that the estimate of the contribution from us in this financial year is of the order of £4,300.000. The money will be provided over the period of construction, but in this financial year we will contribute about £4 “<00,000.

I have mentioned that, in one respect, the proposed terms of the Commonwealth’s assistance differ from what was offered and agreed at the end of 1959. This is in regard to the matter of the interest rate on the Commonwealth’s advances. As I have said, our intention was to put ourselves in the position that we had hoped the International Bank would occupy, and offer Queensland the same terms as would have applied to a loan made by the bank. So far as the interest rate was concerned, we offered to charge Queensland whatever happened to be the ruling rate for International Bank loans of about the same duration at the time we provided the money, subject to a reduction in that rate if we were successful in borrowing more cheaply elsewhere overseas.

At the time we were negotiating with the bank, the ruling International Bank rate was in the vicinity of 6 per cent, per annum. Although the State accepted this arrangement initially we, following receipt of a later suggestion by Mr. Nicklin, the Premier, reconsidered it. In an attempt to settle a firm rate once and for all and avoid unnecessary complications and arithmetic later, we subsequently suggested instead that we charge Queensland the average rate of two particular overseas loans then being raised, the full proceeds of which would, with Loan Council approval, be allocated to the Commonwealth, instead of being apportioned between the Commonwealth and the various States in the normal way. The Premier agreed to this, and the necessary Loan Council approval was secured. The average rate of interest on these two loans was 5i per cent, per annum, and this is the interest rate that the agreement provides will be charged to Queensland on advances made by the Commonwealth under agreement.

There were subsequent discussions with the Queensland Government about other aspects of the financial arrangement, but I feel that I do not need to go into details of these matters here because all agreement has been worked out. I do not propose to do so. It is sufficient to say that full agreement was eventually reached on the basis I have outlined, and when this bill is passed these arrangements can be put into operation.

Apart from the interest rate, the other main terms on which the Commonwealth is proposing to provide financial assistance are these: First, as to amount, we provide two-thirds of the actual cost, up to a maximum of £20,000,000. That is, our two-thirds is up to £20,000,000, not that the maximum cost is £20,000,000. As I mentioned earlier, Queensland had indicated that it would be able to provide up to £10,000,000 towards the cost of the project. The Commonwealth’s advances will be made under section 96 of the Constitution, and are thus outside the provisions of the financial agreement governing ordinary State borrowings. That is important from the point of view of both of us.

Secondly, as to term, the Commonwealth advances are to be repayable in full over twenty years, commencing from 1st January, 1965, after the work has been completed. Interest is to be capitalized during the construction period. These arrangements are similar to those which I explained the other day in relation to Western Australia. Twenty years is the period over which the expert consultants estimated the railway would be able to repay the money from surpluses earned. It will be most unlikely to impose any burden on the Queensland Government’s finances. On the contrary, the Queensland railways seem likely to show improved results as a consequence of this undertaking.

This, then, is in brief - although rather longer than 1 would have wished - the story of how the argreement which the legislation embodies has come about. I am convinced - so is the Government - that it will prove to be one of the most successful and rewarding examples of co-operation ever undertaken between the Commonwealth and a State. For not only will it assist the effective development of vast resources already known but also it will almost certainly help to unlock potentialities for growth exceeding anything we can now envisage. It is much more than a State or regional undertaking: It is a national project in the effective sense of that term.

On all these grounds I have great pleasure in commending this bill to the House.

Debate (on motion by Mr. Whitlam) adjourned.

page 2256

RAILWAY AGREEMENT (WESTERN AUSTRALIA) BILL 1961

Second Reading

Debate resumed from 10th October (vide page 1850), on motion by Mr. Menzies -

That the bill be now read a second time.

Mr BEAZLEY:
Fremantle

– This bill will achieve the standardization of the railway from Kalgoorlie to Fremantle. It will complete an unbroken 4 ft. 8± in. gauge from Port Pirie to Fremantle, lt will bring what is wrongly called the transcontinental railway a 400-mile step nearer to being truly transcontinental. The overall cost is now estimated to be £41,200,000 but this estimate will be subject to many revisions. It is clear from the speech of the Prime Minister (Mr. Menzies) that this line is coming into being not on an estimate of the needs of defence, not alone on an estimate of the transport needs of Western Australia, but because the scale has been turned in favour of the construction of this line which “ would aid the establishment of an iron and steel industry in that State “. The Prime Minister said: -

We subsequently embarked on a close examination of this railway project in consultation with both the Government of Western Australia and the Broken Hill Proprietary Company Limited. We satisfied ourselves that construction of the railway had a vital place in that company’s plans for a major expansion of the steel industry.

The Prime Minister defined what he considered to be a major expansion of the steel industry when he informed the House that, by the end of 1968, the Broken Hill Proprietary Company Limited had undertaken to have at Kwinana a blast furnace with a capacity of 450,000 tons of pig iron per annum, and by 1978 a steel-making plant and other facilities capable of producing 330,000 tons of finished steel products.

The construction of this line must be supported by every one. The only possible query can arise out of the financial arrangements. When the late Sir Harold Clapp, as Director-General of Land Transport, made his report in March, 1945, on the standardization of Australia’s railway gauges, he estimated that the construction of what he called an independent standard gauge line from Fremantle to Kalgoorlie would cost £8,352,000. The distance he allowed for was 419 miles. This measure provides for 528 miles. The 419 miles did not include the branch line to the Koolyanobbing iron ore deposits provided for in this bill, but Sir Harold Clapp’s estimate of cost did include rolling-stock.

Sir Harold Clapp put economic arguments in a secondary position. In paragraph 25 of his report he wrote -

The justification for standardization of gauges must, of course, rest primarily on defence rather than on economic grounds. The likely requirements for defence were fully discussed with the Commander-in-Chief. After a thorough survey of the transport implications, as well as the economic and developmental aspects, I submitted proposals for the conversion of existing lines and the construction of new strategic lines.

For this reason Sir Harold Clapp gave a high priority to the construction of a standard railway from Dajarra to Darwin, and a central strategic line through Queensland.

It is interesting, however, to look back in the report to some of his comments on the railway which is the subject of this bill. Paragraph 30 of Sir Harold Clapp’s report is in these terms -

The construction of this independent line in Western Australia is the simplest way to provide the inter-capital gauge link, pending the conversion at a later date of the entire Western Australian railway system. In view of the extensive nature of the standardization project I am unable to recommend the conversion of the entire Western Australian railways at the outset, but the proposed independent line would be an integral part of the railway system of that State, both prior and subsequent to standardization, and would not in any way interfere with the operation of the existing 3 ft. 6 in. gauge system. Speaking generally, the conversion of narrow gauge lines to standard gauge necessitates the track being more or less completely rebuilt with heavier rails, longer sleepers, wider formation, including cuttings and banks, and new bridges, while in many cases the present sharp curves and steep grades will necessitate re-location of the route.

The existing 3 ft. 6 in. gauge line between Fremantle, Perth, and Kalgoorlie should be retained in operation until such time as the conversion of the entire Western Australian system is effected. If the question of such conversion is likely to be deferred for a long period of years, it may, however, be more economical to abandon the existing 3 ft. 6 in. gauge tine and lay the proposed new standard gauge track with a third rail to provide for dual gauge operation. Subsequently, when the entire Western Australian railways are converted, the third rail referred to could be taken up.

Then he made some comments on the subject of finance. It is, of course, important for us to recognize that the delay between 1945 and now has caused the estimate of the cost of this work to be multiplied by five. Whereas Sir Harold Clapp’s estimate was £8,235,000, the estimate is now £41,000,000 or more. Sir Harold had a comment or two to make about the extreme end of this new line for which provision is also made in the present measure. In paragraph 33 he- said -

The extension of the line to Fremantle instead of terminating it at Perth would provide a standard gauge connexion with the port. A standard gauge passenger terminal would, however, be provided at Perth in close proximity to the existing main station.

We are not informed about the arrangements connected with that, in the present measure. Paragraphs 123, 124 and 125 of the report also have relevance to getting this matter into perspective to-day. In paragraph 123, Sir Harold Clapp drew attention to the fact that the Western Australian railway system covered 4,658 miles of 3-ft. 6-in. gauge tracks, including 277 miles of privately owned lines. In paragraph 124 he said -

I have recommended that consideration be given to the ultimate conversion of the 3 ft. 6 in. gauge lines of Western Australia, but that the preparation of the plans and detailed estimates for such conversion be deferred until such time as the projects recommended under Proposals “ A “, “ B “ and “ C “ are nearing completion.

In paragraph 125 he estimated that to convert the entire system in Western Australia would cost, on 1945 values, £47,508,000. If the multiplication by five represents the movement of costs for the Kalgoorlie to Fremantle section, I presume that to calculate the cost of converting the entire Western Australian system to-day, you would multiply that £47,508,000 by five, and so you would find a cost of about £235,000,000.

Mr Opperman:

– Some of the Western Australian lines have been closed down in the meantime.

Mr BEAZLEY:

– Yes, but I do not think that has significantly changed the total of 4,658 miles of railway. Some lines, such as that going up to Meekatharra, have been opened up again. In paragraph 149, Sir Harold made a comment which is perhaps germaine to this question, because he was speaking about the need for some adjust ment in Fremantle when the broader gauge came into being. In that paragraph he said -

The new independent line would be built with 82 lb. rails and structures to Cooper’s E.60 standard, and during the construction period would be laid as a 3 ft. 6 ins. gauge line with full-size sleepers for standard gauge. This would permit the use in the construction of the line of existing narrow-gauge locomotives, ballast waggons, &c. Afterwards, one rail would be moved out 1 ft. 2i ins. It is proposed to terminate this railway on the north side of the Swan River at Fremantle, where bulk cargoes are handled. General cargoes are dealt with on the south side of the river.

In paragraph 150 he said -

A harbour improvement scheme envisages the development of wharfs on the river, which will be dredged and widened. If it is necessary in the plan of the harbour improvements to serve the south-side wharfs by a standard-gauge line, then a new bridge will be required further upstream.

Then he set out extensive details of the amount of new rolling-stock that would be required. In paragraph 38 he stressed the significance to Australia of the transporting of iron ore. He did not know of Koolyanobbing, of course. He wanted to link Sydney to Perth by a standard gauge by the conversion of the Port Pirie-Broken Hill line. He wrote -

The conversion of the Port Pirie-Broken Hill line . . would shorten the standard gauge route between Perth and Sydney and all points north and north-west thereof by 256 miles. This work, if carried out, would not only confer advantages in defence transport but in case of emergency, such as the cessation of coastal shipping, would enable iron ore, now sent by sea from Whyalla, to be overlanded from Port Pirie direct to Newcastle. Coal could also be sent in the reverse direction from the New South Wales coal-fields direct to Adelaide and Port Pirie.

We were in the closing stages of the Second World War when Sir Harold wrote -

In the present war the existence of this link would have been invaluable for defence transport purposes and would have contributed greatly to the movement of Australia’s land forces between the east and west of the continent.

It is the presence of this defence factor which makes disappointing the Commonwealth share of the burden of cost. The Prime Minister (Mr. Menzies) spoke of a development component, which he feels should be a burden borne primarily by the State, and a standardization component which should be borne primarily by the Commonwealth. This places two-thirds of the cost on to the State and one-third on to the Commonwealth in the Prime Minister’s estimate. There is no defence component mentioned at all. The States did not agree to standardization as such in the past. What has overcome the Western Australian Government’s reluctance to meet the cost is the prospect of the steel industry being established in Western Australia.

Apart from the development of the steel industry, the new line will not open up new country. In all past suggestions of standardization Western Australia would never have entertained a proposal that it bear two-thirds of the cost. The present estimated cost is about five times that estimated in 1945 by Sir Harold Clapp. Allowing for inflation, the Commonwealth will be, in the long run, getting a major Commonwealth project done remarkably cheaply for the ultimate figure of £14,400,000. This is a major defence work and its cost to the Commonwealth will be much less than the £20,000,000 that we are to pay for a Charles F. Adams-class destroyer. The State will carry the other £26,800,000.

The defence aspect would have justified a more generous Commonwealth approach. Whether the Commonwealth’s share of the initial cost will be raised from revenue or loan money I do not know. If it is raised from revenue the Commonwealth could actually make a profit out of the project for it will be charging the State interest at the ruling bond rate, while not paying interest itself. If the Commonwealth’s share is raised from loan money the Commonwealth will be charging the State what the Commonwealth must pay in interest itself. The Leader of the Opposition in Western Australia, the Hon. A. R. G. Hawke, in a broadcast over station 6KY on 6th September said -

The Federal Government’s 35 million pounds will, no doubt, be raised from taxation and therefore will cost the Federal Government practically nothing to obtain. The State Government’s 6.2 million pounds will doubtless come from Loan Funds and so will carry interest and Sinking Fund burdens for the people of Western Australia. Later on the State Government will be required to pay the Federal Government 14.4 million pounds over a period of 20 years,, with interest at the ruling bond rate. Later again, the State will have to (pay the Federal Government the further 6.2 million pounds and to pay interest on that amount over a period of 50 years.

Mr. Hawke gave his own estimate of the total interest at approximately £30,000,000.

The Prime Minister made no estimate of this interest component in his speech. Mr. Hawke paid a back-handed compliment to the Prime Minister when he said -

Clearly, therefore, the Prime Minister, Mr. Menzies, and those who inaugurated the agreement with him for the Federal Government, appear to have done a mighty good job on a financial basis for the Federal Government whereas our Premier, Mr. Brand, and the Minister for Railways, Mr. Court, appear to have let down badly the taxpayers of Western Australia.

It is not, however, a mighty good job for the Commonwealth to have made the arrangements that have been made, if they have the character Mr. Hawke imputes to them. Something of this work would have been a legitimate charge on the defence vote. Further, the new and additional railway interest burden on the State must ultimately be met by Commonwealth grants as the present burden of railway interest is met. That is a factor which Mr. Hawke perhaps overlooked. A greater part of the financing of this by straight out Commonwealth grants without any interest burdens would have been sounder and simpler.

Apart from defence there are other conveniences to the Commonwealth which would have warranted a more generous financial arrangement. This is in the provision that the respective railway authorities, State and Commonwealth, will collaborate in standards of design and construction of rolling stock; and interstate traffic will be more efficient. The Opposition welcomes whole-heartedly the standardization of this line and the development of the steel industry, but it is unimpressed by the financial aspect of the agreement from the point of view of the burden placed on a State with a population of less than 1,000,000 people, and it is disturbed at what seems to be the failure of the Commonwealth to recognize and to assume full liability for a defence component in the agreement. It should be remembered that the importance of the defence component was an important aspect of the most notable Commonwealth report on this subject - the Clapp report. The completion of this line raises the question of the worth of considering again the Broken Hill-Port Pirie line, and of analysing how many other aspects of Sir Harold Clapp’s report are still valid.

The Opposition supports the bill. The fact of standardization in a section of the

Western Australian railways will be a vital achievement, and the Government deserves to be congratulated on initiating it. The financial arrangements can doubtless be made less onerous on the State in the future.

Mr CHANEY:
Perth

.- I was surprised to hear the honorable member for Fremantle (Mr. Beazley) suggest that the State has not got a very good deal under the agreement. I remind him that, in moving the second reading of the bill, the Prime Minister (Mr. Menzies) had this to say - lt is not an exaggeration to say that the undertaking will represent just about the most remarkable new advance in the development of Western Australia since the discovery of gold.

Mr Duthie:

– Does that mean that the State has made no advance since the discovery of gold?

Mr CHANEY:

– The honorable member should trace the history of Western Australia and see what happened. The discovery of gold led to the tremendous settlement of agricultural areas by people who could not find gold. That is simple history, and I do not intend to give the honorable member a lesson On it at this stage. I might do so afterwards, but at the moment I wish to devote my attention to the bill. The Prime Minister also said -

The effect of the provisions relating to repayment by the State is that the State will eventually meet 65 per cent, of the total cost - that is, 100 per cent, of the developmental element - what I have called the Mr Isa element - and 30 per cent, of the standardization element. The proportion of the overall cost to be met finally by the Commonwealth will be 35 per cent. - 70 per cent, of the standardization element. On the basis of an estimated overall cost of £41,200,000, the respective figures are: State, £26,800,000; Commonwealth, £14,400,000. That is in the end result after all the initial money has been found and the provisions to which I have referred have operated.

I should say that most Western Australians would agree that this is a fairly equitable agreement, and that the State will benefit greatly from it. A close study of both the agreement and the Prime Minister’s second-reading speech will disclose that Western Australia will not be paying very dearly for what it is about to receive.

I do join issue with the honorable member for Fremantle on one point. I respect his judgment in connexion with defence matters, and 1 have found him to be a keen student of defence problems, but, between 1940 and 1945, when making a study of the need for development in Western Australia, I found that the philosophy of those connected with planning for defence had not moved from the 1914-18 thinking. They seemed to assume that if there were another war it would be the same old kind of war that we experienced between 1914 and 1918 - a static war with people looking at each other for four years, and in which the gaining of 100 yards of ground cost a tremendous number of lives. All that kind of thinking was shattered by the blitzkreig during the 1939-45 war, and I would not like to see our planning based on an assumption that it should follow the 1939-45 pattern. I should like to think that it will be accepted that if we have to fight another war it will be fought away from the shores of Australia. Therefore, I suggest that this railway project is not so important to our defence as some people imagine it to be. I was a member of a committee of Government members which reported upon rail standardization in October, 1956. Of all the defence experts who were invited to give evidence before that committee, not one would agree that standardization had any defence significance. They did say that it had some value so far as the carriage of materials was concerned, but there was great doubt of its value for the transportation of men, because breaks in rail gauges present no difficulty in transporting troops. After all, men have to be fed and they can be fed while making the change from one gauge to another. I do feel that the question of defence is overplayed a little.

But, economically, this project has tremendous significance, and 1 am convinced that, from 1968 onwards, Western Australia will start to catch up slowly on the eastern States, which have been fed with money that has been poured into them from Western Australia. The honorable member for Fremantle pointed out that the trade between Western Australia and the eastern States favoured the eastern States in the proportion of seven to one against Western Australia.

Mr Beazley:

– Tt is £122,000,000 as against £38,000,000.

Mr CHANEY:

– That is approximately one-third. All those people in Victoria and New South Wales who complain about the treatment Western Australia is receiving under this measure should remember that much of the employment enjoyed by the people of Victoria and New South Wales is made possible by the money that flows from Western Australia into those States. The money that we are about to receive from the Commonwealth Government may be looked upon as some repayment for what we have done for the eastern States in the past.

I might state that the committee, of which I was privileged to be a member, was led by the honorable member for Mackellar (Mr. Wentworth), to whom I pay tribute for having been instrumental in having appointed in 1956 a committee to investigate the question of the standardization of rail gauges in Australia. The work he did in that connexion is, in my opinion, sufficient justification of his term in this Parliament. I pay tribute also to the Minister for Shipping and Transport (Mr. Opperman) for the co-operation he gave us during the period for which he occupied that portfolio; and to his predecessor, Senator Paltridge, for the tremendous assistance he gave the committee. When we visited Western Australia to investigate the standardization of the line between Kalgoorlie and Fremantle, we found that there was a great deal of disagreement between the railway commissioners there. They could not agree on what should be done about standardization. We also met with a great deal of hostility from some members of the Western Australian Parliament, who said that we were unwise even to think about standardization, and that any money the Commonwealth had to make available to Western Australia should be used for the rehabilitation of the whole of the 3-ft. 6-in. gauge throughout the State. I think one member of the Upper House there condemned the committee as a lot of rascals and rogues. Although he used parliamentary language, that was the effect of what he said. I well remember, too, that the then Mayor of Kalgoorlie, who has since been knighted said, when welcoming us to the city, “ Here is another committee wasting public funds. Nothing will ever happen about this.” In actual fact we were not wasting public funds; we were making the visit at our own expense. It is most gratifying to me now to see that what was in those days a dream of the committee is becoming a reality.

Mr Duthie:

– In what year was that?

Mr CHANEY:

– lt was in 1956. At that time, a transport committee of the Opposition was also inquiring into this matter. Since then, there has been a change of Government in Western Australia but the railway system has changed only slightly over the years.

The 28th report of the Commonwealth Grants Commission, published in 1961, contains a table showing the financial results of the various State railways in the period from 1956-57 to 1959-60. It discloses that in 1956-57 the financial results of the Western Australian railways amounted to £5,279,000, that in 1957-58 they improved by approximately £200,000 to £5,422,000, that in 1958-59 they dropped by approximately £200,000 to £5,047,000 and that by 1959-60 they fell by almost £1,000,000. By intense efforts on the part of the Minister for Railways, it has achieved some saving in railway costs. This, of course, will assist the general railway system in Western Australia. The immediate result will be a boost to the economy of the State by the expenditure of this money. I notice that under the agreement, the contractors will need 2,640 sleepers to the mile for 528 miles of railway line. We can imagine what the provision of 1,500,000 sleepers will mean to the timber industry in Western Australia. Many honorable members on both sides of the House have been concerned about the state of the timber industry and this will provide relief for one section of it.

The committee which investigated this matter in 1956 also investigated coastal shipping. It was obvious at that stage that coastal shipping was slowly losing any significance in Australia. The report stated at page 13 -

Many of our coastal ships are nearing the end of their economic life, which is usually reckoned at from 25-28 years, since after that time maintenance becomes prohibitive if standards are to be maintained. Nearly all our passenger-cargo coastal vessels are approaching this critical age, and when (or if) replaced, will incur capital costs at least four times as much per capacity-ton as their original cost. Even allowing for the economics of modern operating practices, this would seem to involve heavy increases in coastal freight rates if the service is to be profitable.

Costs of coastal operation, determined largely by Australian shipping awards, are right out of line with world costs.

This is very true. The timber industry has faced tremendous losses because shipping freight costs from Bunbury to Adelaide are higher than those on timber from the west coast of America to Adelaide. When the new line is established, I hope that the timber industry will get a preferential freight rate so that timber can be sent by rail from Western Australia to the eastern States. This will be possible, of course, because back loading is always at preferential rates on the Commonwealth railway system. The Commonwealth Railways might find that changes can be introduced to the advantage of everybody concerned.

The last annual report of the Commonwealth Railways Commissioner revealed that the traffic is growing so quickly on the east-west line that trains are not available to cope with the demand. It appears that very shortly there will be a daily train each way because of the rise in the demand. One feature of the service is that the Commonwealth Railways have made it extraordinarily attractive for tourists from the eastern States to take their motor cars by train at reduced charges when two passengers travel from Port Pirie to Kalgoorlie. The passenger then has the use of his own car in Western Australia. When the line is standardized, a passenger might be able to retain his car on the train as far as Perth or Fremantle at little extra cost. This will be beneficial to the roads. At present the section between Kalgoorlie and Perth is being used by heavy semi-trailers which are carried to Kalgoorlie on flat tops. In future, they might be taken all the way to Perth or Fremantle on the trains and the roads will be relieved of this heavy traffic.

Sitting suspended from 12.44 to 2.15 p.m.

Mr CHANEY:

– Before the suspension of the sitting for lunch, I had pointed out that there has been an increasing amount of traffic on the Trans-Australian Railway. Most of that traffic finishes at Kalgoorlie, where heavy semi-trailers and other road vehicles are taken off the flat-top rail wagons and driven by road to Perth. I hope that this trans-shipment will stop. It is interesting to note from the interim report of the Commonwealth Railways Commissioner for the financial year 1960-61, that the earnings of the Trans-Australian Railway increased from £3,368,566 in 1959-60 to £3,978,679 in 1960-61. There was an increase in working expenses, also, but the profit increased by some £200,000. The point is that both passenger and freight traffic are increasing all the time.

The report of the Government Members Rail Standardization Committee, which was presented on 31st October, 1956, dealt with the extension of the standard-gauge line from Kalgoorlie through Perth to Fremantle and stated -

The building of a new 4-ft. 8i-in. line from Kalgoorlie to Perth thus seemed more logical than the conversion of the 3-ft. 6-in. gauge to 4 ft. 84 in.; and, indeed, apart from other considerations, this procedure would probably be the more economical, since the existing line must be kept open during the period of standardization.

I am gratified to see that this section of line is to be converted to standard gauge and that the fears expressed by some members of the Western Australian Parliament a few years ago will be groundless, because there will be no ill effect on the traffic on the feeder lines that join the railway between Kalgoorlie and Perth.

I should like to say more, Mr. Speaker, but I know that other honorable members are anxious to speak on this measure. I conclude with a reference to the secondreading speech on this measure made by the Prime Minister. He said -

I am sure that this great railway project will have the wholehearted support of honorable members on both sides of the House. It will have far-reaching effects of the most beneficial kind on the development of Australia and of Western Australia, which is an important part of Australia, in particular.

At that stage the Leader of the Opposition (Mr. Calwell) interjected -

You are making a very late discovery.

It is interesting to note that in the last few years this Parliament has done a great deal to promote the development of Western Australia including development of the north. As a Western Australian member of the Parliament, I place on record my appreciation of what has been done. I realize, however, that one has to pay a price for everything. No doubt the citizens of Western Australia will find that Perth, their friendly capital city, with its reputation for hospitality and an absence of the rush that characterizes other capital cities in Australia, will now become increasingly industrialized and as a consequence will take on the tenor of Melbourne and Sydney. Probably, that is the price we shall have to pay for the standardization of the railway from Kalgoorlie to Fremantle and Kwinana.

Mr E JAMES HARRISON:
Blaxland

– Mr. Speaker, the honorable member for Perth (Mr. Chaney) touched on the ques.ion of the value of railway standardization in war-time. He said, among other things, that the standardization of the railway between Kalgoorlie and Fremantle would not be as valuable for the transport of troops across the continent in war-time as some people might think. At the outset, I wish to state that I firmly oppose the honorable member’s view on that matter.

Mr Chaney:

– I was quoting the views of defence experts.

Mr E JAMES HARRISON:

– I know. The mere fact that the honorable member quoted them indicated that he did not refute those opinions. I want to refute them right now. During the Second World War, I was not able to play the active part that younger men played in the forces, but I was closely associated with the important work of transporting troops and material by rail between Victoria and Queensland. I was then leading the New South Wales branch of the Australian Federated Union of Locomotive Enginemen, and I have some knowledge of the sacrifices that had to be made by railwaymen in meeting the requirements of rail transport in war-time. I put it to the honorable member for Perth and to any committee that may consider the question that the protection of this country in time of war demands the swift transportation of troops. That is essential. The standardization of rail gauges between the west and the east of this continent and the use of modern diesel locomotives, in conjunction with the heavy ballasting of lines and the welding of rails into long lengths, has brought Perth and Sydney within 50 or 52 hours’ travel by rail. We recall the conditions under which 12,000 men were taken from New South Wales to Perth by rail during the war. When we think of the conditions under which they travelled, good conscience surely requiresus to do something about the railways. Nobody wants to see a third world war,, goodness knows. But, if one comes, and if it is to be fought by conventional means, we shall find that we can move our troopsswiftly in this country only if we have undertaken a properly co-ordinated programme for the standardization of lines, at a gauge of 4 ft. 81 in. However, I do. not want to go further into that aspect of the matter, because, in my view, this debate lends itself to the discussion of wider fields.

It is a good thing that, even at this belated stage, after twelve years in office, the Government has taken up where the Labour Government had planned to take up after the 1949 election with respect to the standardization of rail gauges. Plans were already laid when this Government took office, but it has done nothing about them until now. The honorable member for Perth mentioned the report presented by the Government Members Rail Standardization Committee on the standardization of rail gauges. Although he mentioned it in relation to several aspects of rail standardization, he did not touch on the committee’s recommendations with respect to priorities. At page 26, the report of this committee, which, I emphasize, was composed of Government supporters, states -

Looking at the Trans-Australian system as a whole, it would seem reasonable to construct the Broken Hill-Port Pirie-Adelaide link before the Kalgoorlie-Perth-Fremantle link, since the latter cannot be really effective without the former . . .

I underline that statement in this report by a committee composed of Government supporters. The honorable member for Perth said that he was a member of the committee. I suggest that, if we want Australia’s railway system to be really effective, we must look at the problem as a whole. I hope that, at the Commonwealth level, we never look at it piece-meal, although that is what appears to be envisaged in the measure now before us, as I propose to show in developing my argument. The report of the Government Members Rail Standardization Committee continues - whereas the former (which cures two breaks of gauge and removes the isolation of the present 4-ft. 8i-in. Commonwealth system) can be effective without the latter.

The honorable member for Perth mentioned the unloading of vehicles from flat-top wagons at Kalgoorlie and said that he hoped it would cease when the 4-ft. 8i-in. link between Kalgoorlie and Perth was constructed. That underlines another part of the argument that I propose to develop. At this stage, 1 say that I am inclined to the view that, as the Prime Minister (Mr. Menzies) almost stated at the outset of his second-reading speech on this bill, the Government’s decision to undertake this railway project appeared to be designed to serve the interests of the Broken Hill Proprietary Company Limited rather than to deal with the Australian railway system with a broad national outlook.

Mr Bandidt:

– That is a peculiar conclusion.

Mr E JAMES HARRISON:

– Well, let us see what the Prime Minister said. I am astonished at any honorable member from Queensland taking this quietly. Let me read Just two paragraphs of what the Prime Minister said, and then the Minister, who also comes from Queensland may have second thoughts about the Government’s approach to the provision of rail transport in Australia. The Prime Minister said -

We subsequently embarked on a close examination of this railway project in consultation with both the Government of Western Australia and the Broken Hill Proprietary Company Limited. We satisfied ourselves that construction of the railway had a vital place in that company’s plan for a major expansion of the steel industry. Indeed, we ascertained that, if the railway were not built, the prospects of an expansion of steel production which would substantially assist in bringing about a major contribution to our export earnings would be adversely affected. It was against that background that we entered into discussions with the Government of Western Australia, the outcome of which is reflected in the agreement of which the approval of Parliament is now sought.

A little later in his speech the Prime Minister said -

The existing narrow gauge railway would be quite incapable of carrying economically tonnages of this magnitude, and, to be able to cope with the likely traffic, would need to be substantially reconstructed.

I pause there to point out that he does not say that it cannot be done with a 3-ft. 6-in. gauge. What the Prime Minister said was that a line of that gauge would be quite incapable of carrying economically tonnages of a certain magnitude. He continued -

Because of the capacity of a standard gauge line to carry the heavier loads and cope with the speeds of modern trains, and because of the fact that, for the tonnages which could be involved, the standard gauge line would make the enterprise economically sound and attractive, it became essential to reconstruct the track on standard gauge rather than on the existing 3-ft. 6-in. gauge.

Nobody will quibble about that. In a modern rail transportation system the 3-ft. 6-in. gauge is out so far as lines with heavy traffic are concerned, because of its low haulage capacity. That is one of the reasons why I cannot understand the expenditure on the Mount Isa-Townsville line. A standard gauge line, as distinct from the 3-ft. 6-in. gauge line, will repay its own capital cost in a relatively short time if there is heavy traffic on the line. I know the particular line with which we are now dealing. Whereas the maximum load is now about 675 tons to 700 tons the proposed maximum load on the new line will be 3,500 tons, using the same man-power and equipment. When the Prime Minister talks about this being so essential he is, in effect, turning a blind eye to what is happening in relation to the Mount Isa-Townsville narrow gauge line and other parts of our rail transport system.

Nobody will disagree with the wisdom of the, unfortunately, belated intention of the measure, but I want to deal with some of the history that surrounds the matter. Clause 3. - (1 .) of the agreement states -

The objectives of this agreement are to achieve before the 31st day of December, 1968-

Seven years away! With the modern equipment and material available a line of even this magnitude could, and should, be constructed in half that time. In the construction of the standard gauge line to Leigh Creek, the Commissioner for Commonwealth Railways demonstrated what could be done with modern equipment.

Mr Thompson:

– That line went on to Marree.

Mr E JAMES HARRISON:

– I am taking the first stage of it first. The job of pushing the line through to Marree was done in even swifter time. We ought to remember that with modern construction methods and equipment such as are used by the Commonwealth Railways the time of construction of a modern railway is less, mile for mile, than that for a four-lane modern highway. We are approaching standard gauge extension in the States in the wrong way. The objectives set out in the agreement include -

  1. the construction and establishment of the standard gauge railway and associated narrow gauge railway works on the routes specified in the First Schedule;

Clause 6 (1.) of the agreement states -

The State will carry out, or will use all reasonable endeavours to cause to be carried out, with due diligence and efficiency and in accordance with the relevant programme, procedures, plans and specifications for the time being agreed to by the parties under this agreement, the work specified in the Second Schedule with a view to the completion of the work before the 31st day of December, 1968.

Sub-clause (2.) reads -

The work to be carried out by the State pursuant to the preceding sub-clause shall include the acquisition of land, the purchase, construction, alteration and conversion . . .

The point I want to make here is that the Commonwealth Government is undertaking items of heavy capital expenditure with respect to the Albury-Melbourne standardization and now in respect of the PerthKalgoorlieKwinana standardization. I am assuming, Mr. Speaker, that before the period of seven years is up - that is, before December, 1968 - the necessary action will be taken to standardize the line between Broken Hill and Port Pirie. Those things run hand in hand. But I think that the plan being followed is incorrect in that, now we have launched on the project of rail development the modern construction equipment that is held by the Commonwealth should be provided for use in whatever direction development is taking place. Otherwise we will have the situation of one State operating the equipment used in the Western Australian development, another State operating the equipment used in the Albury-Melbourne development, and another operating the equipment used in the Broken Hill-Port Pirie development. This would mean wastage in the use of equipment.

I saw the construction of the Commonwealth line through to Marree, and I saw the methods used. Long gone are the days when the men working on the construction lived under canvas. In a properly organized construction job now the men live in rail trains and they move forward with the line. The equipment that lays the steel rails moves forward on the rails it has laid. All the excesstime that was involved in the old methods is now saved. There should be a common pool of modern rail construction equipment held by the Commonwealth. The provision of such equipment would entail the investment of considerable sums of money, but before long the equipment would repay its cost. In my view it is wrong to have individual States providing their own equipment when the Commonwealth has tho necessary equipment and the experience in its use. Clause 18 of the agreement reads -

The parties affirm the principle that there should be collaboration between them and their respective railway authorities regarding the standards of design and construction and the operation of rolling-stock with a view to facilitating efficient inter-system traffic and co-ordinated services.

