House of Representatives
20 October 1964

25th Parliament · 1st Session

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

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Issue of Writ


– It is my intention to issue a writ on Monday, 26th October for the election of a member to serve in the electoral division of Robertson in the State of New South Wales to fill the vacancy caused by the resignation of Mr. Roger Dean.

The dates in connection with the byelection will be fixed as follows - Date of nomination, Monday, 9th November 1964; date of polling, Saturday, 5th December 1964; date of return of writ, on or before Saturday, 23rd January 1965.

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Prime Minister · KooyongPrime Minister · LP

– I wish to inform the House that the Minister for External Affairs (Mr. Hasluck) yesterday left Australia on an overseas visit. He will be away until 13th December. While absent, he will attend meetings of the United Nations General Assembly and the Colombo Plan Consultative Committee. He will also pay brief visits to a number of European and Asian capitals for discussions with Government leaders.

During the Minister’s absence, the Minister for Works, Senator Gorton, will act as Minister for External Affairs. In this chamber, I will deal with matters ordinarily the concern of the Minister for External Affairs.

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– I ask the Prime Minister whether he has yet sent congratulations to the new Prime Minister of Great Britain, Mr. Harold Wilson. Does he foresee any difficulty in his conservative Government working in harmony with Mr. Wilson’s Labour Government? Will he invite Mr. Wilson to visit Australia at an early date to discuss matters of Commonwealth interest such as defence, interCommonwealth trade, the development of the Commonwealth and Mr. Wilson’s idea that a Commonwealth consultative assembly along the lines of the Council of Europe at Strasbourg should be established? Alternatively, will he visit the United Kingdom at an early date to discuss these matters with Prime Minister Wilson?


– I am not in the habit of conveying to the public any personal communications I have, and I will not break that rule.

Mr Whitlam:

– It was very vulgar of President Johnson to do so.


– I beg your pardon?

Mr Whitlam:

– President Johnson sent his congratulations and told the public about it.


– I am not President Johnson.

Mr Stewart:

– You are lucky you are not Khrushchev.


– There are only two differences between Chairman Khrushchev and myself. One is that he is already 70 years of age and I am not quite. The other is that he is out and I am not quite. But let us leave those little technical differences and get back to the substance of this matter.

I have never anticipated any difficulty in carrying on our dealings with the United Kingdom Government, whatever that government may be. I had very happy associations with the Labour Government under Mr. Atlee, now Lord Atlee. I have no doubt that I shall be able to deal very happily also with the Government under Mr. Wilson. Nobody need assume that I butt in on the domestic politics of other countries. I accept the decision of the people of Great Britain, who are well qualified to make their decision. I do not think Mr. Wilson would thank me for suggesting that at a very early date he should come to Australia. He has a government to establish. He has great problems and he has announced a very considerable programme. I do not think it would be doing him a kindness to suggest that we think he ought to come here quite soon. But we will be delighted to see him whenever he feels he can come here.

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– My question is directed to the Minister for Labour and National Service. In view of recent events on the waterfront, can the Minister say whether waterside workers have opportunities to obtain enough work to return them a reasonable income?

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

– The House can make up its mind, on the figures, whether waterside workers do in fact earn, reasonable incomes. Figures recently published by the Australian Stevedoring Industry Authority show that for a 32 hour week the average payment for waterside workers throughout Australia is a little over £27 a week. This is the highest weekly payment on record. The most important ports are Sydney and Melbourne. In Sydney, where a 38-hour week is worked, the average payment is £29 10s. a week, and in Melbourne the average payment for general cargo is £30 10s. for a 38-hour week. As I have said, honorable members can make up their own minds as to the reasonableness of these payments.

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– My question is addressed to the Minister for the Interior. In view of the pending Senate election, and having in mind the enormous number of informal votes usually cast at such an election, will the Minister arrange for the Commonwealth Electoral Officer to prepare a short film, demonstrating and explaining the method of preferential voting, for showing on all television stations in Australia prior to the election, so that the large number of voters who are unable to follow the voting system at present may be better informed and, as a consequence, the number of informal votes may be reduced?

Minister for the Interior · RICHMOND, NEW SOUTH WALES · CP

– I am pleased to be able to tell the honorable member that I have already initiated procedure which will involve the dissemination of publicity by the Commonwealth Electoral Officer telling the people how to cast a vote and how they may avoid informal voting. As to the suggestion for the preparation of a film, I am led to believe that a film was prepared before the last Senate election and is still in existence. This film will be circulated throughout Australia.

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– I direct a question to the Treasurer in his capacity as Leader of the House. It relates to item No. 16 on the notice paper which refers to the debate on the Attorney-General’s statement on the Australian Congress for International Cooperation and Disarmament which is to be held in Sydney next week. When is the debate likely to be resumed on the motion that the House take note of the paper?


– I realise that there is a great deal of interest amongst honorable members on this topic, and clearly if there is to be a debate on the matter it should take place before the conference is held. However, we have a very heavy business programme ahead of us and it will be something of a problem to fit in all the business that we can see outstanding and which it is desired to complete this week, while at the same time finding a useful space of time for an adequate discussion of this matter. I shall be glad to discuss these problems with the Opposition to see how far, in the restricted time available to us, we can go to meet the wishes of honorable members in arranging a debate on a matter of such present . importance and general interest.

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– 1 ask the AttorneyGeneral a question. It concerns the refusal of a visa to Archbishop Alexei by the Department of Immigration on the advice of the honorable gentleman. I ask him whether he can confirm the statements in last Thursday’s “ Anglican “ that the Archbishop was received in the United States last year by both Russian Orthodox and Protestant Episcopal leaders there, that he is a member of the Central Committee of the World Council of Churches and that a few weeks ago he was a guest of the Archbishop of Canterbury. Will the honorable gentleman disclose what facts to the Archbishop’s discredit have become known since he was admitted to the United States and Britain, or which of his characteristics are regarded as injurious here but not in those countries?

Attorney-General · BRUCE, VICTORIA · LP

– The first point I wish I to make is that the refusal of the visa was undertaken by my colleague, the Minister for Immigration, as a matter of government policy, but not on my personal advice. As to the second matter, I am able to tell the honorable member that there has been a great deal of misconception, which apparently the honorable member shares, as to who is the Archbishop Alexei. who applied for the visa. The Archbishop Alexei who applied for the visa is a man’ born about 1929, give or take a year or two - I do not guarantee the exactness of this date - and he is not the Patriarch. As I am reminded by the right honorable the Prime Minister, the particular man refused a visa has not been a guest of the Archbishop of Canterbury.

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– My question is addressed to the Minister for Snipping and Transport. Certain residents of the outer suburb of Maida Vale and Kalamunda must travel to the city of Perth by one of three routes each of which is now to be crossed by the standard gauge railway to Kwinana. The proposed level crossings on the Kalamunda, Maida Vale and Welshpool roads are considered as hazards to traffic necessarily using these routes. Will the Minister have discussions with the State Minister for Railways, the Honorable Charles Court, with a view to overpasses being provided or, at least, adequate safety devices being installed at each of these crossings?

Minister for Shipping and Transport · FORREST, WESTERN AUSTRALIA · LP

– I do not have in my mind the precise topographical details of the area to which the honorable member refers. In any event, the construction of the standard gauge railway through that area is primarily - in matters of design - the responsibility of the State Government which refers its proposals to the Commonwealth Government. The Government of Western Australia has been carefully considering the question of safety factors at level crossings. I am very conscious of that fact because the cost of the scheme seems to be mounting considerably from day to day. However, I will examine the proposal made by the honorable member and see what is being done in that area.

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– I direct my question to the Right Honorable the Prime Minister. Does the right honorable gentleman recall stating in May last year, in South Australia, that foreign investments in Australia during the last ten years had been phenomenal, but that every time he mentioned these facts some bunch of left wing men would say to him: “ You are pawning the country to overseas bankers.”? Is it a fact that the right honorable gentleman recently stated that he would like to see Australia participating in foreign owned companies? Is the right honorable gentleman at last going to take some action against indiscriminate foreign investment? If he is, does he then consider himself to be a member of the so-called left wing?


– There is nothing I admire more, having regard to his experience, than the great respect that the honorable member has for newspaper reports. If he would like to have a copy - I am sure there are plenty available - of my policy speech made during the last general election, he will find that what I said in that speech about this matter was exactly what I said in Adelaide. When it was in the policy speech it passed unobserved. Now, apparently, it has been noticed.

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Industrial Dispute


– I preface my question, which is addressed to the Minister for Labour and National Service, by saying that the Australian Council of Trade Unions has rejected the strike-breaking offer by the executive of General Motors-Holden’s Pty. Ltd. Does this mean that trade unions will negotiate only when the company representatives capitulate in full? Docs it also mean that, supported by the Leader of the Opposition and the honorable members who sit behind him, the people breaking the law and the decisions of arbitration will continue to break them until, by default, they obtain increases in wages, more and more leave and so on?


– I think the House well knows that on Saturday the General Manager of General Motors-Holden’s Pty. Ltd. interviewed Mr. Monk, the President of the Australian Council of Trade Unions, and submitted an offer to him, with the intention of terminating the dispute.

Mr Curtin:

– What was the offer?


– The offer was that G.M.H. now was prepared to negotiate on the basis of a consideration of anomalies in both the foundry and the fettling yards. Secondly, the company said that if it could be proved that there were anomalies or that over-award payments in the G.M.H. factories were less remunerative than those in the factories of the major competitors of G.M.H. it would closely consider such comparisons with a view to making appropriate adjustments. This was done without giving any assurances or concrete commitments. The A.C.T.U. rejected the offer as not being sufficient.

The dispute has been left in the hands of the President of the A.C.T.U. and a decision has been made that the Disputes Committee will meet not later than next Monday to consider the course of events. As the matter is now in the hands of, or is being dealt with by, the President of the Council and the General Manager of the company, it seems to me that it would be wiser at this moment not to make any comment which could be regarded as either provocative or inflammatory. Consequently, I would suggest that for the moment any comment should be restrained or avoided, wherever possible.

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– I direct a question to the Prime Minister, The right honorable gentleman opened the new Chrysler motor plant at Tonsley Park in my electorate earlier this month. He will recall opening new plants for the Standard Motor Company at Port Melbourne in September 1955 and for the Ford Motor Company at Broadmeadows in January 1960. I ask the right honorable gentleman whether he will give an assurance that he will not follow up the recent ceremony with tax and credit measures against the motor industry, such as those he took so soon after the earlier opening ceremonies that he performed.


– The honorable gentleman is asking me to make a pretty long range forecast. I do not know over what period of time this assurance is supposed to extend. AH I know is that, rightly or wrongly, when I have opened one of these factories I have been invited to open another; and then having opened the second I have been invited to open a third. I do not know how many more there are; but if I can fit the openings in, I will do so.

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– My question which is addressed to the Minister for Trade and Industry, refers to the problems of the decentralisation of industry and population away from the. capital cities and into the more sparsely populated areas of Australia, and also to an editorial in the “ Sydney Morning Herald “ on 1 8th August which said -

Mr. McEwen recently announced that there would be a conference on decentralisation between the Federal Government and the Stales but only on a non-Ministerial level.

Was that report correct? Has that meeting taken place? If it has, what actions were decided upon? If it has not, will the Minister do all in his power to organise talks on this important subject between State and Federal Governments, not only on a non-ministerial level but also on a ministerial level?

Minister for Trade and Industry · MURRAY, VICTORIA · CP

– I am sure that the report - I think I saw it, but it is not fresh in my mind - must have referred to a decision taken at the Premiers’ Conference which, in the absence of the Prime Minister, I chaired. An item under the heading of decentralisation was put on the agenda for that Conference by one of the State Premiers. After discussion it was agreed that it would be useful if, as a starting point, there were a conference between Federal officials and State officials to examine what the governments might conceivably do, and it should be taken from there on. I do not know whether the meeting has been held yet. It is not infrequently the experience that it takes some time to arrange a date mutually acceptable to the officials of the seven governments. I have no doubt the meeting will take place, if it has not already taken place.

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– My question is directed to the Prime Minister. Does the right honorable gentleman remember that seven weeks ago I advised him, by way of a question without notice, that the Premier of New South Wales had announced that the Newcastle University College would be granted autonomy as from 1st January 1965, and that T requested him to examine this proposal of the New South Wales Government and request the Chairman of the Australian Universities Commission to review the Commission’s recommendation for autonomy, as from 1st January 1967? In reply he promised, among other things, to inform himself on the matter and to find out, also, the attitude of the Australian Universities Commission. I now ask the right honorable gentleman: Has he so informed himself, and is it true that the Chairman of the Australian Universities Commission, Sir Leslie Martin, has examined the proposal and has refused to change the Commission’s recommendation of autonomy on 1st January 1967. If this is correct, will the Government again discuss this question and advance the date for autonomy to 1st January 1965, in view of the remarkable development that has taken place at the Newcastle University College?


– I informed myself on this matter this morning. I am told that there is at present on my table a draft reply to Mr. Renshaw, who wrote fairly recently once more directing attention to the matter. The honorable member will see that I should send my answer to Mr. Renshaw before announcing its contents, but as soon as that has been done I shall certainly keep him informed.

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– My question to the Minister for Shipping and Transport refers to the Broken Hill-Port Pirie standard gauge railway. What decision, if any, has the Government reached about that part of the line which runs from Cockburn, on the South Australian border, to Broken Hill in New South Wales? Is it intended to follow a new route or to make use of the existing line, changed to standard gauge, now operated by the Silverton Tramway Co.?


– I regret having to advise the honorable member that the Government has not been able to reach a final decision in this matter. Constitutionally, as the honorable member will know, the Government cannot construct a railway in any State without the approval of the State government. The Government of

New South Wales was approached some time ago by the Commonwealth Government to ascertain whether it would be prepared to allow us to adopt whichever of the two courses seemed the better. We obtained permission to have a survey made so that we could form an estimate of the costs of such a railway. That survey is in progress, and some estimates are being prepared. But in the meantime the State Government has indicated to the Commonwealth that any approval for construction of a railway was entirely conditional on the Commonwealth treating as part of the standardisation project the upgrading of the Parkes-Broken Hill section of the railway. The Commonwealth had already refused to treat this section as part of the standardisation project, on the grounds that this was already a standard gauge railway and the maintenance of it was entirely the responsibility and within the capacity of the New South Wales Government. I have since sought from the New South Wales Minister for Transport some clarification of the State Government’s attitude. It seems quite unthinkable to me that a project of the importance of standardisation of the railway between Broken Hill and Port Pirie should be held up by what appears to be an irrelevant consideration, particularly in view of the very strong views that the New South Wales Government now seems to have about its constitutional rights.

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– I direct a question to the Prime Minister. I ask: Is it true that, at what I understand to have been his only appearance at the United Nations, the right honorable gentleman sought an interview with Chairman Khrushchev of the Soviet Union? If so, will he say why, on his last visit to London, he did not seek an interview with Mr. Harold Wilson when it must have been apparent to the Prime Minister, as a man of acknowledged political astuteness, that Mr. Wilson was destined to be Prime Minister of the United Kingdom before the year was out?


– The honorable member turned out to be right, but only just.

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– I ask the Minister for Labour and National Service a question concerning the refusal of the ‘ Waterside Workers Federation of Australia to load or unload cargoes to or from South Africa. Has he seen a report that a letter has been written by the secretary of a South African trade union, 95 per cent, of the members’ of which are coloured, pleading with our Waterside Workers Federation to unload cargoes from South Africa as the present actions of the Federation are causing widespread unemployment and suffering among the coloured workers of that country? Has the Minister any information to indicate whether the officials of the Federation have informed its rank and file members of this letter? Does the letter vindicate the view that economic sanctions imposed against Sooth Africa injure most the persons whom the sanctions are designed to support?


– The House will remember that some weeks ago it was informed that the embargo imposed by the Waterside Workers Federation of Australia on the movement of cargoes to and from South Africa and to and from ports on the whole of the east and west coasts of Africa could only injure the working men themselves and particularly the coloured people of South Africa. I have been informed of the letter mentioned by the honorable gentleman. I have not been advised that the existence of that document has been mentioned to the working members of the Federation, nor that it has been discussed by the Interstate Executive of the Australian Council of Trade Unions. It is also true that the letter, which was written on behalf of the South African Trawler and Line Fishermen’s Union, pointed out that 95 per cent, of the workers in Capetown manning the ships working the trade were coloured people. There is no discrimination by Irwin Johnson Ltd., which employs the men and ships frozen cargoes of fish to Australia.

The A.C.T.U. does not agree with the action of the Waterside Workers Federation which has been taken on the grounds of apartheid. 1 think it can be said that since such action has been condemned the number of stoppages due to the apartheid issue has been greatly reduced. 1 can only hope that, as a result of the letter received from’ the Secretary of the South African union mentioned, the matter will now be dropped completely. In other words, I hope that the embargo on the movement of cargoes to and from South Africa on the apartheid issue will cease.

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– My question is directed to the Prime Minister. In view of the decisions by the Anglican Synod, the Presbyterian Assembly of New South Wales and the Methodist Conference not to accept the Government’s handout for school science laboratories and equipment, will the right honorable gentleman think more carefully before propagating similar election gimmicks during the forthcoming Senate election campaign?


– I am interested to find that the honorable gentleman, speaking no doubt for his party, regards the assistance of science teaching in secondary schools as nothing but an electoral gimmick.

Mr Calwell:

– Of course it was. What else was it? The right honorable gentleman did not know anything about it.