We should go further than that. We should ensure that the same equipment is used by the various controlling authorities. My view is that every time we make a move towards the extension of the standardization of railway gauges in Australia we must be more and more impressed with the need for Commonwealth control of all Australian railway systems. When the standard gauge line is completed between Albury and Melbourne, I am told that trains running between Sydney and Melbourne will have to change crews at Albury, not merely because the different crews are controlled by different State organizations but mainly because the signalling systems will be different in the two States. In connexion with the measure now before us we should be careful to ensure that the signalling system on the line from Kalgoorlie to Kwinana will be the same as that used on the. Commonwealth Railways. I am hoping that in the construction of this line we will give much closer attention to the need for Commonwealth control and coordination of railway systems. To me it seems all wrong to suggest that when this line is completed Commonwealth Railway crews will work as far as Kalgoorlie, and that then those crews, and perhaps the locomotives, will be detached, and similar diesel-electric locomotives owned by the Western Australian railways and manned by Western Australian crews, will take the train through to Perth or Kwinana.

We are making provision in this legislation for 22 main-line diesel-electric locomotives of 2,000 horse-power each. Those locomotives will be able to handle as much traffic as 70 modern steam locomotives. The ideal economic run for a diesel-electric locomotive is the maximum distance that it can be run on a single line. 1 have a strong feeling that in the planning of this line little thought has been given to a system of co-ordinated Commonwealth control. That is the kind of control I have always advocated, because it is only in that way that you can get the best out of diesel-electric locomotives. For instance, the locomotive that leaves Port Augusta will travel to Kalgoorlie. There is no reason at all, in my opinion, why it should not go on to Kwinana. If it is detached at Kalgoorlie it will probably have to wait there until the next train comes in from the Perth end, and every hour that a dieselelectric locomotive is left standing is an hour of unproductive time in the life of that locomotive. Normally these locomotives wear out in about seven years, but if they could be operated over longer mileages and for the maximum possible times, they would wear out in, perhaps, five years. I contend that at least every five years drastic modifications and changes are made in the construction of diesel-electric locomotives and in their hauling capacities. At the present time Australian Electrical Industries Proprietary Limited is providing new diesel-electric locomotives for the New South Wales Railways which are of somewhat different design and lighter than those at present in service.

We must achieve a greater degree of coordination in the purchase of railway equipment, and in this the Commonwealth should play a major role. It is silly to have different kinds of equipment in different States simply because the States have different railway organizations. This applies not only to locomotives, but also to carriages and everything else associated with the operation of our standard-gauge railways. We must have a co-ordinated method of purchasing rolling-stock, and we should build all the rolling-stock and the dieselelectric locomotives in our own country. I hope that when equipment is required for the haulage of these heavy loads in Western Australia a conference will be convened by the Minister for Shipping and Transport (Mr. Opperman), and will be attended by all transport Ministers of States that have standard-gauge railways. Many of us will live to see the day - we may still be in this House - when trains will leave Sydney and at the end of their journeys will pull into Perth and Kwinana. In those circumstances it would be most inefficient to change equipment and crews at Broken Hill, again at Port Augusta, and finally at Kalgoorlie. I am one who believes that the sooner we achieve Commonwealth control of rail transport in Australia the better for this country. This view is held also by the union that I have the honour to represent. We know that there are great difficulties to be overcome, but those difficulties are small in comparison with the national disadvantages that flow from an unco-ordinated rail system.

I could never understand why the Cabinet, about twelve months ago, granted a contract to Japanese interests for the supply of additional equipment required by the Commonwealth Railways. That decision just did not make sense. We have in this country thirteen companies that are coordinated for the work of producing railway rolling-stock. In 1955, those companies had 3,300 employees. These employees were not occupied all the time in producing rolling-stock, but they all played some part in that activity. Between 1955 and 1960, the value of railway equipment produced by Australian industries dropped from £17,000,000 to £7,000,000 and the number of employees declined from 3,300 to 1,300. This is all wrong.

I notice that the measure before us provides for workshops in Western Australia at Kwinana. If we are going to have co-ordinated diesel equipment in Australia, let us have an assembly line for these power units. We should not have a repair unit in Perth, another in Kalgoorlie, another in Melbourne and another in Sydney. Let us co-ordinate our efforts and achieve uniformity. I believe that the Cabinet approved the purchase of Japanese equipment on the recommendation of the then Australian Railways Commissioner. The decision staggered me. The best passenger train ever run in this country was the first train that the Commonwealth Railways used for passenger traffic. The then Commonwealth Railways Commissioner told me that his organization was purchasing according to a pattern. I was in the workshops of the Commonwealth Railways when further passenger vehicles were being constructed, and the Commissioner then said that the Australian workmen in the Commonwealth Railways’ own workshops were producing a carriage which, in his opinion, was superior to the imported German carriage. To my way of thinking, we should either approach this matter from a national angle or we should forget about achieving efficiency.

I know what was done in your own State, Mr. Speaker, in the haulage of coal between Leigh Creek and Stirling North. When the standard gauge was provided between these centres, haulage rose to 5.500 tons with two diesel locomotives and one crew. The efficiency of the rail service operating on this gauge is one of the reasons why South Australian electricity is so reasonable in price.

Mr Forbes:

– It is only one of the reasons.

Mr E JAMES HARRISON:

– I am glad the honorable member agrees that it is at least one reason. This underlines what I am saying. What can be done on this line can be done generally in rail transportation. I had a look at the relevant figures to-day. The average cost of rail haulage in Western Australia at present is 4d. a ton-mile. With properly coordinated rail transport, using standard gauge, this cost can be halved. Every time transport costs are reduced, the national economy is lifted. Some honorable members have been looking at this matter for quite some time, and I hope that improvements in rail transport will not be left where this schedule takes us.

I believe honestly that we have now taken a major step towards the point at which we will have forced upon us a condition that we have not been willing to accept up to the present. I refer to the greater intrusion of the Commonwealth into the rail services of Australia. I know the Minister will agree that co-ordination by the Commonwealth would eliminate many of the stupid arrangements we now have. The springs for a rail truck to carry 40 or 50 tons built for the New South

Railways may be two inches longer or two inches shorter than those for a similar truck built for the Victorian Railways. The automatic couplings may not match, and this is a most important point. France and Germany found that they had to adopt similar couplings if they were to have a completely co-ordinated system on the Continent. But in Australia, we find something different every time we cross a border. I hope that the decision of the Commonwealth to join in this scheme is the first major step towards the complete standardization of equipment in Australia.

Mr BROWNE:
Kalgoorlie

.- We have just heard the voice of a unificationist. The Australian Labour Party is dedicated to the principle of unification and we on this side of the House are dedicated to the maintenance of the federal system. The honorable member for Blaxland (Mr. E. James Harrison) said that the Commonwealth should tell the States what type of rollingstock and other equipment to use on their railway systems.

Mr Reynolds:

– It is a pity you did not do that a long time ago.

Mr BROWNE:

– There is a fundamental difference in political philosophy involved and I will not go into it now. It is just as well that the honorable member for Blaxland has told the people of Australia just what the policy of unification means. We believe in a federation of States, each having sovereign rights and being able to determine what it will do with its railway system.

Be that as it may, the Government has come to the aid of Queensland and Western Australia in an effort to provide better railway services. It is deplorable that the Opposition should seek to belittle what the Government has done. It does not do the Labour Party very much credit when it derides this measure. The bill is, of course, the result of an agreement reached between the two governments concerned. The Western Australian Government is warm in its applause of the Commonwealth Government’s action; but the Opposition says the terms of the agreement are not satisfactory. I suggest if the terms are satisfactory to the State Government - and I know they are - they should be satisfactory to all.

All Western Australians in the last few weeks have been elated at the announcement made by the Prime Minister (Mr. Menzies) that the Commonwealth will assist in this scheme. 1 do not mean all Western Australians, because this would include the Leader of the Opposition in Western Australia, Mr. Hawke. When asked to comment on this scheme, he did not say, “ I think this is wonderful news for Western Australia “, as of course it is. His only comment was, “ I hope the Commonwealth will not charge us interest on the money “.

The standardization of the railway from Kalgoorlie to Kwinana should not be considered in isolation. It should be regarded in the light of the general development taking place in Western Australia. This is a part - a very important part - of an unprecedented spate of development projects. Perhaps the most important factor associated with this project is the development that will occur at the iron ore deposits in Koolyanobbing, which are in my electorate. These deposits are considered to be very rich and of great volume. Development here will overcome the disability suffered by the district generally as a result of the closing of the gold mine at Bullfinch, which is in the same general area. It means that there will still be a mining centre in this region, and it is very important from the point of view of mineral exploitation that these mining centres remain open. We will still have a mining centre here from which other operations can radiate and it is reasonable to assume that, with mining men congregating in the area, further discoveries will be made not only of iron ore but of minerals generally.

At the other end of the railway line will be an integrated iron and steel industry. This of course will herald a great industrial era for Western Australia. The honorable member for Perth (Mr. Chaney) may be quite right when he says this will have its disadvantages. However, a State like Western Australia must have industrialization, and this project will ensure that it will have industrialization. It is to be hoped that when iron and steel products are produced in Western Australia, some benefit will accrue to the local consumers. The fact that they are produced locally should mean cheaper poods to the consumers and greater availability of the goods. In recent times there has been an acute shortage of some steel products in Western Australia, particularly those used in rural industries. 1 refer to steel fence posts, wire and various other products of the iron and steel mills. I hope that these products will be more readily available to rural industries in Western Australia and that the price will be more advantageous to the consumers. It is to be hoped also that some of the great Asian market for steel products will be satisfied from Western Australia which, of course, is the logical source from which to supply much of it. The greater the industry becomes in Western Australia and the more markets to be supplied, the greater will be the benefit which will flow to Western Australia generally.

Other honorable members will follow me in this debate. Because not very much time is available I shall not continue at great length. Indeed, I do not think that a lengthy period is necessary for the discussion of this bill. It can be likened to a gift. In fact, it is a gift, one of the greatest gifts that Western Australia has received in its history. I regard it as a worth-while gift, and I say “ thank you “ to the Government for making this agreement with the Government of Western Australia. Those who quarrel with the terms of the agreement are clutching at straws politically. The issue is clear cut. Both the Commonwealth and the State have a liability in respect of the standardization element and the developmental element. There is nothing new about that; it is a recognized principle in inter-governmental relations. Those who seek to detract from the beneficial results which will flow from this bill by pointing to the terms of the agreement cannot otherwise find very much wrong with it. I support the bill and commend the Government for the way in which it has been presented.

Mr CASH:
Stirling

.- This bill relates to an agreement between the Commonwealth Government and the Government of Western Australia in relation to the construction of certain railways in that State. The Western Australian Government desires to standardize the rail gauge between Kalgoorlie and Kwinana to assist the development of that State’s iron ore deposits and to encourage the production of iron and steel there. The State Government, therefore, presented a case to the Commonwealth Government emphasizing that such development will be in the best interests to the people of Western Australia in particular and of Australia in general. This bill indicates that the Commonwealth has acceded to the request for financial assistance, having recognized that such a great rail standardization project as the one now under discussion will assist in the defence and the development of Australia as well as facilitate interstate trade and commerce generally.

The details of the financial assistance covered by this agreement are particularly interesting. They have been the subject of criticism so I intend to take the liberty of detailing them again despite the fact that some aspects have been mentioned by previous speakers. For the developmental portion the Commonwealth will provide 70 per cent, of the funds initially required and the State 30 per cent. The money provided by the Commonwealth will be repaid by the State from its Consolidated Revenue over a period of twenty years commencing from the completion of the project, with interest at the long-term bond rate ruling at the time the advances are made. Of course, interest accruing during the construction period may be capitalized if the State so desires. For the standardization portion the Commonwealth will provide the whole of the finance initially required, and the State will repay from its Consolidated Revenue over a period of 50 years 30 per cent, of the amount provided during each financial year, together with interest at the long-term bond rate ruling at the end of each such year on the outstanding amount from time to time.

The overall effect of these arrangements is that the Commonwealth will provide 85 per cent, of the total initial finance - that is, 70 per cent, of the developmental part and 100 per cent, of the standardization partand the State will provide 15 per cent, of the total initial finance, that is, 30 per cent, of the developmental part. On the basis of an estimated cost of £41,200,000 the estimated amounts to be found by the Commonwealth and by the State in the first instance are £35,000,000 and £6,200,000 respectively. The effect of the provisions relating to repayment by the State is that the State will eventually meet 65 per cent, of the total cost, that is, 100 per cent, of the developmental element and 30 per cent, of the standardization element. The proportion of the overall cost to be met finally by the Commonwealth will be 35 per cent., that is, 70 per cent, of the standardization element. On the basis of an estimated overall cost of £41,200,000, the respective figures are that Western Australia will provide £26,800,000 and the Commonwealth £14,400,000.

The present narrow-gauge line would noi be capable of carrying economically the 3,000,000 tons of ore which it is estimated will be taken from Koolyanobbing for the Kwinana steelworks and for shipment to other steel centres. But estimates based on the carriage of ore and general traffic at existing levels indicate that the new standard-gauge line will be a sound economic proposition. If the Government of Western Australia looks after its railway accounts, that State will secure in the ultimate the rail standardization and its additional facilities at little or no actual cost. The operation of this new line could result in revenue exceeding expenditure, excluding interest, by nearly £3,000,000 a year. It will mean, of course, a great increase in tourist traffic. Passengers will be able to travel between Port Pirie and Perth in new air-conditioned trains without changing at Kalgoorlie. Ultimately people will be able to travel from Brisbane to Perth without changing trains.

This is more than a great railway project. I believe that it is the key to tremendous industrial development in the western third of the Commonwealth of Australia. The present Liberal Government of Western Australia has set an example to other Australian States in the matter of doing their best to make railways pay. This always has been a most difficult task in every country of the world. I have no anxiety regarding the ability of the administrators in Western Australia to make a really satisfactory financial proposition out of the proposals contained in the agreement which is now under discussion. This is the biggest postwar railway undertaking anywhere in the free world, and it is certainly the greatest industrial and developmental project undertaken in Australia since the commencement of the Snowy Mountains scheme. The fully integrated iron and steel industry to be established at Kwinana will process up to 3,000,000 tons of iron ore a year from the Koolyanobbing deposits near Southern Cross, another well-known goldfields town. There will be a blast furnace with the capacity of 450,000 tons, and there will be a steel-making plant with an expansion of the existing steel bar rolling mill to a capacity of 330,000 tons. Additional wharf facilities will be necessary as will extra ancillary plant of many kinds. There will bc further development in many directions.

This new steel industry which will result from the rail standardization agreement will bring many new industries to Western Australia. These will further assist our State to secure more export markets, particularly in South-East Asia. When Western Australia becomes further industrialized through the benefits which will result from the rail standardization agreement, it is estimated that an additional 12,000 people will be required for the Western Australian work force because production in that State will increase by 300 per cent, in the next eight years. An increased work force means increased production which calls for increased population, and so it goes on. Now is the time for people in Australia, particularly in the eastern States, to adopt the wellknown motto, “ Go west, young man “. In the next eight years the population of Western Australia will increase to more than 1,000,000 persons. With that increased population there will be an immense number of opportunities not only for industry but for all aspects of employment.

The Liberal governments, both in the Commonwealth and in the State spheres, have laid down the welcome mat for private enterprise. As a result private industry has become an important factor in the economy of Western Australia as well as in the national economy. In addition to the establishment of the iron and steel industry, new projects include the provision of facilities for handling lubricating oil at Kwinana, the alumina treatment plant and the titanium-oxide project at Bunbury in the south-west. Also among the many new industries is that of paper manufacturing. All these projects have a very important feature, apart from their export value, and that is that they will create new jobs, particularly for the younger people of our State. The rail standardization project will give such an impetus to the industrial expansion of Western Australia that I can visualize over 5,000 new industrial jobs being created before long. Statistics show that every 1,000 new jobs created in industry means the creation of 2,000 additional jobs elsewhere. That, in turn, means the establishment of nearly 2,000 new households, with the addition of £2,000,000 personal income for the year, as well as an increase in retail sales in Western Australia alone of probably £1,000,000 a year.

I believe that the standard gauge project will mean that Western Australia will play a much bigger role in the affairs of this country. The Prime Minister (Mr. Menzies) put it very well when he said that the rail standardization together with the establishment of the steel industry would be the most remarkable Western Australian advance since the discovery of gold.

I have spoken so far of the importance of this project to Western Australia and to Australia as a whole. But it will be particularly important to the suburb of Midland and the surrounding districts. Midland is at the extreme north-eastern end of my electorate. This is an area which incorporates the railway workshops and is the junction for most of the railway lines in Western Australia. While the new information contained in this agreement will be of great interest to all the people of Western Australia it will be of particular interest to the people of the Midland district. The honorable member for Blaxland (Mr. E. James Harrison) spoke from his great trade knowledge of rolling-stock and he made one or two points which I hope both the Minister and the Government will examine in order to see whether something can be done about them.

I would like now to detail the rolling-stock which will be required for the new standard gauge line. There will be 22 main line locomotives, five transfer road-shunters and eleven shunting locomotives. These 38 locomotives will cost £3,700,000. The passenger vehicles required will number 55, and their cost will be £1,710,000. The mention of passenger vehicles reminds me that there is still a problem in securing accommodation on the Trans-Australian Railway, and particularly when travelling from Western Australia to the eastern States. I ask the Minister and the Government whether there is any way in which the purchase of the rolling-stock for the new line can be hastened, so that the equipment could be used to alleviate the present situation in which people find it very difficult to get accommodation on the trains from Western Australia to the eastern States. The freight vehicles required for the standard gauge line will number 1,138, and their total cost will be £5,093,000. Service vehicles will number 55 and will cost £270,000. The total equipment cost will therefore be £41,210,000.

The people of Midland will be particularly interested in the work to be done in Midland itself. This is not detailed in the agreement but I have gathered what information 1 could so that it might become more widely known. With the implementation of the standard gauge railway in Western Australia much of the initial effort will, of necessity, be concentrated within the Midland area, and I hope that the yard alterations are carried out as quickly as possible so that the whole project may proceed speedily. It is from within this area that the new rolling-stock will move, to transport all the material required for the building of the line eastward from Midland to Kalgoorlie. I have ascertained that, with this end in view, the Western Australian Railways have already completed the overall plan of the work required, and from this plan the extensive works that are to be carried out can be determined in detail in the near future. It is anticipated that the standard gauge line to Kalgoorlie and also the new 3-ft. 6-in. gauge line to Northam will leave the Midland area in the vicinity of the Bellevue station by means of a fly-over which will cross the existing line at that location. Between Bellevue and West Midland extensive yard alterations will be necessary to provide access to existing sidings and also to the bulk wheat storage area, which is one of the biggest in Australia.

As well as the main standard gauge through line in the Midland yards, provision is being made for four standard gauge loop lines with standing room in each of 2,000 feet. Access to the Midland railway workshops will be towards the western end of the yards and it is estimated that approximately £250,000 will be required for structural alterations to the workshop buildings so that they may accommodate the standard gauge rolling-stock. In addition to all this work there will be. of course, ancillary construction, such as the provision or modification of signalling facilities and overhead structures, and while at present we have not the full details of what all this will cost, it is expected, from the information I have been able to gather, that in the Midland area alone, which is 14 miles from Perth, more than £3,000,000 will be spent. This, of course, is of extreme importance not only to Western Australia as a whole, but particularly to the Midland district.

This is an agreement of tremendous importance to Australia, to Western Australia and particularly to the district of Midland, which is a thriving community composed to a large degree of railway and industrial workers. It is an area which is well served by sound local government and the community has taken a great interest in the standard gauge project for many years. I have had occasion to speak on this subject there on one or two occasions. I know that everybody in the area appreciates the great work done by the State Government and by the Commonwealth Government in co-operation to make this most realistic project possible. 1 have pleasure in supporting the bill.

Sir EARLE PAGE:
Cowper

.- Mr. Speaker, I wish to urge this Parliament, now that the chance has come, to make certain that this work is done. Some 40 years ago the Bruce-Page Government put before the State Premiers a proposition to carry out standardization of certain railways. The proposal included the building of a standard gauge line from Fremantle to Kalgoorlie, linking with the existing railway from Kalgoorlie to Port Augusta; a standard gauge line - partly conversion - from Port Augusta to Adelaide; conversion to standard gauge of the whole of the 5-ft. 3-in. gauge line between South Australia and Victoria; the conversion of the 3-ft 6-in. line between Terowie and Peterborough in South Australia; and a standard gauge railway linking

Sydney and South Brisbane, via Macksville, Kyogle and Richmond Gap.

The whole scheme at that time would have cost £21,600,000. Although for a while it looked as though we had a reasonable chance of getting consent to the construction not only of the Sydney-Brisbane connexion, but also the line in Western Australia, we were finally forced to come away with consent only to the Queensland section of the work. That was put through straight away, and I think the line was built for slightly less than the estimated sum. That railway has been running now since 1927 and during its 34 years of operation it has saved more in transportation charges than this work in Western Australia is going to cost. When war came that railway perhaps made the difference between our holding this country and losing it, because we were able to get food, equipment and so on from the south right up to Brisbane without a break of gauge. Since then there have been several other attempts to commence standardization projects. At that time, we put before the South Australian Government a separate proposition under which, for a cost of £5,000,000, the whole of the break-of-gauge problem of that State could have been rectified. South Australia rejected the suggestion. Instead, the Government of that State spent some £14,000,000 in converting the whole of the 3 ft. 6 in. system to the 5 ft. 3 in. gauge. As at that time there was quite a number of 5 ft. 3 in. gauge lines in that State, it was decided to make that gauge the standard for South Australia. As a result, that State now is faced with the problem of converting the 5 ft. 3 in. to 4 ft. 8i in. if there is to be a proper, uniform system throughout Australia.

In the last few years, standardization of gauges has been taken a step further with the almost completed 4 ft. 81 in. line between Sydney and Melbourne, but Victoria still has a problem with its many other lines, which are not included in that project. When we realize that 40 years ago for an expenditure of approximately only £20,000,000 such extraordinarily wide development could have been achieved over so much of Australia, and when we appreciate that during those 40 years we would have had the benefit of all that work in developing our economy, it is to be hoped that nothing will be done to put a block in the way of completing this project. I beg that nobody will put any block in the way of this project, because every undertaking that I have seen delayed has eventually cost from two to three times as much as the original estimate. In fact, we have been lucky if it has cost only two or three times as much. Usually it costs about five times as much to complete a project once it has been delayed. The important thing in all these matters is to make certain that they are completed quickly. They are national matters, over which there should not be any great difference of opinion amongst the parties in this Parliament or amongst the people of Australia. After all, the people of Queensland have just as much interes as have the people of Western Australia in seeing that we have a good railway system, and I therefore beg that nothing at all will be done to prevent the quick passage of this bill or the speedy development of Western Australia.

Mr CLEAVER:
Swan

.- My colleague, the honorable member for Stirling (Mr. Cash) said a little while ago that the measure under discussion is without doubt a vital one. I agree entirely with that, and trust that at the conclusion of my remarks the advantages of this proposal to Western Australia in particular will be clearly noted. If, however, this is a measure of such vital importance, let me remark that it was amazing this morning to note that the honorable member for Fremantle (Mr. Beazley), who replied to the second-reading speech of the Prime Minister (Mr. Menzies) on behalf of the Opposition, was supported by next to no honorable members on his side of the House. I think the sole exception was the Deputy Leader of the Opposition (Mr. Whitlam). I wonder whether that is indicative of the Opposition’s interest in one of the greatest national developmental measures the House has seen? Or is it just an indication that the State of Western Australia is represented largely by honorable members on the Government side, and that in the Opposition there are very few supporters of the interests of the western State?

It has been said that this agreement marks a new era for Western Australia. I echo those words, and do so with no idle intent. For many years now, Western Australia has been looking forward to a move of this kind so that, instead of feeling its isolation, the western coast may take its place in the industrialization of this nation. In giving my full support to this agreement, I suggest that the move now being made has possibilities even beyond the highest expectations and hopes of our forbears of other years, and I think it important that I should refer quickly in passing to the long history of rail standardization discussions.

Some significant reports have been compiled down through the years. The previous speaker, the right honorable member for Cowper (Sir Earle Page) spoke of what was done when he was associated with a government some 40 years ago. I note first ol all that in July, 1920, a conference between representatives of the Commonwealth and of three State Governments took place at Melbourne, and a decision was arrived at under which a committee consisting of two experts from abroad, and an Australian representative not connected with railways, was appointed to consider the whole question of rail gauge standardization and to report to the various governments concerned on the best course to be adopted. In February, 1921, the Governor-General appointed a royal commission consisting of two railway engineers - one civil and one mechanical - together with an independent commissioner, to inquire into and report upon the question of standardization of rail gauges. The result of the commission’s work was a recommendation that the 4-ft. 81-in. gauge be adopted as the standard for Australia. That committee reported that no mechanical, third rail or other device would meet the situation, and that uniformity could be secured by one means only - by the conversion of all gauges to 4 ft. 8i in. This matter was later discussed in Melbourne in 1921 at a conference which the then Prime Minister had with the Premiers, and there it was decided to adopt the 4-ft. 8i-in. gauge as the standard rail gauge for the nation. At that conference it was also resolved that the adoption of a standard rail gauge was essential to the development and safety of the Commonwealth.

The scheme then advocated by the royal commissioners as the first step was the construction of a standard 4-ft. 8i-in. railway between Brisbane and Fremantle and the conversion to that gauge of the other broad gauge lines in the States of Victoria and South Australia. The estimated cost in that year, so long ago, was £21,600,000, spread over a period of approximately eight years. I find it interesting to note the impact of the proposal on Western Australia at that time. The total cost of the work to be done in Western Australia under that scheme was some £5,000,000, of which the State would be asked to contribute only £1,000,000. The estimated cost of conversion of all of the lines in all the States in that year was £57,000,000, and I want to underline the point I have noted in my research that this estimate included the conversion of the 3-ft. 6-in. gauge lines in isolated parts of Western Australia, and the independent lines in north Queensland and other areas. I suggest that the observations I have made about the conferences held in 1920 and 1921 are of special interest, not only to honorable members of this House, but also to very many members of the public.

Years passed by, and, as honorable members are well aware, it was the Clapp report of 1945 which again laid emphasis upon the need for action. In that report, it was estimated that the cost of the standard gauge link between Kalgoorlie and Fremantle would be £8,300,000. Whereas, in 1920 and 1921, the estimated cost of the Western Australian section of the scheme was £5,000,000, we find that with the effluxion of time costs rose until the estimate for the Kalgoorlie-Fremantle link increased to £8,300,000. This long history of consideration, thought, lapse of interest and then resuscitation of interest brought us to the year 1956, a time reasonably close to the agreement now under discussion, and here I pay tribute to the report submitted in 1956 by my colleagues on the Government Members Rail Standardization Committee. In that report, they said that this work was essential. Of course, the costs that they estimated were substantial, indeed, when compared with the figures to which I have been referring.

I firmly believe that the report which my colleagues proudly presented in 1956 has stimulated the presentation of this agreement to the House, but I suggest that the premise upon which their recommendations and report were based was by no means the sole inspiration of the agreement. I recall that my friend and colleague, the honorable member for Perth (Mr. Chaney) interjected when the honorable member for Blaxland (Mr. E. James Harrison) was speaking, to point out that the position is now quite different, that the circumstances have changed. In his second-reading speech the Prime Minister (Mr. Menzies) brought this out to our satisfaction. He indicated that not only has the Government declared its interest in this matter but it has also translated interest into action. Might I again stress that this action is fully acceptable to the Western Australian Government. I think it is pertinent that I should quote from the Prime Minister’s speech. The right honorable gentleman said, speaking of the Government -

We subsequently embarked on a close examination of this railway project in consultation with both the Government of Western Australia and the Broken Hill Proprietary Company Limited. We satisfied ourselves that construction of the railway had a vital place in that company’s plans for a major expansion of the steel industry. Indeed, we ascertained that, if the railway were not built, the prospects of an expansion of steel production which would substantially assist in bringing about a major contribution to our export earnings would be adversely affected.

So, we see here a recognition of changed circumstances and a really earnest stress upon increasing export earnings for the whole country. It is a recognition of something that has developed even since 1956. It changes, surely, the premise of the excellent report to which I have referred that was submitted by the Government Members’ Rail Standardization Committee. But the Prime Minister also in his second-reading speech pointed out the basis of this agreement when he said -

Conditional upon the construction of a standard gauge railway for the carriage of iron ore, an agreement was concluded late last year between the Western Australian Government and the Broken Hill Proprietary Company Limited for the establishment of an integrated iron and steel industry allied with the development of the iron ore deposits at Koolyanobbing. In that agreement, the Broken Hill Proprietary Company Limited undertook, bv the end of 1968. to sei up at Kwinana a blast furnace with a capacity of 450.000 tons per annum of pig iron.

This is an integration of industrial development with a tremendous potential with this proposal for rail standardization. Might I say that, we believe that in the wake of the new steel industry there will come many other industries to the western State. My colleague from Kalgoorlie (Mr. Browne) recently mentioned this fact in his speech.

I believe that the western coast of the future will present a volume of industrialization beyond the hopes and expectations and ambitions of the many leaders of previous governments. That brings us to the agreement itself. The debate has already reminded us in a variety of ways of the magnitude of the financial cost. I refer again to this estimated figure of some £41,000,000. With the trend as we know it to-cay, by the time this task is finished no doubt it will cost some millions of pounds more. We must relate this figure to which we are now committed in this agreement to the estimates of years ago and take note surely, as a Parliament and a people, that when these expensive national developmental projects are delayed, they are delayed at a cost to the nation because more and more money invariably is involved.

It is good to note that this Government has spurred on national development with the largest projects that the country has ever known in its history. Here comes another in the field of rail standardization. As has been said not only in the Prime Minister’s second-reading speech but also by other honorable members, in the first instance the Commonwealth contribution will be some £35,000,000 towards the whole scheme and the Western Australian Government will contribute £6,200,000. But when the initial capital outlay is completed, the final costs will be shared differently. Western Australia will carry £26,800,000 and the Commonwealth the balance of £14,400,000. When the honorable member for Fremantle (Mr. Beazley) was speaking earlier in the debate, he conveyed in his speech the criticism of the Leader of the Opposition in the Western Australian Parliament. But I believe that the honorable gentleman from Fremantle and those who think with him in this mat’er need to be reminded that this particular agreement is cast in favour of Western Australia when compared with rail agreements of a similar kind which appear iti the statutes of the Commonwealth. I point out that with the standardization scheme, Western Australia will benefit at the same time by improvements to its 3-ft. 6-in. gauge railway system worth something like £7,300,000.

I want to develop this thought and bring out a point which some people have quickly noted, for this agreement is cast very definitely in favour of Western Australia. Under this agreement, Western Australia will retain any railway equipment made surplus by the adoption of the standard gauge of 4 ft. Si in. This means that railway sleepers, bridges, buildings and equipment of every kind that can be diverted from lines which will be replaced by the standard gauge may be diverted elsewhere to the existing Western Australian railway system. These items of equipment and the buildings are estimated to be worth not less than £1,900,000. What then of the rolling-stock? The rolling-stock from the narrow-gauge lines is estimated to be worth at least £5,300,000. I submit that this equipment will prove a boon indeed to the Western Australian Government because, like all other governments with railway problems, the Western Australian Government has been grappling with the difficulty of replacing obsolete and worn out equipment in distant parts of the State. Usually a railway agreement of this kind provides for the value of surplus equipment of this nature to be credited against the major work. This means, of course, a reduction in the Commonwealth contribution. The Premier of Western Australia, speaking recently in the State Parliament on the introduction of this scheme, quite rightly praised the relief that the agreement extends to Western Australia. He pointed out that the non-recognition of this betterment aspect in relation to the existing railways system was a great and invaluable relief to him. As I have said, the figure is estimated at £7,300,000 - a benefit well in excess of the first payment by Western Australia from its loan funds. Therefore, I make no apology for praising the agreement and pointing out that there is no provision in it whatever in respect of the betterment aspect so far as Western Australia is concerned.

This standardization plan undoubtedly takes in new railways not essentially linked with the standardization of . the gauge. 1 mean by that that there is a change in the route through Avon Valley. There is a spur line to Koolyanobbing. There will be new rolling-stock that the system requires. I have an interest in this line in the sense that it touches on my electorate. The honorable member for Stirling (Mr. Cash) has the important centre of Midland Junction in his electorate. The new line to Kwinana will go through the Swan electorate at Kewdall transforming an area where years ago there was not a thought that the main line might pass there. But these proposals will alter the railways scheme in Western Australia. They are to the betterment of the whole railways system but there is no provision to the detriment of Western Australia in respect of that betterment aspect. AH those factors have been absorbed as part of the total cost of the overall scheme. The betterment aspect has been entirely disregarded to the advantage of Western Australia.

This is the history of the matter: Forty years or more of constantly recurring discussions, of the appointment of committees and royal commissions, and of hopes that have been raised high by statements made by national and State leaders. Throughout this period, the people of Western Australia, in particular, have often said, “ We shall never see the standardization of rail gauges “. Is it any wonder that we speak with enthusiasm of this agreement which is before the National Parliament to-day and suggest that it will open up a new era for the one-third of the Australian continent that we recognize to-day as the State of Western Australia? This is no idle agreement. This is no idle decision to which the Parliament will come. I suggest that this agreement marks the opening of a new chapter in the history of the western part of this continent. I look forward, as do many others, to a programme of industrialization in Western Australia which not only will bring with it a new status for that State within the whole framework of the Australian Commonwealth, but also will attract hundreds of thousands of people to swell the population, the small size of which has been one of the State’s big difficulties over the years.

I praise this Commonwealth Government for having entered into this agreement. Mr.

Deputy Speaker. 1 suggest, again, that the agreement is weighted well and truly in favour of the State which will share so largely in its benefits.

Mr WHITLAM:
Werriwa

.- Mr. Deputy Speaker, the honorable member for Swan (Mr. Cleaver) began his speech on ;;n ungracious note. I was due to follow he honorable member for Kalgoorlie (Mr. Browne). It was put to me that I should defer my remarks in order to permit other members from Western Australia to make their contributions to the debate on this bill and then leave to catch the 4 o’clock plane to Melbourne, where they could catch a plane home to Perth later to-day. I agreed to defer my remarks.

Mr Cleaver:

– No one criticized the honorable member for that.