– The only trouble about it was that the Leader of the Opposition did not think of it.

Mr Calwell:

– That made it an election gimmick.


– Did it? Then I am learning all the time. Every proposal which has great merit but which also has great appeal apparently is to be called an electoral gimmick. I have read the newspaper report of some of the discussions that have taken place. I want to make it clear that acceptance of the Commonwealth’s contribution is not compulsory. If some church authority does not want it, there is no compulsion to take it. But very many church authorities have accepted our contribution. It may become a nice question as to whether those who have already applied for and received the money and who have now come in with this ban, will be called upon to make a refund. This would not be done with my approval, because I think it is a splendid scheme and serves a splendid purpose.

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– I address my question to the Minister for Primary Industry. As Australian butter production in the first two months of this year was 3,000 tons greater than in the same period of last year, can the Minister give the House any information regarding the possibility of disposal and the price of butter on the London market?

Minister for Primary Industry · FISHER, QUEENSLAND · CP

– The season for the production of butter has opened well throughout Australia. I think it fortunate for the industry that at the same time the London market has firmed. I was advised a few days ago that the London price has been raised from 334s. a cwt. - the figure at which it had stood for 16 months or more - to 350s. a cwt. This is an increase of 16s. a cwt. Judging by the advice I have received, ii seems that there is not an over supply of butter and that the market should remain reasonably firm.

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Industrial Dispute


– My question is directed to the Minister for Labour and National Service. Are the profits of General MotorsHolden’s Pty. Ltd. in Australia admittedly amongst the highest of any company registered in this country? Has the last balance sheet disclosed that the wages being paid to tradesmen by the company are much lower in Australia than the wages paid to tradesmen in similar categories in the United States? Are the profits per unit much higher in Australia than the profits on corresponding units sold in the United States? If these are facts, can the Minister explain why the practice that has been followed for so many years in the United States of direct negotiations between the United Automobile Workers and the General Motors organisation cannot be followed in this country in the best interests of industrial peace?


– I do not think that a direct comparison can be made between the wages and conditions of employment in the United States and those in Australia. I have not the facts on which to base an answer to the second and third parts of the honorable member’s question. As to the substance of his question, I point out that arbitration is the law of the land and arbitration is open to the trade union movement, including the five unions involved in the dispute with General Motors-Holden’s Pty. Ltd. If the unions believe that they have a just claim and if they wish to put it before the Commonwealth Conciliation and Arbitration Commission, a log of claims can be filed and would be heard within a short time. The initiative here lies with the unions. If they refuse to use the remedy open to them under the laws of the land, a law passed by the Parliament, only two conclusions can emerge. The first is that they do not think they have just claims and the second, which is much more probable in this instance, is that the titular leader today of the Amalgamated Engineering Union in Melbourne is determined to destroy arbitration in this country. I repeat a claim can be made to the appropriate industrial tribunal.

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– My question is addressed to the Minister for Repatriation. The Minister has informed the House in his Department’s annual report that the cost last year of pharmaceutical benefits dispensed by chemists for eligible repatriation patients was over £5 million. Can he assure the House that everything possible is being done to keep down the cost of drugs to. institutions controlled by the Repatriation Department?

Minister for Repatriation · DARLING DOWNS, QUEENSLAND · LP

– I appreciate that the cost of drugs is particularly high, but I assure the honorable member that everything possible has been done to ensure that the cost is kept within reason. Two classifications of prescriptions are concerned. One covers’ patients who receive prescriptions from local medical officers and have them dealt with by local chemists. That category is covered by a fairly satisfactory agreement with the pharmaceutical guild and the charges are on an Australia-wide basis which is quite reasonable. In Repatriation Department hospitals and clinics we have out own pharmacies operating. They are able to buy and dispense in bulk, so we have an opportunity there to keep the cost down as low as possible. However, in view of the large figure involved, we have arranged for a further survey to be made this year to see whether any other economics can be effected.

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– My question is directed to the Minister for Supply. In a statement, I think last week, the Minister said that the second Blue Streak rocket to be launched for the European Launcher Development Organisation was to be fired from Woomera yesterday. Can the Minister inform the House whether it has been fired?

Minister for Supply · PATERSON, NEW SOUTH WALES · LP

– I am happy to be able to tell the honorable gentleman that Blue Streak was fired this morning from Woomera. It reached ils required behaviour in every department except one - it fell ten miles short of its programmed flight of 1,000 miles. Otherwise, it was a perfect flight.

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– I address my question to the Minister for Air. What truth is there in the report that the Royal Australian Air Force Mirage supersonic fighter will be unable to operate outside Australia because of its dependence on ground control equipment, the placing of which overseas would be prohibitive in cost? Is this position further aggravated by the fact that no other air force in South East Asia operates this aircraft? Is it a fact that so far the R.A.A.F. has no Government approval even to order the ground control system for use in Australia?

Minister for Air · FAWKNER, VICTORIA · LP

– There is no truth whatever in the article that appeared in one of the newspapers last week. The Mirage aircraft is entirely satisfactory for the purposes for which it was ordered and for which it will be used. As honorable members know, in order to operate fighters effectively it is necessary to have control and reporting units adequate for the purpose. As my predecessor announced to the House more than a year ago, these control and reporting units are approved and will be available for use by the Air Force at the time when the Mirage squadrons become operational. These units can be used not only in Australia but also in any place overseas where we may wish to send them.

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– I ask the Minister for Labour and National Service a question. In view of the extremely tight labour situation at present existing in Australia, will he consider initiating a publicity campaign to encourage more females, particularly those with professional or semi-professional qualifications and technical skills, to return to the work force when their marital commitments so permit?


– From the statistics that have recently been published it will be obvious that there are far more employment vacancies for men than there are men available for work. I am pleased to be able to say that the number of women now being placed in employment is far greater than we have hitherto achieved. This is, I think, a reflection of the buoyant economic conditions that exist in Australia today and which may be expected to exist for as long as any of us is willing to forecast. I think it is a little too early to make a positive announcement about encouraging women to return to work after they marry. I will discuss the matter with my departmental officers. If it is felt that a statement should be made, I will make one.

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– I ask the

Treasurer a question. Is the right honorable gentleman seeking to avoid the odium of another credit squeeze by substituting bank monetary control for the traditional budgetary system of controlling the Australian economy? Will the Treasurer say whether the recent call-up of £22 million of trading bank funds is the last of such call-ups for the foreseeable future or is Dr. Coombs expected to announce a series of restrictions which will be similar in effect to the 1960 credit squeeze?


– I do not know what the honorable gentleman means when he talks about odium. I am always willing to accept responsibility for the decisions taken by the Government, of which I am a member and to whose decisions 1 make contributions. The honorable gentleman has asked whether we are trying to shift to the Governor of the Reserve Bank some responsibility which otherwise might be exercised through a budget. The honorable gentleman should be aware that a range of economic measures is available to a government. With the objective of maintaining the economy on an even keel we have turned to several of those measures. They include the loan programmes worked out with the State Governments, the budgetary decisions which we bring before this House, and the regular control exercised by the Reserve Bank over the credit structure of the economy. In these and a variety of other ways we try to temper the fluctuations which are almost inescapable in a country such as Australia, which has to face the hazards of the seasons and which is subject also to fluctuations in overseas prices. By the employment of the various means available to us we have been able, in the years since the end of the war, to provide for the Australian people one of the highest standards of living in the world and the best sustained level of employment known lo any country.

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– I ask the Minister for Social Services a question. Are applications for grants under the Aged Persons Homes Act still being received? Will the Minister say how much money has been provided by the Government towards homes for aged persons and how many aged persons have benefited from the grants that have been made? Is this legislation regarded by the Opposition as an election gimmick?

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

– I regret to say that I cannot give the honorable member for Mallee a complete and comprehensive answer to his question. But I can say that, as he well knows, the Aged Persons Homes Act is one of the finest pieces of humane legislation ever passed by this Parliament. Applications are still being received, and applications are still being approved under the provisions of that Act. From memory, a sum in excess of £22 million has already been expended by the Government to encourage churches and the charitable organisations to provide additional accommodation for our elderly people.

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Ministerial Statement

PostmasterGeneral · Petrie · LP

– by leave - For the information of honorable members, I present copies of an Agreement between Australia and a number of countries for the establishment of an internationally owned and operated communication satellite system. Plans call for the operation of a satellite over the Atlantic early in 1965, with gradual development of operations to provide world wide coverage by 1967. The system is to be fully commercial, and is open to all members of the International Telecommunication Union.

The Agreement provides for the interim arrangements involved in setting up the system pending the establishment ‘of a permanent organisation in 1970 and its terms are expressed in two inter-related documents which I now lay on the table of the House. One is governmental in character and contains the organisational principles established for the system. The other deals with the financial and technical operation of the system.

Australia signed both documents in Washington on 20th and 24th August 1964, respectively. Besides Australia, 18 other members of the International Telecommunication Union have indicated they will join the partnership. They are the United States of America, Canada, Japan, Great Britain, Vatican City, Ireland and 12 European countries, including Austria, Belgium, Denmark, France, West Germany, Italy, the Netherlands, Norway, Portugal, Spain, Sweden and Switzerland. To encourage the widest possible participation, other members of the Union have a period of six months during which they may join the partnership under the same financial conditions as the original partners.

The “ space segment “ of the system is estimated to cost 200 million American dollars. This relates to the satellites themselves together with the tracking control, command and other facilities required to operate and maintain the satellites in outer space. Capital will be provided by the partners in agreed proportions related to the telecommunications traffic patterns of the various countries. Australia’s share is 2.75 per cent. - 5.5 million dollars, or £2.5 million - to be called up progressively over the next three years. Our initial contribution of £175,000, representing our commitment up to the commencement of operations over the Atlantic, will be funded from the internal resources of the Overseas Telecommunications Commission (Aust.). The provision of ground station facilities is the responsibility of the individual partners.

Under the Agreement, Australia will occupy a seat on the Interim Communication Satellite Committee which has the overall responsibility for the establishment and maintenance of the “ space segment “. Other members are the U.S.A., Great Britain, Canada, Japan and seven European countries. The United States Communication Satellite Corporation - known as Comsat - which is the United States representative body in the partnership, will be the Committee’s managing agent for the establishment and operation of the system. Provision has also been made for industries in the signatory countries to have a fair opportunity to tender for the supply of equipment required for the establishment of the system.

The Agreement is a practical demonstration of international co-operation by members of the International Telecommunication Union, consistent with United Nations objectives which recognise the common interest of mankind in furthering the peaceful use of outer space. The introduction of the system will be an historic step forward in the transmission of communications over long distances and is of particular significance to Australia which, because of our distance from major world communities, has a heavy dependence upon adequate, speedy and reliable overseas communications services. The extra traffic capacity provided by the satellite system, together with the submarine cables Compac, Seacom and Cantat, which it will complement, should meet Australia’s need for communications in the Pacific, with South East Asia, and with the northern hemisphere for many years to come.

I present the following papers -

Satellite Communications -

Agreement establishing interim arrangements for a global commercial communications satellite system.

Special agreement in relation to establishing interim arrangements for a global commercial communications satellite system.

Mr Whitlam:

– May I ask the Minister to clarify one statement? I think he said that the system will be fully commercial. I take it he means merely that it will pay for itself. I gather from the rest of his statement, however, that the responsibility for operating the system will be in the hands of governments or their agents.


– Contributions will be made to the capital by the partners, as I indicated. Commercial rates will be charged for the use of the system. The partner governments, will, of course, share the profits which are made from it.

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Mr SPEAKER (Hon Sir John McLeay:

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

The failure of the Government, three months after receiving the Australian Wool Board’s recommendations, to formulate proposals for a wool reserve price auction scheme for submission ‘ to wool growers for their acceptance or rejection at a growers’ poll. 1 call upon those members who approve of the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places) -


.- I have submitted this proposal to provide an opportunity to discuss the very important matter of the failure of the Government to make a definite decision on the recommendation it received from the Australian Wool Board for the implementation of - a reserve price auction selling system for Australia’s wool clip. Before one can really deal effectively with this question, I think some historical facts should be stated briefly.

Honorable members will remember that in 1949 a Liberal-Country Party coalition government took over from the .then Labour Government. That coalition government inherited the existing wool reserve price auction system which had been originated and put into operation by the Chifley Labour Administration. Apart from the marketing arrangements of the British Australian Wool Realisation Association Ltd., after World War I, the reserve price auction system that operated between 1945 and 1951 was actually the first attempt to bring some order into wool marketing in Australia. It worked admirably. I was a small participant in the scheme and subsequently I. was responsible for its administration. I do not remember any substantial complaints whatsoever about the effectiveness of the administration of the scheme. It delivered the goods, and finally it was my good fortune to introduce legislation in this Parliament to provide for the refunding to growers who had supplied the wool of profits amounting to £93 million which had accrued during the operation of the scheme.

Needless to say, the success of the scheme prompted a movement amongst the more radical wool growers for such a scheme to be incorporated permanently in our wool marketing system in Australia. The Liberal-Country Party coalition took office in 1949 when the scheme was about to expire because the surplus wool, which was sold along with incoming current crops, was reaching exhaustion, so that the scheme automatically had to go out. The incoming Government was impressed with the claim for a continuation of a similar scheme, so it took steps to devise such a scheme, lt consulted with the grower organisations. It sent a study group overseas to try to obtain the concurrence of South Africa, the United Kingdom and New Zealand in a continuing scheme, and it substantially succeeded. Then in 1950 the Government drew up a plan for a scheme in embryonic form and took a poll of the growers of Australia, who overwhelmingly rejected the Government’s scheme.

What was the reason for this rejection? In 1950 the Minister who was then in charge of our primary industries introduced a 71 per cent, levy to raise money to be available to administer the scheme if the growers voted for it. Worse still, he brought down a measure to deduct 20 per cent, from the gross incomes of all wool growers over the period of 12 months, as a means of preventing inflation. Soon afterwards, those who were opposed, in com- mercial, banking and pastoral quarters, to anything being done which might eventually give the wool growers a protective organisation got to work. They led the wool growers of Australia to believe that if they voted for the scheme they would be up for a 27i per cent, deduction for ever and a day, and that was the end of that scheme.

Things went along all right for a little while. We had the boom wool prices of 1950-51, when prices rose to 144d. per lb. In 1951-52, at about the time the Joint Organisation scheme, the Australian Wool Realisation scheme, expired, wool prices fell to 71.77d. per lb. They could not have been expected to do anything else, because it was the Korean War boom that had caused prices to increase to 144d. But by 1952-53 things had started to go to pot properly. The anti-scheme people and the buyers from ali parts of the world realised that the grower was left without any protection whatever, and this is what happened to prices: In 1952-53 the price per lb. was 81.8d. In 1953-54 it fell to 81.5d. For subsequent years I will give only the increases and decreases. In 1954-55 there was a decrease of 10.62d. over the previous year. In 1955-56 there was a decrease of 9.42d. There was an increase of 18.2d. in 1956-57, but in 1957-58 there was again a decrease of 17.21 d. The gain achieved in the previous year was nearly all lost in 1957-58. Then in 1958-59 there was a decrease of 13.88d. There was an increase of 9.21d. in 1959-60, a decrease of 5.72d. in 1960-61, an increase of 3.46d. in 1961-62, an increase of 3.44d. in 1962- 63 and an increase of 10.74d. in 1963-64.

It must be appreciated that a decrease of Id. per lb. means a total loss of income of £7 million. It must also be appreciated that the falls that take place occur from week to week and from month to month as well as from year to year, as do the increases, and that these are matters of vital importance to the people. What has been the result of this instability? We have had agitation by the wool growers, allegations of pies, the appointment of a judge by the New South Wales Government to inquire into the situation in 1958 and his report in 1959 proving conclusively that the Australian wool growers were in the grip of a pie-ing and buying ring. In 1961, as a result of pressure by the wool growers and by the Opposition in this Parliament, we saw the appointment of an inquiry committee, comprising Mr. Justice Philp, Mr. Merry and Mr. Buttfield. These gentlemen submitted a report in 1962 but suggested no solution whatsoever. They completely avoided making any recommendations for an improved marketing scheme. The outcome of that report was the reshaping of the Australian Wool Bureau and the creation of the Australian Wool Board, itself vested with authority to appoint a committee to inquire further into marketing methods to be adopted in Australia. The Wool Board appointed such a committee in 1963 and it made its report last July. The report has been in the hands of the Government since July 1964. The Government held a Cabinet meeting in Sydney on 6th October, and the Melbourne “ Age “ of 7th October reported as follows -

Mr. Adermann pressed for a speedy decision

This was at the Cabinet meeting, according to the “Age” - because he had to meet the wool growers’ representatives on Thursday.

That was Thursday, 9th October. The report continued -

Opposition developed whether there should be such a scheme. The scheme came under heavy attack as unworkable and likely to achieve nothing more than burdening the industry with heavy costs that ultimately could be met only by subsidy from the taxpayer. Discussion disclosed unexpectedly strong opposition to the scheme among Ministers.

I sympathise with the Minister for Primary Industry (Mr. Adermann). Continuing the newspaper report -

The Treasurer is reported to have told Cabinet that the Treasury opposed the scheme believing it to be unworkable in its present form. Mr. Adermann recommended the granting of ?60 million credits from the Commonwealth Bank.