Mr WHITLAM:

– The honorable member for Swan might have forborne to make the remarks which he made when he began his speech concerning the interest shown by honorable members on this side of the House in this bill.

Mr Cleaver:

– I referred to the fact that honorable members on that side were interested.

Mr WHITLAM:

– We are interested. When the bill was discussed this morning, my leader was in the chamber throughout the debate, as also was I.

Mr DEPUTY SPEAKER (Mr Falkinder:
FRANKLIN, TASMANIA

– Order! I suggest that the honorable member address himself to the bill.

Mr WHITLAM:

– Honorable members will be delighted that this bill has now come before the House and that the scheme for which it provides will now go forward without any further delay. Reference has already been made to the royal commission of 1921, which recommended the standardization of the gauge of the railway between Kalgoorlie and Perth and Fremantle, to the report sought from Sir Harold Clapp in 1945 in favour of the same scheme and to the reports which were made to this Parliament by a committee of Government supporters and by a committee of the Federal Parliamentary Labour Party on 31st October, 1956. Those last reports were made almost five years ago, Mr. Deputy Speaker. At that time, honorable members on both sides of the House agreed unanimously that this standardization project should be put in hand. The similarity in the findings of both committees- with respect to routes, costs, reasons and the like was amazing.

When the Australian Labour Party proposed at the last election that the Commonwealth should undertake the work, we were asked where we would find the money. We were told that the Commonwealth had not the capacity to find the money for the proposal at that stage.

Mr Freeth:

– The Labour Government in Western Australia was not interested, either.

Mr WHITLAM:

– I am very happy to say that there is now no dispute about whether the money can be found for what will be now, as it would have been for some decades past, a very worthwhile investment.

The Minister for the Interior (Mr. Freeth) has just interjected and said that the Western Australian Government was not interested in the proposal. That is very true. When there was a change in government in Western Australia in 1959, the new government showed no interest in the project, although the preceding government had shown interest in it. In the two statements that I have made, I rely on answers given to questions on notice which I have asked during the last five years. On 3rd October, 1956, the Minister who represented in this House a former Minister for Shipping and Transport gave me this information -

The last discussions between the Commonwealth Railways Commissioner and the Western Australian Government Railways Commission took place in September, 19S4. It was decided at the conference that the Western Australian commissioners would supply further information in connexion with the cost of standardization, rehabilitation and related matters. The information has not yet been furnished by the Western Australian Railways Commission.

On 28th August, 1958, the representative in this place of the former Minister told me -

The Premier of Western Australia wrote to the Prime Minister on 23rd June, 1958, asking that work on standardizing the Perth-Kalgoorlie line be put in hand during 1958-59. This submission will be considered having regard to rail standardization policy and current commitments in respect thereto.

On 19th August, 1959, the Minister who was at the time representing in this chamber the previous Minister for Shipping and Transport gave me this information -

In his reply to the Western Australian Premier’s letter the Prime Minister indicated that the Commonwealth was willing to give careful consideration to the Kalgoorlie-Fremantle line in conjunction with other standardization proposals and sought detailed information concerning the proposal. In his reply the Premier said that the preparation of detailed estimates was in the nature of a major project and would involve many months’ work. However, on the basis of data already known, the Premier sought financial assistance for the commencement of this work. A change of Government then occurred in Western Australia and there has since been no further exchange of communications between the Governments on this matter.

On 7th September of last year, the present Minister for Shipping and Transport (Mr. Opperman) told me -

In January, 1959, the Premier of Western Australia wrote to the Prime Minister commending the Kalgoorlie-Fremantle rail standardization project and indicated his view that sufficient information was available to commence the project if the Commonwealth allocated funds for it. A change of Government then occurred in Western Australia and there has been no further exchange of communications between the Governments on this matter.

It was only last year, when the Broken Hill Proprietary Company Limited showed interest in establishing an integrated steelworks in Western Australia on condition that adequate transport by rail be provided between the iron ore deposits and the projected site of the steelworks, that the new Western Australian Government took an interest in this matter. For a year and onehalf, it did not pursue the initiative of the former Labour Premier of Western Australia. The Commonwealth took no interest until the after-effects of the financial measures of August last year, and more particularly of November last year, were manifest. In February, the Prime Minister (Mr. Menzies), on the tarmac at Sydney (Kingsford-Smith) airport, at Mascot, said that the Commonwealth was interested in various public works which would provide employment and ensure national development. It was pursuant to that indication that conversations took place subsequently between the Premier and the Minister for

Industrial Development of Western Australia and the Prime Minister and the Deputy Prime Minister (Mr. McEwen). It is from those conversations that this agreement has flowed. We can be very happy that at last a matter in which members of all parties in this chamber have shown an interest for many years is now being brought to fruition.

Sir, we have to recognize, whatever State we may come from individually, that it is impossible to standardize lines, and very difficult to standardize equipment, unless the Commonwealth shows an interest in those matters. There has been no standardization project in Australia since the First World War without the participation of the Commonwealth. The standardization through Kyogle between the New South Wales system and Brisbane, to which the right honorable member for Cowper (Sir Earle Page) referred, was brought about on the Commonwealth’s initiative. It was the only standardization project carried out between the two world wars. It was the sole result of the recommendations of the 1921 royal commission on rail standardization. After the last war, the Commonwealth tried to make an agreement with any State government which was interested in standardization. The South Australian Government was the only government which was sufficiently interested to conclude an agreement. Under that agreement the Commonwealth is obliged to find the whole of the cost of standardizing the South-Eastern Division and the Peterborough Division of the South Australian railways. The whole of the South-Eastern Division has now been standardized at the expense of the Commonwealth, and the South Australian Government is obliged to repay over a period of 50 years 30 per cent, of the money so advanced. The railway between Wodonga and Melbourne is being standardized as a result of an agreement made in 1958. There again, the Commonwealth is making the money available on the same conditions as to South Australia. Those States could not afford to standardize that remaining strip to link their capitals, without the Commonwealth’s assistance. Is it any wonder, then, that Western Australia was unable, without Commonwealth participation, to do a much more expen ive stretch of line, and link its system to the rect of the Australian systems?

The regrettable feature is, Sir, that the most important standardization project in Australia - that between Port Pirie and Broken Hill - is no further advanced than it was when the agreement was made in 1949.

Mr Opperman:

– It is under judgment still.

Mr WHITLAM:

– I am not making any comment on the court case. I merely refer to the fact, and I think that it is by no means embarrassing to say, that that project is no further advanced towards realization than it was in 1949. The writ and the documents have only been served in this matter within the last year, and there was nothing to prevent the governments getting under way with that project in the previous eleven years. It showed a very poor sense of proportion that the South-Eastern Division lines were broadened, with the undertaking that South Australia would later, at its own expense, bring them back 6i inches to standard gauge, before the strip between Port Pirie and Broken Hill was standardized. There is at least twenty times as much freight on the Peterborough Division as there is on the South-Eastern Division. The internal and external consequences to our economy of the Peterborough Division are very much more than twenty times those of the South-Eastern Division, and the potential of the Peterborough Division is very much greater again.

Many members have mentioned the financial aspects of this agreement. On the financial aspects the honorable member for Swan (Mr. Cleaver) might well have made some contribution to the debate, because he has had considerable experience - if not always happy experience - in financial matters, such as bookkeeping and accountancy. The Prime Minister was at pains to explain that the finance for this project was to be divided into two equal parts - the standardization component and the developmental elements. He was at pains to make the distinction because only thus could he justify the less advantageous terms being given to Queensland in respect of the Mount Isa railway. The word “ developmental “ was attached to the Mount Isa railwav to justify its more onerous financial conditions as to the period of the Commonwealth’s loan, the proportion of the loan and the interest on the loan. Before the

Prime Minister spoke the Minister for the Interior (Mr. Freeth), who comes from Western Australia, had reported to his electors that it was because of the Mount Isa case that the Commonwealth had taken care to divide the Kalgoorlie to Kwinana proposition into its standardization element and its developmental component and that the developmental aspect of the Western Australian project received exactly the same treatment as the Queensland project. I would think that, from the point of view of economics and defence, it is very hard to justify a less favorable treatment in respect of half of the Western Australian project than was extended to the WodongaMelbourne line and the Grafton-Brisbane line or, still more, the South-Eastern Division of the South Australian railways. All those projects have been developmental. Each of them, of course, was a matter where assistance was less required than it is in Western Australia; but where assistance was most required, because of the size of the enterprise and because of the resources of the State concerned, the Commonwealth is astute to give less assistance.

I come now, Sir, to another aspect of the financial arrangements - the interest rate. The initial amount, and the greatest amount, of money provided by the Commonwealth to South Australia for the broadening of the railways in the SouthEastern Division was advanced at an interest rate of 3J per cent. The initial amounts, and the greatest amounts, which were advanced to New South Wales and Victoria for the standardization of the railway between Wodonga and Melbourne were advanced at an interest rate of 5 per cent. The sums under the agreement which this bill is to approve are being advanced at an interest rate of 51 per cent. If this railway had been constructed more promptly - if the job had been put in train at the time when honorable members in this place who have interested themselves in it advocated that it should be put in train, if it had been put in hand after the last general elections when the Labour Party said it should be put in hand - it would have cost less throughout the currency of the agreement than it will now cost, because the moneys advanced would have been advanced at a considerably lower rate of interest.

The remain,ng points I wish to make concern collaboration or co-operation between railway systems in Australia. My colleague the honorable member for Blaxland (Mr. E. James Harrison), who, with the former member and present candidate for the Stirling division, Mr. Webb, was principally responsible for the report of the Federal Parliamentary Labour Party on railway standardization made to the Parliament five years ago, referred to the necessity of co-operating and collaborating in the construction and operation of Australia’s various rail systems. Australia is a continent, and a very great deal of our transport already goes across the continent, some of the distance at all events, by rail. When we have a thoroughly modern and co-ordinated railway system a very great deal more freight and very many more passengers, both absolutely and proportionately, will go across the continent by rail.

It is anomalous, therefore, that we should persist with the idea that stretches of railway should be operated by different systems. A very great deal of the advantage of having a standard railway gauge and standard railway equipment is dissipated if there is diverse railway management. Once the scheme now under consideration is carried out, and also the scheme for standardizing the remainder of the South Australian railway line between Port Pirie and Broken Hill, freight and passengers will be able to travel in the same vehicles, drawn by the same locomotives, from Brisbane through Sydney, Broken Hill, Port Pirie and Kalgoorlie to Kwinana. Apparently, however, if this Government is to have its way, such journeys will be under the control of the Queensland, New South Wales, South Australian, Commonwealth and Western Australian railways commissioners.

I do not believe that such a system of operation would be tolerated in any other country. It is certainly not tolerated in Canada, which has rail transport problems comparable with our own. In Canada, there are two trans-continental railway systems; the Canadian Pacific Railway Company and the Canadian National Railways; there is a single authority superintending each transcontinental journey. In the United States of America there are many different railway companies, but they are linked together voluntarily and they are supervised by the

Interstate Commerce Commission. It is possible to go to any office of a railway company in the United States, or any office of the Interstate Commerce Commission, and make arrangements for unimpeded passenger or freight journeys across the entire country, north-south, east-west or diagonally. That is not possible in this continent, and I applaud the honorable member for Blaxland for bringing up this matter once again. We do need to take steps to co-ordinate the operation, as well as the construction, of railways in Australia.

There are some obligations regarding collaboration already expressed in the Commonwealth’s agreements with South Australia. They have not, in fact, been observed. There is provision to travel between Port Pirie and Melbourne, over an unbroken 5-ft. 3-in. gauge line, in the one railway carriage. This requirement has been in nominal effect for over a quarter of a century. It has never yet been observed. Again, the South Australian Government is quite severe with taxes imposed on road hauliers competing with the South Australian railways between Adelaide and Port Pirie. It takes no steps at all to preserve the interests of the Commonwealth railways between Port Pirie and Port Augusta. It discriminates against the Commonwealth instead of collaborating with it.

Again, Sir, many decisions have been made, during discussions between the various railways commissioners, State and Commonwealth, to construct locomotives and freight wagons to the same standard throughout Australia. State politicians have in all cases modified those arrangements. It is unfortunate that many modern wagons constructed for the various State railway systems will not be capable of being linked together, or used in the same trains, when at last we have standard gauge lines linking the different State railway systems. There are some wagons that can be linked in 6,000-ton trains. There are others that can be linked in trains of no more than 2,000 tons. Yet these wagons were built in the same yards and at the same time.

Mr Fairbairn:

– Does the honorable member realize that engines will be changed on trains running on standard gauge lines, that the same train will run in various States, but not the same engine?

Mr WHITLAM:

– I know. It will be absurd, of course. There will still be a change of locomotives at Albury, just as there is at Serviceton, just as there is at Mount Gambier. There will probably also be a change of locomotives at Kalgoorlie.

Mr Opperman:

– I would hope not.

Mr WHITLAM:

– I certainly hope not, too, but unless better arrangements can be made between the Commonwealth Railways and the Western Australian Railways than have been made between the South Australian Railways and the Victorian Railways, the locomotives will, in fact, be changed at the present change points.

I have referred to the construction of wagons. These are constructed by a variety of contractors. I should refer also to the construction of locomotives. No steps have been taken to standardize the locomotives used in the different systems. This is all the more remarkable in that there are virtually only two companies making dieselelectric locomotives in Australia. The degree of standardization which has been achieved in the manufacture of these locomotives in Australia is not due to the railways commissioners, but is due to the fact that there are two companies making the locomotives, and that they make them to American designs. I should hope that the Commonwealth, which is the initiator of every rail gauge standardization project in Australia, would at least bring sufficient pressure to bear on the different commissioners to ensure that the systems whose railway lines are being physically standardized are in fact operated in coordination and collaboration with each other.

I would go further. Now that the Commonwealth is making arrangements to assist with the construction of rolling-stock, as it is under the agreement now before us, and also under the Mount Isa agreement, I should hope that it would bring pressure to bear to co-ordinate the standards of that rolling-stock, locomotives and other vehicles. It is in this way that we can establish a proper national industry in rail transport, which our continent obviously requires. There can be no question that a modern railway, with modern locomotives and modern rolling-stock, is a thoroughly economic proposition. For the carriage of many commodities it is more economic than any other form of transport. In Australia, in particular, with bulk cargoes and long distances, and in many cases unbroken journeys across half a continent, it is an eminently economic method of transportation.

There is one forward step which this Parliament can take, apart from the crucial provision of financial resources. I refer to the Inter-State Commission. The Inter-State Commission has been allowed to remain dormant for 40 years. The difference in rail freight charges in various parts of Australia, and the consequent effect on interstate trade, makes it necessary to have in operation the Inter-State Commission which the Constitution provides and which is particularly designed, as the Constitution states, to deal with railway matters.

It costs considerably more to transport goods between Coffs Harbour and Brisbane than it does over the considerably longer distance between Coffs Harbour and Sydney. It costs considerably more to send goods from Mildura to Adelaide than to send them over the significantly longer distance between Mildura and Melbourne. It costs about twice as much to send goods from Mount Gambier to Melbourne as it does to send them over the same distance between Mount Gambier and Adelaide. The instances I have quoted all relate to stretches of railway which are of the same gauge. There is no physical reason why there should be such different freights. This is a matter which the States will not correct because they have deliberately used their railway systems to centralize their commerce and their political power. The Commonwealth has the constitutional obligation and has every reason in the interest of economics, defence and development, to ensure that interstate trade is promoted.

Reference was made to Northam by honorable members who spoke earlier. It costs considerably more in freight now to send goods from the eastern States to Northam than to send them from the eastern States to Perth. Even if the goods are dropped off at Northam, one pays the full freight one would have to pay on goods sent from the eastern States to Perth and on the same goods carried in a different train from Perth back to Northam.

I hope, therefore, that the Commonwealth will use its financial pressure to standardize and co-ordinate the construction, equipment and operation of the railways of this con tinent. I also hope that the Commonwealth will set up the Inter-State Commission, which is a constitutional instrument for contributing to this end.

Debate (on motion by Mr. Wentworth) adjourned.

page 2280

TARIFF PROPOSALS 1961

In Committee of Ways and Means:

Mr OSBORNE:
Minister for Repatriation · Evans · LP

.- I move[Customs Tariff Amendment (No. 31).]

  1. That the Schedule to the Customs Tariff 1933-1961, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals and that on and after the twentieth day of October, One thousand nine hundred and sixty-one, Duties of Customs be collected accordingly.
  2. That in these Proposals, “ Customs Tariff Proposals “ mean the Customs Tariff Proposals introduced into the House of Representatives on the following dates: - 11th May, 1961; 15th August, 1961; 17th August, 1961; 7th September, 1961 ; 14th September, 1961: 5th October, 1961; and 12th October, 1961.

THE SCHEDULE. IMPORT DUTIES.

Mr. Chairman, the proposals which I have tabled provide for temporary duties on -

Weftless narrow fabrics of man-made fibres, and Four-cycle air-cooled internal combustion piston engines, not exceeding 10 brake horse-power with horizontal driving shafts.

A temporary duty of 25 per cent is imposed on weftless narrow fabrics of man-made fibres, while on internal combustion engines a temporary duty of 10 per cent. is imposed. In each instance, the temporary duties are imposed following reports by deputy chairmen of the Tariff Board and are in addition to the normal duties applying to the goods.

The normal protective needs of the industries concerned have been referred to the Tariff Board for full inquiry and report. The temporary duties will remain in effect only until the Government has taken action on the final reports of the board but in any case not longer than three months after the receipt of the relevant reports.

I commend the proposals to honorable members.

Progress reported.

page 2281

TARIFF BOARD

Reports on Items.

Mr OSBORNE:
LP

– I lay on the table of the House reports by a deputy chairman of the Tariff Board on the following subjects: -

Internal Combustion Engines not Exceeding 10 brake horse-power.

Weftless Narrow Fabrics of Man-made Fibres.

Ordered to be printed.

page 2281

RAILWAY AGREEMENT (WESTERN AUSTRALIA) BILL 1961

Second Reading

Debate resumed (vide page 2280).

Mr WENTWORTH:
Mackellar

.- I support the bill with very great enthusiasm. The standardized rail link to be effected by this measure is the second link necessary in the pattern of standardization to provide a rail link between the capital cities of Australia. It will be recalled that some time ago the Government approved the proposal made for a standard gauge between Albury and Melbourne and that this line is now nearly ready for operation. From this we go on to a standard gauge from Kalgoorlie to Fremantle and Kwinana. This leaves the bad gap, to which I hope to refer later, between Broken Hill and Port Pirie. When this third link, which is part of the pattern recommended some time ago, is finally approved, we shall have a standard gauge line connecting all our capital cities.

A committee of Government mmebers as long ago as 1956 made recommendations for these standard gauge links. One of our recommendations was the completion of the standard gauge line which is the subject of the measure now before the House. We then estimated that the cost of the main line track for 420 miles would be about £17,000,000. If honorable members look at the schedule to the bill, they will see that a cost of approximately £22,000,000 is estimated for some 528 miles of standard gauge line. The estimates that we had when we made our recommendation are relatively substantiated by the details now before the House. It is true that the expenditure contemplated by the bill is much larger. It amounts to £41,000,000. But this includes some £11,000,000 for rolling-stock, which was not, of course, taken into consideration in our original estimate, and a number of odd items such as approved signalling equipment, some narrow gauge spur lines and other minor additions. Of the £30,000,000 which this bill anticipates will be spent on the track, some £22,000,000, as I have said, is attributable to the 528 miles of main line track which is the subject of the bill.

The Prime Minister (Mr. Menzies) in introducing the measure very rightly laid stress upon the great significance of the line in relation to the use of the ore deposits at Koolyanobbing and the establishment of a steel works at Kwinana, near Fremantle. This seems to me to be the reason why the Government has taken the decision to build the line now. At any rate, that is the impression I have gained from the Prime Minister’s remarks.

I should like to read a paragraph from our committee’s report of November, 1956. It is in these terms -

Our final point deserves mention. Near Southern Cross, at Koolyanobbing, there are reserves estimated at about 200,000,000 tons of first-grade iron ore. At present this is virtually useless, because the existing railway system is not capable of transporting it to the coast in sufficient quantities or at a reasonable price. Given a first-class track, however, and adopting the principles applied by the Commonwealth Railways Commissioner to the transport of coal from Leigh Creek to Port Augusta, the 300-miles journey to Fremantle might not be a bar to the development of these reserves. Certainly in Labrador and elsewhere iron ore deposits are being developed in far less favourable circumstances. While it is not suggested that the existence of these deposits would be sufficient in itself to justify the construction of a standard-gauge railway at least in the immediate future, their potentialities obviously enhance the attractiveness of the scheme.

Having regard to the Prime Minister’s remarks when introducing this bill, it appears that the views which we advanced some five years ago have turned out to be substantially correct.

In my view, this railway would bi justified even apart from the iron ore deposits; but the iron ore clinches the matter. It brings the proposition to the stage at which it is immediately practicable. It is very difficult to understand why these reserves of ore at Koolyanobbing, which have been known for years to exist, at least in outline, and which were well known to our committee when we were in Western Australia - the honorable member for Perth (Mr. Chaney) was largely responsible for our visit there - did not attract attention earlier The ore is of a peculiarly high quality in that it tends to break without powdering and, therefore, requires very little sintering or compaction before going into the blast furnace. It is what is known as a to process. It is what is known as a premium ore. I find it very ha. d te understand why it has taken so long to appreciate the merits of this ore which have been well known for some time. As some honorable members will know, in the last few months there have been even more sensational discoveries of iron ore in Western Australia much nearer to the coast than is Koolyanobbing. It is possible that these discoveries will even overshadow Koolyanobbing. Of course, it is too early to be definite on that point, but even though this new ore may be of good quality and vast in extent, the development of Koolyanobbing now will proceed. As the ore is of premium grade, it will definitely find its place in the furnaces and contribute to the expansion of the whole Australian steel ir> dustry.

So much for the question of the transport of ore. I am in full agreement with the statements which have been made, I think on both sides of the House, relating to the economic nature of rail transport for this heavy bulk traffic. But, as well as bringing to Western Australia the great advantage of a steel works and, as the Prime Minister has said, as well as forming the basis for the greatest expansion that Western Australia has known since the gold rush days, this railway will add significantly, although perhaps not as dramatically, to the growth of Western Australia in many other ways. 1 hope it will be possible to bring such items as fish and timber conveniently from Western Australia to the eastern markets. I hope that the railway will lead also to a considerable development of traffic in the port of Fremantle. I am sure that it will. It is always difficult to be certain or even specific on the details of what will happen in this regard, but the general pattern and picture are fairly clear. This is an artery which will bring new life blood to the whole economy of Western Australia.

Some honorable members will recall, although, of course, not from personal experience, the great efforts which were made by the Western Australian Government towards the construction of the original transcontinental railway nearly 50 years ago. Those who know something about the subject from their reading will understand the present enthusiasm of Western Australians for this new project, although they may find it a little hard to understand why it has not been pressed more vigorously by Western Australia in the immediate past. In addition, this project will bring great financial advantages to the transcontinental railway, which in the future will carry much more traffic than it has in the past. It is one of the links in the chain. We know that the Commonwealth Railways has been running at a profit although it still is running with a very low traffic density. There is opportunity for it to run at a much higher profit. This link will contribute very materially to that end. So there are great advantages all round. I do not regard either the Commonwealth or Western Australia as having obtained the best of this deal. Both governments, and, in fact, the whole of Australia stand to benefit.

After considering the details of the proposal may I make three points: First, I regard with very great pleasure the fact that the bill now before the House makes provision for the development of the rail system in the vicinity of Perth and Fremantle. Provision has been made for marshalling yards, a by-pass and a loop line through Kwinana. I shall not go into the details. I can only reiterate that some years ago when our committee was in Perth and Fremantle we had the advantage of advice from the town planning, railway and other authorities, and we are familiar with the details of the route. We are in agreement with what is being done. One of the things which is wrapped up in this is the new bridge to be built over the river at Fremantle a little higher up the river than the old bridge. This will enable the old bridge to be removed, thus giving to Fremantle harbour the opportunity to expand eastwards up the river. This is very much to be desired. So, the first point I make is that the local arrangements are such as to commend themselves to Western Australian honorable members and to others on both sides of the House.

The second point is that when the line is being constructed I hope proper consideration will be given to the question of the loading gauge. As honorable members know, in most Australian railway systems the loading gauge is down to some 14 feet which means that railway trucks cannot carry high loads. The corresponding figure in the United States is, I think, in the vicinity of 17-ft. 6-in. The additional 3 feet or 4 feet is of crucial importance because it determines whether the piggy-back system of running lorries on to flat top rail trucks can be operated effectively. As honorable members are probably aware, the TransAustralian Railway is one of the few railways in Australia which has no loading gauge trouble. It passes over a stretch of country where there are practically no overstructures and because of this it has proved possible on that line to utilize fully the piggyback technique and to run high loads on rail cars. Coming to the extension of the “ Trans “ line from Kalgoorlie down to Fremantle and Kwinana, for nearly all the way - as honorable members know - there are practically no over-structures and load height therefore is not of practical significance. In the small section which lies to the west of Northam it may well be that a quite small amount of money spent now, in laying out the track so that the height clearance is sufficient, will enable piggy-back traffic to be run right through to Perth and Fremantle. This will be of great advantage to everybody concerned. I suggest that this is one of the things that should be kept in mind when the details of construction are being determined.

The third point I make is that with regard to the line between Northam and Merredin - the narrow gauge line which is scheduled for closure - it might pay to put in a third rail so that that section could carry both narrow and standard gauge trains. I put that not as a conclusion, but merely as something worth thinking about, and I need not elaborate on it. Honorable members from Western Australia, who are familiar with the details of their own railway system, will appreciate the point I have in mind. With regard to future standardization of railways in Western Australia, let me say here and now that unless and until there is a quite considerable re-orientation of the whole outlook towards railways in that State, I feel that not much further standardization will be justified. It may be that there are some lines which can be standardized. If so, let us use the technique of the third rail so that the same track can carry both the narrow gauge and standard gauge trains. I think that in the past we have tended to shy away from this technique. Most of the lines in Western Australia carry such a low density of traffic that it is not really economic to standardize them. No doubt there are exceptions to that, but in the case of these main lines, particularly in the Perth area, which depend upon traffic coming from or going to the east, it may be necessary or desirable to resort to the third rail technique. I commend this aspect of the matter to honorable members for further study. I do not think that in a State like Western Australia, which has a small population, a very extensive railway system and a big area, it is economic to consider standardization on a big scale, at least at the present time. But you could get the limited benefit of at least some degree of standardization by using this third rail technique, which you can apply without disrupting the remainder of the narrow gauge system, and I think this is of the essence of the matter.

I was interested in the remarks of the honorable member for Blaxland (Mr. E. James Harrison) in regard to uniformity. To a very great extent 1 find myself in agreement with him. He was obviously right when he said that the most economic use of a diesel-electric locomotive is to run it right through on the longest possible journey; to make the greatest mileage use you can of it. I agree with that wholeheartedly. I agree also with the honorable member’s contention that we should be thinking of standardizing such things as couplings, wagons and the numerous components which go to make up a railway system. I feel that the proposition ne was putting forward was so correct that it was almost not worth arguing about. It was something which obviously should be done. To this extent I find myself in agreement with him. __ ‘

I do not think it is necessary for the Commonwealth to take over all railways in order that this may occur, and there I think the Deputy Leader of the Opposition (Mr. Whitlam) rather cut the ground from under the feet of the honorable member for Blaxland. He drew attention, quite rightly, to the fact that in Europe and elsewhere there are railway systems which are differently owned and operated - perhaps by different nations - tout which, nevertheless, achieve between them some degree of standardization. I feel that it would be better for the Commonweath to spend more time and effort bringing the States together, taking the initiative and seeing that they come to a co-operative plan of standardization, than to try to take the railways away from the States and assume sole responsibility for them.

As I say, this is a different method of approach, but it does not in any way invalidate the great measure of agreement between me and the honorable member for Blaxland on the need for uniformity of practice throughout the whole of the standard gauge railway system. We may differ as to what is needed to bring this about, but I hope we do not differ “at all as to the necessity for bringing it about. Finally - and I thank the House for its patience - let me say something about the missing link - the 250-odd miles of railway between Broken Hill and Port Pirie. We all feel that it is unfortunate that this matter is at present the subject of litigation. I must be careful to say nothing to prejudice the case which is at present ‘before the courts. I say only that in my view it is essential for the work on this link to proceed. That is made more and not less essential by the bill at present before the House.

This measure will give us a standard gauge railway system between the capital cities except for the missing link between Broken Hill and Port Pirie and a standard gauge spur down into Adelaide itself. I hope also that there will be a standard gauge line from Port Augusta into the new steel town which is to be built at Whyalla. This would be a very short line and one of very little consequence as far as cost is concerned. Whatever the past may be, the Government of South Australia has proposed in relation to the Broken HillPort Pirie line and the spur line a scheme which in my view is a satisfactory and reasonable one. It may not have been officially proposed as yet. It may be just standing in the form of a verbal agreement between the various railways commissioners. But a scheme has been put forward to which, as I understand it, agreement would be given by the New South Wales Railways Commissioner, who is concerned with Broken Hill, and by the South Australian Railways Commissioner, who is the man most concerned, and by the Commonwealth Commissioner of Railways, who represents the interest of this Australian Government.

I shall not go into the details of the scheme, although I have had the opportunity to examine them. It seems to me that, physically at any rate, we now have an acceptable scheme, which should be agreed to by all parties. I reiterate my extreme regret that this matter has become bogged down in the present litigation, and I must be careful to say nothing that is prejudicial to the proper nearing of the matter currently before the court. I can only hope that it will not be long before the matter is resolved.

It is important, of course, if we are to do things in the best and most economical way, that construction should proceed according to plan, and here again I find myself in agreement with some of the remarks made earlier by the honorable member for Blaxland (Mr. E. James Harrison). 1 suggest that it is most economical if you use your construction machinery - not necessarily Commonwealthowned machinery, but also the machinery of private industry - in such a way as to complete one particular job, then move it on to do a corresponding job in some other part of the rail standardization scheme. Such a method would give most value for the least expenditure of money. I repeat that I do hope that this vital mattei relating to the missing link will be resolved as soon as possible, and that we shall be able to get the construction under way quickly so that we may have the complete linking up of all capitals, and an economic transport backbone for the Australian system as a whole.

Mr DUTHIE:
Wilmot

.- Despite the remarks of some honorable members from Western Australia who sought this afternoon to convey an impression to the contrary, the Opposition is pleased to see this big project being put under way. But we do not join in the frilly eulogies indulged in by the honorable member foi Swan (Mr. Cleaver), because certain aspects of this agreement make the halo on the Prime Minister’s head very wobbly indeed. We do not agree with every full-stop and comma in the agreement. We believe that Western Australia will be paying through the nose for this project for a very long time; that Western Australia has come out of this deal second best, as I shall prove later. But we do appreciate the fact that something which has been fought for over the years is likely to be commenced soon, and that at least we shall have a standard rail gauge between Adelaide and Perth.

It is interesting to note that talk of standardization of rail gauges went on for many years in Australia, and the Government which really brought the matter to a head was the Labour Government led by Mr. Curtin. In the fourth year of World War II., that Labour Government decided to do something about the standardization of rail gauges. Despite the fact that we were fighting a war, that Government was prepared, in March, 1944, to appoint Sir Harold Clapp, Director-General of Land Transport, Commonwealth Department of Transport, and formerly Chairman of Commissioners, Victorian Railways, to submit a report and recommendation regarding the standardization of Australia’s railway gauges on the basis of a 4-ft. 8i-in. gauge.

Mr CAIRNS:
YARRA, VICTORIA · ALP

– Who was the Minister at that time?

Mr DUTHIE:

– The man who was then Minister is now sitting on the Opposition side of the table in this chamber. He was the Honorable E. J. Ward. Honorable members on the Government side have not paid the slightest tribute to Sir Harold Clapp for beginning this great work. He went into the matter thoroughly, and made some splendid and far-reaching recommendations covering the whole field of standardization of rail gauges.

The next step in this interesting story of standardization was the bill introduced into this Parliament in August, 1946, a bill based on the recommendations made by Sir Harold Clapp. That bill empowered the then Minister, the honorable member for East Sydney, to enter into negotiations with the State governments for the purpose of securing general agreement on this very important project. But at that time, the States were unwilling to proceed with the work, their main ground for refusing being cost. The only State in which complementary legislation was passed was South Australia, which was more co-operative than either Western Australia or Victoria. Without reading the whole of the document, I point out that the report of the committee of the Federal Parliamentary Labour Party on Rail Standardization, which was ordered to be printed on the same day as the report submitted by the Government Members Rail Standardization Committee in November, 1956, did contain certain recommendations as to finance. Incidentally, on that committee were the present honorable member for Blaxland (Mr. E. James Harrison) and the then honorable member for Stirling, our friend Mr. Harry Webb. On page 15 of the report of the Federal Parliamentary Labour Party’s committee we find this passage relating to finance -

page 2285

FINANCE

That provision is not included in this agreement, and I propose to show, by quoting the remarks of Mr. Hawke, Leader of the

Opposition in Western Australia, just how Western Australia has been led up the garden path in connexion with the financing of this project. The principle of standardization is accepted by all governments, and it has been left to this Government to initiate a standardization scheme by commencing with the line between Albury and Melbourne. But, after all, this Government has been in office for twelve years, and it is only beginning with the work. If Labour had been in office for that time both the AlburyMelbourne project and the Western Australian line would have been started much earlier, and probably would have been finished by now. When a government has been in office for twelve years it cannot take much credit for having decided to carry out those two projects.

The waste, danger, inconvenience and delay resulting from disjointed railway gauges have been demonstrated a thousand times over. Australia is the only country that has a divided, disjointed system of railway gauges. This has been due largely to the bitterness and jealousies between States when they began constructing their railway systems in the last century.

I come now to the time factor, and here I propose quoting from the second-reading speech of the Prime Minister. On page 1850 of “Hansard”, the Prime Minister is reported as having said -

The work entailed is to be carried out by the Western Australian Government, the intention being that it will be completed by 31st December, 1968. In the interest of the more efficient and expeditious completion of the project, it is provided that, except where special circumstances may dictate otherwise, the work will be carried out by the letting of contracts after public tenders have been called.