This amount was to be used to back the scheme. The “Australian” of 9th October reported that the Minister for Primary Industry stated, after he had met the executive of the Australian Wool Industry Conference and Sir William Gunn on Thursday 8th October -

The Government wished to make a clear examination of the scheme before it determines its final attitude. The Government’s doubts were not purely on the mechanics of setting up the scheme. The Commonwealth still had not decided whether the scheme would be in the best interests cf the nation. 1

It has been a long time deciding. The report in the “ Australian “ continued -

The Government had to satisfy itself on the appropriate level of the reserve price in any scheme; the total amount of capital needed; the degree to which the wool industry would contribute to this capital and the provision of finance by the Commonwealth.

The Minister then mentioned briefly, as another “possible obstacle” the legal challenge by the Logan Downs Pastoral Company of Queensland.

We find in the same issue of the “ Australian “ a report of a statement by Sir William Gunn to this effect -

It appears that the Government will nol be in a position to give a decision until the Logan Downs legal challenge is resolved. No-one can forecast when this will happen. Because of this challenge it is now unlikely that any change can take place in the marketing system by July 1st next . year.

In this Parliament on Tuesday, 13th October, I asked the Minister for Primary Industry a question and this is what he replied -

I would remind the honorable member that there is another factor involved, and that is the casts taken- out by the Logan Downs Pastoral Co. on the promotion levy. That could have a bearing on the levy suggested within the present s.heme. Obviously, before the Government would legislate, or before I would recommend legislation on this matter we would need to know the result of that case.

The Lord only knows when that will be. Let us have a look at the alibi of the Government. Here is a government which has been sitting on a report for three months. Now, it is quite reasonable to suggest that no government could be expected to accept out of hand a recommendation of practically any committee. But it would have been expected that having had the report in its hand for three months the Government would have a sub-committee of Cabinet working on it and determining what sections and what particular features of the scheme required amendment. Such a sub-committee should have been able to say that this matter ought to be rejected and that matter ought to be accepted and it should have been in a position to advise the growers* organsations. It should have provided the information that the Minister should have had - and probably did have - in his hands at the Cabinet meeting. After all, he has magnificent personnel in his Department, some of whom were associated with the last reserve price scheme which ended in 1951. He has, in the archives of his Department, all the detail that could be required. He bas the Treasury advisers on call.

These are some of the things that the Minister might be required to know: Should the scheme be accepted by the Government? That is one thing the Government should determine. Of course, the scheme might have required a different controlling authority. The Government would be required to decide on the final authority which would determine the reserve price fixation while Government finance was involved. The Government might have to decide, in the face of heavy buying, whether the Government’s financial guarantee should be greater or smaller. It might have to decide on the amount of the grower levy and it might have to decide at what stage of financial strength it should pass full control of the scheme to the growers. It might have to decide the length of time for which the scheme should operate and whether South Africa and New Zealand and the United Kingdom should be brought into the scheme. The Government might also have to decide what should be done in regard, to private selling, which is rampant in Western Australia.

The answers to all those questions should have been in the Minister’s hands before going to Cabinet. He has a Cabinet riddled with anti-wool marketing Ministers. Sitting behind him, he has a party the members of which hold the same views, particularly the honorable member for Corangamite (Mr. Mackinnon). They do not want, nor do the big financial interests outside the Parliament want, any forward step which would put the wool growers of Australia in a position to meet the world buyers of Australian wool. Australia’s wool clip is worth not less than £450 million and is a very great factor in determining the economic position of every man, woman and child in this country. The Minister stands condemned of negligence - although he was fair dinkum - and so do all the Ministers from this Liberal Government, for not bringing the wool reserve price scheme into operation for the 1965-66 season.

Minister for Primary Industry · Fisher · CP

– The motion moved by the honorable member for Lalor (Mr. Pollard) to enable him to discuss this matter is based on wrong premises in the first instance. He stated in his early remarks that the Government had failed to make a definite decision. The Government is in the process of making a definite decision and he knows that quite well. In referring to a three months’ delay, he did not take very great care to check his facts. Undoubtedly, it is three months since the Australian Wool Board’s Wool Marketing Committee, which was set up under the Wool Industry Act, reported to the Board, but the Board had to consider the report and then present its recommendations to the Wool Industry Conference. The executive of the Wool Industry Conference then met to consider the Board’s proposals and the Conference in turn made its recommendations to the Government. That was the first time the Government had anything of a proposal before it. This happened on 27 th August.

Mr Pollard:

– Do you deny that you had that document in July?


– That has nothing to do with it. There was a recommendation by the Wool Board to the Wool Industry Conference and the Conference, having discussed the recommendations of the Board, then came to me with its proposals for the Government.

I made no move so far as recommendations to the Cabinet were concerned until such time as the industry itself had put its proposals before me. Obviously it was six weeks from then until I met the executive of the Wool Industry Conference again. If that is a long time so far as a great industry such as the wool industry is concerned then I accept the charge that it was a long time. The honorable member knows the implications involved. He has had the experience of being a Minister and he is only raising this matter, of course, to try to get some political capital out of it.

The honorable member did relate the history of the early 1950’s. He referred to a 7i per cent. levy, plus another 20 per cent, but he did not mention that there was also a large sum’ of money available for wool growers if they turned down the scheme. He did not mention that record prices were being paid for wool at that time which gave the growers no incentive to vote for a scheme. He ought to be fair about it. I remind him of the policy of the Australian Labour Party. I remind him that he himself spoke on behalf of the Labour Party at Grafton when he put the last proposal of that party to the people of Australia, lt is obvious, having in mind that this 71 per cent, levy defeated the proposal in the early 1950’s, that he wanted the Labour Party proposal to be defeated. I say that because he proposed a levy of up to 7i per cent, on behalf of the Labour Party.

Mr Pollard:

– Under certain circumstances.


– That is rightunder certain circumstances. He was going to deprive the wool growers of the £44- million that this Government has given them. He was not going to give that to the wool growers. So, let us consider the circumstances, by all means. The Labour Party proposal was that the growers should vote for a reserve price scheme with a levy of Ti per cent, and they were not to have the £4£ million that this Government gave to them in order to promote the industry unless the proposal was carried.

The promotion scheme we have incorporated in legislation is the best thing to ensure any reserve price plan. Let the Labour Party face up to its sins in this matter. It is obvious that it did not want a reserve price plan itself. We have gone a long way in this industry. This Government has enacted legislation. We got the Philp report and, as everybody knows, at that time there was really no voice speaking for the industry. We legislated, first of all, for a voice for the industry and established the Wool Industry Conference. Arising out of that, we also enacted legislation to put the industry organisation on a better basis. There was the Australian Wool Testing Authority and there was the Wool Research Committee working in isolation from the Wool Bureau. The honorable member for Lalor knows of, and be supported, the comprehensive legislation that we brought into this Parliament that we might put the industry on a better basis and re-organise it. The Labour Party was going to deprive the grower of any payment and did not want a promotion levy.

The honorable member must face the facts. He cannot say that he pushed the Government because we took the action of our own volition. The Government made it mandatory for a marketing committee to be appointed. So, the Wool Marketing Committee of Inquiry reported to the Australian Wool Board in due course and the Wool Board made its recommendations to the Wool Industry Conference which, as the spokesman for the industry, came to this Government and put its proposal. We are now in the process of considering those proposals. Obviously they are important matters, in so great an industry. This industry affects the whole Australian economy. The honorable member does not deny that, of course.

I do not intend to discuss the merits or demerits of the proposal, because they are not involved in the matter raised by the honorable member. But there are matters which the Government has to consider, such as the form, composition and powers of the authority to be set up to administer the scheme, Who should fix the reserve price level and how the necessary finance should be provided. The honorable member read out the reason that I gave in relation to the financial aspects. I tell him that, consequent upon the Cabinet meeting, an interdepartmental committee was appointed immediately with the task of getting the facts that we have asked for - facts additional to the information that has been submitted to the Government. That inter-departmental committee is at work.

When the honorable member asked me a question on this matter in the House, I did not think he was very serious, because he laughed at the reason that I gave in respect of the validity of the wool promotion levy legislation. I want to clear the air on this point. A writ was issued by the Logan Downs Pastoral Company.

Mr Pollard:

– That is in relation to the legality of the promotion levy.


– Yes. What I want to tell the honorable member and the Opposition is that the power under section 51 (i), of the Constitution, which we will be using to implement the levy or to raise the finance for a reserve price plan, is the power that is in question in the Logan Downs Pastoral Company case. The point is that it does not necessarily follow that we will not have a reserve price plan if the wool promotion levy legislation is declared invalid.

Mr Pollard:

– Are you going to wait until that case is decided?


– No. In reply to the honorable members question I said that I would not recommend legislation until that matter was cleared up because the decision on it would affect the form of the legislation. But I remind the honorable member that the actual drafting of the legislation for any reserve price plan - if a plan is approved by the growers - will not be undertaken until the autumn session next year, and we should have the decision of the High Court by then because the Government is asking for an expeditious hearing of the case. But, in the meantime, I have asked the Chief Electoral Officer to contact all pastoral companies in order to have the roll ready for any ballot that might be taken. He has taken that action. He is compiling the roll. There has been no delay in any shape or form.

The honorable member quoted something that appeared in the newspapers. All I say is that I gave nothing to the newspapers. There is confusion on this issue, and I regret that.

Mr Pollard:

– No wonder.

Mr Stewart:

– You are not the leas’!) confused person.


– Give me a chance to talk. There is confusion, which I regret and which has been brought about by the people who do not want the reserve price scheme.

Mr Pollard:

– They are your colleagues.


– That is not fair. If the honorable member has been doing his reading, he will know that some of the newspapers that have put out these confused statements have been against all forms of stabilised marketing ever since I have been in this House. They do not want any stability. Look at this Government’s record in regard to primary industries! The stabilisation proposals that have been introduced by Commonwealth Governments have stabilised the economy. The stabilisation of primary industries is the basic factor in the stabilisation of the Australian economy. I am not on the side of any newspaper or any person who decries just for the sake of decrying and tries to confuse the people.

The Government will complete its proposals and will make its decision. If the decision is that there will be a reserve price plan, no confusion will be allowed to exist in the minds of the growers. The whole plan will be set out in pamphlet form. We will make the same approach as we made in respect of the dried fruits industry recently. Every condition will be set out so that the growers can understand the proposal and vote intelligently on it. The issues will be determined by the Government as soon as I receive the additional information from the inter-departmental committee. I have also asked the Chairman of the Australian Wool Board and members of the executive of the Australian Wool Industry Conference - I met them in Sydney and discussed this matter with them - to submit to me further information on private selling, which is an issue in this reserve price plan.

It should not be thought that I, not being a wool grower, claim to know everything about wool and about every industry for which I introduce legislation. But I know something about stabilised marketing. I believe that the record of the legislation which has been put on the statute book since 1 have been Minister for Primary Industry indicates my approach to these matters. After all, we are the representatives of the taxpayers as well as of the wool growers. We will see that the wool growers get a fair and just decision on this matter, and we will take into consideration the economy of the country and the taxpayers.

All the issues which were mentioned by the honorable member for Lalor, and which I cited to the executive of the Wool Industry Conference as my reason for deferring a decision, need to be investigated. We are awaiting further information on them. We are awaiting further information from the executive.

If the honorable member is merely making the charge, for the sake of politics, that we have delayed for too long, that we have been considering the affairs and welfare of this great industry and the Australian economy for too long, all I can say is that I am taking my time and investigating the matter efficiently so that the Government will make a just decision and so that the growers will have an opportunity to make an intelligent choice when the confusion that has arisen has been removed and the issues have been stated quite clearly.


.- Unfortunately, the Minister for Primary Industry (Mr. Adermann) has become overexcited on this matter. He became so agitated that he denied that the Government has had the recommendations of the Australian Wool Board for more than three months. I have the actual document in front of me. It is the report and recommendations of the Australian Wool Board and is dated July 1964. Surely the Minister will not deny that he- received it almost immediately after the date of its publication.

The fact is that the Government is dodging the recommendations of the Board. Last Saturday’s issue of the “ West Australian “ featured an article which carried the headline “ Wool-Price Scheme in Difficulties “. That was the understatement of the year. The article stated -

The possibility of a reserve price wool marketing scheme coming into operation by July 1 now seems remote. More to the point is the question: Will there be a reserve price plan at all?

That is a very natural question to ask, because it has become obvious that there is a real possibility that the Government will shelve this proposal completely. The explanations of the attitude adopted and decisions made by the Government, given previously and today by the Minister, will not fool anybody. First, we are told that more information is required from the Wool Board.

Then the Minister tells us that before any moves can be made towards introducing legislation, it is . necessary to wait for the decision on the action taken in the High Court as a test of the validity of the wool promotion levy. Even if it were necessary to wait for that decision - and I doubt very much whether it is - there is still plenty that has to be done before the scheme can be anywhere near the stage where it goes into legislation. Even if further information isrequired from the Board,, surely sufficient material is available to the Minister and the Cabinet to allow them to push on with this proposal. Certainly it should not be sent back to the Board for further consideration. We ask: What is behind this move? Does it mean that Cabinet expects the High Court to uphold the challenge? Does that in turn mean that if it does so the Government will refuse to carry on with this particular matter? If it does not mean that, why has Cabinet refused to do anything about it, and so caused a delay with the scheme? After all, is it not correct that many of the objections which have been raised against the wool promotion levy - the issue before the High Court - arise from the fact that we have no efficient marketing system? If that is so, surely we cannot squabble with any objection of that nature which is raised.

The wool growers fully appreciate that while the present method of marketing continues the only people to benefit to any degree from the wool promotion scheme will be the middle mcn. Therefore, it is no wonder that there is a certain amount of hostility to a levy being ‘ struck for wool promotion before there is any certainty of a proper and efficient marketing scheme being introduced. The members of the Wool Board drew attention to the marketing system in their report last year when in their conclusions they said -

That there is an urgent need for an examination of the method by which the Australian wool clip is marketed and the Board is determined that the examination be carried out with the least possible delay.

That wool promotion cannot succeed in its objectives if the method by which the Australian wool clip is sold is not most efficient.

Surely in those circumstances, and after deciding to impose a levy upon the growers for wool promotion, the Government must be duty bound to submit to the growers as quickly as possible a plan for an efficient marketing scheme. Whether the growers accept the plan or reject the plan is beside the point at this stage. The real issue is that if the Government intends to keep faith with the wool growers it must surely push ahead with proposals for a marketing system by which, if any benefit is to flow from any contributions made by the growers towards wool promotion, the growers themselves will be the main beneficiaries. What is happening, of course, has become quite obvious. There has been a serious and bitter clash of opinion between the Government parties on this issue. This is to be regretted, because it is a national disaster that members of the Government should be so violently divided on this important matter, which can mean so much to the wool industry and to Australia generally.

People may imagine that Cabinet has disagreed only on the terms and conditions of a reserve price plan, but unfortunately the position is not so simple as that. The fact is that Cabinet members arc unable to agree that there should be a plan of any description at all. That is where the matter lies, and that is why there is so much bitterness between the Government parties and also why Cabinet is looking for some way of escape, for some way to cover up the whole issue. The fact is that the top boys of the Liberal Party are now opposed to the scheme altogether, while the top boys of the Country Party favour the move for the scheme. But apparently the Liberal Party is winning the day, because otherwise we would see some move being made by Cabinet to draw up at least a tentative plan. The attitude adopted by the Liberal Party now makes it appear that while it supported the wool promotion levy, which it knew could benefit the middle man irrespective’ of the marketing system, it is not prepared to go ahead with a marketing scheme which must, if it is efficient, be of great benefit to the wool producer. It is well known, of course, that there is considerable friction between the Government parties on this issue. While the Liberals always seem to win the major battles, it is going to be very interesting to see what happens on this occasion.

An article appeared last week in an issue of the “ Australian “ pointing out that the Chairman of the Australian Wool Board, Sir William Gunn, was launching a campaign for the adoption of a reserve price plan. The article stated -

Sir William’s campaign’ could also aggravate the conflict in Federal Cabinet. Country Party ministers, including their leader Mr. McEwen and the Minister for Primary Industry, Mr. Adermann, are known to favor the scheme, but some Liberal Ministers arc just as strongly opposed to it.

An article in the “ West Australian “ said -

The point is that the scheme itself has struck unexpected difficulties and opposition within the Government and now runs a real risk of foundering.

The article went on to deal with the possibility of the Treasury insisting that the Government play a major part in setting the seasonal reserve price for each type of wool. It stated-

Some Government members would like to see this course adopted, in the hope that it would secure defeat of the scheme.

The article concluded -

Meanwhile, the Government will be happy to defer consideration of the whole subject until after the Senate election on December 5.

What a wonderful outlook for the wool producers of this country. We have the Wool Board vigorously campaigning for a reserve price plan, and we have the Government parties fighting among themselves, not on how the plan should operate but on whether there should even be a plan at all. Then we have the middle man sitting back and rubbing his hands over the prospect of greater benefits from the growers’ contributions to the wool promotion scheme, while the wool growers themselves continue to be fleeced under the existing marketing system.

One issue which is causing an upheaval among the Government members, and one which has put the Liberal Party on the spot, is one which has been thrown into the arena by certain of their friends and supporters in a particular section of the wool industry. In 1951 those people left no-one in doubt as to where they stood in relation to the post-Joint Organisation reserve price plan, but on this occasion they have indicated that they will be quite happy to come to the party provided - and this is where the Liberal Party finds things so sticky - that the Government eliminates private selling. The proviso laid down by the Liberal Party’s influential friends is the abolition of private selling. This is the position which has caused a considerable uproar in the respective camps of the Government parties. Government members realise that under the existing marketing system there are advantages -in private selling, which may still be present under a different system. Some members of the Country Party - I am not prepared to say all members, because there does seem to be a tendency among them to support the wealthy organisations - appreciate what private selling means to some of the smaller growers, and they are becoming disturbed at the idea that it might be abolished.