Now for the time factor. It is horrifying to me to note that in these modern days this work will take seven years to complete. The construction will be at a snail’s pace. Let us look at two other construction projects to make a comparison. As the honorable member for Blaxland (Mr. E. James Harrison) has said, with modern methods that have been tried already in Australia, the time could be cut by half. I have before me, in the report of a Parliamentary Labour Party committee on standardization, the story in brief of the construction of the Commonwealth railway line from Port Augusta to Kalgoorlie. The federal act to implement this scheme was passed in 1907 and provided for an expenditure of £20,000 for a preliminary survey. This survey was commenced in 1908 and completed in March, 1909. The estimated cost of construction of the line of 4 ft. 8i in. gauge from Port Augusta to the Kalgoorlie gold-fields, a distance of 1,063 miles, was £4,045,000.

In September, 1911, a bill was introduced into the Commonwealth Parliament to authorize the construction of this line and the bill became law in the following December. The South Australian Parliament passed the necessary legislation, and the Western Australian Parliament passed implementing and supplementary legislation.

A Railway Construction Department was formed by the Commonwealth Government to carry out the work which was commenced from Port Augusta in September, 1912. The first sod was turned there by the Governor-General, Lord Denham, on 12th September. At the Kalgoorlie end, the Prime Minister, Mr. Andrew Fisher, performed the ceremony. It was a Labour Government which pioneered this project. Between 1st September, 1913, and 17th October, 1917 - the date on which the eastern and western divisions met at 621 miles 58 chains from Kalgoorlie - a total mileage of 1,036 miles 35 chains was completed. What a magnificent performance! From 1913 to 1917, exactly four years and one month, over 1,036 miles of railway line was constructed.

The project covered by the bill before the House is for the construction of 528 miles of line and the work will take seven years. No wonder Western Australia is cutting up at the interest it will have to pay on a project that will be spread over such a long time. I cannot understand why the work should take so long. With all our modern methods of construction, we are going to take twice as long to build this line as it took to build the line twice as long from Port Augusta to Kalgoorlie almost 50 years ago.

Mr DUTHIE:

– They must propose to do it by hand, with shovels and barrows. That is the only way to explain the slow pace. Let me give another illustration. The Canadian-Pacific Railway line was built through the Canadian Rocky Mountains in the 1860’s. I travelled over this line in 1952. They had to cross rivers and excavate dozens of tunnels. They built 650 miles of railway in five years through the most dreadful country in Canada or the whole of America. This is one of the finest railways that has ever been built anywhere in the world. Yet they built it in five years just 100 years ago. The proposal before us is to build 528 miles of railway and it will take seven years. That is a disgrace to our planners and to the parliaments which agreed to such a snail’s pace in these modern days. 1 turn my attention now to the financial side of the project. Honorable members from Western Australia have become eulogistic about this scheme. The total cost will be ?41,210,000. I have a report of a speech made by Mr. A. R. G. Hawke in the Western Australian Parliament on the second reading of the bill to approve the agreement between the Commonwealth and the State. It is a speech that twists the haloes resting on the heads of Government supporters. Mr. Hawke pointed out that seventeen-twentieths of the total amount required, or approximately ?34,750,000, would be provided by the Commonwealth Government and three-twentieths or approximately ?6,250,000 by the Western Australian Government. Mr. Hawke said -

If that ratio were to remain the permanent all-time division of the capital cost as between the Commonwealth and the State Governments, we would have all the reason in the world to be deliriously happy. Unfortunately for Western Australia, that is not to remain the permanent situation at all.

The agreement goes on to provide for the State, from its Consolidated Revenue Fund, to pay back to the Commonwealth firstly over a period of SO years 3/17ths of the total amount provided initially by the Commonwealth Government which is 3/17ths of ?34,750,000. Under this agreement the State is bound, therefore, to repay over 50 years ?6,150,000 and to pay interest during the period at the ruling bond rate.

A succeeding provision in the agreement lays it down that the State, again from its Consolidated Revenue, must pay back to the Commonwealth 7/17ths together with interest at the ruling bond rate. I have worked out that these repayments by the State amount to an approximate figure of ?20,500,000. So the initial cost plus the repayments which Western Australia would have to make to the Commonwealth Government over a period in all of 50 years would approximate ?26,750,000.

Mr Bryant:

– This sounds like Ned Kelly.

Mr DUTHIE:

– If Ned Kelly came back now he would be a gentleman. Mr. Hawke went on to work out the total amount of interest that the State would pay to the Commonwealth over 50 years and estimated that it would be approximately ?30,000,000 and he said -

However, the Treasurer-

That is the State Treasurer - this afternoon in answer to a question which . had placed on the notice-paper gave the Hous a figure of approximately ?20,000,000. I do no propose at this stage to argue with the Treasure about the figure. I am quite prepared to accep the figure which he has given to the House for the purpose of my argument.

Let us base it upon the figure of ?20,000,000. It will be seen that not only will Western Australia have to pay approximately ?27,000,000 of the estimated total capital cost of ?40,000,000, but will have to pay in addition, by way of interest payments to the Commonwealth, at least ?20,000,000 which, in combined total, makes the cost to Western Australia ?47,000,000.

Mr. Court: It is purely academic of course, because in reality it costs us nothing.

Mr. Hawke; We have heard this sort of approach from the Minister for Railways before

Mr. Court: Don’t fob that one off!

Mr. Hawke: and I suggest to him that he wait awhile until I deal further with this subject.

Mr. Court: We hope you will deal with that one.

Mr. Hawke: As I was saying, the total cost to Western Australia, under the headings of capital and interest payments, will approximate ?47,000,000 finally. Even the Minister for Railways will not, I think, try to talk his way around that conclusion. The Commonwealth Government will provide only finally ?14,000,000. Ii we take into consideration - which 1 think we might be entitled to do - the fact that the State will pay ?20,000,000 in interest to the Commonwealth Government, we could say that the Commonwealth Government finally will make no contribution at all on a financial basis, but would make a worthwhile profit out of the whole transaction.

Mr. Craig: But the Commonwealth wouk have to pay interest on the money lent to Western Australia.

Mr. Hawke: I think the member for Toodyay might be a bit ahead of himself . . .

Mr. Court: You have to answer the Minister for Railways yet. It is purely academic.

Government supporters in the Western Australian Legislative Assembly were trying to side-track Mr. Hawke, but he would not be side-tracked. His figures are astounding. He went on -

I was going to say that so far as I am aware the Commonwealth Government will make its initial capital contributions from the taxation which it will raise from the people and the industries of Australia. I do not think the Commonwealth Government will borrow money to make it available to assist in the capital construction of these railway projects in Western Australia. Should the Commonwealth Government raise all of its contribution from taxation - as I am almost sure it will - the only cost to the Commonwealth Government of raising that money will be the cost of collecting the money from the people of this country.

Mr. Hawke pointed out that the taxpayers of Western Australia would have to shoulder a tremendously heavy burden in connexion with this project. Then an interesting discussion, involving a number of interjections, took place concerning the Commonwealth Grants Commission. Mr. Brand, the Premier of Western Australia, suggested that the commission could make up to Western Australia the amount that that State would have to pay in interest to the Commonwealth. Mr. Hawke was Treasurer of Western Australia for six years, and he knows how the commission works. He knows that it has a specific charter. In the light of his knowledge, he very rightly said -

I have seen no guarantee of any kind by the Federal Government to the State Government in this matter.

The report of Mr. Hawke’s speech continues -

Mr. Court: It is written into the agreement.

Mr. Hawke: ft is not written into the agreement. It is useless for the Minister for Railways to say that it is written into the agreement.

Mr. Court is the Minister for Railways. The report goes on -

Mr. Court: Once the words “consolidated revenue “ were written into the agreement it entirely sewed the situation up so far as this State was concerned.

Mr. Hawke: I completely refuse to accept that. It does not sew the situation up at all.

Mr. Court: You have been Treasurer for six years. You know it does.

Mr. Hawke: I say that noone can bind the Commonwealth Grants Commission in any direction,–

The Minister for Shipping and Transport (Mr. Opperman) knows that - let alone in the direction in which the Minister for Railways now blatantly suggests. The Commonwealth Grants Commission works under its own charter, not under the charter worked out by the Minister for Railways. The Minister for Railways might be able to bulldoze some people around, but he will find himself up against an altogether awkward situation if he starts trying to bulldoze the members of the Commonwealth Grants Commission around.

Mr. Hawke rightly pointed out that the Commonwealth Grants Commission could take into consideration the cost to Western Australia of interest and other charges in respect of this project, but could not guarantee to the Prime Minister or the Government of Western Australia that it would do so. All the details have to be looked at and the commission, of its own free will, will decide whether it will compensate Western Australia for such expenditure. This applies not only to Western Australia, but also to Tasmania. These are the two claimant States.

After quite a barrage of interjections across the floor of the Legislative Assembly chamber, Mr. Hawke said -

  1. . no-one can say with certainty how much of this expenditure necessarily to be incurred by the State under the terms of this agreement will be returned to the State by way of compensation payments from the Commonwealth Parliament as a result of recommendations which the Grants Commission would make from year to year.
  2. . Not even the Prime Minister would be entitled to bind the hands or decide the policy of the Grants Commission.

I think that the Prime Minister will agree with him about that.

When one analyses the situation financially, as Mr. Hawke has done, one sees that, at the end of 50 years, the Commonwealth will have got out of the scheme for nothing and the poor old people of Western Australia will have paid ?47,000,000. I and other Opposition members cannot see in that situation anything about which to eulogize this Government. The Western Australian Government, naturally, is glad that the Commonwealth is helping in the initial stages. I do not think that Western Australia is to begin making repayments until the project is finished. The Minister will correct me if I am wrong in that. I admit that such a provision is excellent. But let government supporters not kid themselves that, in this issue, the Commonwealth Government is playing the part of Father Christmas to Western Australia. It is not. It will get all its money back. This Government willlend only moneys from the

Consolidated Revenue Fund, which cost it nothing, except for the salaries of taxation officers who collect these funds in taxes.

The Minister for Shipping and Transport certainly does not epitomize Father Christmas in this matter. He does not look to me at all like Father Christmas as he sits at the other side of the table. However, I congratulate him on having brought this agreement to fruition and having cleared the way of difficulties in order to make a start on the project. Changes in the agreement may have to be made when it comes up for review in 1966, Mr. Speaker. The contract between the State Government and the Federal Government may have to be varied. In any event, as the agreement stands now, the people of Western Australia will be paying for the scheme for SO years and, at the end of that time, the Commonwealth will have cleared its debts in relation to this project. So far as I can see, that appears evident on the basis of the detailed analysis made by Mr. Hawke, the Leader of the Opposition in the Western Australian Parliament.

In conclusion, I should like to say one thing, Mr. Speaker. A lot of Commonwealth money is being spent on the standardization of rail gauges. That money is obtained from all the taxpayers of Australia. I should like the Minister to listen particularly to these remarks. The standardization of the gauge of the railway between Albury and Melbourne will cost a great deal, as will the standardization of the railway between Kalgoorlie and Perth, together with the provision of two or three standard-gauge branch lines to iron ore deposits. Much Commonwealth money is being spent on the mainland on the standardization of rail gauges. I ask: Has the Government considered compensating Tasmania, my State, for its proportional contribution to the total amount of Commonwealth funds being spent in this way? Tasmania is not benefiting, and never will benefit, from such projects. The railways in that State are of 3-ft. 6-in. gauge and, so far as I know, there is no intention of ever increasing the gauge to 4-ft. 8i-in. Tasmania is the only State that will not benefit from expenditure made by the Commonwealth in the standardization of rail gauges.

A measure was introduced in this Parliament in 1946 with respect to the standardization of rail gauges, but those were the early days of this idea, and nothing further was done before Labour was defeated at the election in 1949. I think it was suggested then that Tasmania deserves some compensation. I certainly consider that we in that State deserve some kind of financial compensation for the contribution that we make on a proportional basis. We could very well spend the money on our own State railway system on maintenance, new locomotives and new rolling-stock.

Mr Jess:

– Would that work both ways?

Mr DUTHIE:

– We are getting some assistance from the Commonwealth Grants Commission at present, of course. It may be that the commission could consider this aspect of the matter and see whether Tasmania ought to be compensated for the share that it contributes to the funds out of which rail standardization works are financed, those being works which will never benefit Tasmania. I thank you for your indulgence, Mr. Speaker.

Mr OPPERMAN:
Minister for Shipping and Transport · Corio · LP

– Mr. Speaker, it is a pity that the honorable member for Wilmot (Mr. Duthie) concluded a series of quite constructive speeches by Opposition members on a rather grudging note by attempting to put a damper on the arrangements made between the Commonwealth and Western Australia. All I can say about the final plea made by the honorable member for Wilmot on behalf of Tasmania is that if his feelings on the matter are a true reflection of Tasmania’s feelings, that State has lost its sense of proportion. Let me remind the honorable member that without any cost to Tasmania the “ Princess of Tasmania “, “ Bass Trader “, the “ North Esk “ and “ South Esk “, with the necessary terminals for their operation, were provided for the benefit of Tasmania, and are of much more advantage, I am sure, to Tasmania than acceding to this extraordinary submission for the standardization of its railways would be. I think it is rather a pity that the debate is ending on that note, because even though other speakers in the debate did direct attention to various factors in the agreement with which they were not satisfied they were not quite so grudging in their attitude towards it as the honorable member was.

As a person who lived in Western Australia before the present line from Perth to Kalgoorlie and over the Nullarbor Plain was laid down, and as one who has travelled on it since, I can assure honorable members that I derive tremendous satisfaction and extreme pleasure from this modern development in standardization. I feel that the present project results from the alliance of a great company - Broken Hill Proprietary Company Limited - and a great State on a great project. Let us face the fact that Western Australia has always been conscious of its isolation. Between it and the more populous parts of the Commonwealth have always lain thousands of miles, much of it of bad country. For a long time, it had just a shipping service to connect it with the rest of Australia, and despite the remarkable post-war growth in other communications Western Australians have always felt the need for an uninterrupted rail link with the eastern States. I know that Western Australia has felt a sense of isolation from the rest of Australia which even Tasmania, with the Bass Strait between it and the mainland, has not had. Now, in one dramatic and exciting move, Western Australia is not only to have this rail link, but is to have tremendous industrial development in its own right - a development which must attract subsidiary industries and lead to further development. This will give Western Australia a heavy industry component which will put it more in balance with the other States.

Before I deal with some of the matters which have arisen during the debate I wish to say that, as a Minister who has been fortunate enough, and privileged enough, to have experience of the progress towards this present satisfactory situation, I think I should be entitled to refer to some of the factors which have led up to the present position, and which I have personally observed. One has undoubtedly been the outstanding enthusiasm shown by honorable members from Western Australia, who have made constant submissions on behalf of their State. The very isolation of Western Australia has developed among Western Australians a great spirit. They have this link between themselves, and they take every opportunity to advocate very strongly anything that will be of benefit to their State. They have been unremitting in this way. The Western Australian members of the rail standardization committee, which has been led by the capable member for Mackellar (Mr. Wentworth), have proved to be splendid representatives of their State. Their interest has been consistent and unremitting. This has been made doubly evident by their speeches here to-day. It is obvious that they have a full realization of the benefits that will accrue to Western Australia from this project.

I wish to refer now to what I regard as a first-class example of the right kind of submission presented in the right way. I am referring to the prompt and efficient steps taken by the Western Australian Government in this matter, and to the very cordial relationships that have obtained right throughout the negotiations between the Commonwealth and Western Australia. When the triumphant conclusion of such an agreement comes up at this particular stage of the life of a parliament, the Opposition naturally thinks that it would not do to let it go through as something that had no defects in it. So the Opposition has made some endeavour to cast doubt on the virtues of the financial arrangements. I should like to emphasize that when two parties can successfully negotiate an agreement with all the complicated details that this one has, inwhich not only developmental work but also rail standardization is involved, and conclude it on an equitable basis, we have reached a most satisfactory standard of Commonwealth-State relationships.

From the time it became obvious that these iron ore deposits were available, and that the railway had to be laid down to carry the ore there began the preparation of the most careful submissions regarding the quantity of ore that would have to be carried, and regarding the estimated rail costs. I found these most impressive. The Commonwealth’s reactions to the proposals have been described to-day as being very quick in comparison with the years and years that have been spent on other standardization projects. That the Commonwealth’s reaction in this case has been quick stems from the fact that the people concerned knew what they were doing, knew what the ultimate benefit would be for their State, and had prepared very careful submissions. The ex-Premier, Mr. Hawke, has made some remarks about the project. I should like to know whether, if he were now in the position of having this Commonwealth offer made to him, he would adopt the same attitude towards it as he is now adopting on the purely political side.

One factor on the financial side which has been overlooked is that the East Northam to Midland via Toodyay line through the Avon Valley, on a 3-ft. 6-in. gauge, will be commenced as one of the early projects in this undertaking. Linking, as it will, with the present 3-ft. 6-in. Western Australian network it will soon begin to earn money for the Western Australian Railways. This is one of the advantages that will be derived immediately from this project.

The honorable member for Swan (Mr. Cleaver), who is so interested in this project, mentioned the amount of recovered equipment and surplus rolling-stock as an advantage. In addition, there is the amount of £2,900,000 which will be derived from the disposal of the 3-ft. 6-in. gauge line. I might also mention that repayment of the State’s share of the £26,800,000 cost will be spread over more than 50 years. There will also be reimbursements to the State as a result of the business-potential nature of the line being laid down. I want to point out that this project will be a payable proposition. One must remember that revenue will be earned from the carriage of ore over the line. This apart altogether from any considerations of national development. As I said at the outset, this scheme has been looked on as a good deal which will be satisfactory to both parties. There have been no recriminations, and both sides have considered the arrangement a businesslike one which will be mutually advantageous.

The honorable member for Blaxland has had, as we all know, a long experience in railway matters, and because of his extensive experience we .listen to ‘him with interest when he speaks on subjects connected with railways. He referred, as did the honorable member for Wilmot, to the finalization of the agreement in 1968 as though that happened to be a defect. If those honorable members had read the second-reading speech of the Prime Minister (Mr. Menzies), as they should have done, they would have seen that the entire undertaking is based on the revenue that will be gained from the carriage of iron ore. The Prime Minister said -

Conditional upon the construction of a standard gauge railway for the carriage of iron ore, an agreement was concluded late last year between the Western Australian Government and the Broken Hill Proprietary Company Limited for the establishment of an integrated iron and steel industry allied with the development of the iron ore deposits at Koolyanobbing. In that agreement the Broken Hill Proprietary Company Limited undertook, by the end of 1968, to set up at Kwinana a blast furnace with a capacity of 450,000 tons per annum of pig iron . . .

It is obvious that the line will not reach full earning capacity until 1968. lt would not be reasonable to go ahead and finish the line and have it lying idle, with all its locomotives and rolling-stock, before it could earn revenue. If we did this we would be open to censure. This scheme is not only for the purpose of developnig and integrating the iron and steel industry; its purpose is to integrate the railway with the iron and steel industry. I think that answers the point made by the honorable member for Blaxland and the honorable member for Wilmot.

Both the honorable member for Blaxland and the Deputy Leader of the Opposition (Mr. Whitlam) referred to the need for coordination in the provision of rolling-stock and also in railway management. Let me direct attention to the fact that this point has been covered in paragraph 18, Division IV of the schedule, which says -

The parties affirm the principle that there should be collaboration between them and their respective railway authorities regarding the standards of design and construction and the operation of rolling stock with a view to facilitating efficient inter-system traffic and co-ordinated services.

You could not get a better provision for the future than is contained in that paragraph.

I would like to emphasize the fact that in all the negotiations and discussions that have necessarily been conducted there has been the closest and most friendly cooperation and co-ordination between the State and Commonwealth authorities. Already it has been agreed that the experience of the Commonwealth Railways will be placed at the disposal of the Western Australian Government. This experience is by no means inconsiderable. Those who have read the report of the Commonwealth Railways will appreciate that the progress it has made over recent years demonstrates that it can efficiently conduct a railway specializing in long hauls and return a profit on its operations. I believe that the paragraph I have just read from the agreement will ensure co-ordinated operations. No one can quarrel with the proposition that co-ordination is desirable if we are to achieve efficiency.

The honorable member for Stirling (Mr. Cash) raised a question concerning the services provided by the Commonwealth Railways. This is not really relevant to the measure we have before us, although, of course, when standardization of gauge is achieved we will have to turn our attention to questions of this kind. The Commonwealth Railway services are at the present time subject to peaks and lows, and, just as with the “ Princess of Tasmania “ in holiday periods-

Mr Haylen:

– Is she subject to highs and lows?

Mr OPPERMAN:

– Yes, as the honorable member for Parkes suggests, the “ Princess of Tasmania “ is subject to highs and lows, but not, perhaps, to the extent that the honorable member might think if he has not travelled on her, because she is fitted with very efficient stabilizers.

Mr Bryant:

– Will the train run as fast as you ride a push-bike?

Mr OPPERMAN:

– I cannot allow these extraneous remarks on the subject of transport to divert me from my main theme.

Mr Haylen:

– Perhaps it will be a ghost train?

Mr OPPERMAN:

– I do not think anybody who has travelled on the east-west line could refer to the train as a ghost train. There may be some State lines that have trains that could be so described, but not the transcontinental line.

During the last few years we have provided more and more express trains. There are now five trains each week, equipped with modern air-conditioned rolling-stock which is equal to any in Australia and, we believe, comparable with the best to be found overseas. However, at peak periods all the rolling-stock and the locomotives are taxed to their limit. If extra carriages and diesel-electric locomotives were provided they would have to remain idle except in peak periods, and this would involve unnecessary expense. As the honorable member for Blaxland said, diesel-electric locomotives must be kept in constant work if we are to get the most efficient results from them. However, attention is being given to the matter raised by the honorable member for Stirling. We are considering the possibility of running six trains a week, after negotiations with the Western Australian and South Australian Governments.

I want to make one point in conclusion. During a visit I made to Western Australia in February I found, as has been stated by one or two of the Western Australian members of this Parliament, that people in that State seemed to look on this proposition as a dream that might not be fulfilled. I found it necessary at times to declare most emphatically that although a decision could not then be made, because of the negotiations that had to be conducted and the details that had to be ironed out, the Commonwealth Government was firmly of the opinion that if it was found to be a worth-while proposition the standardization project would be carried out. I would like to point out now to those in Western Australia who may have doubted the genuineness of the Government’s intentions, that this bill is tangible evidence of the Government’s sincerity.

Question resolved in the affirmative.

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

Bill - by leave - read a third time.

page 2292

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL (No. 2) 1961

Second Reading

Debate resumed from 15th August (vide page 79), on motion by Mr. Harold Holt -

That the bill be now read a second time.

Mr. SPEAKER (Hon. John McLeay).Is it the wish of the House that the suggestion of the Minister be adopted? As there is no objection, this procedure will be followed.

Mr CREAN:
Melbourne Ports

.- The bill in its strict interpretation deals with the exemption from sales tax of certain goods. The Opposition does not oppose the hill in its particular application because we believe that ultimately all goods should be removed from the field of sales tax. However, we criticize the smallness of the exemptions and the niggardly extent of the reductions made in the resolution, which -we are considering with the bill. As all honorable members know, goods are subject to sales tax unless they are specifically exempted. Various articles are classified and varying rates of tax imposed upon them. Sales tax in the Budget for this year is designed to collect about £150,000,000, and the estimated cost to revenue of the reductions now being made, is £11,200,000 in a full year and £8,900,000 in the remainder of this financial year.

Large sections of the community had hoped that the Government would have gone much further than it did and would have exempted other items from sales tax. In particular, they had hoped that sales tax would have been removed from foodstuffs. The rate of tax on foodstuffs is 2i per cent. The Australian Food Manufacturers’ Association estimated that sales tax applies to gross sales amounting to £200,000,000 a year. If we apply an average sales tax of 12i per cent.- - Mr. SPEAKER. - Order! I ask the honorable member not to go too deeply into the problem of foodstuffs. That is not covered by the bill.

Mr CREAN:

– No, but we are, after all, considering the resolution at the same time. As I said earlier, the bill provides for certain specific exemptions, but the resolution deals with the reduction of rates. My suggestion is that instead of reducing these rates, other rates should have been eliminated.

Mr SPEAKER:

– The honorable member should not get too far from the matters “before the House.

Mr CREAN:

– I suggest that the matter I have raised should come within the province of the debate. However, in brief, the Australian Food Manufacturers Association intimated that if sales tax on foodstuffs was eliminated, the saving to the average family would be at least 5s. a week. The Government has chosen not to remove the tax from household furniture but to reduce it from the present rate of 8J per cent, to 2i per cent. If there was any virtue in changing the rate, there seems very little canon for stopping at 2i per cent. Why did the Government not go the whole distance and remove the tax altogether? The Government seems to be adopting a kind of yo-yo approach. It is unrolling the string so far but leaving a little bit of string so that it can get the yo-yo back to the same position or even higher, if it wants to do so. Let us say that the price of a piece of furniture is £100. The sales tax component would have been £8 6s. 8d. Under the new rate, it will be £2 10s. But why not go the whole distance and remove the tax? It seems that the Treasury has adopted a cautious approach. It apparently believes that the boom, which it thought existed in the past and which it has now pricked, may suddenly re-emerge. In this situation, it would be handy to be able to re-impose the sales tax at the same rate or an even higher rate.

I would like to direct the attention of the House to a communication I have received from a person in Queensland. I will not mention his name and in the interests of the manufacturer involved, I will not give the name of the washing machine. The letter reads -

I wish to advise that after reading in the paper where the Treasurer has brought down his budget and made concessions in relation to sales tax on different commodities including furniture and furnishings which states a reduction from 8i% to 24,% I would like to point out to you what is happening here in Townsville regarding this announcement of a 6% reduction in sales tax on furniture, furnishings and washing machines etc.

I can speak on the position in relation to a washing machine which prior to this announcement was priced at £226 16s. - here in Townsville and with a reduction in sales tax of 6% would mean that it would be reduced in price by approximately £13, making the cash price here in Townsville £213 16s. whereas I have been informed to-day by the retailer that this particular washing machine . . . will only be reduced by £5 5s.

When I questioned the salesman on this matter he replied by saying that . . . who are the wholesalers of this machine, have advised all retailers that the 6% reduction in sales tax will only affect the wholesaler buying it from the manufacturer and the full 6% would not be passed on to the consumer, but only one-third of the reduction, and on the 1st September they have announced the price of this particular machine would go up by 24% and would eventually come back to its present price of £226 16s.

So, you can see the way it has been put in the paper has grossly misled the people in the street regarding the statement made by the Treasurer in relation to sales tax reduction.

I would like you, if you see fit, to raise this question in the House when you are attacking the Treasurer’s budget next week. I am speaking with experience because it is I who is buying the machine mentioned and I am quoting exactly what the retailer has told me in relation to the sales tax reduction mentioned in the paper.

This involves a real difficulty. At times we argue about the incidence of tax and whether, when a particular tax is imposed, it affects the retail price by a like amount, or whether the price is increased on a “ mark up “ basis which inflates it by more than the increased tax. I suppose that a fair margin of profit is allowed as between the manufacturer and the retailer who distributes the article finally to the purchaser. This margin of profit is increased still further because no doubt most of the sales of the kind now under notice are on terms and not on a cash basis. If a reduction of 6 per cent, in the sales tax on a washing machine is made, the former price of £226 16s. should, to all appearances, be reduced by something like £13. The price should not be jacked up.

When announcing the reduction in sales tax the Treasurer’s avowed intention was to help to stimulate sales in this field. Sales will not be stimulated if unscrupulous dealers take advantage of the reduction in sales tax to inflate their prices. The whole argument of those who oppose sales tax is that it involves an increase in prices; that it tends to reduce consumption; that it affects the demand for other articles because more must be paid for the articles which carry sales tax and this means that the purchaser has less money left to buy other things; and finally, that it affects the flow of production and employment generally. The Treasurer at least should make some inquiries into the charge which has been made by the person in Townsville whose letter I have read. 1 am prepared to give the Treasurer the names of the person and of the firm concerned. There may be an explanation for the action which the retailer took on this occasion, and I am sure that the Treasurer has no desire to protect the unscrupulous, but at least on the surface it is hard to understand how the cost of a washing machine on which a 6 per cent, reduction in sales tax has been effected, should be higher than it was before the reduction in tax.

The Opposition’s views on sales tax are well known. We believe in its ultimate elimination. We believe that there is no logic whatever in the principle of taxing certain items. The Government seems to be far more concerned these days with endeavouring to reduce the consumption of ice cream than in the devouring of one ice cream company by another. That is the kind of problem involved in this question of sales tax. We offer no objection to the bill because it removes one or two minor items from the field of taxation. At least in relation to household furnishings the Government has gone some way towards eliminating sales tax although one may feel sceptical about the caution displayed in reducing the tax from 8i per cent, to 24 per cent. If a case was made to reduce the tax to that extent, the tax would be better removed altogether. I offer no further comment at this stage on these measures.

Mr THOMPSON:
Port Adelaide

– I want to make a few comments in relation to what the honorable member for Melbourne Ports (Mr. Crean) has stated. He referred to the reduction in sales tax on a washing machine which, apparently, resulted in the price of the washing machine being increased. The difficulty is this: If a person goes into a store to buy a washing machine - I am not referring now to the store at Townsville which was mentioned by the honorable member for Melbourne Ports - that person does not know the amount of sales tax included in the cost of the article. The retailer does not specify the amount. That is a matter which should be cleared up now. Some stores write up the cost of an article by 33$ per cent, and even 50 per cent. When deciding on the retail price of an article they add to the manufacturer’s price the amount of sales tax plus their write up, which may be regarded as their margin of profit. If 2i per cent, sales tax is added to the price of a washing machine costing, say, £100, the retail price would be £102 10s. But the purchaser pays not only the sales tax but also the 33i per cent, of 50 per cent, write up on the original cost of the machine plus the sales tax. If the article is sold on terms, very likely an additional percentage is added as compensation for the period of repayment. I have raised this matter in the House on several occasions. There should be some way of knowing the amount of sales tax which is included in the cost of the machine.

Under the system which operates to-day sales tax of 30 per cent, is added to the price of a motor car. When a person inquires what a motor car will cost he is told that the price is so much plus sales tax, the amount of which is specified. The purchaser knows the exact amount he is paying in sales tax. If a motor car costs £1,000 one would expect the sales tax to be £300, but that is not always the case. It may be only £250. There is a simple explanation for this. The sales tax is added to the price which the manufacturer or importer charges the agent for the motor car. But the purchaser who buys it from the retailer must pay also the margin of profit which the manufacturer or importer allows the agent to make. This could be as high as £150. This process is completely covered up under our present system, whether the article be a washing machine, household furniture, a motor car or anything else on which sales tax is payable. The purchaser does not know how much profit is being made by the seller because the seller writes up on the manufacturer’s price a margin of profit for himself and then adds sales tax. The purchaser never knows how much of the purchase price represents sales tax.

This may be some part of the explanation for what happened in the case to which the honorable member for Melbourne Ports has referred. I do not know whether the Government can direct that the amount of sales tax must be shown on the price tag on an article, but I do know that if such action were taken people would know how much sales tax they were paying. For years, particularly during the period of office of the

Labour Government, the grocer would tell a person who complained about the increase in the price of groceries that the Government in Canberra was responsible for it. We do not hear that explanation these days. The retailer would never show on either the article purchased or the bill the amount of sales tax paid. Instead, very often when he was inflating his profits he attributed his higher prices to sales tax and so blamed the Government. If the Government must impose sales tax the amount of tax should be stated on the account when the goods are purchased. We know that this could not be done with minor items such as ice creams, because there is no sale docket, and in any case the tax is only a penny or a halfpenny, but when there is a substantial purchase, and the sales tax runs into many pounds, the amount of tax should be disclosed on the account so that the purchaser may know what he is paying, and perhaps, how much profit the seller of the goods is making.

It is difficult to calculate the amount of sales tax that is charged on an item even if the percentage rate is known. For instance, when the sales tax on motor cars was increased from 30 per cent, to 40 per cent, calculation of the amount of tax paid on, say, a Holden, was not simply a matter of deducting 30 per cent, from the original retail price and then adding 40 per cent. The only way to determine the figure was to work back to the original wholesale price without sales tax.

I can quite understand why the person concerned wrote the letter to the honorable member for Melbourne Ports (Mr. Crean). He would have no idea of how the sales tax is worked out. As my friend, the honorable member for Melbourne Ports said, 2i per cent, sales tax is only 6d. in the £1, and when you consider the cost of collecting this small amount as well as the cost to the storekeeper of keeping records, the whole thing becomes ridiculous. Clearly the result is not sufficient to justify the tax. I think it should be removed.

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.

SALES TAX BILLS (Nos. 1ato 9a) 1961.

In Committee of Ways and Means: Consideration resumed from 1 5th August (vide page 80), on motion by Mr. Harold Holt -

  1. That, from and including the sixteenth day of August, One thousand nine hundred and sixtyone, the rate of sales tax . . . (vide page 80).

Question resolved in the affirmative.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Hulme and Mr. Townley do prepare and bring in bills to carry out the foregoing resolution.

Motion (by Mr. Hulme) agreed to - ‘

That so much of the Standing Orders be suspended as would prevent the questions in regard to the first and second readings, committee’s report stage, and third readings being put in one motion covering several or all of the Sales Tax Bills Nos. 1a to 9a, and the consideration of several or all of such bills together in a committee of the whole.

Bills (Nos. 1a to 9a) presented by Mr. Hulme, and passed through all stages without amendment or debate.

page 2296

BILLS RETURNED FROM THE SENATE

The following bills were returned from the Senate: -

Without amendment -

Cellulose Acetate Flake Bounty Bill (No. 2) 1961.

Without requests -

Customs Tariff Bill (No. 2) 1961.

Customs Tariff (Canada Preference) Bill (No. 2) 1961.

Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Bill 1961.

Customs Tariff (New Zealand Preference) Bill (No. 2) 1961.

Excise Tariff Bill (No. 2) 1961.

Customs Tariff (New Zealand Preference) Bill (No. 3) 1961.

Sitting suspended from 5.54 to 8 p.m.

page 2296

COAL LOADING WORKS AGREEMENT (NEW SOUTH WALES) BILL 1961

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 New South Wales with respect to certain coal loading works.

Bill presented, and read a first time.