If it were not so serious, this situation would be a source of entertainment for us. We could sit back and enjoy it. However, the fact is it means so much to the industry and so much to Australia. While we are very critical of the Government - particularly the Cabinet - for allowing this position to develop, we also appeal to its members to settle their differences in the interests of all those concerned.

Mr Malcolm Fraser:

– At the outset 1 wish to correct an impression held by the honorable member for Lalor (Mr. Pollard). My friend the honorable member for Corangamite (Mr. Mackinnon) has asked me to say on his behalf that when the proposals were put forward in 1951 he in fact voted for them and not against them. So the charge that (he honorable member for Lalor has made that the honorable member for Corangamite was against any marketing proposal for wool surely falls to the ground. The honorable member for Kalgoorlie (Mr. Collard) repeated the charge made by the honorable member for Lalor and tried to substantiate that what in fact has happened to this marketing programme is a postponement and that it might never see the light of day. The Minister for Primary Industry (Mr. Adermann) gave us one or two facts which are quite pertinent to this particular matter. He said that the Government has asked that the Logan Downs case be expedited so that the Government will know the decision as soon as possible. The Minister also said that he has asked for rolls to be prepared so that any necessary ballot may be taken with the least possible time lost.

Both Opposition members who have spoken plainly cannot read a simple heading on a pamphlet prepared by the Australian Wool Board. The Opposition has tried to make out a case that the Government has had the Board’s report, or the Conference report, for three months. The report that I am holding in my hand, and which the Opposition members have referred to, was not a report to the Government; it was a report to the Australian Wool Industry Conference, and it may or may not have been adopted by the Australian Wool Industry Conference. The executive of the Conference itself put proposals before the Government not before 27th August of this year. It was on 8th October that the Minister told the executive that the Government required some more time to examine these matters in slightly greater detail.

At that time, the Government had had six weeks to look at the proposals that had been put in positive form by the industry, and the industry itself had taken well over a year to formulate its proposals. Therefore, I suggest that the charge made by the honorable member for Lalor to some extent falls to the ground. The industry took more than a year to formulate its proposals, the Wool Marketing Committee of the Australian Wool Board had continued its inquiries for 1 1 months, and then the executive of the Board took some weeks before it felt prepared to make a submission to the Government. At that time, the Government had taken six weeks to consider the matter, and surely a little more time is reasonable. When one looks at some of the controversial matters raised in the report by the Wool Marketing Committee of the Board, it is obvious that the Government would require more time to consider the recommendations.

The Opposition could have done the industry a service if it had presented reasoned views about the controversial matters that are raised. I should like briefly to discuss four controversial recommendations relating to, first, the floor price scheme and the finance to be available for it, secondly, private selling, thirdly, the size of lots and. fourthly, the position concerning new wool selling centres that may be proposed in the future. Let us first consider the reserve price plan. In 1951, the growers were to put up capital of £48 million for such a scheme. Now, with a much larger wool clip, the Board states that £20 million will be sufficient. In 1951, the government guarantee to support the scheme was to be unlimited. In fact, this would have to be the case in any renewed proposal submitted to the growers for ballot. But the Board, for some reason, has now declared that a government guarantee of £80 million would be sufficient. The differences apparent in these figures are substantial, and they call for some study and some discussion.

The Australian Wool Board has mentioned several means and several criteria that would have to be taken into account in fixing the reserve price in any one year. I have grave doubts about the wisdom of setting in one year a reserve price that might have to be lowered in another year, because, once the reserve price was lowered in expectation of a fall in the price of wool, the price of wool would inevitably fall. So it may well be that the reserve price would have to be set at a level that would never in fact be lowered. These questions are not canvassed in the report made by the Board to the Australian Wool Industry Conference; nor have they been canvassed in public. But they are certainly questions that any responsible government would have to canvass closely before submitting to the growers for a ballot recommendations that in fact would become government recommendations.

Then there is the question of private selling. The Board recommends that private selling be abolished. But is it not probable that the scheme would be defeated in Western Australia because of the attraction that private selling has for people in that State, which could quite properly bc described as the father of the reserve floor price scheme? Therefore, if the Board’s recommendation on this matter were accepted, the defeat of the proposal at a ballot might well be inevitable because of what could happen in Western Australia. This should be borne in mind by people like the honorable member for Lalor who say: “ Why has not the Government accepted these proposals? Why has it not put them into practice? “

The next question relates to the size of lots. It may perhaps be said with justification that one bale lots should be abandoned. But would it then be said that lots of two, three, four or five bales should be abandoned? At what stage will the grower bc asked to lose his own identity in the sale of his wool? This is something that is ill defined in the Board’s report, but it is a matter of some substance and some importance, for growers like to know that the wool being sold is theirs. They like to bc able to see their wool on view when it is sold. This is something that the honorable member for Lalor has not mentioned. This identity of the grower with the wool being sold is dear to the hearts of the small farmers and the smaller wool growers whom the party that the honorable member supports claims to serve. He should have considered this matter.

Then there is the question of new wool selling centres which may be proposed in the future and which the Board may consider should be referred to any wool commission that may be established as a’ marketing authority. This, again, may be advisable, but it would involve the denial of the rights of growers themselves to help establish and operate wool selling centres and of independent firms that may want to do so. I know of two wool selling centres at least which have been established in recent times and which may well not have been established had the position envisaged in the Board’s report already prevailed. This, again, is something that requires the closest possible examination. The Government has an obligation to study not only the effects of the proposal envisaged on the wool industry but also its effects on the nation. In particular, the effects of subtracting from the rights of individual growers which is inherent in the scheme as outlined by the Australian Wool Board must receive the closest possible attention.

The Opposition would have done the country a service if, in the discussion that has taken place so far, it has turned its attention to three matters that I have mentioned - the abandonment of private selling, the question of one bale lots and the subject of wool selling centres. In view of the controversial elements involved in the proposals concerning all these three matters, which the Board has said are integral with the reserve price plan, it is clear that the Government must examine very closely all the issues involved. The Australian Labour Party has not put its views very clearly. It seems just to want a plan without caring very much what plan is adopted. The plan put forward by the honorable member for Lalor in delivering that Party’s policy speech on rural matters during the last Federal general election campaign was quite different from the one submitted to the Government in the Board’s report. There has been no attempt by honorable members pposite in this debate to show which plan would be better.

Indeed, the plan submitted by the honorable member for Lalor during the last election campaign should be examined, because I wonder whether the Opposition has been sincere in stating that it wants a plan.

An integral part of the proposals submitted by the honorable member for Lalor before the last election was a levy on wool growers, which, in the ultimate, would have paid for the total cost of the scheme for the stabilisation of wool sales. I suggest that this is quite beyond the capacity of the wool industry at present. I remind the honorable member for Lalor that this was a feature of his rural policy speech and that he would do well to reread that speech. If this sort of proposal had been put to the growers for a ballot, clearly it would have been rejected. The difference between honorable members on this side of the House and Opposition members is that we on this side want any proposals submitted to the growers to be workable and soundly based so that they will be for the benefit of the wool industry in general and the country as a whole, whereas the Opposition merely wants any plan regardless of its effects on the industry. We on this side of the chamber want a scheme that will be for the benefit of the whole community.


.- Mr. Deputy Speaker, the Opposition’s purpose in bringing this matter before the House this afternoon is not to debate, in the words used by the honorable member for Wannon (Mr. Malcolm Fraser), the minor details of a reserve price plan for the wool industry. Our purpose is, first, to impress on the Parliament the urgent need for reform of the present system of wool marketing and, obviously, for the institution of a reserve price scheme. Our purpose, secondly, is to register the strongest possible disapproval and dismay at the Government’s failure to agree on and to submit proposals for a reserve price marketing scheme to the Australian wool growers for approval or rejection by them at a referendum.

Before I deal with those points further, I want to take a few moments to discuss briefly a matter mentioned by the Minister for Primary Industry (Mr. Adermann). He accused the honorable member for Lalor (Mr. Pollard) and the Opposition of endeavouring to have the promotional levy abolished. I may add that the Minister, if he looks at the records of this Parliament, will find that about three years ago the Opposition, in this House, proposed an amendment urging the introduction of the promotional levy. So the Minister will find that his accusation was entirely false.

The wool industry is unchallenged as Australia’s most important industry, MrDeputy Speaker, but years of procrastination and delay have marked the Menzies Government’s dealings with the industry. By failing even to agree in principle to the reserve price scheme recommended by the Australian Wool Board, the Government has abdicated its responsibility. On the flimsiest of excuses, this Administration has achieved yet another year’s delay in reform of the wool marketing system. What a story of delay and delusion there has been over the years. The background to this move for reform in the wool industry is one long story of stonewalling by this Government and reactionary forces which have fought a long drawn out rearguard action against reform. There has been a great deal of agitation for change. Indeed, there have been years of it. The agitation has been spearheaded, I am pleased to say, by the Australian Labour Party, which has been strong enough and progressive enough to stump this country and advocate change when change was far from popular. The Labour Party has advocated a reserve price scheme and has been strong enough to expose those who have battened on to the wool growers and manipulated the industry.

Progressive elements in the wool industry raised their voices and finally the Government, reluctantly, set up the Philp Committee of Inquiry into the wool industry. Deluded into expecting action, the voices of the progressive elements were stilled, only to find 18 months or so later that the Philp Committee recommended yet another inquiry. This resulted in more delay, until finally, with mixed feelings, the Cabinet received the report of the Wool Marketing Committee, which was dated July 1964. Feelings were mixed, because it is clear that Cabinet is divided. This throws the spotlight on the uncomfortable situation within our coalition Government. Clearly the Liberals are finding the pressure from their Country Party colleagues is irksome; In trade, tariffs, electoral redistribution, foreign investment, intrastate aviation and in a number of other spheres, there has been a difference of opinion and this has created a widening gulf between the Government parties. It is regrettable that this internal struggle affects the welfare of Australia’s greatest industry.

I have said that the Opposition regards the introduction of the scheme as a matter of urgency. We hold our view for a variety of reasons. First let us look at the annual report of the United Nations Food and Agriculture Organisation, which was published just two weeks ago. It pointed out the danger of not limiting wool price fluctuations. Clearly manmade fibres are wool’s mortal enemies. Scientists on both sides are struggling for the upper hand. But disregarding the physical properties, synthetics already have a tremendous advantage over wool. They have price stability, a stability which the world’s manufacturers in competitive markets value so highly. One of the basic aims of the wool reserve price scheme is to smooth out the violent fluctuations of price at wool auctions. The Chairman of the Australian Wool Board, Sir William Gunn, told an audience at Armidale last week, according to a report in the “ Australian “ -

  1. . the scheme was urgently needed to protect wool in its competition with synthetics by reducing the violent price fluctuations that occur under the present unregulated auction system.

The Committee for Economic Development of Australia, when comparing the export potential of a variety of products, plumped heavily for improving the competitive position of wool against manmade fibres. In April and May of this year, the price of wool plummetted more than 20d. a lb. for average 64’s, but this fall could have been reduced, in effect, if manufacturers had known in advance of a base level beyond which the price could not fall. There is ample evidence of the activities of pics, which diminish competition and reduce prices. The Royal Commission in New South Wales conducted by Mr. Justice Cook considered the activities of pies. Mr. Justice Cook spoke out strongly and was very critical of their activities. Indeed, the Philp Committee of Inquiry recognised the existence of pies and the fact that they could depress the market, but it could not say to what extent the market was depressed. But if they meant the loss of only 1 per cent, in the average price of wool, the wool growers and the nation would Jose in excess of £4 million a year. Both the individual wool grower and the nation need protection from such activities. Certainly, a reserve price scheme could afford a degree of protection. In addition, such a scheme could guarantee a grower at least a minimum income for his labours. These are the Opposition’s reasons for saying that this matter is urgent. They are very strong and valid reasons, I submit.

In the circumstances, I think we are entitled to ask why the Government has refused to treat the matter as urgent and why it has refused to accept the plan as yet, despite the long period that it has had to study the plan. We have been told that Cabinet seeks more information on the scheme. I feel a little sorry for the Minister for Primary Industry. This is the most important piece of prospective legislation he has ever handled. Now, more than three months after the report of the Wool Marketing Committee has been placed in the hands of his Government, Cabinet has rejected it. Why? We are told it has done so because of lack of information. This is virtually a charge that the Minister is incompetent. Did he fail to prepare his brief properly? What information did he not make available? What additional information is needed? The remarks of Sir William Gunn reported in the Melbourne “ Age “ today are very pointed. As I see it, he has pointed at the critics of the scheme within Cabinet. The newspaper report states -

Sir William Gunn yesterday challenged critics of the Australian Wool Board’s marketing scheme to “ be specific “ in their criticism.

Sir William challenged critics: “Let’s not have a general charge of ‘ no information ‘. How about these people being more specific on what they want, and we will give it to them”.

The honorable member for Kalgoorlie (Mr. Collard) spoke of Sir William’s campaign to convince people of the merits of the scheme. He might well commence his campaign within Cabinet.

Whatever has happened in Cabinet, whatever differences the Minister has with the Labour Party - in some areas of policy these are substantial - the Minister for Primary Industry is sincere in his approach to tint scheme, I believe. He certainly is not incompetent. But he is the scapegoat for the powerful Liberal group . representing the large financial interests and the big city graziers who have called a halt to a promising move for much needed reform in wool marketing. Cabinet’s long and unfruitful deliberations on this reserve price scheme were in startling contrast, I thought, to its unseemly haste in rushing through approval of regulations governing the aviation industry and protecting its big business friend. Two minutes deliberation brought a “ Yes “ for Mr. Ansett; two days deliberation brought a “ No “ for the wool growers. Of course, providentially there has appeared for the Government an excuse for further delay in the form of a legal challenge to the promotion levy and the reserve price scheme has been dropped like a hot cake. Why? Arc we to understand that every time someone takes legal action against some provision made under Commonwealth law the Government will duck for cover and suspend operations? Of course, that would be ridiculous. The reserve price scheme is not even under challenge and, whatever the court may decide on the wool promotion levy, ways can be found to collect it, and the Minister and the Government know it. Clearly, this has been a straw grasped by the Minister.

Similar schemes operate in South Africa and in New Zealand, our partners in the International Wool Secretariat. These schemes operate successfully and have done so for years. Wool is our greatest single export commodity. It is of vital importance to the nation. The Government’s failure to give the Australian wool growers the opportunity to ensure its protection and to advance its competitive position against synthetics warrants the strongest possible censure. The Opposition voices this censure and I have no doubt it will be echoed by tens of thousands of Australian wool growers.


.- Obviously, the Opposition did not study the proposal thoroughly before raising this matter. The Opposition’s case is based on false premises. We have been told that the Minister for Primary Industry (Mr. Adermann) has had the information for three months, but this is entirely incorrect. Then the Opposition showed how ridiculous its case is by confusing the report of the Australian Wool Board with the report of the Wool Industry Conference to the Government. It has never been the policy of the Government to tell the wool growers what it wants. It has been the policy of the Government to ask the wool growers what they want and then to frame appropriate legislation. The Opposition proposes to tell the wool growers what is good for them. Had Labour been returned to power, we would undoubtedly have had an acquisition scheme without a referendum.

There is no question at all that the scheme is not thoroughly understood. I claim that my electorate contains more wool growers than does any other electorate in the Commonwealth, but it is rare to find any wool grower within my electorate who really understands what the whole scheme is about. The Government has taken the stand is important for all details of the scheme to be put clearly before the wool growers before a proposal is put forward for them to vote upon. Many and varied rural organisations do not agree, mainly because they do not understand yet what the whole scheme is about. The decision to be reached by the wool growers is very important. After all, as other honorable members have said, the wool industry is Australia’s greatest industry. The scheme does not concern only the wool growers; it concerns everybody. Wool is still Australia’s greatest earner of export income and the whole economy is dependent on the ability of wool growers to produce sufficient wool economically and to export it to earn income for the nation. If the Government gives its support to any scheme, the taxpayers would have a tremendous part to play because they must supply part of the finances.

The Opposition, as far as I can understand, wants to push the proposed scheme through as quickly as possible. That is the basis of the argument put today by Opposition members. I ask: Why the urgency about this most important question? The important thing is a correct decision - one that has been thoroughly thought out. It is rather amusing to see the crocodile tears that have been shed by members of the Opposition over the position of the wool growers because, after all, it is the Labour Party’s avowed policy to socialise the industry.

They would take not only the wool but the land as well. Every member of the Opposition has signed that pledge. When we hear members of the Opposition crying over the plight of the wool grower we would be amused if the whole thing were not so serious.

I maintain that this motion is really an attempt to gain some political advantage by embarrassing the Government. This has been clearly borne out by the statement of several members of the Opposition that there is a split between the Government parties on this subject. Honorable members opposite have made similar statements on other matters on previous occasions, and it must be terribly disappointing for them to find out that there is no split. When it comes to any definite and important question, the Government parties stand solidly together. I should like to emphasise that the man who is promoting this scheme more strongly than anyone else is Sir William Gunn, who has stated that he is quite happy for the Government to give full consideration to this scheme before the growers are asked to vote on it. Recently Sir William Gunn said -

The Board will give its support in every possible way to the Government and the Australian Wool Industry Council in their further examination into the details of this scheme.