Second Reading

Mr MENZIES:
Prime Minister and Minister for External Affairs · Kooyong · LP

– by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to obtain the approval of Parliament to an agreement between the Commonwealth and the State of New South Wales providing for financial assistance to the State towards the cost of installing improved coal loading facilities at the ports of Newcastle, Port Kembla and Balmain. This project is one of the major State works to which I have referred before as being projects which should make a significant contribution to the promotion of increased export earnings. Increased and diversified exports are essential.

The export of coal overseas from New South Wales has expanded notably in the last three years and is already making an important contribution to Australia’s balance of payments. During 1960-61, over 1,800,000 tons valued at about £7,400,000 were exported through the three ports concerned in the present project. The exports were shipped mainly to Japan, to meet the requirements of that country’s rapidly growing industries. There are good prospects of a further substantial increase in the trade. Forecasts based on studies of Japan’s future coal requirements and discussions with Japanese industrialists indicate that coal exports from the New South Wales ports could increase to £12,000,000 per annum within a few years and to over £16,000,000 per annum in this decade. These exports will be possible and, I think, probable without prejudicing in any way the needs of the Australian steel industry. In addition to the valuable export earnings which can be expected, the New South Wales coal industry and the coal-mining districts should benefit directly in many ways from the wider market for New South Wales coal.

The expansion in coal exports which is in sight cannot materialize, however, unless the facilities for loading coal at the ports are improved and the improvements are completed in the shortest practicable time. The trade is very competitive. The overseas buyers might turn to other sources for their coal requirements if they thought that the New South Wales ports would not be able in a few years’ time to provide adequate and economical facilities for coal shipments. Of primary importance is the need to deepen the harbours and berths to receive the larger vessels now coming into use in the coal export trade. Larger vessels offer significant freight advantages. Coal exports are expected to be carried increasingly in ships of 25,000 tons capacity and upwards as compared with the present 10,000 to 12,000 tons. Equally important is the need for modern equipment at the wharfs, capable of loading coal at reasonably fast rates, so that the full benefit of larger ships can be gained through quick turn-round and reduced harbour and wharfage dues. Faster loading equipment at the wharves needs, in turn, adequate storage and access facilities to maintain the supply of coal to the loaders.

I am happy to say that the New South Wales Government has a full realization of the problems associated with the expansion of coal exports and the trend towards larger vessels. For some time it has been studying the prospective volume of the trade and planning the facilities required to handle it. The maintenance and development of ports is a State responsibility and the Commonwealth Government has no intention of intruding into State rights and responsibilities in this field. In the present case, however, the expansion of exports in prospect was sufficiently important for the Commonwealth Government to believe it had an obligation to inform itself about the progress being made by New South Wales and to ascertain whether there was any way in which the Commonwealth could help in the carrying out of the project.

It became apparent during the discussions which took place with the New South Wales Government that the Commonwealth could make it possible to reduce materially the time taken to complete the work. Without outside financial assistance, New South Wales could not undertake to construct the works at all three ports simultaneously, lt would be necessary to spread out the works over a period of about six years, and to complete some sections of the total programme before starting on others. When I say that, I do not say it critically. I think that was a just estimate by the New South Wales Government.

Even this programme could have been delayed for financial reasons. Financial assistance from the Commonwealth, on the other hand, would make it possible to compress the time-table by removing financial obstacles to the completion of the port facilities in the shortest time practicable on engineering and other physical grounds. This is estimated at three to four years, and the shorter construction period could make, and I believe will make, a significant difference to Australia’s ability to secure favorable export contracts.

The outcome of the discussions between the Commonwealth and the State was a formal submission by the New South Wales Premier of estimated costs and of proposals concerning the way in which Commonwealth financial assistance might be put to best use. On the basis of his submission and the detailed knowledge of the programme which had been gained during the discussions, a Commonwealth offer was formulated and was accepted by the State.

The main features of the assistance agreed upon were described in a statement which I issued on 29th August. The New South Wales Government undertook to ensure that a programme of work, involving the spending of some £10,660,000 on three harbours, would be carried out as expeditiously as practicable and that the funds necessary for that purpose would be provided as required. The total programme includes the deepening of harbours and the provision of deep water berths as well as the installation of coal loading plant and related works. The Commonwealth, for its part, undertook to provide financial assistance to New South Wales in respect of the coal loading plant, including the associated wharfage, storage, road and rail facilities, up to half the estimated cost of the coal loading works, that is, up to an amount of £2,650,000. The Commonwealth assistance is to be provided on a £1 for £1 matching expenditure basis with the State, up to individual maxima of £1,500,000 at Newcastle, £1,070,000 at Port Kembla and £80,000 at Balmain.

Of the total Commonwealth assistance, up to £1,000,000 is to be made available from the Coal Industry Fund of the Joint

Coal Board. As I pointed out in my statement of 29th August, any assistance which the Commonwealth might provide to revenue-producing works of this kind would normally take the form entirely of repayable advances. In this case, however, we had regard to the uncertainties in the costs of works of this magnitude and in the estimates of the eventual volume of coal exports through these ports. The State naturally accepts whatever risks are involved in these respects, but the Commonwealth has been anxious to give the State all reasonable support and has decided to make part of the assistance available by way of grant. This will also serve to reduce the charges which would otherwise be levied for the use of the new facilities.

The remaining part of the assistance, amounting to up to £1,650,000, is proposed to be made available by the Commonwealth in the form of advances repayable by the State. Negotiations have been conducted between the Commonwealth and State governments on the terms and conditions of the repayable advances and a formal agreement has been drawn up and signed on behalf of each Government. This is one of those matters in which we have made complete agreement with the State Government. It is the bill to give effect to that agreement which is now before the House for approval.

The bill itself is brief and provides mainly for approval of the agreement and for appropriations from the Consolidated Revenue Fund for advances to be made by the Commonwealth in accordance with the agreement. The agreement is set out as the schedule to the bill and its contents may be summarized as follows: The preamble is, in effect, a brief description of the reasons for and the nature of, the whole Commonwealth financial assistance, including the grant element as well as the repayable advances. The arrangements for the grant assistance referred to in paragraph (f) of the preamble are straightforward and do not require further approval. They are simply that when the State applies for funds, it will apply for grants as well as advances in the same manner and supported by the same kind of evidence of expenditure. The Commonwealth will arrange for payments to be made to the State in the proportions of grants to advances set out in paragraph (e) of the preamble. The terms and conditions of the repayable advances are given in detail in the body of the agreement.

Clauses 4 and 5 of the agreement provide for the making of advances by the Commonwealth to the State up to the amounts specified either as reimbursements of expenditure already made by the State or, if the Treasurer approves, in anticipation of expenditure to be made, on or in connexion with the coal loading works. The advances are to bear interest at 51 per cent, per annum and are to be repayable in ten years by twenty semi-annual payments. In case my Queensland friends perceive a difference between 5t per cent, and 5i per cent., I hope they will observe the difference between repayment in ten years in this case and repayment in twenty years in the case of the Mount Isa railway.

The State undertakes in clause 9 to carry out the coal loading works with a view to their completion as part of the harbour works at the earliest practicable date, subject to the Commonwealth providing financial assistance as agreed. The remaining provisions relate to variation of the schedule of works, the provision of estimates, the supply of information, audit and the giving of notices. A description of the works is set out in the schedule to the agreement under two headings - the harbour works and the coal loading works.

I conclude by emphasizing that the programme which the New South Wales Government has embarked upon is an important contribution to the expansion of the export trade. Some of the work has already begun and other sections are in an advanced stage of preparation. At Balmain, dredging has been completed and tenders have been received for the new coal loading facilities. At Newcastle, tenders have been called on a world-wide basis for the removal of rock from the bar at the harbour entrance and it it proposed to dredge the leads and channels and the berths, to provide a depth of at least 36 ft. of water to the coal loading plant. Tt is planned that the coal loading plant will be able to load at a rate which is yet to be determined but which will be at least 1.500 tons an hour as provided for in the schedule to the agreement. At Port Kembla, planning is well in hand for the construction of a coal berth on a new site in the inner harbour and tenders have been called for a loader with a capacity of 2,000 tons an hour. The plans include the provision of adequate storage and access to the wharf and the deepening of the berth to at least 36 ft. of water. The Commonwealth Government is satisfied that the installation of these works will permit the coal export trade to be maintained and expanded and that financial assistance from the Commonwealth in the manner proposed will contribute importantly to their early completion. I have great pleasure in commending the bill to the House.

Debate (on motion by Mr. Crean) adjourned.

page 2299

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION ASSESSMENT BILL (No. 3) 1961

Second Reading

Debate resumed from 17th October (vide page 2094), on motion by Mr. Harold Holt-

That the bill be now read a second time.

Mr CREAN:
Melbourne Ports

. These amendments are largely in the nature of machinery alterations to the income tax law. The Opposition does not oppose the measure, but we wish to direct attention to one or two aspects of the amendment. The Income Tax Act is the central act in our taxing machinery operating as it does upon companies and individuals and netting in the aggregate, I suppose, between £600,000,000 and £700,000,000. The act itself has become quite a compendious document and I hope that the new Government will give some consideration to recasting many of the very awkward sections that are now found in it.

As honorable members know, a committee was set up by the Government some time ago and it has recently reported to the Government. The report has been printed, but at this stage the Government has not chosen to implement any of the major recommendations of that report. What was said there goes to the root of the determination of rates of taxes su far as they operate in respect of partnerships and companies of a private kind. T think most people were astonished by the suggestion tha* what are possibly regarde J as loopholes in the law amount to a potential loss of revenue to the Government of som,. £15,000,000.

Tax law provides a lucrative field for shrewd lawyers and subtle accountants who are always willing to do battle with the Taxation Branch of the Treasury in attempting to find means of evading the law. Apparently, it is regarded as the accepted thing that one will get around the law if he is shrewd enough to be able to do so. If the spirit of the law is being consistently evaded, it is incumbent on the Government to legislate to block loopholes and to ensure that the spirit of the law is observed. However, I do not propose this evening to go into the intricacies of that aspect of tax law. I merely note that a government-sponsored committee has at least come down on the side of making a serious attempt to close loopholes in the law.

As is usual when measures such as this are before the House, the Department of the Treasury has prepared a memorandum which sets out briefly what is proposed. In this instance, the proposals fall under five broad heads. Compensation for death or compulsory destruction of live-stock is the first matter dealt with. As honorable members, particularly those who belong to the Australian Country Party, know, sometimes, because of disease or fire, stock are destroyed and the owner receives insurance or compensation payments. If these amounts are treated as income in the year in which they are received, the tax pattern of a person or company can be seriously distorted. Such payments are to be subject to an averaging provision. I do not think that any one quarrels with the equity of that proposal.

Deductions are to be allowed for certain expenditure on land used for primary production. The cost of purchasing and laying pipes underground for the purpose of conveying water for primary production purposes is to be allowable as an outright deduction when incurred by a taxpayer engaged in primary production. That is an extension of special provisions that have been applied to primary producers in respect of outgoings of a kind that, in business undertakings, would be regarded as capital expenditure and allowed in full as a deduction in the year in which the expenditure is incurred. This proposal is supposed to be a means of using tax policy to encourage investment in productive fields.

The third proposal relates to calls on shares in mining and afforestation projects where groups of holding companies are involved. I do not want to go into the technicalities of that proposal except to say that it seems to remove a doubt about the existing provisions.

The fourth proposal concerns gifts to certain organizations. As honorable members know, there is now quite a long list of organizations, contributions to which by individuals are allowed as deductions in the assessing of taxable income. The name of the Ian Clunies-Ross Memorial Foundation is now to be added to this list. I do not think that any one needs to expand on the great loss that the nation suffered by the death of Sir Ian Clunies-Ross, who was Chairman of the Commonwealth Scientific and Industrial Research Organization. It is fitting that his work should be remembered, as I am sure he would like it to be remembered, by a foundation designed to extend scientific knowledge. Gifts to that foundation are well worthy of treatment as allowable deductions.

The final proposal relates to deductions for medical expenses. I think that it emanates from the report of the expert Commonwealth Committee on Taxation which was recently presented to the Government. Any individual taxpayer can claim a total of £150 per person as a deduction for medical expenses in respect of himself, his spouse and dependent children. A total of £30, within the total of £150 for each person, may be claimed for dental expenses. As honorable members who have had to meet dental expenses for members of their families know, the limit of £30 per person in one financial year can easily be exceeded. The purpose of the proposed amendment of the act is to remove the limit of £30 per person on dental expenses, although the deduction will still be subject to the overall ceiling of £150 per person. This amendment will provide flexibility between the floor and the ceiling, as it were, and that is a good thing in relation to dental expenses.

As I have said, Mr. Speaker, we offer no objection to this bill. One is tempted, of course to reflect on ideal changes in the income tax laws that could be made, but I shall resist the temptation on this occasion.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 8 - by leave - taken together, and agreed to.

Clause 9.

After section seventy-seven a of the Principal Act the following section is inserted: - “77b- (1.) In this section- (5.) Where a company has lodged a notice under this section and a taxpayer, being a company that is a resident of Australia, has, during the year of income of the first-mentioned company in which the calls specified in the notice were paid, paid to the first-mentioned company moneys, being moneys paid on shares, at a time at which that taxpayer was a prescribed beneficial shareholder of the first-mentioned company, a deduction is, subject to section seventy-nine c of this Act, allowable from the assessable income of that taxpayer of the year of income of that taxpayer in which the calls specified in the notice were paid of one-third of so much of the amount of the calls specified in the notice as bears to the amount of those calls the same proportion as the amount of those moneys paid on shares bears to the whole of the moneys paid on shares received by the first-mentioned company in that year of income.

Mr HAROLD HOLT:
Treasurer · Higgins · LP

– I move -

In sub-section (5.) of proposed section 77b, omit “ that “ last occurring, insert “ the firstmentioned “.

The intention is to refer to the year of income first mentioned in the sub-section, and the amendment will ensure that this result is achieved.

Amendment agreed to.

Clause, as amended, agreed to.

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

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

Bill - by leave - read a third time.

page 2300

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION BILL 1961

In Committee of Ways and Means: Consideration resumed from 17th October (vide page 2098), on motion by Mr. Harold Holt-

– (1.) That, in this Resolution . . . (vide page 2094).

Question resolved in the affirmative.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Harold Holt and Mr. Freeth do prepare and bring in a bill to carry out the foregoing resolution.

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

page 2301

SUPERANNUATION (PENSION INCREASES) BILL 1961

Second Reading

Debate resumed from 17th October (vide page 2089), on motion by Mr. Harold Holt-

That the bill be now read a second time.

Mr CREAN:
Melbourne Ports

.- Mr. Speaker, in view of the stage now reached in the life of this Parliament, we do not propose to offer opposition to this measure, but we want to make a few remarks about superannuation as it operates in this country. This bill is designed to increase the weekly pensions paid mainly to male ex-members of the Commonwealth Public Service who retired prior to 20th April, 1954, and who received no increases of pension as a result of changes that have been made in legislation on more than one occasion during the past several years. There has been a series of alterations to the value of the superannuation unit, which originally stood at 10s., was increased to 1 2s. 6d. by amending legislation under the Chifley Government in 1947, and was later increased in 1951 and 1954. It has a present value of 17s. 6d. The Chifley Government, in 1947, also increased from sixteen to 26 the maximum permissible number of units that could be taken out. The 1954 legislation raised the maximum to 36, and it has since been increased to 54.

The increase in the value of the unit now proposed will bring the Consolidated Revenue Fund component of the superannuation pension up to, broadly, a level comparable with what would have been payable bv the Commonwealth had the superannuation been determined under the 1954 scale of pension. This was explained in some detail by the Treasurer (Mr. Harold Holt) in his second-reading speech, and he indicated that some of the more technical details might be elaborated at the committee stage.

What has happened over recent years highlights some of the difficulties that face any superannuation scheme, or any fund, in> an inflationary situation. When people take out a certain number of units of superannuation, the number has some relation te the salary they are receiving at that time and the amount of income they believe they should have after retirement. Now, the value of money is significant in more than one way in a transaction of this kind. To show what may happen as a result of inflation I shall give some figures that I gave on another occasion some months ago, when the Life Insurance Bill was before the House. These figures are taken from an article that appeared in the Proceedings of the Actuarial Society of Australia and New Zealand for 1 960. They are part of a paper which was delivered by Mr. J. R. Harris, a Fellow of the Australian Society of Actuaries, the subject of which was, “ Protecting the benefits of superannuation funds against inflation “. Mr. Harris makes a comparison between a hypothetical and an actual case. He gives the history of a person who, launching on the career of bank clerk in 1921 at the age of 21, at what was then the ruling salary, contributes for a certain superannuation pension. Mr. Harris then tells what would have happened to the clerk had there been no inflation. He compares that his:ory with the history of an actual bank clerk. He compiled this second history by finding out from individual banks what the typical bank clerk would have received in salary between 1921 and 1960. He sets those details out in his paper. I do not want to read them all. I merely want to say that had there been no inflation, had there been a reasonable constancy in the value of the hypothetical bank clerk’s salary, starting off in 1921 at £235 a year, the clerk would possibly at time of retirement have had a salary of £450 a year. In fact, because of inflation, the typical bank clerk was receiving £1,650 a year instead of £450.

Mr Harold Holt:

– Some account must have been taken of improvements in genera) standards.

Mr CREAN:

– Yes. The calculation was made, first, on what the ordinary bani clerk might have expected to receive. The calculation was not based on a flat salary. Similar considerations apply in the case of public servants. After all, when people join the Public Service or a bank they expect that they will, after twenty years’ service, have increased their skill, and that they will be commensurately rewarded by being paid at a higher rate. Presuming no inflation, the calculation shows that the cork’s salary would have doubled over the 40-year period, and this implies that he would have received some increments for skill. But had the individual joined a superannuation fund into which a total contribution - and I am not arguing at this stage how much should be paid by the employer and how much by the employee - equivalent to 10 per cent, of his salary was paid, he could have expected on retirement in circumstances of no inflation, to have received a lump sum equivalent to 8.1 times his annual salary on retirement. With that lump sum he could have purchased an annuity which would have given him a pension equal to two-thirds of his retiring salary. Moving on to the real situation, in which his final salary has become £1,650, and assuming again a contribution equivalent to 10 per cent, of his salary during the period of payment into the fund, he would, of course, have received a higher gross amount on retirement, but it would have been equivalent to only 3.1 times his rot :ing salary.

That gives some indication of the effect of inflation on funds of this kind. That is the sort of circumstance that faces the Commonwealth Superannuation Fund in particular. In fact, the effect on the Commonwealth Superannuation Fund is irreater than on some other similar funds, because other funds are able to invest in what are called equity stocks, the value of which tends to rise pretty well as genera1, costs and prices rise. In fact, the very table to which I have been referring gives figures that are relevant in this regard. Tt takes 1946 as the base year and shows that the C series index figure in that year was 1,900, while the share price index, based on a Sydney Stock Exchange index, was also 1,900. At the end of 1959 the C series index had risen to 4.473 and the shan? price index to 4,203. The difference between them is not significant. The point is that the value of equity stocks had risen pretty well in proportion to the rise in costs and prices I rought about generally by inflation.

If, however, one contemplates the investments of the Commonwealth Superannuation Fund, as they are shown in the Budget Papers, one finds the rather peculiar circumstance that about three-quarters of the total investment is not in Commonwealth Government securities at all but in semi-governmental securities. The simple reason for this is that you can get roughly .5 per cent, more for semigovernmental securities than for Commonwealth Government securities, and because the investments in this fund are not subject to tax the trustees look for the highest possible yield. As they are confined to trustee investments, the tendency is to go for semi-governmental rather than Commonwealth Government securities. This highlights a rather peculiar investing anomaly in connexion with this fund and some other funds. We know, of course, that the Treasurer (Mr. Harold Holt) frequently tries to influence investors to take Commonwealth Government securities because of taxation concessions. He says it is shrewder to invest in Commonwealth securities than semi-government securities because of the tax rebate that is allowed. But that is just by the way.

Individual contributors to the Commonwealth Superannuation Fund have found themselves right in the middle of this inflationary situation. There has been in Australia in the last ten years more inflation than there was in the previous 40 years. This means that any one who left the Commonwealth Public Service in. say, 1947, before substantial marginal increases were added to his salary, as they were added to the salaries of similar officers between 1947 and 1954, has bee.i placed at a considerable disadvantage.

The Government, of course, cannot do anything about the contributor’s side of the fund. It can adjust only on the basis of its own contribution. If you look again at the statistics of the Superannuation Fund, as published in the fund’s own reports, you will find that from 18th October, 1922, when the fund began, to 30th June, 1959- this is the latest report I have been able to obtain - the total amount paid out in superannuation payments in that 37-year period was £48,035,000. Only £11,363,000 of this came out of the contributors’ side of the Superannuation Fund; the remaining £36,672,000 came from the Consolidated Revenue Fund. Over the whole history of the fund about three-quarters of total payments have come from the Consolidated Revenue Fund, the remaining quarter being paid out of moneys provided by contributors. I think the position at the moment is. broadly, that of every unit of 17s. 6d. the Government’s share is five-sevenths and the contributor’s share two-sevenths. That is the basis of this adjustment of 12s. 6d. on the 17s. 6d. unit.

As the Treasurer has said, it is a pretty complicated task to adjudicate on every individual case, but that is what must bc done here. Each case involving a person who retired before 1954 and who has not so far had the benefit of an adjustment must be looked at individually before the actual benefit can be assessed. The Treasurer has said that everybody will gain in the process, but that at this stage he cannot estimate the amount of the gain. But what is taking place here will have to take place periodically if inflation continues in future years as it has proceeded over the last few years.

This seems to throw up for pretty serious consideration the whole question of social approach to the existence of superannuation funds. At the moment the total assets of this fund are about £70,000,000. The number of government servants is increasing, and I think it is increasing proportionately to the population, 1, for one, raise no objection to this. It merely emphasizes the fact that certain kinds of activity can only be sensibly and rationally carried out these days by public servants. However, as you get an increasing number of people and increasingly higher scales of salary, and while you have an increasing variety of offices, and you also have continuing inflation, you will continue to feel the need, from time to time, for revisions of the kind that we are discussing. At least, the Government is able to give some measure of justice to those who contribute to the fund. But, of course, not only Commonwealth public servants suffer from the effects of inflation; there still remain some four-fifths of the community who cannot be insulated by government action of this kind. Some of them are in private superannuation funds, some of them are not in funds at all. Those who are not in funds but have relied upon savings or investment suffer the same difficulties as the people covered by this bill suffer, but they cannot obtain so ready a remedy for their troubles.

This is an interesting social question. If we had more time, we could go into it more extensively, and it is a problem that must be examined seriously in the future by a government. I was interested to hear the Minister for Social Services (Mr. Roberton), when speaking recently on the Social Services Bill, intimate that because of the inroads of inflation this Government no longer regards the creation of a national insurance fund as a feasible proposition. This situation also confronts funds which operate on the basis that certain payments made over a period of time will result in a determinable sum being paid. The other assumption which is vitiated by inflation is that the sum received at the end of the period, measured in terms of purchasing power, will have some relation to the expectation of a contributor when he joined the fund. This raises very serious social problems.

I merely point out that at least some justice is done in this bill to a limited section of the community, but that the great majority cannot have justice done for them.

Mr COSTA:
Banks

.- This bill provides for increased superannuation pensions to be paid to certain persons. As pointed out by the honorable member for Melbourne Ports (Mr. Crean), this is a fairly complicated bill. The secondreading speech of the Treasurer (Mr. Harold Holt) did not inform us of the details. I support the bill because it intends to effect some improvements for pensioners, but I will attempt in the course of my speech to present an argument to show that the increases now granted should be much more liberal. I shall give some idea of how little we know about the bill. In his secondreading speech, the Treasurer said -

Details of the adjustment will be explained in the committee stage, but the following is a broad outline of the manner in which the increases will be calculated. For each pensioner who retired at an earlier date a notional 1954 salary will be determined, having regard to general increases in salaries that occurred after the date of retirement, and prior to 19S4

This does not explain very much, but apparently some aged superannuitants will receive some benefit. The Superannuation Act was first enacted on 15th September, 1922. The Attorney-General of the day, when introducing the original bill, said -

The object of the scheme now submitted is to provide payments for those who have given a life-long service to the Commonwealth so that when they reach the age limit for retirement, they will not find themselves in a position of pecuniary embarrassment. Moreover, should they during their term of service become permanently incapacitated, they will not altogether be without means of support, neither will their widows nor their dependants.

That was the intention of the original bill, but I am not sure that the intention is still followed. Quite a number of superannuitants are not in the secure position that they were at first intended to be in.

In August, 1957, a joint meeting of the Public Service Board and the Public Service unions agreed that the value of the superannuation unit should be increased from 17s. 6d. to 20s. 1 venture to say that if such an increase was warranted in 1957, it is even more warranted to-day. The Superannuation Act provides for a contributory scheme for government employees. In 1922, when the original act was passed, the basic wage was £4 a week and the unit of superannuation was 10s. The basic wage to-day is £14 8s., but the unit is only 17s. 6d. When the superannuation benefits scheme was first introduced, most employees patterned their contributions on a basis that would return them a pension of about the basic wage or living wage standard. However, we have suffered huge increases in the cost of living, or as some people prefer to say, the inflation disease has destroyed the value of all pension schemes and the Menzies Government has failed to prevent or cure the trouble. The once splendid superannuation scheme which public servants enjoyed and which they looked upon as giving them social security in their retirement, has disappeared because of the Government’s failure to halt inflation.

There is now a big gap between the pensions for which public servants contribute and the basic wage. Let me give some brief comparisons. The original basic unit in 1922 was 10s.; to-day it is 17s. 6d. lt has increased by only 75 per cent. As

I said earlier, the Commonwealth basic wage in 1922 was £4; it is now £14 8s. lt has increased by 360 per cent. The age pension in 1922 was £1; it is now £5 5s. lt has increased by 500 per cent. War pensions have also increased by a far greater percentage than has the superannuation unit. 1 do not say that these pensions are adequate either, but they have increased more than the superannuation unit has.

I wish to make two further points. First, the value of the unit should be increased to raise the purchasing power of the superannuation pension to meet the increased cost of living. Knowing what has happened in the 39 years since the scheme was first introduced, the Government should take precautionary steps now to prevent further depreciation in the value ot the superannuation pension. If prices and costs are allowed to run haphazardly as they are doing now, there is little doubt that in 39 years the present contributors to the fund will find themselves in a predicament similar to that in which the original contributors have found themselves. The Government has a responsibility to maintain the value of the superannuation payments. This can be done by making a proper effort to stabilize prices and costs. Failure to do this is having a ruinous effect, not only on superannuation pensioners but also on other people who many years ago made provision for their years of retirement. The age and invalid pensioners, civilian widows, repatriation pensioners, those in receipt of payments from private superannuation funds, recipients of stipends and people who invested in loans and deposited money in savings banks to be used in their old age. are also suffering.

Let me now advance some reasons why the superannuation unit should be increased from 17s. 6d. to 20s. in accordance with the recommendation of the joint meeting of Commonwealth public service unions, the Public Service Board and the Superannuation Board. In the first place, according to the Auditor-General’s report the fund is buoyant. In the second place, as was pointed out by the honorable member for Melbourne Ports, there has been a considerable increase in the number of contributors to the superannuation fund. I believe that the earnings of the fund could be increased bv wiser investment 1 <<n no- claim that the present investments are no! wise because the fund has invested in gilt edged securities, but possibly avenues of investment can be found which will provide a better return. The public servants have asked that the fund lend money to contributors for home building purposes.

Another point to be borne in mind is that contributors to the superannuation fund save the Government many millions of pounds annually in social service payments because, as recipients of a superannuation pension, in many cases they are not entitled to receive social service benefits. They may receive a portion of the age pension, but even so they still save the Government a considerable sum. The average superannuation pension to-day is about £12 10s. a week. A single age or invalid pensioner is allowed to have or to earn £3 10s. a week in addition to the full pension of £5 5s., making a total income of £8 15s. a week. But the superannuation pensioner who contributed for ten or more units is not entitled to receive any social service benefit. Thousands of retired public servants contributed for more than ten units. Each of them saves the Government at least £5 5s. a week which is the present age pension. The average pension of a married contributor to the superannuation fund is £12 10s. a week, representing fourteen units. In most cases these persons save the Government the full pension of £5 5s. a week.

A factor which should be considered when deciding whether the unit should be increased from 17s. 6d. to 20s. is that not only do public servants contribute to their own superannuation pensions but they also pay the same rates of income tax as do all other citizens. In effect, the public servants pay twice. They pay into the superannuation fund and they pay income tax. Further, they pay income tax on their pension when they retire. They pay taxes almost from the cradle to the grave. They pay income tax during their working life and when in retirement. There is every reason why the Government should treat superannuation pensioners more generously than is the case at present. Their standard of living is being affected adversely. In considering this measure we should have regard to the present superannuation pensioner rather than to the present contributor to the superannuation fund because I believe that posterity will look after present and future contributors.

Why has the Government not taken any notice of the recommendation of the joint meeting of Public Service organizations, the Commonwealth Public Service Board and the Superannuation Board relating to an increase in the value of the superannuation unit? The joint council was established many years ago to study matters of common interest to various Public Service organizations. In August, 1957, it recommended to the Government that the superannuation unit should be increased from 17s. 6d. to 20s. I am certain that the council would have given very deep consideration to the question before making such a recommendation. If the fund was buoyant enough in 1957 to meet the suggested increase in the value of the unit, it certainly is more buoyant now because the funds for distribution are much greater and contributors have increased by many thousands. The Labour Party thought so much of this recommendation that it incorporated the suggestion in its policy prior to the 1958 election, and undertook that if returned to office it would increase the value of the unit from 17s. 6d. to 20s.

I shall now indicate to honorable members just how buoyant the fund is by referring to figures contained in the AuditorGeneral’s report. The honorable member for Melbourne Ports referred to the report and I shall now elaborate on it. The Auditor-General stated that on 1st July, 1960, the balance in the fund was £71,000,000. By 30th June, 1961, the balance had increased to £80,000,000. In twelve months there had been an increase of £9,000,000. The Auditor-General then indicated that last financial year the fund had an income of £18,685,000 whereas payments amounted to £9,000,000. It is apparent that the fund is very buoyant. This lends weight to my suggestion that the fund is so prosperous that it will not be affected adversely if the value of the unit is increased. The Auditor-General’s report indicated also that the fund’s earnings amount to £3,528,000.

Let me now refer to the 37th annual report of the Superannuation Board which is the latest report available. It shows clearly that the number of contributors is increasing because the Public Service is growing, as it should. The report indicates that in 1955 there were 79,000 contributors to the fund but at the end of 1959 the number had grown to 96,000. This represents a very considerable increase. The report indicates also that almost 17,000 persons are in receipt of superannuation pensions. These pensioners contributed to retire either at 60 or 65 years of age. For retirement at 60 the average number of units which the public servant contributes is 17.30, which represents a pension of £15 2s. per week. The permissible income for married conples who are age pensioners is £17 10s. a week, so it seems that that contributor is saving the Government £8 8s. a week, which is the difference between the full pension of £10 10s. and the £2 2s. that it has to pay to bring the pension of the couple up to £17 10s. Turning to the contributor who elects to retire at 65, we find that the average contribution is for 14.65 units, which is equivalent to a weekly pension of £12 6s. Here again the permissible income is £17 10s., and the difference between the superannuation and the permissible income is £5 4s., which means that the husband and wife save the Government £5 6s. a week when they become pensioners. If the contributor is single, the Government is saved the full social service pension.

Over all, the average number of units contributed for is 15.42, which is equal to a pension of £13 5s. a week on retirement at 65. On this basis, each married couple saves the Government £6 6s. weekly. Assuming that, as the figures show, there are 16,966 superannuitants, and supposing that half of them are married, you find by adding, say, 8,000 wives to the original figure that nearly 25,000 people are receiving benefits from the superannuation fund. As the average saving to the Government in social services is about £5 5s. a week, the aggregate saving over a period of twelve months is about £5,400,000. The report of the Auditor-General indicates that the Commonwealth Superannuation Fund is very buoyant. It appears to me that the return on investments from the fund will most likely double in the next ten years and as I have said, the income from investments last year amounted to £3,500,000. I think the Government should consider this in relation to the recommendation that the superannuation unit be increased by 2s. 6d. I notice that the rate of interest being received by the fund on its invest ments is at a record level of £4 10s. 8d. per cent. The fund invests its money mainly in Commonwealth loans and Commonwealth bonds, which of course are giltedged investments. As I pointed out earlier, the Public Service associations have from time to time suggested that some of the money from the fund should be used to build homes for public servants. I do not know whether this proposal has ever been considered by the Government, but 1 think its adoption would provide a wise avenue of investment, because in my opinion a loan to a permanent public servant who needs a loan to build or buy a home is just as reliable an investment as is a Commonwealth loan. Not only would the adoption of such a scheme help to provide homes for people who need them in these days of housng shortages, but Commonwealth public servants would be delighted to be able to borrow money at 5 per cent, interest from the fund.

As all honorable members know, many returned soldier public servants who are entitled to loans under the War Service Homes Act have had to wait for lengthy periods before getting them, and have had to obtain temporary finance from firms which charge hire purchase rates of interest of 10 per cent, or more. Public servants who are in that position would be delighted to borrow back from their own fund some of their contributions at 5 per cent.

I think I have submitted substantial reasons why the value of the unit should be increased. The important point to be remembered in administering a fund of this kind is that the pensioner should get something out of it. At the present time the pensioner is getting nothing substantial out of it, due to the inflated economy and the high cost of living. I believe that if the administrators of the fund are not convinced that the financial state of the fund is sound enough to improve the standard of living of the present pensioner, they should do something about it and confer with the combined Public Service unions to see if slightly increased contributions are needed to meet the situation. I do not think they are. Public servants, on the whole, are sensible people.

I refer again to the buoyancy of the fund. The Auditor-General’s Report shows the total payment of pensions, and so on, as £9,012,819. At the present rate of increase, income from investments will grow sufficiently in 25 years, in my opinion, to match all pension and other payments. The credit balance of the fund increased from £71,278,112 in 1960, to £80,950,930 in 1961, an increase of more than £9,000,000. It will be seen therefore that the fund has great prospects and I think that in fifteen years it will be fully self-sufficient. So why not give the present pensioners a better deal?