He, too, being a reasonable man, wants this scheme thoroughly worked out and thoroughly understood before anybody is asked to vote on it. Australia cannot afford to make a mistake in altering the method of selling of its most important product. The marketing of wool concerns every man, woman and child in Australia. All that we have heard advocated from the Opposition benches today, purely on political grounds, is that we should rush this scheme through. 1 sometimes wonder just what is behind that suggestion. But I do know that the wool growers of Australia have been able to handle their own affairs effectively for many years They have been able to carry on a profitable business in the face of rising costs over which they have had no control, and they have been able to give to this country this prosperous period that we have enjoyed, for the last 10 or 15 years in particular. The Australian wool growers are quite competent to decide what they want in their wool marketing scheme. Make no mistake, the wool growers of Australia will move when they have been given the opportunity to study the scheme fully.


.- The honorable member for Hume (Mr. Pettitt) did not take even the 10 minutes allowed to. him. He was battling to find arguments to answer the motion moved by the Opposition. For 12 years the wool growers have beenwaiting for an organised marketing scheme from this inept Government. Until 1951 we had the Australian Wool RealisationCommission which was engaged in winding up affairs after the war, but for the last 12 years this Government has done absolutely nothing except murder its own plan of 1951 in the most deliberate and subtle way that could be imagined.

In 1951 the Deputy Prime Minister (Mr. McEwen), the Leader of the Country Party, initiated a scheme similar to the one that we had during the war. Legislation was enacted to impose a wool levy of 7) per cent, to provide capital for this new plan, but the levy was not to be imposed until the growers, by a ballot, had approved the scheme. In the midst of all that, the MenziesFadden Budget for 1950-51 took 20 per cent, of the gross income of wool growers for that year, in addition to the levy of 7i per cent., so the growers faced a 27-i per cent, reduction of their income for one year.

Mr Benson:

– Was that this Government?


– Yes; at the same time as the plan was being put to the growers -for their approval. The growers reacted violently to this, and when the plan was submitted for their approval they rejected it decisively at a ballot, and so would anyone else if the Government tried to put that kind of imposition upon them. So we can say quite truthfully that this Government deliberately murdered its own organised marketing plan in the 1951-52 period.

Twelve years is a long time to wait for the introduction of a marketing scheme, but it is the delay that has occurred during the last three months that makes us all wonder how dinkum the Government is. and whether it wants a reserve plan within, the auction system. We all admit that Australian wool exports constitute 35 per cent. - that was the figure for the last 12 months - of Australia’s total exports, and 40.72 per cent, of our primary production exports.

In other words, wool brought in £481 million last year out of a total revenue of £1,384 million from’ all exports, lt is still the export which determines whether or not we enjoy stability. It is still the yardstick by which our prosperity is measured. Wool is therefore absolutely fundamental to our economy. Although we would like to see a greater diversity of primary products being sold overseas and less dependence on wool, at present and for some time ahead our wool exports will dominate our export earning capacity. Wool’s true significance is vividly demonstrated in the figures that I have just cited - 40.72 per cent, of our total export earnings from primary products come from wool.

Therefore, changes in the marketing methods for wool, changes in wool types, changes in wool markets, changes in wool presentation, changes in consumer demand and preference are all of tremendous importance to this Parliament and the nation. We cannot ignore these things and survive economically. We cannot ignore these things and remain dominant in the business of wool producing and selling on world markets. Fluctuations in wool costs and wool prices affect every Australian’s security. A rise or fall of Id. per lb. in the price received for our wool means approximately £6,500,000 to our economy, up or down. Therefore, delays in implementing recommended improvements to wool (marketing are the grave concern of every Australian and particularly of this Parliament.

The Opposition has introduced this debate in all seriousness. Its purpose is to focus the spotlight on the delay by this Government in reaching a decision about underwriting a reserve floor price plan within the auction system of wool marketing. This plan has been recommended by no less a body than the Australian Wool Board after a painstaking analysis, taking about 12 months to get all the evidence in Australia, New Zealand, South Africa and the United Kingdom. The Board delivered its report to the Australian Wool Industry Conference “n July this year, but three further important steps are vital before the scheme can be Implemented. The first is the approval of the Australian Wool Industry Conference. Secondly, Federal Cabinet must approve; and thirdly, there must be a poll of growers in a referendum. The Australian Wool Industry Conference has not yet approved because its vital meeting, which was to have been held on 14th October, has been postponed indefinitely. Mr. Ick-Hewins, Chief Executive Officer of the Graziers Association of New South Wales, under the dateline 12th October, said -

There is no prospect of the A.W.I.C. meeting this month, -

That is October - possibly this year. We shall arrange graziers’ meetings throughout New South Wales after the A.W.I.C. has held its meeting.

Further, the New South Wales Graziers Association has cancelled 22 country meetings designed to explain the Federal Cabinet’s proposal on the reserve price plan. Even the special conference of that association planned for 3rd November has been cancelled. So the A.W.I.C. cannot decide without a meeting and this meeting is postponed indefinitely. This is the story of what delay has done so far as the important AW.I.C. is concerned.

Concurrently with this problem is the vital decision of Federal Cabinet, where the second important step has to be made, though in point of time the decision by the Federal Cabinet would have to be made first and it would have to be favorable. Otherwise, the whole scheme would be wrecked. It would not be worth the time of the A.W.I.C. meeting even to discuss it if Federal Cabinet were opposed to it. On the favorable decision of the Federal Cabinet to underwrite the new scheme to the extent of approximately £60 million over a period stands or falls the whole scheme. If the Cabinet says, “ No “, there will be no reserve price plan, even though its implementation is now considered necessary by the majority of growers. The delay in coming to a decision at Cabinet level has been brought about largely through pressure from the Treasurer (Mr. Harold Holt) and other Liberal Ministers directed against the entire scheme.

There were bitter differences of opinion in the Cabinet when this matter was discussed in Sydney recently, despite what the Minister for Primary Industry (Mr. Adermann) said this afternoon. Red herrings were thrown into the ring. Icy water was poured on certain aspects of the plan, which is now in cold storage - perhaps for a long time. While all this delay occurs at the top level, the third vital decision is also delayed indefinitely. I refer to a poll of wool growers themselves - a decision which has to be made at the wool grower level before the scheme can be given legislative effect.

In the midst of the Cabinet discussions came a breath of fresh air for the Treasurer and the Liberal Party Minister who oppose the scheme. The breath of fresh air came from the challenge in the courts by C. W. Russell to the legality of the wool levy legislation which passed through the Parliament his year. The Cabinet must have thanked its lucky stars for the intervention by C. W. Russell, which will delay the plan indefinitely. In an article dated 12th October Sir William Gunn is reported to have said -

I have little hope now that the Australian wool marketing system will be changed by 1st July, 1965. The Government now has to await the outcome of the Logan Downs challenge, and no-one can foresee when it can happen.

The Government has had three months in which to gather the information that it required. Further delay is inexcusable. We know that the scheme must be put into effect if promotion overseas is to be worth while. Money spent on promotion overseas will be wasted unless we have a sound marketing scheme. Wool growers are disgusted, frustrated, hesitant and confused. Opponents of the reserve price plan want wool growers to be in that state of mind. “ Delay and confusion “ is their slogan. This Government is not only a party to these cynical tactics; it is co-author of them. While the Country Party and Liberal Party members of the Cabinet conduct a war over the matter, the wool grower, as usual, remains the victim.


.- I cannot help feeling a little embarrassed for the Labour Party in this exercise. It has set out to make political capital out of a case which it has not carefully examined. The Opposition’s case, as I see it, depends on two facts. The Opposition says that the Government has had a report for three months. The fact is that the Government has had the report for only six weeks. It has become increasingly obvious that the Opposition is confusing the report from a committee to the Wool Board with the plan to be put forward by the Wool Industry Conference. The Opposition must remem ber that the report which it states the Government has had for three months is a report by the Wool Industry Conference. I say that in no sense of criticism and only to be helpful. The Conference reported to the Government only six weeks ago.

I am trying to be helpful to the Opposition. I realise that in wool matters its thinking is rather woolly. I admit that the honorable member for Lalor (Mr. Pollard) has his vocabulary roughly right. I think of him as a blade shearer. He is competent in a rough way. I think of the honorable member for Wilmot (Mr. Duthie) in a different way. He has his flocks mixed. The other members of the Opposition who have spoken in the debate showed a rather surprising lack of knowledge of a subject that is the life-blood of our economy. I would have liked to hear the honorable member for Grey (Mr. Mortimer) on this subject. At least he is a shearer and can sort the wool from the sheep. It is important to be able to do that. I understand that the honorable member for Hindmarsh (Mr. Clyde Cameron) also has some skill in shearing. Perhaps these honorable members would be better employed shearing than taking their places in this House, because good shearers are scarce. We must be clear that the report which the honorable member for Lalor says was in the hands of the Government for three months is a report by the Wool Industry Conference. The Conference brought its plan to the Government six weeks ago. Now we are told that we should have made a quick decision.

Last year the wool industry was worth £500 million to the economy. With all respect to the Minister for Primary Industry (Mr. Adermann), I ask: Is that peanuts? This industry is the life-blood of our economy. Are we to rush in and try to set things right, to lay down a plan or to pass opinion on a plan in less than six weeks? What kind of responsibility have we to the economy and to the wool grower? What kind of decisions have yet to be made? Is the problem of private selling of no account? Is not that the kind of problem that should be dealt with carefully by any sensible and responsible Government? What representation is the Government to have on the authority? Is it to have a right of veto, having regard to the large amounts of money its finds? How much money will the Government put up - £80 million or £100 million? Are these small matters? How much will the grower put up? How will it be gathered?

Can we say that six weeks is plenty of time in which to reach decisions on these large questions? We are not discussing the Wool Board’s scheme. Nobody has yet seen the plan of the Wool Industry Conference except members of the Government. I am certain that members of the Labour Party have not seen it. Back bench supporters of the Government have not seen it. For the Opposition’s edification I repeat that the plan to bs discus-ed is to bc submitted by the Wool Industry Conference and not the Wool Board. Obviously the Opposition is not clear on this matter. Honorable members opposite are woolly in their thinking if not in their experience. Is six weeks too long in which to decide how a referendum will be held or whether a referendum is wanted? Who will vote on the referendum? If the scheme is not carefully prepared it will be lost at thz referendum. Those who want the scheme most should be careful to see that a carefully prepared scheme goes to the grow:rs because many wool growers, large and small alike, do not want the scheme. However the majority of wool growers perhaps do want it. We must not act hastily. We must see that we go about this matter carefully and thoroughly. Surely this is what sensible and responsible people would do. I repeat that the Government is not being asked to consider the Wool Board’s plan. It is being asked to pass judgment on the plan proposed by the Conference. The Government is being asked to make a decision on the Wool Industry Conference plan, which we and the honorable member for Lalor, with all his august and ancient experience, have not seen.

What is the panic? Why hurry and risk the economy in this way? Are we being ruined at present? If so, I would like to say that it is a very pleasant process. The wool market is as steady as it has ever been. Those of us who know anything about the subject do not want to see the market any higher than it now is because if that happens we will let in the synthetics. We all know that. Whether we want a floor price plan or not, those of us who have any experience in the industry say immediately that irrespective of the reserve price plan, things are steadier in the industry now than they have been for years. I do not say that I am opposed to a floor price plan, but I am opposed to any indecent haste in arriving at a plan.

In conclusion, I pay tribute to the Minister for Primary Industry (Mr. Adermann) for the patient, dogged path he has taken in these negotiations. There have been many occasions when I have expressed impatience at the rather slow pace at which he has. sometimes seemed to move, but, in his wisdom, he has gone along quietly and gradually gathered the industry’s brief together, lt is a remarkable tribute to his qualities that he was able to bring the interested people to the table and to get them to work together in evolving a plan. Let us have no more of this foolish talk that the Government has had the plan for more than six weeks and therefore should have done something about it by now. To expect any government with a sense of responsibility to the economy and the nation to arrive at a decision in that time is complete and litter foolishness. The Opposition has foolishly embarked upon this exercise without even reading the basic document; without realising that the report which the honorable member for Lalor was waving about so blithely was not a report to the Government but a report to the Conference. To behave like that is to display a lamentable lack of responsibility to the woolgrowers of Australia and to the economy of the country.


– Order! This discussion has now concluded.

page 2088


Accommodation Blocks at H.M.A.S. “Cerberus”, Victoria. Mr. FREETH (Forrest- Minister for Shipping and Transport) [4.47]. - I move -

That, in accordance wilh the provisions of the Public Works Committee Act 1913-1960, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report: - Erection of four accommodation blocks for ratings at H.M.A.S. “ Cerberus “, Victoria.

The buildings will be of load bearing brick construction with concrete floors, asbestos cement roofs and metal infill panels below windows. The estimated cost of the work is £720,000. I table plans of the proposed works.

Question resolved in the affirmative.

Royal Australian Air Force Academy, Point Cook, Victoria. Mr. FREETH (Forrest- Minister for Shipping and Transport) [4.48]. - I move -

That, in accordance with the provisions of the Public Works Committee Act 1913-1960, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report:- Construction of the R.A.A.F. Academy at Point Cook, Victoria.

The proposal involves the construction at an estimated cost of £970,000 of instructional, administrative and accommodation buildings, together with associated playing field, parade ground, external engineering services and landscaping, to complete the Royal Australian Air Force Academy complex at Point Cook. Stage I of the Academy, the completed and occupied science building, was examined by the Committee some time ago. Generally, the buildings will be steel-framed, with brick cavity infill panels, concrete floors and copper roofs. Curtain wall infill panels will be used in certain areas. I table plans of the proposed works.

Question resolved in the affirmative.

page 2089


In Committee.

Consideration resumed from 1 Sth October (vide page 2058).

Second Schedule.

Department of the Treasury.

Proposed expenditure, £88,238,000.

Advance to the Treasurer.

Proposed expenditure, £16,000,000.

Dr J F Cairns:

.- A number of years ago, the very famous economist, Lord Keynes, said that whenever any ordinary man thinks of economics he is usually reflecting the theory of some economist long since dead. Now Lord Keynes himself is dead, and I think that most economic thinking, especially that which influences and guides the Government in the Treasury, is either Keynesian or reflects it or may even be dominated by it. Therefore, when we are debating the esti mates for the Treasury, a department which, more than anything else in the country, determines government policy, it is necessary for us to have a look at some of the economic theories which undoubtedly influence the mind of Treasury officials.

Many of the influential people in the Treasury have been trained in the faculties of economics where Keynesian theories dominate the situation. In the most significant contribution which Keynes made to economics, he concerned himself almost solely with unemployment. He said that full employment was not assured or even probable in the economic system and he was not concerned only to define a way in which mass unemployment could be removed. Since that time, first a war, then the reconstruction after the war, and, following that, a cold war, provided circumstances which, more than anything else, contributed to the removal of mass unemployment and Keynes’ theory was of importance in that it explained what, in fact, was resulting from these circumstances.

According to Keynes and I think, according to fact, once full employment is established, then classical or neo-classical economic theory comes back into its own. So, since mass unemployment is no longer a fundamental problem, the problems with which we have had to deal - those resulting from inflation - have been approached in the light of classical or neoclassical economic theory. The standard way of looking at the problem of inflation is to say that inflation occurs when there is too much money chasing too few goods; when there is too much money in circulation, as though everybody has too much money - the rich and the poor, the people who borrow and the people who lend, the people who control the large oligopolies in the country and the people on small farms and in small firms. The neo-classical theory, therefore, leads people to say that such a situation has to be dealt with by making money less easy to get, or by reducing the quantity of money. So we see introduced the policy of increasing interest rates, the policy of making money harder to borrow. We also see introduced a budgetary or fiscal policy, under which the Government collects more from the community than it spends or puts back into the community, thereby reducing the amount of money in circulation. Thirdly, we see a monetary policy operated through the banks under which the banks, in addition to raising interest rates, make overdrafts more difficult to get. In other words, they impose a credit squeeze. 1 think it is fairly clear objectively that these policies, to say the least, have had very limited success. Indeed, there may be some justification for saying that they have failed. They have failed because the first remedy, that of increasing interest rates, involves an increase in an economic quantity with only a very small addition to costs any way and therefore has only a very marginal effect. At times when producers expect that prices will go on rising, they are not affected adversely by any increases that may occur in interest rates. In respect of the Budget it has been quite impossible for governments to cut spending because there is such a need for government services and such a demand for government spending. Similarly, it has been impossible for governments to increase taxation because increasing taxation is unpopular, and in these days no government is prepared to do unpopular things.

Similarly monetary policy has been ineffective. It has been ineffective because of the growth of fringe institutions to a position in which they are as important as or more important than the trading banks. It has been ineffective also because of the practice of large oligopolistic concerns of managing their own prices and getting from the market the funds needed for their own expansion. Monetary policy has been unable to control these practices. Classical economic theory, as 1 said, had provided no means of devising an economic policy to get rid of mass unemployment, and now that they have had the job of dealing with inflation, classical and neo-classical theories have done no better. The economy df 1964 badly needs another Keynes.

There are some signs of a radical view here and there. In Australia Dr. H. C. Coombs, in, I think, the most important economic lecture delivered in Australia in the last 20 years - it was in Perth in 1959 - said -

The tendency for prices to creep upwards in periods when total demand is not excessive, and even when it is mildly deficient, derives in part from . . . those who make decisions in business.