I wish now to make a comparison between superannuation schemes. The banks have superannuation schemes and their pensioners have been affected in the same way as other people have been by the failure of the Government to do something about inflation. The Australia and New Zealand Bank Limited increased pensions to its retired officers as follows: In 1954 it increased all pensions by 5 per cent. In 1955 it gave another 5 per cent, increase to all pensioners and late in 1959 it gave an increase of 10 per cent, with a minimum of £50 per annum to those who had retired prior to 1st July, 1954. To those who had retired between 1st July, 1954, and 30th June, 1956, it gave an increase of £50 per annum. In respect of those who retired on or after 1st July, 1954, I have a table which shows the treatment accorded to retired officers of the A.N.Z. Bank and of the Commonwealth, respectively. In 1953, the A.N.Z. Bank pensioner was receiving £5 5s. and the Commonwealth pensioner, with 6 units, received £5 5s. In 1954 the bank pension rose to £5 9s.; in 1955 to £5 13s. and in 1959 to £6 13s., while the Commonwealth pension remained at £5 5s. Turning now to Commonwealth officers with 12 units of superannuation we find that the comparable A.N.Z. Bank pension went from £10 10s. to £12 7s. in the period from 1953 to 1959, while the Commonwealth superannuation payment remained at £10 10s. To show the position of Commonwealth superannuitants on 24 units I point out that whereas the bank pension went from £21 to £23 13s. in the period from 1953 to 1959, the Commonwealth pension remained at £21.

This shows that pensioners in private superannuation funds have been treated more generously than Commonwealth pensioners although the Commonwealth fund

page 2307

F.8842/61.- R.- [85]

is more buoyant than the A.N.Z. Bank’s fund. I support the slight increases that are to be made, because some improvement is better than none, but I think a 2s. 6d. increase in the value of the unit would give a fair amount of justice. Let me repeat what I said at the outset: The main concern of any pension scheme should be the pensioners.

Mr MAKIN:
Bonython

– I strongly support the points made by the honorable member for Melbourne Ports (Mr. Crean) and the honorable member for Banks (Mr. Costa). We have been greatly advantaged in Australia in having a body of public servants who have rendered yeoman service and played a faithful part in building up public administration. I feel that our recognition of their efforts in the interests of the community have not been commensurate with what they might reasonably expect. If the granting of greater concessions meant some heavy financial sacrifice on the part of the Government, or if the Government were experiencing financial difficulties and credit restrictions were necessary, I could understand the Government’s refusing to give these people more consideration, but no such circumstances obtain. The Superannuation Fund is in a buoyant condition. Because it is buoyant, the retired public servants are entitled to extra benefit. According to the information supplied to me by former public servants who are now recipients of superannuation payments, the value of eight units of superannuation in 1939 was almost equivalent to the then basic wage, whereas to-day the same number of units is worth £6 less than the basic wage. Therefore, retired public servants are suffering a disadvantage, and they have every right to expect justice from this Parliament Although I propose to be brief, I do wish to express my great concern at the fact that these people are being denied more equitable treatment. When they made their contributions in former times the value of money was much greater than it is to-day, and they should not be required to carry the heavy load they are bearing merely because the value of money has depreciated.

I am very disappointed to note that this bill is to operate only as from the date upon which it receives the royal assent. I suggest that its operation should be made retrospective at least to 1st July last. If that were done, the retired public servants would receive a little more relief from the burden they have been bearing. I suggest also that superannuation payments should be reviewed at regular intervals, probably at intervals of two or three years, with a view to their being adjusted in order to ensure that recipients enjoy a standard of living equal to that enjoyed by the community in general. If they are not assured of at least that much, they are being denied that justice which the splendid service they have rendered to the community demands that they should enjoy during their period of retirement.

Mr Jess:

– Do not this bill and the Defence Forces Retirement Benefits (Pensions Increases) Bill, which was introduced yesterday, do exactly what you suggest should be done?

Mr MAKIN:

– I am afraid not. I remind the honorable member that both the honorable member for Melbourne Ports and the honorable member for Banks, who was himself a public servant, have stated the Opposition’s views on this matter. I support what, they have said, and the honorable member for Barton (Mr. Reynolds), who is to speak after me, will also support them. I feel sure that, after hearing the arguments adduced from this side, the Government will be convinced that these worthy people deserve a greater measure of justice from this Parliament.

Mr REYNOLDS:
Barton

.- I am confident that this measure will be the means of affording relief to some urgent cases. There are some people I know who retired before 1947, and for whom some earlier provision was made, but I also know people who retired after 1947, and who have been sorely disadvantaged under existing legislation. Just how far this bill will go in providing relief cannot yet be assessed. We are told that each case will be dealt with on its merits, and there will be a certain measure of uniformity in that, in respect of all those who retired before 1954, a notional estimate of their superannuation entitlement will be made.

Of course, the only contribution that will be made will be the 12s. 6d. per unit by the Commonwealth itself. I suppose, naturally enough, recipients will not receive the benefit of the extra 5s. that would ordinarily come their way as contributors to the fund. Like other speakers, I feel that it is quite possible that this gesture will not amount to such a great deal. Every year at this time, during the three years I have been in this Parliament, I have referred to the growing credit balance of the Superannuation Fund, and the fact that only grudging concessions have been provided for our retired public servants.

Let me refer now to the increases which have taken place in the annual contributions to the Superannuation Fund. It is quite true that this year the amount standing to the credit of the fund has jumped by £9,672,818, and I am sure that no comparable increase will be made in the concessions granted. I cannot remember the exact amount of the increase last year, but I think it was about £7,000,000.

When you analyse the figures further, you find that the amount expended by the fund this year will be just over £9,000,000. The contributions by the officers themselves, excluding the Commonwealth contribution, amounted to £8,400,000. That in itself almost paid for the total expenditure out of the Superannuation Fund. Besides that £8,400,000, there was also £750,000 paid into the Provident Fund by those who were not eligible to contribute to the Superannuation Fund for one reason or another, such as physical disabilities. So, already, there is contributed by the contributors themselves this year £9,100,000 as against a total outlay from the fund of just over £9,000,000. This is to say nothing about the Commonwealth’s own contribution which amounted to over £5,250,000 while interest on investments already residing in the fund brought in £3,500,000.

I think we have been ultra-conservative about these funds just as I think that those who operate the medical benefits funds and the hospitals contributions funds in our community have been ultra-conservative and ultra-safe in their distribution of benefits from the moneys that have been contributed by the people of Australia. I cannot understand why it is necessary to be so ultraconservative about providing for all possible contingencies that might occur. I cannot see why we should go on accumulating this great amount of money, amounting to £9,750,000 on top of the total expenditure out of the fund this year. One thinks of the very human problem in the community of good souls who have only one life to live and who have only a few years left. They are experiencing the inroads of inflation upon their previous contributions. They are not going to benefit by this accumulation of funds if we go on in this grudging way each year accumulating greater and greate amounts in a fund but denying to the retired persons the benefits of this accumulated money. 1 am sure we all want to know just what advantages this bill provides. Just what will it cost the fund? I will bet that it will not cost more than £1,000,000 or £2,000,000, and I doubt whether it will cost that much; yet there is a profit, if you can call it that, of almost £9,750,000 in the fund this year. This is a Commonwealth Government venture, and even if the worst possible contingency arose and there was a gross demand on the fund, the Commonwealth Government with all its resources could provide for its own officers. Why not take that infinitesimally small risk and provide for these people who have been sorely hit by inflation over the years of this Government’s administration. Some of them can get their paltry superannuation pensions supplemented by social services or repatriation pensions, but another piece of obnoxious legislation passed by this Government in 1955 debarred practically all of them from pensioner medical services that go with the normal age pension. They do not get that service. If an individual is earning more than £2 a week or if a married couple receive £4 a week, they do not get that security against ill health and hospitalization. If a single person is getting the princely sum of £8 1 5s., that makes him ineligible for an age pension. With that benefit goes his entitlement to other things including not only the pensioner medical service but also a concession on radio and television licences. An honorable member has mentioned concessions on municipal rates and they are lost also, but that concession is given by local government authorities and not by the Commonwealth. A person who is unlucky enough to get £8 15s. instead of £8 10s. misses a whole lot of these allowances.

Up to 1955, of course, persons who were getting a small portion of the age pension, even if it was 5s. a week, had the benefit of the pensioner medical service and all that goes with it, including free medical attention, free hospitalization, and most medicines free. But all these things have been wiped out. Those who were entitled to these benefits in 1955 were able to retain them. Others outside the superannuation provisions who happened to be earning £2 a week, or £4 if they were married, could so arrange their investments temporarily that they would not bring them in £2 or £4 a week. They could then apply for the pensioner medical service benefit and once having got it they could resume their previous investment to bring them in the return they were formerly getting. That is the stupidity of this arrangement. A person who had not contributed to superannuation but had put money in the bank or invested it could take the money out of the bank or from an interest-earning account and put it into a current account or a lower-interest account and so bring his income down below £2 or £4 temporarily. He could then apply for the pensioner medical benefit and get it. Other individuals in the higherearning income bracket could not get it. There is an urgent need for a thoroughly comprehensive review of the social services scheme and repatriation in relation to other provisions such as Commonwealth superannuation.

I agree with the honorable member for Banks (Mr. Costa) in that I cannot see any reason why the superannuation unit should not be lifted to £1 a unit. The Leader of the Opposition in the New South Wales Parliament is making a great to-do because the State Government is not providing a unit of £1. This has been a big issue there. He has said it is disgraceful; but in the Commonwealth sphere where we have even more resources to back our fund, we are not doing this sort of thing. Many persons will not benefit from this bill and some who do benefit will do so to a very small extent. Even the bill anticipates that there might be some people who could lose by the provisions of the measure if it were observed to the letter; and so a clause has been inserted to ensure that if people suffer a decline in superannuation as a result of this bill, this particular clause will over-ride the bill and ensure that their superannuation payments will stay as they are.

For what it is worth, I suggest that the pension of people who did not eat their cake or who were compelled to contribute to superannuation should be assessed at only half its value when the means test for an age pension is applied. That would be some incentive. These people are not allowed to spend their money or put it into some other kind of investment. When people are compelled to invest in superannuation, let us give them some incentive compared with those who spend their money and apply for an age pension when they retire. This proposition is a purely arbitrary one, but I think it has some value. If a person receives superannuation of, say, £5 a week, only half of that amount ought to be taken into account. I have heard people strongly assert that we ought to disregard superannuation altogether, because the person who receives it has delayed spending on consumption in the early part of his life and has contributed instead to a superannuation scheme. A compromise that perhaps would not cost much would be to disregard half of the value of the superannuation in assessing entitlement to the age pension and other social service benefits.

Another proposal that has been supported strongly - I think it is a thoroughly good idea - is that part of the great accumulation of money in the Superannuation Fund, which amounts to £89,000,000, ought to be made available to public servants for home-building or home purchase.

Mr L R Johnson:

– Instead of to David Jones Limited.

Mr REYNOLDS:

– Yes . We made available from this fund to what somebody described as a rag shop £1,000,000 for private investment, but there is nothing for our public servants, many of whom are sorely in need of homes. I admit that no facilities and staff are now available for such a lending scheme, but that is no reason why it should not be adopted, as is done in some of the States, particularly in South Australia and, also, to a degree, in New South Wales. Certain superannuation funds are made available to public service organizations’ building funds, such as that conducted by the New Soutn Wales Teachers Federation. The State Superannuation Board in New South Wales makes money available to such bodies so that they may lend it for housing purposes to contributors to the superannuation fund. A good case can be made out for doing the same sort of thing for Commonwealth public servants. Many public servants in this city are desperately trying to get the wherewithal to acquire a home, and numbers of public servants in various part of Australia are seeking accommodation. The resources of the Commonwealth Superannuation Fund could be of very great assistance to them in the manner that I have outlined.

I wish to note, Mr. Deputy Speaker, that the Government is making a belated attempt to give relief to people who have been sorely hit by inflation. You, Sir, made a plea that the operation of this measure be made retrospective to July. One could say, with justice, that it should be made retrospective right back to the date of retirement of the people concerned, in order to compensate them for the losses that they have suffered as a result of inflation. It is axiomatic that if some people lose by inflation others correspondingly benefit by it. The people who have benefited by it are well known. They are the profiteers and the speculators - the people who, aided and abetted by this Government’s policy, have made money dear in this community. These are the people who have benefited by inflation. If this is to be a just society we should now take back in taxes something from those people who have exploited the community, particularly people on superannuation, and who have made excessive profits in the process. We should take some of those excessive profits back from them in taxes in order to reimburse, to a greater degree than this bill will ensure, those people who have been defrauded of their just entitlements - the people who have contributed good money to superannuation funds and who are receiving back deflated value in returns on their investments.

Summarizing, I suggest that a lot more could have been done than this bill will do. It is not for us at this stage to assess what the bill does. However, it seems unlikely to do much, having regard to the very affluent condition of the Superannuation Fund. I make the fervent plea that we be a little less cautious about these accumulated funds and that we take a little more risk - if it can be called risk - and, instead of allowing these funds to continue to accumulate to a mammoth total which increases by £7,000,000, £8,000,000 or £9,000,000 a year, do something for the people who have contributed not only their money to the Superannuation Fund but also their services to the Commonwealth. Let us give them, while they are still alive, genuine relief and genuine compensation for the losses that they have suffered.

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. Freeth) proposed -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to provide for Increases in certain Superannuation Pensions.

Mr CREAN:
Melbourne Ports

.- Mr. Chairman, I should just like to point out at this stage that in this instance we do not know what the appropriation is to be.

In most other instances, the amount is mentioned somewhere. Earlier in the consideration of this measure, I made the point that in this matter a number of cases have to be assessed individually and the amount involved is not known to us. I merely want to point out that the committee does not know what sum it is asked to appropriate for the purposes of this bill. I suggest that we ought to be told officially how much is involved.

Mr FREETH:
Minister for the Interior and Minister for Works · Forrest · LP

– Mr. Chairman, we are here appropriating revenue to meet the requirements of a measure which prescribes a formula by which certain pensions are determined. The quantum of money which will be needed cannot be prescribed exactly, because, as the honorable member for Melbourne Ports (Mr. Crean) has stated, individual cases are being dealt with. The estimate of the amount required is contained in the Budget appropriation. The resolution now before the committee is designed merely to appropriate part of the Budget expenditure to meet the requirements of the formula laid down in the measure. That is the explanation, as I understand it

Mr CREAN:
Melbourne Ports

.- The explanation given by the Minister for the Interior (Mr. Freeth) is only a partial one. As I have said, in most other instances the amount involved can be found in the Estimates. The amount involved in this instance cannot be found there. That is the point that I make. The Minister has not given a satisfactory explanation.

Mr POLLARD:
Lalor

.- Mr. Chairman, it is quite true that, as the Minister for the Interior (Mr. Freeth) has said, in effect, the exact amount required cannot be ascertained. But there is at least an estimated amount. That amount could be appropriated and any additional amount required could be provided later.

Question resolved in the affirmative.

Resolution reported and adopted.

In committee: Consideration resumed.

Bill agreed to, and reported from committee without amendment or debate; report adopted.

Third Reading

Motion (by Mr. Freeth) - by leave - proposed -

That the bill be now read a third time.

Mr COSTA:
Banks

.- I wish to point out, Mr. Deputy Speaker, that in his second-reading speech the Treasurer (Mr. Harold Holt) said that explanations and further details of the measure would be given at the committee stage. We are still awaiting those details.

Question resolved in the affirmative.

Bill read a third time.

page 2311

BILLS RETURNED FROM THE SENATE

The following bills were returned from the Senate: -

Without requests -

Appropriation Bill 1961-62.

Without amendment -

Appropriation (Works and Services) Bill 1961-62.

Loan (Housing) Bill 1961.

Quarantine Bill 1961.

Beaches, Fishing Grounds and Sea Routes Protection Bill 1961.

Lighthouses Bill 1961.

Post and Telegraph Bill 1961.

Explosives Bill 1961.

page 2312

DEFENCE FORCES RETIREMENT BENEFITS (PENSION INCREASES) BILL 1961

Second Reading

Debate resumed from 17th October (vide page 2091), on motion by Mr. Harold Holt-

That the bill be now read a second time.

Mr HAYLEN:
Parkes

.- This bill is consequential upon the legislation brought down to adjust superannuation pensions and pensions generally. Whilst not actually bracketed, these measures are supplemental in every way. Any one who listened to the strong arguments from this side of the House in regard to superannuation pensions would arrive at the same conclusions in regard to the benefits provided under this measure as he would have arrived at in regard to superannuation pensions. I agree with my colleagues on this side of the House that the increases proposed are puerile, paltry and peck.sniffian. I do not suppose that the poor old soldier who gets an increase of £30 a year would apply exactly the same terminology to it, but if you get down to an analysis you would find that he really felt the same way about it. The basis of the thing is not so much what the serviceman or the permanent soldier is getting as the whole plan of superannuation, and as that has been dealt with it would be idle at this hour to pursue the matter. I must say that I did expect to see, in addition to the honorable and gallant Minister at the table, a service Minister present. I would have liked to see the Minister for the Army (Mr. Cramer), but I understand that he is on a commando exercise of his own at present in the seat of Bennelong, where he is engaged in mortal combat, and may be watching and waiting for a situation in regard to parliamentary pensions to develop in the very near future.

The pensions to be provided under the measure are of two classes - those payable directly in respect of the number of units, which have been mentioned, and those payable in accordance with the member’s rank and period of service, the amounts of which are governed by the member’s unit entitlement. We know that the method of adjustment proposed here is the method proposed in regard to the increase of the superannuation unit, and that it deals with a situation which arose prior to 1954. All that has been traversed. The increases of pensions are notable and should be quoted. Privates at present in receipt of pensions of £155 per annum will receive an increase of £22 per annum; sergeants receiving £205 per annum will receive an increase of £30 per annum; majors receiving £505 will receive another £60; and colonels receiving £855 will receive another £1 10. That is the pro rata base, and there is no complaint about that.

The Opposition will give the measure a speedy passage because it believes that, after having put its case on the wider implications of superannuation, this should facilitate the passing of the bill. It is regrettable, however, that the increases provided are low. The informed case made by my colleagues, particularly by the honorable member for Banks (Mr. Costa), who has had distinguished service for many years in the Public Service, is something the Government must listen to.

To coin a phrase, all these things come up in what are known as the dying hours of the Parliament, and whereas we would have liked to have given this a good rattle and put up some further points and some further speeches, we are limited by time. I note the paltriness of the increases in regard to the civilian side and the defence side. Widows who at present receive five-eighths of the husband’s pension are to receive five-eighths of the increase. There is something to consider there. Their entitlement will be about another 3s., 4s., or 5s., a week. There it is for what it is worth and we will not unduly hold up the consideration and passage of this bill. However I should like to say in conclusion that superannuation measures and pension measures do reveal, when you get them back into your electorate, some startling anomalies. Eligibility for pension can become a very tenuous thing. You can lose it so easily as a result of something that is not actually a break in service, but is regarded as such. I am reminded of one case in my electorate, the case of a man in the Navy, a petty officer who, because of family considerations, decided to transfer to the reserve from the active list. In the reserve he was doing, not substantially the same thing as he did while on the active list, but exactly the same thing, at exactly the same place and in the same working hours. But because of the break in his service as a result of going on to the reserve list from the active list there was a consequent break in his pension entitlement and now, when he seeks to retire, he has not the qualifications. I took this matter to the Minister for the Navy (Senator Gorton), who was quite concerned about it and did his best, but we ran into a blank wall when we got as far as the Naval brass. As far as they were concerned, it was there, and there it was going to say. That is a distinct and rather sad anomaly affecting a good man, a particularly good member of the Naval forces, who has now become completely disgruntled because of it. I do not know how the difficulty will be overcome, but surely it is not beyond our wit and understanding to solve such problems, because the very spirit of the pension provision is to give a man something for his services over a period. If a man has served in the same capacity as before, but in a different category he should get the pension. But the answer from the Naval Board and other officers concerned is that when a man is not on the active list he is not on call, and so there is a strong difference. But the actual spirit of it, the spirit of what we pass as legislation governing pensions for members of the forces, is not assailed when you correct these anomalies by the exercise of a bit of common sense.

There are several other matters in relation to pensions as they affect the military forces. The honorable member for Hume (Mr. Anderson) would recollect some of them, as would the honorable member for Maribyrnong (Mr. Stokes). This is not the time to conduct a full dress debate on this matter, and so I merely make mention of it.

I conclude by saying that this measure is in keeping with the short shrift that all pensioners and superannuated men and women generally have received. For a long time they have hoped for a substantial increase in superannuation. There has been no wonderful increase. It has not even been adequate. It has not been just. I think I can speak for the Opposition on this matter when I say that the measure is puerile, paltry and pecksniffian. But since this bill has to be passed, we do not want to hold up the unspecified sums that will in due course accrue to the pensioners and superannuatees. We will agree to the passage of the bill.

There is just one other point I would like to make. It concerns the purity of the English language, and I think on this occasion the Prime Minister (Mr. Menzies) would agree with me. Why in the name of heaven do we refer to people who have retired as retirees? We are becoming a little infantile in our conversation when we use words like this. Superannuatees is another word I have heard. That is a caterpillar word. We have all heard about journalese, of which I have been grossly guilty in my time. We know of many words that have been coined, such as bureaucrat. This one, however, is a little treasure. I shall simply leave the retirees in the hands of the retiring Government.

Mr STOKES:
Maribyrnong

.- From conversations I have had with various people I am convinced that there is a decided lack of understanding about the effect of this measure and the one we discussed earlier, the Superannuation (Pension Increase) Bill. This has been due to the complexity of the amendments. I intend, as far as I am able to do so, to explain some of the fundamentals of this superannuation legislation and the original concept of the superannuation scheme. This will, I hope, clarify the amending legislation.

The background of the Commonwealth Superannuation Fund, from which the Defence Forces Retirement Benefits Fund stemmed in 1948, was as follows: When the scheme was commenced in 1922, the unit system was introduced. The maximum number of units was established at sixteen. In 1947 it was increased to 26, in 1954 to 36, and the last amendment in 1959 increased the maximum number of units to 54. Something has been said to-night about unit value. It is true that in 1922 the value of a unit was 10s. a week. In 1947, 25 years later, it was increased by the Chifley Government to 12s. 6d. Then, as the honorable member for Melbourne Ports (Mr. Crean) said in the earlier debate, in 1954 the unit value was increased to 17s. 6d. The value was increased by 5s. over a period of seven years.

At this stage I must say that some of the comments made by honorable members opposite have simply demonstrated their endeavour to make party political capital out of this measure. We must be fair, however, and at the outset let me say that 1 agree with the remarks of the honorable member for Barton (Mr. Reynolds) about the anomaly that exists in the case of aged couples who saved their money and then found themselves entitled, under the new merged means test, to social service pensions as against the people on the lower scale of superannuation contributions. Consideration may have to be given to the cases of such persons. But 1 remind the honorable member, and other honorable members who spoke about increasing the unit value to £1, using the New South Wales scheme to substantiate their arguments, that the New South Wales Government’s contribution is only 50 per cent, of the unit value, whereas the Commonwealth Government’s contribution is five-sevenths or about 71 per cent, of the unit value.

We have heard several speakers ranting about inflation. I have frequently been most appreciative of the erudite approach that the honorable member for Melbourne Ports brings to financial matters in this chamber, but I must say that he was by no means fair when he talked about inflation, because his party condemned the very financial measures that this Government adopted late last year in an endeavour to halt inflation.

Mr Cope:

– And who brought about the inflation?

Mr STOKES:

– It was brought about, to a large extent, by pressure exerted by trade unions, which resulted in the trend towards increased wages, which in turn raised the cost structure, although that is something that honorable members opposite will never admit.

I repeat that the Commonwealth contribution is five-sevenths of the unit value, leaving only two-sevenths to be paid by contributors to the fund. In 1954, when the maximum number of units was 36, members were entitled to one unit for each £65 of salary up to a limit of £1,300. If a contributor’s salary was higher than £1,300 he could obtain one extra unit for each £130 of salary. This basis, of course, has varied as certain adjustments have been made. For example, under the 54-unit- maximum scheme in 1959, one unit could be obtained for each £65 of salary up to a limit of £1,950, with extra units available for each £130 of salary thereafter. The general effect of this unit entitlement is that all existing contributors who, since 1959, have operated on the new 54-unit maximum, are contributing towards the provision of pensions for those on salaries below £1,950 of approximately 70 per cent, of their annual salary in their year of retirement. Of course, the proportion of pension to retiring salary is reduced as the salary increases, so that when the 54-unit maximum is reached the pension represents only 40.9 per cent, of the retiring salary.

In 1947, when the maximum number of units was increased from 16 to 26, a flat increase in the unit value was made. This system had a snowballing effect. It resulted in a situation in which contributors could ensure for themselves substantially increased benefits in the future, which they would not previously have been able to do. In 1957, this method was changed, and a sliding scale of increases for pensioners was introduced which allowed for the fact that those who retired before 1947 had been disadvantaged because of their inability to take up any of the additional ten units made available under the increased maximum introduced in 1947. Even this scheme resulted in anomalies in the case of certain small groups of pensioners, and it was felt by the Government that any future increases on a similar sliding scale would not only increase these anomalies but would also widen the field of those disadvantaged in this manner. For this reason the present scheme was introduced, being considered the most equitable that could be devised.

Under the new scheme, the maximum unit level is to be increased from the 26 of 1947 to 36, which was the maximum introduced on 20th April, 1954. Secondly, those pensioners who retired prior to this date and who had previously contributed for the maximum number of units in relation to their salary entitlement will now receive the Commonwealth contribution in respect of as many of the additional ten units as they would have been capable of taking on the 1954 equivalent of their retirement salary in addition to their present pension - that is, the increases plus the existing pension.

The third point I wish to make is that the value of the 1954 unit is 17s. 6d. a week. The Commonwealth contribution is fivesevenths, or 12s. 6d. The maximum monetary increase is therefore £325 per annum based on ten units at £32 10s. per annum. For example, a vice-admiral who retired at the age of 60 years on the maximum number of units prior to 1954, and whose present pension is £1,183 per annum will, under the scheme now proposed, receive £1,508 or the maximum increase of £325 per annum. However, this maximum increase does not apply to members of the defence forces who retired prior to December, 1954. and whose retiring ages are less than 60 years. Take the case of a major whose retiring age under the 1948 regulations is 47 years. His pension is fixed by the act at an arbitrary percentage of the normal age 60 pension. Therefore, he will receive only that percentage of the base amount of increase - that is, £32 10s. per annum per unit in respect to each of the additional units for which he may now qualify under this amendment. The arbitrary percentage commences at 50 per cent, for age 40 retirements and progressively increases to 100 pet cent, at age 60. In the example of the major retiring at 47 years, this percentage would approximate 65 per cent.

Mr Peters:

– What pension would he get?

Mr STOKES:

– He gets 65 per cent, of the number of units to which he would be entitled on his salary range, as against 100 per cent.

Mr Peters:

– What is that?

Mr STOKES:

– I have not the time to work it out at the moment. The other point is that cognizance has been taken of the difference in status of a pensioner who either accepted during his period of service a lump sum and a reduced pension based on a lower number of units, or did not elect, because of private reasons or on the grounds of expense, to contribute for the maximum number of units to which during his service his salary entitled him. Retired members in these categories will receive only an increase in their present pensions of that proportion of the basic increase that is represented by the fraction formed by placing the number of units they originally took over the maximum to which they were originally entitled. For example, a member whose salary range prior to 1947 entitled him to 20 units and who for certain reasons decided to take only 18 units, will receive only nine-tenths of the proposed basic increase which is payable to another member on a similar salary on retirement who has claimed and contributed for the full twenty units.

Under both acts, as has been stated, widows are entitled to five-eighths of the pension for which their husbands qualified, and this basis is carried through to the amending legislation in both categories.

I believe that this amending legislation is a great feather in the cap of the Government. The Government has not only shown an awareness of the problems confronting the members covered by both acts, who had been forced to retire on fixed low pensions as dictated by the lower salaries of the time, and their difficulties in meeting the demands occasioned by post-war increases in prices; the Government has also shown a willingness to work out a progressive and equitable scheme such as that we have had before us to-night. I should like to remind the House that the total cost of implementing these adjustments - that is, not only of this act but of the previous act - is, I understand, estimated at £750,000 in the current year. This is being wholly provided by the Commonwealth out of Consolidated Revenue and places no strain at all upon the respective contributors’ funds.

The Treasurer (Mr. Harold Holt) in his second-reading speech on this bill concluded with a statement to which I attach a great deal of importance. He said -

  1. . it represents the most equitable method of adjustment-

This is the point I wish to emphasize - and should form a basis for any future considerations.

This is proof that the Government does not propose to stand still. It shows that as and when it is financially capable, it will give effect to such increases as constant vigilance and circumstances may direct.

In this connexion, I wish to draw the attention of the House to the fact that the next existing increase phase is that of 14th December, 1959. Inherent in any adoption of this standard is an increase in the maximum number of units from 36 to 54 - that is, eighteen units - or almost double those covered by the present scheme. I suppose it is quite evident to all honorable members that the total implementation of this basis would cost more than double the present amount and could only be achieved in the long term. However, I believe there is something that could be done in the near future, as an interim measure, to redress an anomaly that has been occasioned by the enforced earlier retirement of many members of the permanent defence forces, following a change in Goverment policy in 1948.

Those I refer to are the men who, during the major period of their engagement, had contracted to serve until they were 60 years of age in the majority of cases and whose contributions for superannuation were based on this longer period, as governed by the Commonwealth Superannuation Act. These people were cut short in their prime and practically compelled to accept the lesser benefits originally laid down in the Defence Forces Retirement Benefits Act of 1948. Special considerations are given to retrenchees - if 1 may use a word that my friend from Parkes (Mr. Haylen) must agree with - under the Superannuation Act. But although these men were virtually retrenched by a change in Government policy, no such considerations are extended to them under the Defence Forces Retirement Benefits Act.

Proposals have already been made to the Treasurer asking for an investigation into this and other anomalies stemming from the provisions of the original act, with suggestions as to methods of increasing their pensions. I now suggest to him that a fair and equitable method of adjustment for this section of members may be this: All members who were so compelled to accept earlier retirement under the 1948 act up to 14th December, 1959, would have their existing pensions increased by five-sevenths of the difference between such pensions and that to which they would have been entitled in the rank of their retirement as at 14th December, 1959, on similar general conditions to those in the present amending legislation; save and except that no such increase shall accrue and become payable until the member attains his original retirement age of 60 years. I estimate, with due respect, that this scheme would not cost more than £250,000 per annum. I am quite aware that it is a matter of Cabinet judgment as to whether this amount would come out of Consolidated Revenue.

I would like to remind the House that the fund appears to be in a most healthy state. The annual report disclosed a total investment of contributors’ funds as at June, 1959, of £1 1,165,795, which earned interest in that year of £465,937. Under the act, the interest is added annually to the amounts to be re-invested. The amount paid in that year in pensions from the fund totalled only £130,963. Even allowing for actuarial treatment, there seem to be ample funds, without diminishing the 1959 invested capital, to make available sufficient money to finance my suggestion and not to impose any further drain on public moneys.

I know that the Treasurer and his department are doing all in their power to administer effectively this most complex piece of legislation which was hastily placed on the statute-book to meet the discrepancies which arose with earlier retirement ages following a change of policy by the Labour Government in 1948. I know that the Government has made many improvements to date and intends to mak; others in the future. However, 1 urge the Treasurer to give early consideration to the matters which I have raised so that the financial hardships which this group of people have suffered for a considerable time will be removed. In conclusion let me extend my sincere congratulations, not only to the Government and to the Minister but also to the officers of the department for introducing the present amending legislation. They have done so much to ease the financial burden on this most valuable sector of the community. They have taken a step in the right direction.

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. Harold Holt) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to provide for Increases in certain Defence Forces Retirement Pensions.

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.

page 2317

STATES GRANTS (SPECIAL ASSISTANCE) BELL 1961

Second Reading

Debate resumed from 17th October (vide page 2101), on motion by Mr. Harold Holt-

Thai the bil] be now read a second time.

Mr BARNARD:
Bass

.- The measure now before us authorizes payment to the two claimant States of Tasmania and Western Australia of a total of £11,231,000 for the financial year 1961-62. Of that amount £6,156,000 will be made available to Western Australia and £5,075,000 to Tasmania. In his second-reading speech the Treasurer (Mr. Harold Holt) stated that the total amount to be made available is an increase of £2,613,000 on the amount which was provided in the financial year 1960-61.

At this stage I should like to pay a tribute to the work of the Commonwealth Grants Commission. Although on some occasions I am in complete disagreement with the basis upon which the commission makes its decision, I have always felt that at least it gives complete and thorough consideration to the matters in relation to the States with which it deals. I should like to pay a tribute also to the former chairman of the commission who, I have no doubt, devoted himself with a great deal of enthusiasm and certainly common sense to this very responsible body.

The grants are determined by the commission on the basis of the States’ financial needs. Previous reports of the commission have indicated that there are two elements in this formula, first, the qualification of the States for a special grant, and secondly, the need to ensure that the claimant States are not left in a financial position in which they are unable to accept their responsibilities in the federal community. I have no doubt that in the future, as in the past, the Commonwealth Grants Commission will consider the needs of the two remaining claimant States. To this extent I believe that the commission examines thoroughly the Budget achievements of the various States, but it should be pointed out at this stage that in recent years the two remaining claimant States of Western Australia and

Tasmania have been obliged to budget annually for a deficit. The non-claimant States have not been placed in this position in every instance. There now is a need for the Government to consider further the whole question of Commonwealth and State financial relations.

The normal system of federation is growing weaker. By that I do not imply that the Commonwealth has, or has shown, any desire in the past to encroach upon the normal functions of the States. Nor do I suggest that the States have not been prepared to accept their responsibilities. But as a result of the introduction of uniform tax laws the States no longer are masters of their own financial houses. They are becoming increasingly dependent annually upon the amounts that they receive from the Commonwealth Government, whether in the form of tax reimbursements or, in the case of the claimant States now under consideration, as a result of the deliberations and considerations of the Commonwealth Grants Commission.

Under the existing tax laws the States are provided each year with a certain amount which is worked out on a tax reimbursement formula. But I have always held the opinion that the formula does not compensate the States completely for their increasing population as a result of the Government’s immigration programme. The tremendous increase in the school population is an example. For these reasons I believe there is need for the formula to be overhauled. This financial year, the Commonwealth will be financing from revenue the greater part of the public works for which it is responsible. On the other hand, the States will be obliged to finance their public works to a large extent at least from loan moneys and so will have to pay interest as well as repay the capital. In that respect they are certainly at a great disadvantage. Owing to the geographical position and the vast area of Australia it will always be essential for the Commonwealth as a whole to accept responsibility for the development of this continent.