Here Coombs was putting his finger on the core of the inflationary problem, one that was ignored completely by the neo-classical or classical approach. Going beyond Coombs, there is no-one else in Australia who seems to be concerned with this problem. No economist in private or public service seems to be concerned to look at the problem in this way. But we can go to other places. We can go to Britain, where the economists behind the Labour Party are well aware of the oligopolistic industrial structure. In Sweden the economists are well aware of it,- as they are, of course, in the United States of America. I want to quote a number of American economists whose work can easily be found in summary form in a book called “The Economists of the New Frontier “ by B. H. Wilkins and C. B: Friday, published in 1963 by Random House in New York. Our economists iri Australia are economists of the old frontier, the very old frontier, and it is most gratifying to note that in the U.S.A. initiative and new ideas still exert a very great influence in breaking through the old ‘ forms. In America an economist named Gardner Ackley had this to say -

In the above analysis -

That is the analysis he had just been making -

I have in effect argued that the inflationary process is essentially an administrative one. . . . Whether aggregate demand is excessive or deficient the problem of inflation needs to be analysed in administrative, that is essentially political, terms,’ and on the price as well as the wage side.

This is quite a radical departure and one that is significant in almost every country but Australia that is at this stage of economic development. There is also the well known economist in America, J. K. Galbraith, who had this to say about the problem -

In that sector of the economy where firms are large and control over prices is substantial, there is opportunity for large discretionary increases in prices whenever demand is favorable. The demand that is favorable to high employment is favorable to such price increases.

In a few minutes the honorable member for. Reid (Mr. Uren) will give details of one of the largest oligopolistic concerns in this country, General Motors-Holden’s Pty. Ltd., and show how that company’s economic policy is quite independent of the market, lt goes ahead confident that it can fix its prices to extract from the Australian community an enormous flood of funds, making it quite independent of the banking structure, so that monetary policy can have no effect upon it whatever.

What are the consequences of this situation? It seems to me that the consequences have not ever been thought of by economists here, but Gardner Ackley in the United States is well aware of the consequences. He said -

  1. . this approach to the analysis of inflation has significant implications for policy. . . . One such implication is the limited usefulness of the instruments of monetary and fiscal policy in combating inflation.

He recognises the limited usefulness of the practices we follow now to try to deal with inflation, practices that are certain to allow booms to move and certain to produce recessions and therefore the stop-go process with which we have become familiar. But Galbraith, starting from an analysis of the structure of the economy, emphasised a quite different and equally valid point. He said -

The analysis means that both monetary and fiscal policy must have a markedly different impact on different parts of the economy.

He secs monetary policy closing down the opportunities that people have to borrow money from the banking system, even the fringe banking system. He knows that the present situation stops the supply of money to people who are poor enough to need to borrow it, such as small firms and farmers and individuals who need money for housing and other purposes. These people are prevented from getting their money by monetary policy but the big people who get their money from the market, or who have enough to begin with so that they do not need to borrow, are not stopped by monetary policy, and therefore the distortion that was evident in the economy to begin with, which Galbraith called private affluence and public squalor, is exaggerated by this very policy. So the attempts the Government makes in these circumstances to solve its education crisis or to improve the housing of the poor people or to build roads or to achieve decentralisation - all the things that need development in the public sector and are covered by public policy - are set back by the very procedures that the Government follows. - To show that this view is held by quite a number of people, let me quote, first, the American economist John P. Lewis, who said -

Let me do them -

He was referring to monetary and fiscal policy - less than justice and remark simply that they cannot possibly solve the whole secular inflation problem. The core of that problem is the vast, lumbering one-way cost-price escalator into which many of our price setting institutions have inadvertently joined.

The Americans recognise this situation and they recognise that nothing can be done about it by the traditional methods. They point out - having been influenced by Keynes - that the superficial, almost glib analysis of the economy made by so many people today directs attention towards aggregates, aggregates of employment, aggregates of income, aggregates of gross national product,’ and that economists trained along such lines and making such analyses have no concern at all for the way in which those aggregates are made up. They fail to realise that the real problem of inflation and economic growth is one of allocation. This is something recognised by yet another economist, James Tobin, who wrote -

The importance of accelerating economic growth brings the question of allocation to the fore. Can we as - a nation, by political decision and governmental action, increase our rate of growth?

He recognised that this is a question of allocation. We have to take certain steps with economic policy to get the kind of allocations we need.

Mr Chipp:

– What you really mean is price control, isn’t it?

Dr J F Cairns:

– What a superficial, rather pointless remark to make, typical of a man who has done only moderately in Keynesian economic theory. I know that, because I corrected some of his examination, papers.

Mr Chipp:

– This is outside the three mile limit.

Dr J F Cairns:

– Well, don’t come in if you don’t want the answer. First of all, the problem in economic policy is one of allocation of resources. It is useless to think that we can allow gross national product, to take whatever form it does as a result of the exercise of contemporary value judgments in the market and then by taxation or borrowing hope to get a result which differs significantly from the original allocation. We need means of getting the allocation we want in the first place. We need, of course, the value judgments that are consistent with this.

Galbraith, as one of the most clear minded of the American economists, realises that the two main obstructions to this are the obstructions provided by economists and large business concerns, both of which groups, Galbraith recognises, for good reasons have a vested interest in fiscal and monetary policy. I submit that the time has long since passed when we need some radical thinking in the Treasury Department and from those who advise the Government on economic policy. Our attitudes are altogether superficial and complacent and if we cannot get these things soon by a change of government let us hope that we can get them soon by a change of outlook so that the economists in this country can have a new Keynes needed in 1964 and will not remain conservative for so long.


.- I rise to throw the phrase, “ glib and superficial survey of our economy”, back to the honorable member for Yarra (Dr. J. F. Cairns). He gave us this very entertaining survey of the Australian economy but omitted to mention the most important of all our economic weapons, and that is the Australian tariff. We do have a very strong and effective structure of tariff in Australia without which we could have very little, if any, secondary industry. I do not deny the importance of the tariff to Australia in strengthening our economy but I do claim that any survey of our economic system must take into account the full impact of our tariff to be of any value whatsoever. We do not live isolated from the rest of the world. We are competing actively with other trading nations and to a very large extent the prices of goods in Japan, for example, determine the prices of goods in Australia. If we wish to have greater competition for our manufacturers in Australia then we can achieve that best by modifying the level of the tariff which protects our local manufacturers

I feel this matter is of such importance that it should be raised repeatedly in the

House. I am sure that we do not pay quite as much attention as we should to . this . economic weapon. I feel that, unfortunately, because of our general lack of appreciation of the effects of the tariff, our economy is being distorted and, as a result, the great, overseas income earners, the primary , industries, are suffering. We know that, as a rule, investment on the land takes many years to come to fruition. For example, if we wish to raise the level of production from irrigated pastures, then we must start to plan dams, to construct ‘ and to arrange for settlements on the lands below them. It will be anything up to 30 1 years before we reap the full benefits of our planning.

Perhaps that is an extreme example,’ citing irrigated pastures, but in pretty well every other avenue of primary production there is a very considerable period from the moment of first application of capital, or introduction of capital, to the moment when that capital starts to pay off.

Because Australia is expanding very rapidly and because we know that we must multiply our exports of primary goods in. order to keep up our level of foreign earnings to match the rate at which Australia is expanding, I believe we must look now to the quality and quantity of the investment that we are making in the primary industries of Australia. If our tariff is set at a level which prevents an adequate degree of investment in our primary industries then we should adjust our tariff to make sure that those primary industries which ultimately carry the burden - the full burden of development - are protected and are enabled to go on expanding and increasing their production.

I am not interested in the theories quoted by the honorable member for Yarra. I know only this fact: Australia will be running out of food within 30 years unless we multiply our production very rapidly on the land. That calls for a large and heavy investment in our primary industries now. Unless this is done not onlywill we be unable to feed ourselves in 30 years time, such is our rate of population in-, crease, but we will also be unable to import the essential goods to keep our secondary industry going. Therefore, I ask- for more attention from economists and from the House generally to the level of the Australian tariff.


.- The honorable member for Gwydir (Mr. Ian Allan), 1 can see, does not come into this House when tariff debates are discussed because I do not suppose that any honorable member makes a greater contribution to tariff debates, with the exception of the honorable member for Wakefield (Mr. Kelly), than does the honorable member for Yarra (Dr. J. F. Cairns). The honorable member for Yarra leads the Australian Labour Party during the tariff debate and makes a contribution of some merit. The honorable member for Gwydir . said he was not interested in the theories enunciated by the honorable member for Yarra. We can see that he is not interested. But for heaven’s sake I hope the Government will pay some attention to them because we have had enough of this stop and go policy. We have to get on with some long term planning and I think the people of Australia would support those views wholeheartedly.

During the debate on these Treasury estimates I want to discuss some of the favorable treatment given by this Government to the oligopoly section of Australian industry - the 102 companies that earn onethird of the profits of the 54,000 companies which make a profit. Just think of it - 102 companies constitute this oligopoly section of the community. This is the section that is holding down the workers and the workers have to struggle for wage justice.

I want to deal with General MotorsHolden’s Pty. Ltd. and I want to refer to some of its historical background. This company was incorporated in Melbourne on 6th May 1926 and it was first called General Motors (Aust.) Pty. Ltd. The name was changed to General Motors-Holden’s Pty. Ltd. on 17th June 1931. An agreement was entered into in February of that year between General Motors (Aust.) Pty. Ltd. and Holden’s-Motor Body Builders Ltd. whereby the business undertaking of Holden’s was to be acquired for £1,111,600, to be satisfied by the payment of £550,000 in cash and the allotment of 561,600 £1 6 per cent, preference shares The whole of the ordinary shares were held by General Motors Corporation in the United States of America. In 1936 the capital was increased by the creation of 761,600 ordinary shares of £1 each thus raising the authorised capital to £2,311,600. An ordinary dividend of 81.19 per cent, was declared in respect of 1937, amounting to £784,200 which was satisfied by the issue of ordinary shares thereby increasing ordinary capital to £1,750,000 and paid up capital to £2,311,600.

In 1947 the Chifley Government asked G.M.H. whether it would produce a motor vehicle in Australia. The company referred the matter to its head office in the United States and later informed the Australian Government that it was interested in building an Australian made motor vehicle, but that it did not have available the capital required to start such a project. It is understood that Mr. Chifley made inquiries about the amount of capita] required and decided to make available a £3 million overdraft from the Commonwealth Bank. The Bank of Adelaide heard of this venture and suggested that it would provide £1 million of the overdraft. So the Commonwealth Bank provided the remaining £2 million. The paid up capital remained at £2.3 million until January 1963 when the company made a bonus issue of 11.5 million £1 ordinary shares to the parent American company, the General Motors Corporation. In May 1960 the parent company purchased all the remaining 6 per cent, preference shares - 561,600 «f them.

No balance sheet was published for the financial years ended 30th June 1960 and 30th June 1961. However, the Victorian Companies Act was altered in 1962 to force all companies to publish a balance sheet. Let me give some statistical background in the form of the profit figures of this oligopoly company. Since 1950 it has made a net profit of £147.8 million. Since 1953, £70.7 million has been repatriated to the United States in the form of dividends. It is estimated that £8 million was repatriated to the United States in the form of dividends in 1960, and £6 million, in 1961. Since 1951, the company has retained £73.9 million in undistributed profits. The estimated undistributed profits for the years 1960 and 1961 were £7 million and £5 million respectively. We must bear in mind that this undistributed profit is included in the company’s cost structure to assist in its future development and is paid by the Australian consumers - the buyers of Holden vehicles and other G.M.H. products. So it is the Australian consumers who pay for the development of these major undertakings.

The history of this Government in relation to G.M.H. is worth examining. In 1953 this Government entered into a double taxation agreement with the United States. Prior to that year G.M.H. paid 7s. in the £1 income tax on all dividends repatriated to the United States. After the double taxation agreement came into operation, the company’s income tax payment was reduced to 3s. in the £1. The saving to the company between 1953 and 1963 inclusive, on that account alone, was £14.1 million. So that agreement represents a handout of £14.1 million to this oligopoly company. Although Australian workers are struggling against this company for wage justice, this Government has given handouts in that way. Until 1951, G.M.H. and all other public companies paid 2s. in the £1 tax on undistributed profits. That tax was abolished in that year. The abolition of that tax has meant a saving to G.M.H. of £7.4 million. Those two Government actions alone represent a present or gift from this Government to G.M.H. of £21.5 million. This Government has treated this great monopoly concern very generously. It has handed out to the company great taxation benefits by means of the abolition of the undistributed profits tax and the double taxation agreement with the United States.

It is well worth noting that in the years 1957-58, 1958-59, 1961-62 and 1962-63, taxation deductions of £19.5 million have been allowed to this company in the form of depreciation on plant and equipment.

Mr Sinclair:

– What is wrong with that?


– The figures for the two years 1959-60 and 1960-61 are not included in that total figure, because they were not disclosed. Last year’s balance sheet shows that the company made a profit of £19 million and in addition it was allowed a deduction of 7.2 million for depreciation on plant and equipment. That is in one year. The honorable member for New England, who just interjected, knows quite well that the farmers, whom he represents and who are struggling with the equipment that they have, do not receive the huge benefits that the great monopolies in the cities receive.

The “ Sydney- Morning Herald” of 18th June, 1960 stated -

General Motors-Holden’s latest dividend represents no less than 480 per. cent, on the ordinary capital of £1.75 million which has been unchanged since the 1930’s.

But when we look at the company’s 1962 balance sheet we find that the £11.8 million repatriated to the United States represented a dividend of 674 per cent, on the original capital of £1.75 million. Of course, this company needs some beneficial treatment! In the “ Sydney Morning Herald “ of 19th June 1964 the financial editor, speaking about G.M.H., said -

No company in Australia plays a tougher game than this one, which did not hazard one dollar of American capital in the Holden project.

As I said, the General Motors Corporation, back in 1931, paid only £550,000 in cash to buy out Holden; the remainder of the price was paid in preference shares. We know that later those preference shares were purchased by the company with money that had been made out of the Australian consumers. Even the £550,000 had been made out of the Australian consumers between the years 1926 and 1931.

The attitude of this Government has been to allow this great undertaking to make huge profits. Yet the company uses the dog collar of the arbitration system to force its employees back to work. It is not prepared to sit down and negotiate. The huge profits that are being amassed by the company, the large taxation concessions given by this Government and the wages received by the Australian workers are the problems with which this Government should be dealing. But it is a sectional government. It looks after only the great monopoly section, the wealthy section. It does not think of the great masses of workers. It taxes the people indirectly instead of directly. I feel that more and more Opposition members will be able to expose the attitude of this Government which has a law for the wealthy and a law for the poor - a law for the major companies and, of course, a law for the workers.The Government places a dog collar on the trade union movement when it struggles for wage justice against this great monopolistic undertaking. What do we hear? We are told that there is the law of the land. Of course there is the law of the land, but the law is so one sided, and it is stacked against the. workers. This Government will have to pay for representing great monopoly undertakings, lt should be told that it is selling out our heritage more and more. At the Senate elections these figures will be given and we will be able to recount the true position of what is happening in Australia.

La Trobe

.- I want to speak to the Committee about the Defence Forces Retirement Benefits Act as it is given effect to by the Treasury, and in so doing I point out that together with many members on both sides I have brought to the Government’s notice frequently anomalies in this Act which affect retiring members of the Services. This evening I draw attention particularly to one case purely as an illustration of many cases throughout the Services. I draw the Committee’s attention to a question asked on 22nd September 1964 by the honorable member for New England (Mr. Sinclair) of the Minister for the Navy (Mr. Chaney) concerning Captain Robertson. He asked -

Tn view of his announcement of the acceptance of the resignation of Captain Robertson, will the Minister say what provision is to be made for retirement benefits to be granted to Captain Robertson?

The Minister replied -

If an officer resigns before his scheduled age he can, under the Act, receive a pension under these conditions: First, if he is retired to meet the needs of the Service; secondly, if the date of resignation is within three years of the scheduled retiring age and with the approval of the Service board he leaves to establish himself in civil employment or, thirdly, if he should become entitled to an invalidity pension. None of these conditions has been satisfied on this occasion. Therefore the officer will receive a refund of his contributions and such payments as are due to him from accrued furlough or recreation leave.

This is quite true, according to the Act, but how anybody could explain to me or to honorable members how this is just, I do not know. The Act sets out a number of conditions which have to be observed. One section of the Act provides that a member, not being an officer, qualifies for and retains his right to a pension on completion of 20 years’ service whereas an officer has no entitlement to pension, irrespective of length of service, unless he reaches the retiring age for the rank held by him, or three years short of that time if he is retiring to take a job subject to certain conditions. It would appear not only logical but also fair and just that the qualifying period of 20 years’ service for pension should apply also to officers or that, at the very least, an entitlement to pension at the rate applicable to a lieutenant commander at the age of 45 remains an irrevocable right irrespective of any future promotion which increases the retiring age of the member.

In other words, if Captain Robertson had been retired, and was of no use to the Navy, he would have been entitled, under the Act, to a pension; but because he was considered by the Navy to be suitable for appointment as a captain, immediately on his resignation he gave up all rights so far as his pension was concerned. I am sure that nobody in his right mind would consider that this was just. This officer has given 34 years service to this country. At the early age of 13 years he entered the Royal Australian Navy and he has served in all theatres of war. He has served for 34 years with great distinction. However, because of some unfortunate occurrence whereby he considered that he should resign, the Government or the Act says that he is not entitled to a pension. That is to say, he goes out with the payment he has made to the pension fund over 34 years. He gets nothing more. He gets no pension. After his 34 years service the Government says: “We are sorry. You get nothing back.” He has accepted this, and so have many other officers, but I suggest that this Parliament should not accept it, because if he died tomorrow his wife and his children would not be entitled to anything from this Government or from this country. I am sure that this is not what this Parliament feels is just, and I am sure it is not what the people of Australia feel is just.

I ask the Treasurer (Mr. Harold Holt), who administers the Defence Forces Retirement Benefits Act, whether this matter could be looked at not only in respect of Captain Robertson but also in respect of other officers who have served this country for a long period and who have resigned after, say, 25 or 30 years. They should be entitled to at least some portion of the pension to which they have contributed.

Let me now refer to an anomaly which I find difficult to reconcile with the facts I have stated. I refer to the case of the former member for Robertson (Mr. Dean), a most distinguished member of this House, and a gentleman, who has received an appointment in the Northern Territory. He resigned from this House. He came into it in 1949, and he left it in 1964. He has accepted an appointment in the Northern Territory under the Government. As I understand it, he will be entitled to take his parliamentary pension when he terminates his appointment in the Northern Territory. This is very different from the experience of Captain Robertson, who has given 34 years of service to this country, most of it at considerable risk to his own life. He goes out after 34 years with nothing. I find these things hard to reconcile. I believe there is an anomaly in the Act and I hope that the Treasury, the Government, and indeed the Parliament will have a further look at the Act to see whether some payment cannot be made to this officer and to other officers who have served this country with great distinction for many years and who, because of some circumstances which may or may not justify it, have resigned their commissions. After all, 34 years of service at Dunkirk, at the evacuation of Crete, at Leyte Gulf, on the Tobruk run, in the Mediterranean and in all the oceans of the world, surely is worthy of some recompense by this Parliament and by the people of Australia.

I feel very strongly that the people of Australia would endorse any move which the Government made to see that this officer, his wife and his children had at least some entitlement for the years of service - the honorable and distinguished service - which he has given to this country. J therefore ask the Treasurer to look at this matter again. The resignation was accepted on 22nd September. It is now 20th October, and as yet t have not heard of any suggestion or move by the Government whereby such action might be taken.


.- I want to address myself in this debate to two matters. The first I believe is of very general concern. It relates to the complete absence within this country of any disciplinary body with power to control transactions on the stock exchange. I also propose, at a later stage, to speak on the general question of hire purchase agreements and retail sales financing by instalments. I preface my remarks by reading to honorable members from an item which was published in the “ Sun-Herald “ financial review on 20th

September. It is headed “ Reversals of

Form “ and states -

Recent reversals of stock market form would have caused riots if they had happened on the race track.

The stock exchanges ais investigating some of these sudden reversals. But their disciplinary powers are extremely limited.

Although there is increasing watchfulness at thu Attorney-General’s and Companies Registrars’ offices in the various States on these matters, there continues to be a strong case for the establishment of a Federal body to supervise the securities industry in Australia.

Events’ of recent weeks can hardly improve the stock exchanges’ image as markets which are free, open and fully informed at all times.

If honorable members look at this morning’s Sydney newspapers, they will see comment on most remarkable alterations in share prices and an admission by the Chairman of the Sydney Stock Exchange, Mr. Urquhart, of the inability of that Exchange to do anything about it or to find out the whys and the wherefores.

We in Australia, Sir, are perhaps the last frontier of unrestricted capitalism. We are, if I may use the phrase, the Wild West of Capitalism. Those honorable members who have studied the horse operas that are so notable a feature of our radio and television programmes will have noticed the extent to which the lawless and the profit seeking elements of a community are attracted to primitive areas of little development where the climate is congenial for their activities. Today, there is no more congenial climate and no more suitable area for the activities of such financial elements than in the Commonwealth of Australia. The profiteer, the racketeer, the share pusher, the get rich quick expert, can find every possible scope here for the exercise of his talents. To put it shortly, Sir, there is need for the establishment of a securities exchange commission in this country that would be the counterpart of a similar body that has functioned most satisfactorily and with great distinction since 1934 in the United States of America.

Honorable members who are interested in these matters will recall that in 1932 the late President Roosevelt came to the Presidency of the United States at a very difficult time at the end of the worst economic depression that the world has ever seen. It had been highlighted by some of the worst financial crashes in the history of the so-called capitalist world. Public confidence in almost every form of general investment had been destroyed and President Roosevelt had been elected on a policy of “ priming the pump “ and restoring public confidence in ordinary economic transactions. In the stock exchanges, shares of fictitious companies had been peddled. Every possible and conceivable manipulation of the company laws in their then primitive form had been practised, and it was necessary to do something to correct the situation. So legislation to establish the Securities Exchange Commission was introduced. The Commission has established itself and endured. It has withstood attacks and tests in the United States Supreme Court, and today it stands more than ever pre-eminent in the respect of business interests in that country.

I am no apologist for or champion of those who are well able to look after themselves but in this country in recent years, unfortunately, we have witnessed the spectacle of little people - honest men and women - having put their all into companies that have crashed and failed. I shall give you further details of this later, Sir. The point is that this Government, up to date, has not been prepared to do anything about this situation, although a new Companies Act has been adopted as a matter of general agreement after consultation between the respective Attorneys-General of the Commonwealth and the States. That Act, though quite a good one, does not deal with the situation where the securities or the shares of any public company are listed for sale on a stock exchange. Although there are undoubted powers of investigation, mostly vested in the Attorney-General in each of the States, on the petition of a fixed percentage of the shareholders of a company, and after the proper formalities by way of company meetings have been complied with, no provision is made for controlling, investgating or regulating the behaviour of company shares listed on the Stock Exchange and there is certainly no means of investigating and controlling the fraudulent activities that occur in respect of many companies whose financial behaviour has been so disgraceful a feature of the economic scene in recent years.

I have in mind that the introduction of legislation to establish a securities and exchange commission would be a function purely of the Federal Government. Lest there be any person here who would ask whether we have the necessary constitutional powers let me say that undoubted constitutional powers exist. The Commonwealth’s constitutional powers in this field are quite clear. They are to be found, first, in the trade and commerce power, secondly, in the power of taxation and, thirdly, in the power to borrow money on the public credit of the Commonwealth. After all, the public credit of the Commonwealth is always at issue whenever any Commonwealth bond is sold on a stock exchange. The Commonwealth constitutional powers are to be found, fourthly, in the power relating to postal, telegraphic, telephonic and other services; fifthly, in the well known and well defined power over banking other than State banking; and, finally, in the power to control foreign corporations and trading or financial corporations formed within the Commonwealth. These powers, in aggregate, present the most formidable constitutional justification for the introduction of legislation to establish a securities exchange commission.

The Securities Exchange Commission of the United States is composed of five Commissioners, three of whom are chosen from the ranks of one of the two major political parties and two from the ranks of the other, I am not interested in that particularly. I merely mention it to illustrate the composition of the Commission. The point is that the Commission is not interested in the formation of a company and its registration under either State or Federal statute law, but it is extremely interested in the registration of the shares of any company as a commercial security to be bought and sold on the various stock exchanges that are scattered throughout the United Stales. I do not wish to reflect on our stock exchanges collectively, Sir. There are good elements and bad among them. The stock exchanges are essentially private organisations and they are not subject to specific statutory control.

In the United States, a company may be formed and registered and it may then transact its business in the normal private way. But the moment it seeks to have its shares listed on any of the stock exchanges it must first seek approval and registration by the Securities Exchange Commission for that purpose. It must not only submit full details of its capital and its memorandum and articles of association but also submit to the most searching scrutiny. In the United States, stock exchanges themselves must apply for registration. It is a substantial offence for transactions to be conducted on an unregistered exchange. and disciplinary powers vested in the Commission are very great. Naturally, reports are made periodically by the various registered companies whose securities have been registered with the Commission. But the Commission also has an overriding power. It is a permanent watchdog which is able daily to study variations in the prices of shares and to examine the manipulations that occur on the stock exchange, and it may immediately call before it the parties concerned, investigate their dealings and take appropriate action.

One of the major powers the Commission has is the power to suspend, and even to cancel, the listing of a share on a stock exchange. Such a power, had it existed in Australia, would have prevented a number of recent fiascos that are a matter of public knowledge. Let us take perhaps the three most significant in recent years. They are the Reid Murray group, the Stanhill group and the Latec group. The Latec group had a vital effect on the savings of coal miners and steel workers in the City of Newcastle. These three groups between them placed in jeopardy more than £100 million worth of assets. In the Reid Murray group, 81,000 persons who were shareholders or debenture holders, secured and unsecured, were affected. My information is that another 21,000 were affected in the Stanhill group and 9,800 in the Latec group. In these three cases more than 112,000 Australians have been denied by this Government the elementary protection that exists in a more sophisticated country. The Government deliberately is not prepared to introduce the necessary legislation, because it would affect very many of its wealthy friends and would no doubt expose scandals that would redound to its detriment.

I challenge the Government to take appropriate action. It is a major scandal that in a country such as this the share pusher, the pedlar and the ruthless and unscrupulous company promoter should be allowed complete liberty and licence. We lack legis lation such as the Clayton Act. Takeovers which are accepted as ordinary commercial practice in this country are criminal offences in the United States. We do not have anything that even remotely resembles the Sherman Act and the general anti-trust legislation in the United States. We all know of the evasion and equivocation we have had here from the Attorney-General (Mr. Snedden) and his predecessor on the restrictive trade practices legislation. The reluctance to introduce the legislation is notorious and this is again a scandalous state of affairs.

It has always been the proud boast of English speaking communities that they have at least certain standards of commercial probity, honesty and decency. Those standards are being quickly and successfully destroyed in Australia. The Government has had the power to provide an appropriate remedy for well over 100,000 Australians. It has the power to ensure that the abuses I have outlined in the short time available to me are corrected and that their future repetition is prevented. In the name of common commercial decency, the stock exchanges of this country should be controlled for their own good and for the benefit of the development of Australia.

Melbourne Ports

.- I hope that the Minister for the Army (Dr. Forbes), who is at the table, and the Treasurer (Mr. Harold Holt) will take note of the very significant remarks of the honorable member for Cunningham (Mr. Connor) about the control of certain activities in the Australian community. The Treasurer in his Budget Speech referred to the evils of speculation, and the Governor of the Reserve Bank portended what in some circumstances could be called a really explosive situation. The Opposition’s criticism has been that the Government, instead of taking remedial action to control these matters, does nothing until they have happened. The honorable member for Cunningham has mentioned a sphere in which the Government could act. If the Government still thinks that affairs such as this are private and ought not be brought within the realms of Government interference, it should seriously study a document produced under Victorian State legislation and described as an interim report of an investigation under Division 4 of Part

VI of the Companies Act of 1961. If anything points to the inadequacy of trying to deal with these matters within the limits of one’s State, it is this document. People were prepared to lend their good names to unscrupulous activities that could have been prevented in Australia if we had had the sort of organisation that the honorable member for Cunningham has hinted at - the Securities Exchange Commission. It could not have stopped the formation of the first company, but it could have prevented certain statements in the prospectus of another company. I suggest that the Government should do something about this sort of thing.

It is one of the ironies of Australian life that we have what is called a uniform Companies Act. This is an Act that is supposed to be similar in every State and to operate uniformly throughout the Commonwealth. Such acts are devised by machinery which consists of the Attorneys-General of the States and the Commonwealth AttorneyGeneral, but no opportunity whatever is given for this Parliament to debate the merits or deficiencies of the acts in their final form. I suggest that the Commonwealth AttorneyGeneral should report to the Parliament when uniform legislation is broached. The document I have mentioned points to one deficiency in the legislation. Mr. Murphy, who made the report, was able to engage in some of his activities because he found that he was apparently automatically appointed an inspector in New South Wales and Queensland under the corresponding provisions of the Companies Act. In other words, the ramifications of the situation he had to investigate were not confined within the boundaries of one State. I suggest that this highlights the inadequacies of the approach of the Government to problems of this kind. Six reputable firms associated with the stock exchanges in each capital city were prepared to lend their agencies to this affair. Another reputable firm was prepared to underwrite a transaction which, if it had been investigated initially in the way that the honorable member for Cunningham suggests, would have been recognised from the start for what it was - a confidence trick being perpetrated upon thousands of innocent people.

It may be said that fools cannot be protected from their folly. That is an easy way, I suppose, of looking at these matters. But we have a community that is prepared to talk, when it chooses to do so, about something that is called the people’s capitalism. This is still a very much thinner institution than some people suggest it is. Nevertheless, it is supposed to show that in the Australian community today the owning of shares is no longer confined to a comparatively few people in the community. These people are subjected to all sorts of blandishments in statements which, if we were an enlightened community, would be subject to some sort of check. They cannot be subject to a satisfactory check unless this is done on the basis of the Commonwealth as a whole. I suggest that this is only one of certain activities in our economic life that, in future, must be policed at the Commonwealth level rather than at the level of individual States. The honorable member for Cunningham has suggested that what he thinks ought to be done could be done within the confines of the Constitution as it stands at the moment. There are some other things that it may not be possible to do within the limits of the Constitution as at present written, and perhaps it will be necessary for the Constitution to be amended.

I am one who believes that no matter who is in office in Australia within the next 10 years, whether we have a continuance of the tragic ineptitude of the Government we already have or whether the people of Australia do as the people of Great Britain did. last week and change the government, no government in Australia within the next 10 years will be able to operate this country satisfactorily in the interests of the greater needs of the community as a whole unless it has greater constitutional powers, particularly in these economic fields. A committee which was set up many years ago brought down a report suggesting deficiencies in the economic powers of the Commonwealth. Although the Treasury as it is at present constituted is probably acting within the terms of its constitutional functions, there are nevertheless grave deficiencies in its present structure which prevent it dealing with the sorts of problems that ought to be looked at seriously by governments in Australia. When we are debating the Estimates we have one of the few opportunities given to an ordinary member to scrutinise the sorts of problems that were raised here this afternoon.

To show the concern that these matters cause to the community, I remind honorable members that I mentioned the other evening, when referring to the Elizabethan Theatre Trust, that the “Current Affairs Bulletin”, which receives some subsidy from the Commonwealth Government to enable its continuance, was critical of the way in which the money from the Treasury was handled. The most recent issue of the “ Current Affairs Bulletin “ deals in a popular form with the sort of things that the honorable member for Cunningham raised here this afternoon. I refer to the defectiveness and inadequacy in many ways of company law as it exists in Australia today. I saw a review of that bulletin in the “ Australian Financial Review “ a few days ago, so I endeavoured yesterday in Melbourne to buy a copy of that “ Current Affairs Bulletin “, but I found that all copies had been sold. This bulletin has become a best seller, although 1 do not think that is usual with other issues of the “ Current Affairs Bulletin “. It has been the fate of this one, and the demand for this bulletin shows that when matters of this type are mentioned in a journal such as the “ Australian Financial Review “ or in the financial columns of our various daily newspapers there are people in the community who see that probably there is something in what the author has written, so they try to ascertain whether the deficiencies that they know instinctively to be there are being pointed out by people more learned than themselves.

When there is criticism at this level I believe it is time for a government to take action. Perhaps there is some very good reason why the Treasurer is not in the chamber this afternoon. He was here at the opening of the debate on the estimates for his Department. 1 do not expect that a Minister as busy as he is can be here through all the debate, but I hope that the Minister for the Army, who is his liaison man on this occasion, will advise him that honorable members this afternoon have raised matters which go to the root of economic organisation in our community, particularly as it concerns the entity called the company.

Honorable members have heard quite frequently this afternoon that rather awkward term “ oligopoly “. Smiles have been apparent in some quarters and eyebrows have been raised in others over this awful conglomeration of syllables. Nevertheless, behind the use of that word is the very real feeling in the minds of those who have used it this afternoon that the small corner store and a concern like General Motors-Holden’s Pty. Ltd., although they may both vaguely be called private enterprises, are animals of entirely different kinds, and that some companies raise social problems which arc not being handled properly at the moment.

Sitting suspended from 6 to 8 p.m.


.- In answer to a question on notice the Treasurer (Mr. Harold Holt) told me that he did not know how much real estate in Australia was owned by overseas interests. He told me also that he did not know the number of companies in Australia in which overseas interests had a 50 per cent, investment. He did not know the number of companies in this country in which overseas interests had a 20 per cent., 30 per cent, or 40 per cent, investment. In answer to another question the right honorable gentleman told me that he was not aware of the amount of money saved by United Kingdom and United Stares interests as a result of double taxation agreement’s.

I should think that these facts would be essential for the formulation of a policy in the interests of the people of this country. The Government should know how much of our real estate is owned by overseas interests. It should know the value of that real estate and its location, lt should not be very difficult to secure this information. Anybody selling real estate has to report particulars of the sale to the taxation authorities, the land tax authorities and municipal authorities. The Treasurer was unable to say how many overseas interests had a 50 per cent, investment in Australian companies, yet a couple of years ago the Department of Trade issued a statement in which it listed 38 industries - not firms - in Australia in which overseas organisations had more than a 50 per cent, interest. Although the Treasurer is unable to tell me or other members of this Parliament how much has been saved by United Kingdom and United States investors in this country as a result of double taxation agreements, from another source I have been able to ascertain that as a result of such agreements United Kingdom investors have saved about £150 million and United States investors about £70 million - a total of £220 million.