Although a certain amount of work has been carried out in the past by the private sector of the economy, there are certain national development works which will always remain the responsibility of the Commonwealth Government, purely and simply because if they were left to private enterprise no development at all would take place. I point, for example, to the railways. In some countries the railways are privately owned but in Australia, had it not been for the central government and the various State instrumentalities there would certainly not have been the development of railways that has taken place. Another example is the Bell Bay aluminium industry. Had it not been for the enterprise of the central Commonwealth Government there certainly would not have been an aluminium-producing industry in this country to-day. It is perfectly true that the Government has now handed over its responsibilities in this respect partly to the State of Tasmania and partly to private enterprise, but the fact remains that had it not been for the initial planning and finance made available by the Commonwealth there would not have been production of aluminium in this country to the extent that it is taking place to-day.

The third example I wish to refer to is the Snowy Mountains Hydro-electric Authority which is financed by the Commonwealth Government largely from revenue. This is completely opposite to the position of the various State instrumentalities. The Government of Tasmania has extensively developed hydro-electric power in that State in recent years largely with loan funds which have been made available to it by the Commonwealth Government, but on which interest payments as well as capital repayments have to be made. Then there is the development of the north, for which the Commonwealth is certainly responsible. It is obvious that private enterprise is not prepared to do anything about the urgent development of the north.

I refer next to the developmental work which is being carried out in Western Australia at the present time and for which the Commonwealth Government has accepted some of the financial responsibility. I have always believed that the revenue made available each year by the Commonwealth for public works should be pooled, and that the State instrumentalities should have a share in that revenue for the purpose of underfaking their public works. Obviously, if the States were not obliged to repay to the

Commonwealth the capital which they receive as a result of the loan programme, and did not have to pay interest on it, public works in Australia would be much cheaper than they are to-day.

The next matter to which I wish to refer concerns the reports of the Commonwealth Grants Commission. This is a subject to which I have referred previously during debates on measures such as this. I have always felt that an injustice is being done to certain claimant States. According to the twenty-first report of the Commonwealth Grants Commission the view of the Commonwealth Treasury is that miscellaneous expenditure by the States should be taken into consideration in assessing State grants. In other words, the commission has to consider thoroughly the efficiency of a State and whether economies in some items which the commission has been pleased to refer to as social services could be effected.

I have always argued that no State should be penalized because of its expenditure on social services, If one State is prepared to spend more money on, say, education than another State does, I do not think it should be penalized. Similarly another State may spend more on health. If a State believes it should spend more on health I think it has a perfect right to do so. I do not believe that any State should be penalized merely because, in its own interests, it decides to spend more in one direction on social services than another State does.

The reports of the Commonwealth Grants Commission normally deal extensively and thoroughly with the budgetary adjustments of the various States and the commission certainly gives a great deal of consideration to the information that is placed before it. The table set out at page 65 of the commission’s twenty-eighth report shows the expenditure on social services in the various States and refers to the net expenditure per head of population from revenue sources on certain social services during the financial year 1959-60. It refers specifically to expenditure on education, and on health, hospitals and charities. The final table deals with expenditure on law, order and public safety in the various States.

In New South Wales, for example, expenditure on education was 259s. 6d. per head of population. In Tasmania the figure was 305s. 2d. The State which spent least on education was Queensland, with a figure of 204s. 3d. The total for the States was £25 ls. 9d. Tasmania spent more on education than any other State in the Commonwealth. On the other hand Queensland spent 183s. 7^. per head of population on health, hospitals and charities. In Tasmania, the expenditure per head of population on health, hospitals and charities was 177s. 6d. It will be seen from those figures that some States place greater importance on health and hospitals than they do on education and, as I have said already, I believe that the States have a perfect right to decide just what they will spend on any particular service. I do not believe that any State should be penalized because it has spent money on its social service programme. No doubt, the Commonwealth Grants Commission has taken that factor into consideration when assessing the amount to be paid to Tasmania, one of the claimant States, in any year. Tasmania, of course, has recognized the importance of education, and has spent more on education than some of the other States and it has been penalized for this by the Commonwealth Grants Commission. I submit that a claimant State should not be looked upon as inefficient if it spends more on social services than do some of the non-claimant States.

I come now to the question of financial assistance from the Commonwealth Government. I acknowledge that this Government has been prepared this year, as in other years, to honour in full the recommendations of the Commonwealth Grants Commission, but I must emphasize once again that although another claimant State - Western Australia - has enjoyed special grants each year from the Commonwealth Grants Commission, Tasmania has never been able to qualify for one of the emergency grants which have been made available so frequently by the Commonwealth to other States. At the moment, this House is considering measures under which it is proposed to make three emergency grants to Queensland for the development of roads, the beef industry there, and so on. No doubt those grants are being made available at the request of the Queensland Government, and on most generous terms.

Western Australia, too, has been given every assistance by the Commonwealth for developmental schemes, all of which are referred to in the report issued by the Treasury on Commonwealth payments to or for the States. In that report, reference is made to the fact that in April, 1961, the Commonwealth Government agreed to assist the Queensland Government with the construction of certain roads in the gulf country of Queensland, and that under the terms of the agreement the Commonwealth Government is committed to a total expenditure of £650,000 in that financial year. It also discloses that the Commonwealth Government made available £5,000,000 to Western Australia to finance the cost of constructing a comprehensive water supply scheme in that State.

I make no apologies for being parochial in these matters, and I point out that Tasmania has consistently made representation to the Commonwealth Government for financial aid for various developmental projects, but with the exception of the generous assistance which it has given to keep the sea lane open between Tasmania and the mainland, the Commonwealth Government has not been prepared at any time to accede to requests made by the Premier of Tasmania with the unanimous agreement of all parties in the House of Assembly in that State. Quite recently, the Premier of Tasmania met the Prime Minister and discussed with him several development projects in Tasmania. I am not in a position to say just what those projects were, but I do refer honorable members to the land development scheme in the north-east and the development of the vast mineral deposits on the west coast of Tasmania. When replying to a question asked by the honorable member for Franklin (Mr. Falkinder) a few days ago, the Prime Minister stated emphatically that he was not attracted by the proposals that were put to him by the Tasmanian Government.

I have said consistently in this House, and I say again - because I believe it to be true - that this Government looks upon Tasmania as being completely expendable, politically at any rate. If the Commonwealth Government can see fit to give sympathetic consideration to the development of irrigation schemes in Western Australia, surely it should also see fit to give equally sympathetic consideration to developmental schemes in Tasmania. I say at once that the Government has not had time, since the Tasmanian proposals were submitted to it, to give them reasonable consideration. Those proposals have been merely dismissed out of hand. I repeat that, with the exception of the money that it made available for the construction of the two ferries that are now running between Victoria and Tasmania, this Government has given no consideration whatever to proposals that have been advanced by Tasmania. Those proposals which were submitted with the unanimous approval of all political parties in Tasmania, have been rejected out of hand.

There are certain developmental projects in Tasmania that merit serious consideration by this Government. I refer in particular to land development on the north-east, and the development of the extensive mineral deposits on the west coast. These projects can be undertaken only if the Commonwealth is prepared to make money available on the same generous terms as those upon which assistance was granted to Queensland. Other development which has been put before the Commonwealth Government, and which has had no consideration whatever from it, is the hydro-electric work done in Tasmania. In contrast to its refusal to help Tasmanian projects, there is the generous assistance granted by the Commonwealth in connexion with the Snowy Mountains hydro-electric scheme. Tasmania has developed its own hydro-electric potential extensively over the last 20 years, and the cost of this work has been met entirely from loan funds upon which the State is required to pay interest to the Commonwealth Government. The Commonwealth is developing the Snowy Mountains scheme from revenue. I have no quarrel with that, because I have always maintained that our public works as far as possible should be developed from revenue rather than from loan funds.

Having made those points I return to the measure to say that the Oppos.it.ion does not oppose it. We appreciate that the Government is honouring entirely the recommendations of the Commonwealth Grants Commission as it has done in other years. The Opposition accepts the recommendations of the commission and expresses its complete satisfaction that the Government has accepted the recommendations.

Mr. DUTHIE (Wilmot) [10.511. - I support my colleague, the honorable member for Bass (Mr. Barnard). All members of the Parliament know how this complex arrangement of grants to the States operates. The last two remaining claimant States - Western Australia and Tasmania - are assisted through the Commonwealth Grants Commission. The interesting fact about the commission is that it takes into consideration on the one hand any laxity, maladministration or overspending in any field when assessing the assistance it will give. On the other side of the ledger, the commission is cognizant of the fact when a State is battling against difficulties as sometimes happens in the case of floods or droughts. Generally, the Grants Commission acts as a watchdog on the State finances; but I wonder whether it is not a little dictatorial. To give an illustration of how Tasmania has suffered from adverse adjustments, I refer to the Tasmanian Railways and the metropolitan transport in Tasmania. The Grants Commission states at page 68 of its report -

For Tasmania adverse adjustments have been made of £40,000 for railways and £20,000 for metropolitan transport.

The commission had it in mind to give an adverse adjustment on account of housing and the report for 1961 states -

Consideration was given to the adoption of an adverse adjustment for housing because the evidence of the State Housing Department indicated that the annual loss on State housing activities arose largely from the fact that some of the houses erected in the earlier post-war years were let at less than the economic rent. However, hefore any final decision was reached, information was furnished by Tasmania indicating that further action has been instituted which would result in a marked reduction of the total cost borne by Consolidated Revenue in respect of housing. This action included a revision of the basis on which rental rebates are determined, and the adoption of the practice followed in other States of treating capita] profits on sales of houses as revenue of the housing authority. In view of this the Commission has decided not to adopt an adverse adjustment for 1959-60. If. however, a loss continues to be disclosed the Commission will need to examine more closely the basis on which a number of low-rental tenancies have been continued.

That is where the Grants Commission puts the Government on a spot. In respect of railways, this is what the commission stated at page 98 of its report -

In the case of Tasmania, the overall level of charges was also below the rates in the standard States, and, having regard to the nature of the main items of traffic and to the conditions of operation, the Commission decided to adopt an adverse adjustment of the sum of £40,000.

That was a total of £60,000 on the railways and metropolitan transport. What is the commission forcing the State to do by this sort of approach? lt is forcing the State to put up rates on railways and on metropolitan transport. Metropolitan transport in Hobart and Launceston is run by a trust now, and it has been having difficulty because of unemployment and the increased use of private motor vehicles. It may be that a completely revolutionary approach is needed and that by cutting rates the Metropolitan Transport Trust might be able to get people back to the public transport system. This might occur generally in Australia because all transport authorities are in trouble for the same reason. But by penalizing Tasmania for low rates and charges on transport, this commission is forcing up costs to the public. Once we start to increase freight rates on the railways, we will hit at the primary producers who use our railways and also at the big industries. Where does this crazy pattern end? We on the Opposition side believe that public utilities should serve the people and should not necessarily make a profit. When they can make a profit it is very good. But who will suffer in the process? We believe in the greatest good for the greatest number. Sometimes a public utility has to run at a loss to do justice to all the people using it. Although the Commonwealth Grants Commission is a watchdog, it can put undue psychological and ethical pressure on the States concerned to do certain things that are not, perhaps, government policy.

The Tasmanian State Budget for 1959- 60 on which the Grants Commission worked showed an increased deficit of £1,032,000 compared with £908,000 in the previous year 1958-59. That was an increase in 1959-60 of £124,000. In that year, there were devastating floods in the Derwent Valley. The total public and private loss was estimated at £3,000,000 when the river raged out of control. Expenditure on hail insurance claims and flood damage in 1959-60 was £344,000. So Tasmania’s deficit in that year was aggravated by this devastating flood. That sort of thing happens to all States. I think we should be given some consideration when such catastrophies hit the island.

The commission also took into consideration the effects on State Budgets of State basic wage policies. Western Australia and Tasmania fell into this category and the Grants Commission reported -

This year Western Australia submitted that the unfavourable adjustment in respect of the State basic wage level should be reduced because -

the financial result of the railways had improved;

the effect of the higher basic wage has been offset by policies directed at restricting both the total number employed in State undertakings and the expenditure on overtime and penalty time to a minimum.

There was also discussion at the Hobart hearings about the calculation of adjustments arising out of State basic wage policy. In Tasmania the situation had developed in which a number of State employees engaged under Federal awards were paid a basic wage higher than either the Federal or State basic wage.

That was the result of government policy in Tasmania and of a decision by the State arbitration tribunal in Western Australia. The Commonwealth Grants Commission takes all these things into consideration, and any rise in wages under State awards is immediately calculated by the commission and applied adversely to the State. The total increase of basic wage payments was about £300,000, and that had an adverse effect on the Tasmanian budget. Every State is caught and trapped by the process of wages chasing prices all the time in this period of crazy inflation under the administration of the Menzies Government.

The honorable member for Bass mentioned the need for emergency grants for special projects in Tasmania. Mr. Reece, the Tasmanian Premier, has recently made proposals to the Prime Minister (Mr. Menzies) about two projects. We do not yet know the final result of the approach to the Prime Minister. Two previous proposals were rejected out of hand. The Grants Commission has recommended the payment of special grants, totalling £5,075,000 to Tasmania and £6,156,000 to Western Australia, in the current financial year. Tasmania has received no special emergency grant from the Commonwealth for very many years. It is of no use for the Prime Minister or the Treasurer (Mr. Harold Holt) to try to dodge that fact. This Government has sold out the Bell Bay enterprise to foreign interests for £9,000,000, which is to be paid over about five years. We have urged the Government to re-invest that money in some of the Tasmanian projects about which Mr. Reece has so ably submitted detailed proposals for the Prime Minister’s consideration. The proceeds of the sale of this plant will go into the Commonwealth Treasury and the enterprise will be completely owned by foreign interests. The proceeds of the sale ought to be re-invested in specific projects in Tasmania. I trust that the Government will consider this suggestion, Mr. Deputy Speaker. I am sure that a Labour government will consider it after the next election. We have proposed irrigation schemes and even a thermal power station project which could be undertaken on an economic basis if the Commonwealth advanced £8,000.000 to £10.000.000 to meet the capital cost. This power station would save the coal mines of the Fingal valley.

I commend the Commonwealth Grams Commission on the great amount of detailed work that it has done. It heard about 50 witnesses in Western Australia and Tasmania. All told, it did a tremendous amount of work. I commend the commission’s report to the members of this Parliament for the detailed information concerning the economic situation in Australia which appears at the back. This report is an invaluable guide and reference book on many matters.

In conclusion, Mr. Deputy Speaker, I turn to another matter. The Leader of the Opposition in the Tasmanian Parliament has criticized the present Tasmanian Government for having made Tasmania the highest taxed State in the Commonwealth. Appendix No. 4. table No. 5, at page 125 of the Commonwealth Grants Commission’s report. gives details of State taxation revenue on a per capita basis for the financial year 1959-60. The figures are: Victoria, £17 ls. 5d.; New South Wales, £16 4s.; Queensland, £15 12s.; Western Australia, £12 9s.; South Australia, £12 6s. 10d.; and Tasmania, £12 6s. 5d. The figure for Tasmania is the lowest. Yet the Leader of the Opposition in the Tasmanian Parliament has attacked the Premier and charged the Tasmanian Government with having taxed the people of Tasmania more heavily per capita than the people of any other State are taxed. That charge is utter rubbish, of course, as is proved by the particulars in the report of the Grants Commission which I have just given to the House. Tasmania is the lowest-taxed State, not the highesttaxed.

Question resolved in the affirmative.

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

page 2322

ADJOURNMENT

Royal Australian Air Force - Political

Parties - The Parliament: Petitions -

Basic Wage - Security

Motion (by Mr. Adermann) proposed -

That the House do now adjourn.

Mr JAMES:
Hunter

.- Mr. Speaker, I rise to-night to bring to the notice of the House the arrogant and highhanded attitude of certain members of the Royal Australian Air Force at the Williamtown air base. I know, from my association with Air Force men before I entered this Parliament, that many officers and others in the service are decent and public-spirited. I wish to bring to the notice of the House the deterioration that has become apparent in the public relations of the Air Force in recent times.

The Cessnock Rotary Club, which is a very public-spirited organization, about a fortnight ago, wrote and asked me to appeal to the R.A.A.F. authorities to permit parachutists to jump into the Glenbawn dam near Scone, which is about 20 air miles from the Williamtown aerodrome, on 12th November, to aid an aquatic carnival that is to be conducted by the club. The carnival will benefit various charitable organizations, including the spastic centre, the local branch of the Red Cross Society, the police boys’ club and kindred organizations. RotaTy clubs, particularly in my electorate, are seen in a different light from that in which they were regarded years ago, when it was suspected that their assemblies were designed to aid the members in promoting and stimulating their business activities. In the Hunter electorate to-day, particularly at Wallsend and at Kurri Kurri in the heart of my electorate, and also at Cessnock, rotary clubs show a deep interest in charitable organizations and in relieving the burdens and soothing the sufferings inflicted on unfortunate people in the community as a result of this Government’s economic measures. The Cessnock Rotary Club with men like Athol Lightfoot, Mr. Rob Lewis and Sam Robinson, among others, takes an interest in this work. These men have terrific driving force and are anxious to help the community in the area in which they live. In asking for these parachutists from Williamtown aerodrome to be dropped into the Glenbawn dam at this aquatic carnival they only wanted to help in the charitable work on which they were engaged. In response to inquiries made of me I Tang a friend of mine, a very senior man in the Department of Air, who said that he saw no objection to the proposal, but that it would be a matter for decision by the Royal Australian Air Force authorities at Williamtown. The R.A.A.F. authorities at Williamtown have refused to co-operate, and have endeavoured to put a wet blanket over this aquatic carnival to be held at Scone in the electorate of Paterson on 12th November.

I wish to point out that these highranking air force officers have entirely forgotten that they are living in a democracy, and that the taxpayers of Australia pay about £60,000,000 a year for the maintenance of the Air Force. These are times of peace, when the Air Force people could well do something to help other people to do the work for the community that the men in the Cessnock Rotary Club are doing. It is only a matter of about 20 air miles from Williamtown aerodrome to the site of the carnival, and the appearance of the parachutists would have greatly assisted in the success of the function.

This is not the first instance in which such an attitude by the R.A.A.F. has come under my notice since I have been a member of this Parliament. I recall the attitude of a man whom I named in this Parliament - a very senior officer in the Air Force - who refused permission for a charter aircraft to take off from Williamtown aerodrome to take members of the Wallsend bowlers’ club, known as the “ Wallsend Flying Bowlers “ to Broken Hill on Anzac week-end, 1960. They contemplated flying to Broken Hill, laying a wreath on the cenotaph there, and enjoying a game of bowls over the week-end. The officer in charge of the R.A.A.F. air operations in the area refused to allow Lite charter aircraft to take off from Williamtown. The reason that he gave to the honorable member for Shortland (Mr. Griffiths), who spoke to him on the telephone - I was beside the honorable member at the time - was that it would interfere with night flying of jet aircraft. I made my own investigations, and I established that no night flying was contemplated on the night in question. So it was a complete, diabolical lie when this high-ranking officer said that one of the reasons was that it would interfere with night flying. He gave as a second reason for not permitting the charter aircraft to take off that he would have to bring on special ground crew to bring the aircraft in. My inquiries showed that this also was a complete lie.

Mr SPEAKER (Hon John McLeay:
BOOTHBY, SOUTH AUSTRALIA

Order! The honorable member should moderate his language.

Mr JAMES:

– It was untrue, or wickedly false. It was verging on a lie, Mr. Speaker, if it did not reach that class because I established the fact that the ground crews are maintained at Williamtown aerodrome 24 hours a day, seven days a week, in case of civilian aircraft having to land there. So that was No. 2 untruth.

The same officer is now in charge of Air Force operations in Darwin. When I was in Darwin recently, the people in the Fannie Bay district were complaining about their homes being damaged as a result of the dropping of bombs on a bombing site at Fannie Bay. This officer made a statement to the Darwin daily newspaper along the lines that those people should have known it was a bombing area before they built their homes there. That is complete arrogance, Mr. Speaker, I say with all respect. This is a democratic community where the people rule, and where the people pay the wages of the members of the Air Force and other defence forces. The bombing site in Darwin could well have been moved without great expense to another area rather than that decent citizens should be told that they should not have built their homes where they did.

I should like to see those matters rectified. This is what is commonly referred to by the honorable members for East Sydney (Mr. Ward), Parkes (Mr. Haylen) and other honorable members on this side as bureaucratic control of Government, Where decent men like the Minister for Air (Senator Wade) and the former Minister for Air (Mr. Osborne) virtually become rubber stamps for those high and mighty, arrogant, powerdrunk senior officers of the R.A.A.F. I hope that those matters will be rectified, and that the community will be considered, particularly the members of the Cessnock Rotary Club, who show an interest in the well-being of unfortunate people. It is all right for the honorable member for Griffith to laugh. This week he has been showing great sympathy with an unfortunate, formerly blind young woman, for which 1 admire him, but when I ask this Parliament to be conscious of the fact that the Cessnock Rotary Club is showing some sympathy with unfortunate people and spastics, the honorable member for Griffith laughs with great arrogance, and tries to make a joke of it. It is not a joke. I would hate to see him become Minister for Air, because he would just rubber-stamp the decisions of senior officers of the R.A.A.F. as is being done to-day.

Mr Snedden:

– That is enough.

Mr JAMES:

– You just keep quiet, or I will say something about you in a minute. I was deprived of the opportunity of bringing this matter forward this morning in the Grievance Day debate because-

Mr SPEAKER:

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

Mr JESS:
La Trobe

.- The only thing I want to say in regard to the speech of the honorable member for Hunter (Mr. James) is that he said he does not like wet blankets. Frankly, at this particular stage of the game, T should like to raise a matter of some importance that has to do with some wet blanketry in Melbourne. I came into this matter after a small incident in the

House last week or the week before with the honorable member for Hindmarsh (Mr. Clyde Cameron) and the honorable member for Yarra (Mr. Cairns). I was in my office on Monday, when I was rung on the telephone by a gentleman - I presume he was, because he showed every sign of it to me - who asked whether he could come to see me. He came to see me, and he brought a pamphlet which is going around Melbourne at the moment, and which all members on both sides of the House know about. It is headed “Australian Labour Party, Victorian Branch, rank and file committee. Labour ‘ Yes ‘ Sam Cohen No ‘.” I do not know much about this matter, but honorable gentlemen opposite, I am sure, know much more about it. All I can say as to the bona fides of the gentleman who came with it to me is that he produced his union card and that, to me. was an indication that he did not vote for the parties on this side of the House. It is indicative of the position to-day in Australian politics when a section of the people who formerly voted for members on the other side of the House are now being forced to come to members on the Government side for assistance as a minority group, when they cannot be heard, and cannot get the facilities to be heard. The particular question in this circular with which I wish to deal refers solely to the part that is headed “ Strange unity “.

To summarize the matter, it is claimed by this group of people that after the heavy press coverage that has been given in Melbourne newspapers in recent weeks to their activities and to the background of the No. 2 Senate candidate for Labour in Victoria, they have now been prevented by an agreement from airing their views in the press. They claim - whether it is right or wrong I do not know - that a delegation from the Victorian Central Executive of the Labour Party, which included the Leader of the Opposition (Mr. Calwell) and the Deputy Leader of the Opposition (Mr. Whitlam), went to the press, and that as a result it was agreed that except in certain circumstances no coverage would be given in the press to their fight. The reasoning of these people is rather extraordinary, but they claim that the newspapers agreed to this arrangement of strange bedfellows because they wanted the Communists to remain affiliated with the Labour Party. They wanted the Senate candidates to succeed because this would keep the Liberal Government in power. Frankly, I reject that proposition. I know that the Government and the members of the Libera] Party and the Country Party would have nothing to do with it at all. However, one never knows where the truth lies when some of these things are said.

The circular then goes on: -

The Central Executive is interested in the strangulation of any opposition against their disastrous policy of unity tickets, co-operation with communists, and acceptance as members of the A.L.P. of secret Communists and fellowtravellers.

Any one member of this Parliament would agree that at this time particularly, when an election is to be held on 9th December, the people of Australia have the right to hear everything they can about the candidates from whom they will have to choose when casting their votes. Any agreement between a political party and a section of the community to stifle free speech and criticism by a small group of people who have no other way of getting their opinions into the newspapers is wrong. For this reason I feel it is my duty to raise this matter and possibly give these people some assistance in their fight.

Mr Harold Holt:

– Does not the pamphlet refer to the Leader of the Opposition and the Deputy Leader of the Opposition?

Mr JESS:

– I mentioned that, lt certainly does suggest that they were in the delegation that approached the newspapers. Whether that is correct 1 cannot say.

The question I would like to ask is this: Where does the Labour Party or the Opposition in this Parliament stand in this matter? Where does it stand in regard to what is happening in Australia to-day, when this political party, the Labour Party, is being publicized as an honest party fighting communism and going all out for the things that Australians believe in? I would like to read to the House a few remarks made by the Leader of the Opposition on 4th November, 1948, when he was a member of the Government of this country. They appear in “ Hansard “, volume 197, page 2523. The honorable member was speaking on a motion of censure against the Labour Government for its procommunist tendencies. He said -

The Australian Labour Party has always opposed communism, because it has always stood for liberty. It opposes communism because communism is based on an alien philosophy. It has declared time and time again that an unbridgeable gulf exists between the Labour Party and the Communist Party.

Does the Leader of the Opposition say that to-day? Can he honestly say that, in view of what is happening with regard to Labour’s Senate candidates in Queensland, in South Australia and in Victoria? Can he say to-day that he believes in these things? What have the right-wing members of the Labour Party, who sit on the fence and never commit themselves either way, got to say about it?

Let me quote also some remarks made by the honorable member for Lalor (Mr. Pollard) on 9th September, 1948. They appear at page 356 of “ Hansard “ for that date. The honorable member said -

It is well known to the average intelligent Australian - and most Australians are intelligent - that the policy of the Communist Party is completely foreign to the Australian Democratic outlook. That policy is quite incapable of realization because it will be rejected by the people at elections.

I only hope the honorable member bears that in mind on 9th December. I hope he also refreshes his mind about what he said in this House a week or two ago. I remind the House that the honorable member asked. “What is wrong with being a Communist?” I should also tell the House what was said in 1948 by Mr. Dedman, who was then a member of the Government. He stated that communism was out to destroy the Australian Labour Party. Have honorable gentlemen opposite no responsibility to the decent section of the Australian Labour Party or to the people of Australia? I do not think they can claim to have any such responsibility.

Let us consider the background of some of Labour’s Senate candidates. The No. 3 candidate on the Labour ticket in South Australia is Mr. J. Cavanagh of the plasterers union. He is a prominent member of the left-wing-controlled building trades group. In 1948, he was refused permission by the then Labour Government to go to the Woomera Rocket Range. He was prevented from doing so under the Approved

Defence Establishments Protection Act, which was designed to protect the Woomera Rocket Range against Communist attacks on the industrial front. It is most interesting to note that the honorable member for Kennedy (Mr. Riordan), who was then the Minister for Supply, refused Mr. Cavanagh this permission, stating -

The Government was firm in its determination to prevent trouble at such establishments at Woomera by persons who had affiliations with associations advocating Communist ideas and theories and subversion generally.

What a great set-up it will be if Mr. Cavanagh comes to this Parliament as an honorable senator from South Australia. No doubt the honorable member for Kennedy will buy him a drink and say, “ Let us forget it for auld lang syne. I did not mean it. Let us forget that you are a Communist or are accused of being a Communist.”

The No. 2 Labour candidate for the Senate in Queensland is Dr. Poulter. Everybody knows his associations. He has been named as a fellow traveller with Communists. The No. 3 Senate candidate for Labour in Queensland is Mr. A. Arnell, who has become known as “ Unity ticket “ Arnell. The honorable member for Lilley (Mr. Wight) gave us his full history and no honorable member opposite was able to give any effective refutation of the facts stated by the honorable member for Lilley. In Victoria the No. 2 Senate candidate for Labour is Mr. Sam Cohen. Whether he is or is not a Communist, I do not know; but I do know that he is president of an organization that has been described as a Communist-front organization.

I do not care about what is happening in the Labour party, but I do care about what is happening to Australia. If you people opposite are prepared to admit the truth, then admit that you are putting up these candidates and admit their background, so that the people will know whom they are voting for. If you are trying to prevent the people from knowing who the candidates are whom you are presenting as possible members of an alternative government, then I think it is criminal. What would happen if we had Communists in this Australian Parliament? They could see every defence establishment. Every secret would be open to them.

Mr SPEAKER:

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

Mr PETERS:
Scullin

.- The honorable member for La Trobe (Mr. Jess) said that some one rang him up and then brought him a document, part of which he has read to this House. He said this gentleman produced a union ticket, and that this showed that he would not vote for a member on the Government side of the House. Those were the honorable member’s exact words. He considers it inconceivable that any member of a union could possibly vote for any member of the Liberal Party. This shows that occasionally, in a frank moment, a member of the Liberal Party will tell the truth. I cannot conceive of any unionist in the La Trobe electorate voting for the honorable member who has just sat down.

The honorable member talks of criminality. Every individual who sits on his side of the House is personally responsible for a state of affairs in which there are more than 100,000 unemployed, a state of affairs which is a disgrace to this country. That brings me to the subject about which I rose to speak. The Minister for Shipping and Transport (Mr. Opperman) received a communication from the Australian Textile Workers Union in his electorate asking him to present to the Parliament a petition signed by 1,400 members of the union. That petition was not presented to the Parliament. I received a petition to present to the Parliament. It had attached to it hundreds of signatures. That petition was not presented. Other honorable members on this side of the House and probably honorable members on the other side of the House received petitions to present, but they were not presented to the Parliament. They were not presented because they were not in the proper form. The petition that came to me is in the following terms: -

Petition to Federal Parliament through Mr. E. W. Peters, M.H.R., Member for Scullin.

We the members of the Australian Textile Workers’ Union employed at Prestige Ltd. Brunswick desire to draw to your attention the parlous state of the Industry - hundreds of people have lost their jobs and the Mills are now only working four days a week - this because of the Government policy of lifting import restrictions and the Bank Credit squeeze.

This artificial depressing of the Industry is causing uncertainty, fear and hardship among the people.

We ask that you as our local parliamentary representative, place our views before the Government.

We further request that you place before the House, our petition as a matter of urgency before the Textile Industry suffers irreparable damage and consequent suffering to the people in your electorate.

That is worded in a particularly respectful manner.

Mr McColm:

– What is the date of it?

Mr PETERS:

– There is no date on this petition, but the Minister for Shipping and Transport received his communication in August. My petition, together with other petitions, was not allowed to be presented to the Parliament although it expressed clearly and definitely in respectful language what the people desired to be submitted to the Parliament. How should they have submitted their petition so that it would receive the attention of the Parliament? They should have said -

The humble Petition of the representatives of Prestige Ltd. respectfully sheweth . . . Your Petitioners therefore humbly pray . . . And your Petitioners, as in duty bound, will ever pray.

Mr Anderson:

– What is wrong with that?

Mr PETERS:

– What is wrong with it? ls there anything more archaic, more absurd or more Uriah Heap-like than that type of petition? Of course there is not! I appeal to you, Mr. Speaker, in this semienlightened age in which we live, to ensure that when members of this democracy - our masters and the masters before whom honorable members opposite will be trembling on 9th December - seek to put a petition before the Parliament and couch it in unexceptional language, their petition is received by the Parliament. They should not be prevented from placing their petition before the Parliament. The petition I received was not the only one. The Minister for Shipping and Transport had one. There were thousands of names on probably dozens of petitions, but none were presented to the Parliament because they were not couched in this absurd language. Are we to continue in this way and prevent people from expressing their grievances through their representatives in their Parlia ment, no matter what the grievances may be?

I take this opportunity to appeal to you, Sir, to use whatever power you have as Speaker to ensure that in the future respectfully worded petitions in unexceptional language are received by this House. I ask you also, if you possibly can, to convey to the wastepaper basket petitions using terminology of the type that I have described as Uriah Heap-like.

Mr WENTWORTH:
Mackellar

– I wish to refer to the most serious matter raised by the honorable member for La Trobe (Mr. Jess). It is a serious matter that there is a considerable Communist taint in some of the candidates the Australian Labour Party is presenting to the people at the coming general election. This matter has great significance. It is, I think, fairly certain that the Communist affiliations of the Labour Party will result in its resounding defeat. It is probable even that after this election the executives of the Labour Party will be cleaned up. It may be that the left wing will be ousted from it. But what good is this if, on a six-year term in the Senate, there is to be left the residue of Communist influence? Just as a locust before it dies will lay eggs, to await a favorable season, so the Labour Party will be leaving Communistinclined senators on a six-year term to wait for a favorable opportunity to return Communist influences to the Parliament and the country.

I do not wish to refer to-night to Mr. Poulter and Mr. Arnell. No doubt other honorable members will do so. I do not wish to refer to Mr. Cavanagh. But I wish to say something about the position in Victoria where Mr. Cohen has the second position in the Labour team and is therefore reasonably certain of election to the Senate. He has succeeded in ousting his old enemy Mr. Ashkanasy, who was expected to get the position. This is an instance in which the left wing has once again succeeded in routing the right wing of the Labour Party.

Mr. Cohen is the president of the so-called Jewish Council to Combat Fascism and Anti-Semitism. This is not, I believe, a bona fide Jewish body. It does have in it still a number of people who are probably unaware of its real nature. In its past - certainly at the time it was founded - it acted in a way that would have had the approval of most of Jewry. But of late it has deflected and has become not a body fighting for Jewry but a body devoted to the betrayal of Jewry to the Communists. For my evidence of this, I intend to quote the words of Mr. Jacobson, who was the president of the executive council of Australian Jewry. He was the titular lay head of Australian Jewry. In the “ Australian Jewish Herald “ of 22nd April, 1960, he is reported as having said -

The Jewish Council was expelled from the Board unanimously for failure to abide by the policy of the Board at the particular time. Since then the Council has made numerous approaches to my predecessors in office and to myself, but the Board has not been prepared to take them back. There are many reasons for this, the main one being that within and without our community the Jewish Council is known to be a communistcontrolled organization. The evidence in support of this without taking into account the personnel of the Council is as follows:

The Council has refused to condemn or dissociate itself from the persecution of Jews in Rumania.

It refused to condemn the persecution ot

Jews in Hungary.

lt defended and justified persecution of

Jewish leaders in Czechoslavakia.

It refused to condemn or dissociate itself from the Jewish doctors’ trials in Moscow.

It refused to condemn persecution of Jewish writers in the Soviet Union.

lt had finally refused to support the legiti mate claims of Soviet Jewry, particularly with regard to the right to practise religion, the right of cultural association and the right of emigration to Israel. For the above reasons, it is generally considered by the overwhelming majority of the Board that the Jewish Council does not serve the interests of the Jewish community.

And so, rejected and detested by the Jewish people, they turned for help to the A.L.P. and Trades Hall Council. And surely the Victorian A.L.P. executive, continuing the Policy of “ Unity “ and accommodation for all communist front organizations, willingly adopted the “ Council “. Politically they tried to give them respectability by taking part and providing speeches at functions organized by the “ Council “ and organizationally they gave them an outlet through the Labour Party Branches for their disruptive activities. (Even “ Council “ circulars are sent to the branches by the A.L.P. executive.) And the T.H.C., following the same McNolty line is happy to allow a representative of the “ Council “ to address the T.H.C. And so the Trades Hall Council Delegates will experience the farce of listening to a supporter of Communis! anti-semitism condemning Western antisemitism. 1 have with me several copies of the annual reports of this so-called Jewish Council to Combat Fascism and Antisemitism. The Council was founded in 1942. The date is important because as honorable members know, anti-semitism was rampant in Germany long before 1942. What happened was that after Hitler broke his alliance with Stalin and attacked Stalin in the middle of 1941, the Communists, endeavouring to find some alibi for the antisemitism that had characterized Russia at the time of her alliance with Hitler, attempted to come out as leaders in the campaign against anti-semitism. That was a treacherous manoeuvre but it was one in which a number of well-intentioned people participated. They may not have realized who was pulling the strings behind the scene, but it did not really matter at that time because while we and Russia were opposing Germany there was no split in our policies and it was quite possible for us to take the Communist viewpoint and to be doing some things that were in line with Australia’s national policy. But later the divergence became evident and in 1952 they were expelled for their disruptive tactics and their pro-Soviet orientation by the representative council of Australian Jewry.

It is interesting to realize that Mr. Cohen himself was chosen as the spokesman by this council to lead the campaign to divert all attention away from the antisemitic acts perpetrated by Soviet Russia and her satellites. T have in my hand a paper dated May. 1953, containing a signed statement of council’s policy. I will be happy to provide that document to any honorable member who wishes to see it. The statement is signed by Mr. Cohen. When one reads it one is in no doubt that it follows the Communist line of endeavouring to show that everything in Russia is O.K. - that Russia has no anti-semitic feelings at all. This is confirmed in such things as their annual report for 1952-53. Again, I have a copy of that report which I can provide to substantiate the theme that this is not a genuine body opposed to anti-semitism.

Mr SPEAKER:

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

Mr COPE:
Watson

.- We have heard the honorable member for Mackellar (Mr. Wentworth) make one of his usual speeches. He reminds me very much of Lady Chatterley’s gamekeeper. He is always on the spot when there is dirty work to be done. I admit that occasionally he makes a worth-while contribution when he speaks on matters concerning national development. He delivered a good speech in the House to-day on rail standardization, but when he talks about communism - we are all aware of his fanaticism on this subject - very few of us take him seriously.

Let me illustrate the honorable gentleman’s fanaticism in this regard. This Liberal-Country Party Government has traded with Communist countries for many years. Last year it sold to Communist countries £67,800,000 worth of goods. I think most Government supporters will agree that that income was most beneficial to our economy and particularly to the economy of the primary producing section of the community. But if this gentleman had his way he would cancel that trade to-morrow, to the detriment of the Australian economy. That fact is well known.

The honorable member for Mackellar and some of his colleagues have for years condemned the Communists as being thoroughly untrustworthy, but the Government thinks that they are people of the highest integrity. The Government has sold wheat to Poland and Roumania and is now selling wheat to mainland China on a pay-as-you-eat basis. The Government has more or less said: “ Here you are, boys; we do not care for your politics but we trust you implicitly to honour your bargain and pay us every penny that you owe for this wheat “.

The honorable member for La Trobe (Mr. Jess) seemed concerned about the internal workings of the Labour Party. Everybody in this House knows that I am a generous-minded fellow. If any honorable member opposite is worried about the Australian Labour Party, I think that we on this side of the House should reciprocate. Let us see what happened in Queensland between the Liberal Party and the Country Party. 1 would not like to see a split in this unhappy marriage. A certain gentleman in Queensland named Houghton missed out on selection for the State seat of Redcliffe.

Mr McColm:

– He did not stand for the seat.

Mr COPE:

– He did stand. He missed out on selection and stood as an Independent. That reminds me of the honorable member for Herbert (Mr. Murray). He was elected to this Parliament as a Country Party member. When he came into this House and saw the drones with whom he would have to sit on the Country Party benches he decided to join the Liberal Party. In Queensland, where they had this big dispute, Mr. Houghton said -

Neither the Government party can settle its differences, and they were trying to make me the scapegoat.

I am not going to be a member of an organization which does not have the courage to stand up and fight.

The Country Party held a pistol at the Liberal Party’s head over the loss of a seat.

If I was acceptable to the Liberal Party there was no reason why I should be held out of the meeting of the Caucus.

The attitude of the Country Party has been most undemocratic.

I submitted my resignation in writing to the Parliamentary Libera] leader (Mr. Morris) at 2 p.m.

I did this after the Liberal Parliamentary Party and the Country Party Parliamentary group asked me not to attend the meeting. They cannot settle their petty squabbles. I will make a statement in the House soon explaining my position. I am confident the people of Redcliffe will support me in my stand.

I am not going to tie myself down to which way I will vote in future on any issue. I am an Independent.

This is what Mr. Regan, the State President of the Liberal Party, had to say about the Country Party -

The Liberal Party organization strongly condemns the deplorable sequence of events which caused the resignation from the State Parliamentary Liberal Party of Mr. J. Houghton, M.L.A. for Redcliffe.

A blunt threat to terminate the coalition State Government was employed to effect Mr. Houghton’s resignation from the Parliamentary Liberal Party, and this appears to us so improper a procedure that the Liberal Party organization rejects it utterly. ft should be clearly understood that Mr. Houghton’s acceptance into the State Parliamentary Liberal group after winning the Redcliffe seat in I960 as an Independent did not in any way breach any agreement or understanding between the Libera] Party and Country Party organizations.

Then we find that there was a meeting between four of the top Country Party members in Queensland and four of the top Liberal Party members. These are the backroom boys who decided which seats would be contested and which they thought would be the best for their own candidates. The meeting was attended by the Honorable H. Richter, M.L.A., the Honorable C. W. Davidson, M.H.R. - the Postmaster-General -Mr. Lawrie and Mr. Ahern, on behalf of the Country Party. Among those representing the Liberal Party were Mr. F. Campbell, M.L.A., and Mr. D. Killen, M.H.R.- the honorable member for Moreton. He is one of the backroom boys. These are the fellows who are always talking about the backroom boys of the Labour Party. Mr. Sherrington was there also on behalf of the Liberal Party.

Now let me turn to New South Wales and give a few illustrations of the great harmony that exists in the Liberal Party in that State. I have before me a press article which is headed “ Improper tactics in Liberal ballot alleged”. This is what the president of the Mitchell divisional conference of the Liberal Party has had to say -

There have even been suggestions that a new party be formed to sponsor free and private enterprise.

It would appear the only way that we can bring the Government back to reality is for outstanding businessmen to oppose the Ministers of the Government at the next election.

That statement was made by Les Irwin, president of the Mitchell divisional conference of the Liberal Party.

Now let me read a report about Alderman Rathbone, the president of the Bexley branch of the Liberal Party. He was asked to appear before the State executive of the Liberal Party in New South Wales for making statements. The report I am about to quote has to do with the selection of a candidate to contest the seat of St. George. It reads -

Alderman Rathbone said the pre-selection went to Mr. Sidney Timothy Alewood … a businessman from Bexley, who was not a member of the Liberal Party when approached. “The nomination was hawked around the seat to anyone who was a good catholic,” he said. “It was sickening.”

This is a party that is worried about the internal workings of the Labour Party! The Liberal Party has more trouble on its hands than has Gip Jordan. In Victoria there is a bit of a split in the Liberal Party. We note that members of the New South Wales Parliament have not been selected again.

Mr SPEAKER:

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

Mr HAROLD HOLT:
HigginsTreasurer · LP

– Members of the Opposition should not treat so lightly matters that are raised on this side of the House and which, if they had a real concern for the future of this country, they would regard as being of importance to themselves, just as they are to us. Indeed, Mr. Speaker, I feel that the Deputy Leader of the Opposition (Mr. Whitlam), who is present in the absence of his leader, has a responsibility to make some comments on the quite extraordinary statement which has been circulated in the pamphlet to which my colleague, the honorable member for La Trobe (Mr. Jess), has referred. 1 am not saying that that statement is correct. I am giving the Deputy Leader of the Opposition a chance to say whether it is correct. An allegation is made in this pamphlet - which has been circulated by those who claim to be an unofficial committee of the Australian Labour Party - that the Leader of the Opposition (Mr. Calwell) and the Deputy Leader of the Opposition, in association with members of the Victorian executive of the Australian Labour Party, went to members of the press in Melbourne and asked them, in effect, to suppress references to the activities of this unofficial committee of the Australian Labour Party.

Mr Haylen:

– They had to do that, because it was anonymous.

Mr HAROLD HOLT:

– The honorable member for Parkes says it is reasonable that that should have been done, because it is not proper for the press to give publicity to material which comes to it from anonymous informers. If that is a part of the code of ethics observed by the press, I am very interested to hear of it. Was that the ground on which action was taken by the Leader of the Opposition and the Deputy Leader of the Opposition, or either of them? We have no information other than that contained in the pamphlet, despite the opportunity that has been given to honorable members opposite here to clear up this matter for us. We and the people generally are entitled to know that these honorable gentlemen viewed those allegations so seriously that they thought it was necessary to ask the press not to make any further reference to them.

They are serious matters. In Victoria the discussion built up around the fact that a man who is the president of an organization which the Labour Party in the past has condemned as being, a Communist-front organization has been selected as the Labour Party’s No. 2 candidate on the Senate ticket, and has been selected in preference to a well-known, well-regarded Labour man of some stature in Victoria, in the person of Mr. Ashkanasy, a well-known barrister who has previously been a Labour Senate candidate. That in itself surely is not without some significance, particularly when it is viewed against the background of an executive in Victoria which has become notorious as the violently left-wing element in official action in the Labour Party. That in itself is a matter of lively public interest.

But then my colleague from La Trobe points out that in at least two other States men have been selected who have come under criticism in the past inside the Labour Party for their known left wing leanings. I do not know whether they are Communists; all I am going on is what is put to us as being the view of the Labour Party itself about those men. We are told that one of the men selected in South Australia was denied access to Woomera by the then Minister for the Navy, who is at present in the House and who can speak for himself in regard to the facts. Apparently this man was regarded by the Labour Government of that day as being a threat to security in the Woomera area.

When we come to Queensland we are told, on the authority of my colleague from Bowman (Mr. McColm), that one of these men had been publicly described in the official organ of the Australian Workers Union as a fellow traveller. The other, Mr. Arnell, has achieved a certain notoriety and has the well-established nickname of “ Unity Ticket” Arnell. His association with the left-wing element, to give it that euphemistic description, is, I believe, also widely known.

I should have thought that, at a time when we are moving towards a general election, the Leader of the Opposition or the Deputy Leader would have had something to say in rebuttal of the charges, if the charges imply that the Labour Party is asking the people of Australia to accept as Senate representatives men whom solid elements inside the party, at earlier points of time, have refused to have associated with them, or who have been described in the kind of critical terms which we have had brought before us in this House. That would be bad enough at any time, but we are moving to a political stage when there will be a distinct possibility of the Senate being evenly divided, or, as I believe to be probable, of this Government being returned with a substantial majority in this House and a minority of supporters in the Senate, leading to a deadlock. Is the balance of power in this country to be held after the next election by men who, if not directly members of the Communist Party, have been flirting with the Communists and with the most rabid left-wing elements in the Labour Party? Are they to hold the balance of power in the Parliament which will be elected after the next general election?

These are not light matters that have been raised. It has, of course, become habitual for honorable gentlemen opposite to attack members on this side, who take a great interest in these matters and are really concerned about them, when they voice their concern. The honorable member for Mackellar (Mr. Wentworth) is regularly attacked. He is told that he is using the tactics of McCarthyism. The kind of attack which is persistently launched against him whenever he ventures to open his mouth on these matters in this House is of the worst kind of McCarthyism, as it developed in the United States.

Mr Calwell:

– Do you support him in his attacks?

Mr HAROLD HOLT:

– I am glad to find you here.

Mr Calwell:

– I will have something to say about you, too.

Mr HAROLD HOLT:

– Do not bother to say something about me. Say something about matters which are of real concern to the people of this country, such, as those that have been brought before us to-night.

It is typical of members of the Opposition, Mr. Speaker, that when we raise matters which are of wide public concern, the only defence they have is to make vicious personal attacks on honorable members on this side who have had the courage to get up and speak. Instead of the Leader of the Opposition, his deputy and his followers doing that, let them face up to these allegations and let the public know exactly who these people are and the associations behind them, and how the Leader of the Opposition and his colleagues of the Labour Party feel about their bedfellows.

Friday, 20th October 1961

Mr WARD:
East Sydney

– We can now see the pattern that the anti-Labour campaign is to take during the forthcoming general election campaign. It is obvious that the supporters of the Government have no defence at all to the charge that they have wrecked the Australian economy. They are once again proposing to depend on the old red bogey to get them back to the treasury-bench. The Treasurer (Mr. Harold Holt) would have done much better, and I am certain that his remarks would have proved much more interesting to the Australian community, if, instead of repeating like an old, cracked gramophone record that has been played night after night, the statements that we have heard so often, he had told us something about the questions that have been directed to him regarding the crooked deal in respect of the letting of the contract for the Reserve Bank building in Sydney. Those are the things that the people want to know about.

I rise particularly to correct a statement made by the Minister for Labour and National Service (Mr. McMahon) at question time to-day. T endeavoured to do so by way of a personal explanation, but because of unexpected difficulties I was unable to complete my remarks. I now want to make the position clear regarding one of the bread and butter issues in which the Australian workers are really interested. I asked the Minister this morning -

Is it a fact that the Minister has declared himself in opposition to all adjustments of the basic wage based on the declared cost of living?

The Minister said that that part of the question was based on false premises. Let me read what he said, as reported in the “Sydney Morning Herald” of 21st September last, when he addressed the Printing and Allied Trades Employers Federation. The newspaper reported -

Mr. McMahon said he had misgivings about the wisdom of semi-automatic adjustments. Automatic quarterly adjustments had been tried and abandoned by the Arbitration Court and this decision had been upheld in a series of decisions by the Commission. There must be doubts whether annual changes based primarily on changes in a consumer index would be any less disruptive than the former discarded practice of automatic quarterly adjustments.

It is evident from what the Minister said to that gathering of printing trade employers that he believes that the annual adjustments that are now contemplated by the Commonwealth Conciliation and Arbitration Commission ought to be abandoned because, he says, they are just as disruptive as were the quarterly adjustments of the basic wage.

Everybody knows that in 1953, when the basic wage was frozen by the Arbitration Court at the instigation of this Government, the Minister declared that it would not be too bad if the adjustments were made annually; it was the all-too-frequent adjustments which caused disruption in industry, so that employers could not plan. Now that annual adjustments are contemplated, he does not want them either. In fact, what the Minister wants is pegged wages and unfettered rights for the monopolists of this country to exploit the community and make unlimited profits. Those are his real wishes.

Now let me come to the second part of the question I asked this morning. It was as follows: -

If so, does this decision follow from his earlier declaration that the present basic wage is higher than is necessary to maintain the average Australian family?

Again, the Minister denied that that was a correct statement of his point of view. I refer him to “ Hansard “ of 22nd August last. At page 298, the Minister is reported to have said -

  1. . I think everybody knows that originally, in the earliest awards, it was held that the wage would sustain a husband and wife and two or three children. It must be perfectly obvious to-day that the present basic wage would sustain more than that.

If that is not full confirmation of the Minister’s previously expressed views and of my statement at question time this morning, I leave the matter to the judgment of any reasonable Australian citizen who understands the English language. The Minister has embarrassed the Government, not because it disagrees with the views he has expressed, but because it never imagined that he would be so foolish as to utter such views in this Parliament, where his words could be placed on record and quoted1 during the forthcoming general election campaign.

The Minister for Labour and National Service, who answers for the Government in regard to industrial machinery and industrial conditions in this country, has declared that the present basic wage is too high and that it could sustain many more units in the family than is the case at the moment. He further declares that, regardless of how the cost of living may rise, he believes that there should be no adjustment in the basic wage at all. That is the view of the Minister.

Now let me turn to one other matter. I do so because, in answer to quite a number of questions, I have been receiving replies that have not proved to be absolutely correct. When I raised the subject of the resignation of a security officer in Darwin after eleven years’ service with the Australian Intelligence Security Organization, one of the statements I made was that this man had resigned because he had found his position untenable because of interference in the private affairs of both himself and his wife. When I put on the notice-paper a series of questions to the Prime Minister (Mr. Menzies), he denied that the manager of the Australia and New Zealand Bank Limited at Darwin, a Mr. Purton. had given information to this man’s superior officer in the security service, other than with his approval. I have had a communication from this gentleman, a Mr. Young, and he does not mind me mentioning his name. Mr. Young, who resigned from the security service, would welcome a complete and thorough investigation into all the circumstances.

What Mr. Young complained about was that Mr. Purton. the manager of the Australia and New Zealand Bank Limited at Darwin, had discussed the private financial affairs of himself and his wife with Mr. Young’s immediate head, a Mr. R. G. Meldrum, in the security service. Here is an extract from a report made by Mr. Meldrum to Brigadier Spry, his chief, in Melbourne, in November, 1960 -

On Wednesday, 2nd November, the manager of the Australia and New Zealand Bank (Purton) at which Mr. Young banks told me that he had had to ask Mr. Young to call on him. He went on to tell me that Mr. Young’s account had been overdrawn and that he did not feel like paying his cheques without some arrangement.

On Thursday, 10th November, Mr. Purton advised that he had been compelled to dishonour two of Mr. Young’s cheques, one payable to “Cash” for ?8 10s. and another for ?14 10s. in favour of Gees.

That is one of the stores with which Mr. Young did business. The report continues -

These cheques had eventually been re-presented and paid.

They were actually re-presented and paid on the following day because, as soon as Mr. Young’s attention was drawn to the fact that his account had been overdrawn, he corrected the matter himself. To give an idea of whether the Prime Minister was correct in saying that this information was obtained from the bank with the approval of Mr. Young, I shall quote another section of Mr. Meldrum’s report. Here is what he reported to Brigadier Spry -

Mr. Purton has asked that the fact that he discussed Mr. Young’s account with me should be treated as an absolute confidence.

Does that imply that this Mr. Young had given permission? Let me tell honorable members what happened. After Mr. Meldrum, his superior officer, had reported to Brigadier Spry what had been discussed between himself and the manager of the bank with which Mr. Young banked, a Mr. Garvey was sent up by Brigadier Sprv to investigate the matter.

Mr SPEAKER:

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

Mr McMAHON:
Minister for Labour and National Service · Lowe · LP

– I think that, if honorable members opposite wish to be critical of the Government and particularly of statements made by Ministers, they have a double responsibility.

First, they have a responsibility to quote a Minister accurately and secondly, they have a responsibility to have some knowledge of the subject about which they are speaking. The honorable member for East Sydney (Mr. Ward) has said that I have expressed opposition to all adjustments of the basic wage based upon the declared cost of living. I have not expressed opposition to all adjustments. At the moment, Cabinet has not made up its mind about this matter, nor have I.

The honorable member for East Sydney did quote me accurately when he said that I had misgivings about the wisdom of the semi-automatic kind of adjustments. I do have misgivings about them. What happened in this case was that, without the matter first being fully argued by all parties, the Conciliation and Arbitration Commission, to the surprise of the Commonwealth Government itself, suggested that, prima facie, a case could be made for annual adjustments based upon the consumer index. This is a very important matter indeed. I personally believe that, as the quarterly cost of living adjustments turned out to be contrary to the national interest, the question of annual adjustment requires most careful consideration and debate before that principle is adopted by the commission. So, I have expressed no opposition to all kinds of adjustments; I have expressed my misgivings about the wisdom of semi-automatic adjustments, and I believe the matter ought to be the subject of full debate.

The honorable member then went on to say that I objected to adjustments based upon the declared cost of living. Again, that is quite incorrect. What I was referring to was the consumer index, and, if the honorable member wants to know the difference between a consumer index and a declared cost of living, I shall read to him what the Commonwealth Statistician himself says about the consumer price index. In paragraph 17 of his document entitled “A Description of the Consumer Price Index “, the Commonwealth Statistician says -

Consumer price indexes are sometimes loosely called “ cost of living indexes “ and are thought to measure changes in the “ cost of living “. Neither the Consumer Price Index, nor any other retail price index, measures those changes in the cost of living that result directly from changes in the level of living. Changes of that kind are matters for consideration apart from price indexes.

So, the honorable gentleman did not know what he was talking about when he referred to the cost of living index. For that reason, I was perfectly justified in saying that the first assumption he used as the basis of his question was false.

His second assumption was that I had said that the present basic wage was higher than is necessary to maintain the average Australian family. I deny that completely.

Mr Ward:

– lt is in “ Hansard “.

Mr MCMAHON:

– It is not.

Mr Ward:

– 1 have given you the reference.

Mr McMAHON:

– It is perfectly true that the honorable member quoted from one part of “ Hansard “, but let me quote from page 431, where I am reported as having said - i am not expressing here a personal opinion at all. I am merely saying what was the interpretation of the court. I make no expression of opinion, Sir, as to whether it was adequate.

There is what I have said. It is on record, and the interpretation which the honorable member for East Sydney now attempts to place on it is completely false. I have also gone on record as saying that when you are looking at these problems of the basic wage and answering questions as we do, there are other matters that should be considered. I have said this -

I should mention that when we are looking at problems of standards of living we must also look at average weekly earnings per male unit, which are now, or which were in March, £21 16s., and that roughly only 2 per cent, of adult wage and salary earners in Australia receive a wage which is less than £1 above the basic wage.

I then went on to mention certain other supplements to average earnings, or, if you care to use the term, to the basic wage. Consequently, I was justified in saying that to say that I had said that the basic wage was higher than is necessary was totally false. When I was asked a question in this House I attempted a legal interpretation. I realize that trying to express a legal opinion in reply to a question is extremely difficult, but I was trying to interpret what the various findings of the commission and the court were. I thought that it should have been supplemented by a statement of average earnings and the number of persons who receive a specified amount over the basic wage. I expressed no view about adequacy and I do not express a view on that point. For that reason, I was perfectly justified in saying that the second assumption of the honorable gentleman was false. I believe it to be false and I believe that most honorable members will be of that opinion also.

Mr CALWELL:
Leader of the Opposition · Melbourne

– The Minister for Labour and National Service (Mr. McMahon) has tried to establish a case in opposition to the unanswerable case established by the honorable member for East Sydney (Mr. Ward). In February of last year, this Government went before the Commonwealth Conciliation and Arbitration Commission and asked for the freezing of the basic wage as one of the four points of its economic programme. This year the Government produced a dishonest sort of argument before the commission because there was an election approaching. From what we have heard from the Minister, we can now assume that if this Government is returned, next February it will go to the commission and argue against any increase in the basic wage while the profiteers can do what they like.

Mr Cairns:

– And there will be no periodical adjustments.

Mr CALWELL:

– That is so.

Mr Reynolds:

– Will the Government give an assurance that it will not do this?

Mr CALWELL:

– Of course it will not. If you listen to the Minister for Labour and National Service and try to find any sense in what he has said you will be listening for a long time. Having disposed of the Minister quite easily and successfully, I want to turn to some other issues. I am told that earlier in this debate the honorable member for La Trobe (Mr. Jess) said that I had made some request to the press to suppress some remarks I had made about the Cohen case or that I asked the press not to refer to the matter further.

Mr Jess:

– I quoted from an article in a newspaper.

Mr CALWELL:

– Oh! I advise the honorable gentleman always to consult me first before any matters of that sort are raised in respect of anything.

Mr Harold Holt:

– It was a reference in a pamphlet circulated by the unofficial A.L.P. committee.

Mr CALWELL:

– The unofficial A.L.P. committee! That is a very interesting committee. I know of its existence, and I have very much pleasure in telling this House to take no notice of that unofficial committee. It has no connexion with the Australian Labour Party at all. The man who writes that pamphlet is a member of the Australian Democratic Labour Party and a vice-president of the motor employee’s union. His name is Oscar Rosenbess. He has never been a member of the A.L.P. at all.

Now let me tell honorable members something about Mr. Sam Cohen, Q.C. He is a respectable citizen of Victoria. He was recently made a Queen’s Counsel, and in Victoria nobody is made a Queen’s Counsel unless the Chief Justice of Victoria approves. Is it suggested that the Chief Justice of Victoria, Sir Edmund Herring, would approve of the appointment of a man who was in any way dangerous? Is it suggested that the Attorney-General of Victoria, who is the Attorney-General in a Liberal government, would recommend an appointment of this sort if the person concerned was dangerous to the community? Of course, the whole thing is fantastic.

Mr. Cohen is a highly reputable citizen who has been a member of the A.L.P. for many years. The books of the Victorian branch of the A.L.P. are in the possession of the breakaway section that calls itself the Democratic Labour Party. Mr. Cohen was never at any time expelled from the the A.L.P. If he were, the first person who would say so would be Senator McManus, and he has never said it. Mr. Cohen was never expelled. He has been a continuous member of the A.L.P. I know the story of the situation in Victoria better than the croakers on the back benches of the Liberal Party do, and I know that all through the years Mr. Cohen has been a member of the A.L.P. He has attended many conferences, and whatever the troubles may be inside the Jewish community, and whatever may have been the reason for the discomfiture of certain people because Mr. Cohen was selected as a Senate candidate and not somebody else, that is no reason for anybody to suggest that Mr. Cohen is in any way any different from any other person in this community in the matter of loyalty.

Mr Harold Holt:

– Do you regard the organization as a Communist front organization?

Mr CALWELL:

– No, I do not and I never have; but I know that inside the Jewish community, a certain section, for reasons of its own, did declare it so. I also know that the A.L.P. did not declare it. That is my point.

Let me pass on to Dr. Max Poulter. The honorable member for Bowman (Mr. McColm) described Dr. Poulter last week as a friend. To-night he has besmirched him. I do not know what he would do with an enemy after the way he treated Dr. Poulter to-night, but of course Dr. Poulter will be a senator when the honorable member for Bowman will be a memory.

Mr Harold Holt:

– Did you ask the Victorian press not to give any publicity to the activities of the unofficial committee?

Mr CALWELL:

– No, I never did at any stage or at any time. Whoever said that said something that is not true. I have never asked the press for any favour at any time. I will take what is coming and will give what I have to give in reply to the best of my ability. I want no protection and no favours. The Victorian situation will have to be resolved by the Victorian people. I am sure those who know Mr. Cohen will respect him as a man of very great ability and integrity. He is typical of many people in Victoria of all shades of political opinion who are members of the Bar Council - if that is the correct expression - and who are highly respected regardless of their political views.

Mr Wight:

– What about “ Unity ticket “ Arnell?

Mr CALWELL:

– The honorable member for Lilley speaks about Mr. Arnell. I know that Mr. Arnell has been besmirched. I know that he has been attacked. He has defended himself. He has denied that he has ever been associated with a unity ticket. It will be for the people of Queensland to decide whether they wish to elect him or not. I hope they do elect him. I would like to see him here in preference to Mr. Gair. I would hope that he would fill the third position in preference to any member of the Liberal Party. Mr. Arnell has a good reputation as a citizen.

When it comes to this question of associating with Communists and all the rest, it is a remarkable thing that when Lord Casey goes to Russia and spends ten days there, and when the honorable member for Maribyrnong (Mr. Stokes) has a good time in Moscow, and when Senator Nancy Buttfield goes there too, nobody suggests that there is any question of unity with communism where they are concerned. When the Prime Minister (Mr. Menzies) seeks an interview with Mr. Khrushchev and has a happy hour and onehalf with him, and when Mr. Khrushchev sees him to his car and they then issue an agreed-upon communique in which each praises the other, nobody suggests that the Prime Minister has let Australia down. But, if any Australian Labour man happens to go to Russia or to be associated with some one who is a Communist, somebody will say, “ This is a unity ticket “. or something of the sort.

I would not have come in on this issue if the honorable member for La Trobe had not mentioned my name. I am very happy to say that I do not ask favours of the press or anybody else. I leave the matter at that.

Mr SPEAKER:

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

Mr BRYANT:
Wills

.- Mr. Speaker-

Motion (by Mr. Harold Holt) put -

That the question be now put.

The House divided. (Mr. Speaker - Hon. John McLeay.)

AYES: 53

NOES: 26

Majority . . 27

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative.

House adjourned at 12.37 a.m. (Friday).

page 2337

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Exchange of Visits between the Soviet Union and Australia

Mr Aston:

n asked the Minister for External Affairs, upon notice -

  1. Is it a fact that a growing number of visits are being exchanged between the Soviet Union and Australia?
  2. Is he able to say whether the Australia-Soviet Friendship Society played an active part in connexion with the tour in the Soviet Union earlier in the year of a party of Australian doctors and the more recent visit to Australia of a group of Russians described as tourists?
  3. Is it the intention of the Government to promote visits of this kind?
  4. Do the activities of the Australia-Soviet Friendship Society in connexion with these visits meet with the approval of the Government?
Mr Menzies:
LP

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

  1. I am aware that a number of visits are being exchanged between Australia and the Soviet Union.
  2. I understand that this is so. 3 and 4. The Government sees value in genuine visits or exchanges in the fields of science, medicine, culture and art, sport and so on between Australia and the Soviet Union. Its view has been that activities of this kind are chiefly of interest to the variety of Australian institutions directly active in the particular field concerned; these bodies, which are representative of the Australian scientists, artists, sportsmen and so on who are likely to take part in visits or exchanges, are free to make suitable arrangements with the appropriate authorities or bodies in the Soviet Union. But the Government is concerned that exchanges which purport to be of a cultural, scientific or sporting nature should be genuinely so; and doubts of this arise if arrangements are in the hands of bodies which are in fact of a political character, such as the Australia-Soviet Friendship Society. Accordingly, the Government does not favour the intrusion of political bodies such as the Friendship Society as intermediaries in arrangements for exchanges and visits between Australia and the Union of Soviet Socialist Republics - or for that matter, between Australia and other Communist countries.

Finance

Mr L R Johnson:

son asked the Treasurer, upon notice -

  1. Did the Illawarra County Council apply to the Commonwealth Superannuation Board and the Defence Forces Retirement Benefits Board for loans during the year 1961-62?
  2. Were the applications in respect of a new works depot and administrative building estimated to cost £400,000?
  3. What was the result of the applications?
  4. From whom has the Commonwealth Superannuation Board and the Defence Forces Retirement Benefits Board received loan applications during the current financial year?
  5. What has been the result of each of these applications?
Mr Harold Holt:
LP

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

  1. Yes.
  2. Yes.
  3. The Defence Forces Retirement Benefits Board has arranged a loan of £50,000 to the council from funds available in 1961-62.
  4. The two boards have received, either direct or through agents, advice of loan requirements for 1961-62 totalling £110,000,000 of some 350 semigovernmental and local authorities. In addition, the boards were invited to invest in Commonwealth Loan raisings during the year.
  5. One hundred and four loans to semigovernmental and local authorities have been arranged or are in course of negotiation. In addition, the boards have allotted £3,200,000 for investment in Commonwealth Loans.

Medical Benefits

Mr L R Johnson:

son asked the Minister for Health, upon notice -

  1. Is it a fact that some medical benefit funds do not give rebates for refractions by registered optometrists as well as those by ophthalmologists?
  2. Do the Medical Benefits Fund of Australia and the Hospital Benefits Fund of Victoria discriminate against optometrists by limiting payment of supplementary benefits to patients who have been referred to an ophthalmologist by a general practitioner?
  3. Is any Commonwealth benefit payable for optical treatment?
  4. Is it a fact that, as the medical benefits and the hospital benefits funds now stand, in order to claim a benefit, the patient has to go from the optometrist to the ophthalmologist, to the general practitioner to get a “ referral “, then back from the general practitioner to the ophthalmologist and, finally, in many cases, to a particular dispensing shop, if the ophthalmologist prescribes glasses?
  5. Has the Government been asked by the Australian Optometrical Association to amend the National Health Act so as to require medical benefits funds to give rebates for refractions carried out by optometrists as well as those carried out by other registered practitioners; if so, what decision has the Government made in relation to this request?
  6. Has the Government given consideration to inserting in the National Health Act provisions for optometrical services which will include the payment of Commonwealth benefits similar to those paid in respect of hospital and medical benefits; if so, is any action contemplated in this matter?
Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

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

  1. Yes.
  2. No. The funds also pay a fund benefit where a patient consults an ophthalmogist without being referred by a medical practitioner but a higher fund benefit is payable where the patient is referred to the ophthalmologist by a medical practitioner.
  3. Commonwealth benefits are payable for a wide range of ophthalmological services by medical practitioners.
  4. No. 5 and 6. The Government has considered such representations from the Australian Optometrical Association but no amendment of the National Health Act in this regard is contemplated at present.

Foreign Bases in Australia.

Mr Ward:

d asked the Prime Minister, upon notice -

Is it the intention of the Government to seek parliamentary endorsement of any proposal to establish any foreign base or establishment in Australia before bringing the matter to finality?

Mr Menzies:
LP

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

No firm proposals are before the Government. Should any proposals of this kind be put forward the question of their reference to the Parliament will be considered: by the Government.

Cite as: Australia, House of Representatives, Debates, 19 October 1961, viewed 22 October 2017, <http://historichansard.net/hofreps/1961/19611019_reps_23_hor33/>.

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