I also asked the right honorable gentleman, upon notice, whether Japan had sought from the Government a double taxation agreement. On this occasion the right honorable gentleman had a little more information than previously. He was able to tell me that Japan and other countries had sought double taxation agreements with Australia and that negotiations bad been proceeding since early this year between Australia and Japan with the object of entering into a double taxation agreement. The Treasurer did not tell me whether that agreement was favoured by the Australian Government or opposed by it. If the Government does not know the effect of double taxation agreements as applied to the United Kingdom and the United States it is not in a very good position to negotiate an agreement of this kind with Japan. The first thing the Government should know is whether it gained any advantage or suffered any disadvantage as a result of the agreements with the United Kingdom and the United States and whether the encouragement given by those agreements to investors in the United States and the United Kingdom was sufficient or more than sufficient. If the Government knew these things it would know whether it was desirable to enter into a similar agreement with Japan or whether the time had arrived when it should review the existing system of double taxation agreements with the object either of eliminating them altogether or of reducing the benefits that they confer on overseas companies.

There seems little necessity to encourage overseas interests to invest funds in Australia. All the experts and authorities outside this Parliament predict that in view of our present adverse balance of payments position, before the end of the year Australia will have the greatest adverse trading balance in her history.

Mr Harold Holt:

– Who said that?


– An official of the Associated Chambers of Manufactures of Australia, and if you read the newspapers -

Mr Harold Holt:

– What is his name?


– I forget his name.

Mr Harold Holt:

– The statement is incorrect.


– It is indisputable that for the first quarter of this year the adverse trading balance, which is considerably “ less than the adverse balance of payments, is already greater than the adverse trading balance for the first three months of last year. Last year there was a favorable trading balance. If there is an adverse balance of payments when we have a favorable trading balance, when we have an adverse trading balance the adverse balance of payments becomes immensely greater, because it includes invisibles such as freight and insurance charges, lt includes also, of course, the amounts payable overseas as dividends and the interest paid on loans in this community. If the adverse balance of payments is greater this year than that in any previous year, then, because of the increased payment of dividends and interest in order to finance that adverse balance overseas there will have to be an inflow of capital from other countries greater than we experienced in previous years. That, of course, is axiomatic; it is simple, ordinary arithmetic. But even though it is simple ordinary arithmetic, I would not expect it to be understood by the honorable member for Corangamite (Mr. Mackinnon), who is now interjecting. I point these things out and warn the Government of the dangers that lie ahead. I also suggest to the Government that, at the earliest possible moment, it secure from the Bureau of Census and Statistics the information necessary to set out in proper form the trading operations of this country.

I also asked the right honorable gentleman - this time without notice - whether the equalisation tax that is imposed by the American Government upon loans raised by overseas governments and on the purchase of some bonds overseas by Americans applied to the loans that were raised on behalf of Qantas Empire Airways Ltd. in New York in 1964. The right honorable gentleman told me that the tax did not apply to those loans, but I have seen the interest equalisation legislation of the U.S.A. and I know that it states specifically that it shall apply to all loans raised in New York after, 1 think, June of 1964.

Mr Crean:

– After June 1963.


– I am referring to the second Qantas loan raised by this Government. The agreement made by this Government in connection with that loan contains one provision which states specifically that if, during the currency of the loan, the American Government should introduce an interest equalisation tax that tax shall be applicable to that loan. Although I do not doubt the information which the right honorable gentleman has supplied, I think that further information is necessary because the agreement, which is an appendix to the loan legislation, sets out that if the interest equalisation tax should come into operation it shall apply to the Qantas loan. This means that if it should come into operation we should be obliged to pay an additional 1 per cent, which, over the period of the loan, would mean a payment of something like £500,000 more interest than the amount contained in the Bill that was presented to this House.

The point 1 desire to make in connection with this interest equalisation legislation is that the American Government itself says to its investors and to governments which seek loans in America that if those investors buy certain bonds and if those governments secure loans in America then, in addition to paying interest, they must subsidise the American Government to the tune of 1 per cent. That is done to discourage the borrowing of money by outside countries from America.

A further important point is that the legislation is applicable not only to loans borrowed in America by outside governments but also to numerous kinds of bonds. If, in our desire to secure the investment of American capital in this country, we give concessions to American investors, then we should not be called upon, in the case of the sale of certain bonds to Americans, to subsidise the American Government by being required to pay a tax that the American Government imposes upon its own citizens who buy bonds in countries abroad. That tax is being imposed. This country could therefore suffer in two ways. It could suffer through having to pay exorbitant dividends overseas on investments by foreign nations and it could suffer through having to pay this equalisation or discouragement tax - it can be so described - imposed on the borrowing of money for the promotion of this country.


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


– Prior to the suspension of the sitting I made passing reference to the question of hire purchase and its importance to the Australian community, lt is an accepted part of our modern life. Hire purchase is literally the hand maiden of mass production. To that extent, it has made a very great contribution to the expansion of the economy. It has made possible the purchase on a mass basis of things which would otherwise be available only to the upper income groups in the community.

The point I wish to stress is that that service has been made available at increasingly heavy interest rates in recent years. In 1953, this Government deliberately embarked upon a certain policy intended to curb hire purchase, but that policy achieved precisely the opposite result. Previously, the companies had financed their transactions either within the limits of their share capital or by discounting the promissory notes given under hire purchase agreements with the trading banks. An indication was given by the then Treasurer to the trading banks of the day that it was in the best interests of Australia’s finances that an upper limit be placed on the discounting of promissory notes. The result is well known. It is a matter of economic history now. The hire purchase companies chose to bypass the banks and other lending institutions and to borrow directly from the general public, at higher and higher rates of interest, and this has literally distorted the Australian economy.

I listened with very great interest to the statement by the Treasurer (Mr. Harold Holt) that, by placing certain limits on overdrafts, he would be capable of controlling the economy of this country. He cannot, in fact, do that because hire purchase has reached the point where today it is not merely a para-hanking or black market banking institution but literally an economic rival of the orthodox trading banks. We have the spectacle that the total instalment credit in Australia today is no less than £672 million, while the total amount of money that is owing on overdraft is a shade less than £1,100 million. The total limit of overdrafts has been fixed by the trading banks at £1,900 million. The Treasurer fondly hopes that the directive which he has issued placing a limit on overdraft advances will achieve his objective, but it will do nothing of the sort. Inter-company borrowing is accepted practice in orthodox business circles today. The Treasurer should know that to a large extent the £800 million of unused overdrafts can be used for that purpose by companies. For instance, if one company has assets and the right to use a bank overdraft and another company has surplus cash, the one with the surplus cash will lend money to the one which has the assets and the right to use the bank overdraft. It will make that money available at a lower rate of interest than the bank overdraft rate and the bank overdraft of the borrowing company will be used as security for the repayment of the advance. How can the Treasurer hope to control the operations of the banking system when this is going on? It has been said by a witty judge that a hire purchase contract is a contract for the purchase of goods that the people did not want, at a price they can not afford to pay, and on terms they do not understand, from a salesman whom they do not know. Hire purchase has been a very useful device but it has also been the cause of considerable economic trouble in Australia, and what is in question is the readiness and willingness of the Government to act in respect of it. If the Government is prepared to use the legal powers that undoubtedly exist under the Commonwealth Banking Act it can take account of the dictum of Mr. Justice Isaacs, as he then was, who said in a case in 1914 -

The essential characteristics of the business of banking . . . may be described as the collection of money by receiving deposits upon loan, repayable when and as expressly or impliedly agreed upon, and the utilization of the money so collected by lending it again in such sums as are required. . . .

The methods by which the functions of a bank are effected - as by current account, deposit account at call, fixed deposit account, orders, cheques, secured loans, discounting bills, note issue, letters of credit, telegraphic transfers, and any other modes that may be developed by the necessities of business - are merely accidental and auxiliary circumstances

My proposition, briefly, is this: Today the hire purchase companies are in fact dis charging all the functions of trading banks. They are not prepared merely to advertise for money, to offer fixed rates of interest for it, to borrow it for fixed terms and to relend that money purely for the purpose of financing hire purchase agreements; they go a stage further. They are prepared to finance interim loans to be used for the purchase of war service homes. They are prepared to lend money for fixed terms for the purchase of properties by way of mortgage. The main evil in it is that the interest limits placed on the trading banks as a matter of Treasury policy can be completely bypassed, and today we have a scandalous state of affairs. If an ordinary, honest, decent man with a steady job and a good character, prepared to pay his accounts, walked into a trading bank and asked for a loan of £200 for two years at ordinary interest rates the teller, after recovering from his initial horror, might advise him to go to the hire purchase subsidiary of the trading bank, but as for getting what he was legitimately entitled to, that man would be laughed to scorn.

The subject of personal loans has been gone into very thoroughly in other countries, but in Australia the principle of granting such loans is honoured more in the breach than in the observance. Certainly the trading banks could do more about making such loans, but they are not prepared to cut the throats of their hire purchase trading auxiliaries.

Let us take one of the alternative procedures today, apart from deliberate action within the terms of the Banking Act, which provides that any person carrying on the business of banking without proper registration is liable for substantial penalties, penalties of magnitudes similar to those provided in the recent New South Wales airlines legislation. That alternative is for people to join credit unions. I pay a very earnest tribute to the Government of New South Wales for sponsoring credit unions, which are working men’s banks and which obviously are viewed by this Commonwealth Government with very grave concern. This is obvious from the fact that for the purposes of the advance of £250 provided by this Government in its recent housing legislations credit unions wm be recognised, but the Government is not prepared to recognise them after this year. In other words, the

Government wants to nip them in the bud because they represent a possible rival to their chosen children in the hire purchase groups. 1 do not want to labour the matter, although I did want to ventilate my feelings on it. If you examine the average contract of the average hire purchase company today you will find it to be a disgrace. I have before me a contract for the purchase of a television set, drawn up by a subsidiary of the Reid Murray group, under which the simple interest rate being charged to, in effect, a very simple minded person who entered into the contract is no less than 21.6 per cent. No wonder the medieval church had laws against usury and looked upon it as a theological as well as a civil offence. How can we finance the development of this country when interest rates of that order are charged, when the Government allows these persons, by its own leave and licence, to continue their operations and does not invoke existing legislation against them? I challenge the Treasurer on this matter. It is to the disgrace of this Government that it has not been prepared to act. There is, of course, something that can be done without going to the drastic extent of forcing these people to come within the terms of the banking legislation. There is the possibility of refusing them their taxation rebate on borrowed money unless they are prepared to conform to the banking policy of the Government. I leave the problem wilh the Treasurer, and I will bc glad to hear his comment on it.

Treasurer · Higgins · LP

– ‘Honorable members who have spoken in the debate on the Treasury estimates have made some thoughtful contributions. I do not agree with all of them, of course, particularly those that have Come from the opposite side of the chamber. I was not able to be present during the full discussion, but I did have the advantage of hearing the introductory statement by the shadow Treasurer in the Opposition, the honorable member for Melbourne Ports (Mr. Crean). What he says on these matters is not only carefully studied by me; it receives the close scrutiny of my Treasury advisers as well. Indeed I can assure all those who have made contributions to the debate that what they have put, from either side of the Committee, will receive this same careful examination by my officers, who will not doubt discuss with me points that they believe call for attention by us.

Some comments have been made tonight which I could, perhaps, comment on quite briefly while they are fresh in our minds. My friend from Scullin (Mr. Peters) is chronically troubled and indeed haunted by fears of what is going to happen to this country as a result of the investment which is made here by investors from other countries. He seems to worry about this without regard to the source of the investments. I believe that we are fortunate in this country. From the investment reaching here from overseas flow the industries which help us to build our population and absorb migrants into the Australian work force, and we are fortunate in that the majority of the investment comes to us from countries which share our basic beliefs and whose people talk the same language, and whose capital is therefore readily assimilable by us. I know that there are some who entertain the kind of fears expressed by the honorable member for Yarra (Dr. J. F. Cairns), but I have never found, in a lengthy public experience, a single instance in which we have been disadvantaged in some way by this process of investment in Australia by other countries. I have never encountered a single instance in which an overseas enterprise investing in Australia placed this country at a disadvantage by the tactics it adopted. By and large we have had a very favorable experience in Australia of this overseas investment. Indeed, the spectacular development of the postwar years has owed much to the addition to our resources of savings which have come from those who have placed their faith in Australia’s industrial growth.

The honorable member for Scullin mentioned a number of matters in respect of which he said I could not give him an answer. He referred to the proportion of real estate owned by overseas interests and a variety of matters of that kind. He seemed to find some special and rather deplorable significance in these matters. The fact of the matter is that no country of which I have any knowledge and none of the industrialised countries - the more advanced countries of the world - could give him the kind of answers that he was expecting to the sort of questions that he was advancing on these matters. I would suggest to him that if he were to go to the United Kingdom, to France or to the United States of America, or any of these countries and put the same sort of questions he would get the same answer from the Minister responsible for finance in those particular countries. We have not entertained this concern about the investment which reaches us from other parts of the world.

I told honorable members earlier this week, or earlier this session, that the United States of America has, geographically, the same area to develop as Australia, if you leave Alaska and Hawaii out of the picture. When we were founded, the United States had a population of something under four million people. It has now built up its population to something over 180 million and built its industrial strength to that of the most powerful country in the world by the absorption of people and capital from other parts of the world without restraint so far as capital was concerned, without restraint, until recent years, so far as migration was concerned and without restraint on the source from which the capital came for investment. Substantially, that has been the position in the United Kingdom also. Theoretically she maintains certain powers today on capital issues control but in substance I would say that industrial investment in the United Kingdom has proceeded from overseas sources virtually without effective restraint. The United Kingdom has not felt the need to discourage this process.

For our part in Australia, with a continent of this dimension to develop, with only 1. 1 million people, with vast resources awaiting our development, I believe we must embrace the opportunities as they come along for expanding our industrial growth through the assistance which we can secure from overseas and the new techniques which come to us, the addition to our work force of the specialists who come out following the investment, and through the additional knowledge given to us from the research facilities, many of them stationed overseas, which also service the industries here.

However, tonight I do not intend to make any sort of a full dress statement on this very interesting topic. I am sure all honorable members will be assisted in our discussion of it by the views and the facts which will reach us from the Committee of

Economic Inquiry which we have set up to look into the Australian economy. Perhaps we can debate the matter in greater detail when we have the views of this Committee. In passing, there are just a couple of matters which were raised by the honorable member for Scullin (Mr. Peters) to which I could make some reference. I can assure the honorable member that his concern about the interest equalisation tax is unfounded so far as he thinks this is likely to apply to the loans we have made to finance the purchases of aircraft overseas. These loans have been secured on very favorable terms at lower rates than Australia could secure by government bond raising in London or, indeed, in Europe, at the present time. Because the aircraft are supplied from American sources the interest equalisation tax, I am assured, will not apply. Qantas Empire Airways Limited is able in this way to finance, on very modest terms, what is in substance a hire-purchase agreement, thus enabling it to purchase its most modern aircraft. By the earnings it makes overseas from the operations of these aircraft it is comfortably able to repay the loan principal and the interest on it.

The other point raised as a matter of concern to the honorable member was the movement in our trades balance and in the state of our overseas reserves. All I can say, in full charitableness to him, is that he cannot have been studying either the figures or the trends very closely. My mind goes back to the debate which took place in this chamber just prior to the last general election when the honorable member for Yarra (Dr. J. F. Cairns) predicted that there would be a fall - a very heavy fall as he saw it - in our overseas reserves and that this would lead, in turn, to a credit squeeze programme and that the Government was going to a general election because of the decline in reserves which would produce for it an economic crisis. In the results in that particular year, our overseas reserves, thanks to a record export income assisted by capital inflow, rose by £228 million. In that particular year, our previous export income record of £1,050 million was exceeded and reached a total of £1,375,000,000. I am citing these figures from memory but I think they are substantially correct. So there was, in the last year, this very remarkable improvement in our overseas reserves.

Now, what has happened in the course of this year? Normally, in the first few months of the financial year which is the slack part of our export season we find there is a tendency in any year for the reserves to run down. In fact, as I was told some time ago in my early years in the Treasury, we usually find that any decline in reserves occurs in the first six months of the financial year and that for the remaining six months our export income produces for us either a surplus or something much closer to a balance in the overseas reserves position. Having that in mind and also having in mind that imports are proceeding at a high level this year it is rather encouraging, I believe, to discover that, whereas at the 30th June the total of our overseas reserves was £854 million, the highest figure for the end of the financial year in any year in our history, at the end of September they had only fallen to £837.3 million and this was, in point of fact, an increase of £3.3 million over August. Now, this is in the slack of the export period so I do not think the honorable member for Scullin need lose any sleep as to the state of our overseas reserves. Whilst over the year as a whole it would certainly not be surprising if there were some fall in reserves, having regard to the very buoyant state of the economy, the fact is that shortages of labour have become widespread throughout the economy. Therefore we can expect that many people who cannot get goods in Australia at the time they want them will move overseas for their purchases. Having regard to these factors, T do not think we should view the growth in imports as either disturbing or unhealthy. Indeed, at a time when shortages in the economy could increase inflationary pressure, we are lucky to be in a situation where our overseas reserves are so strong that we can face with equanimity a strong import programme assisting us with supplies at this time.

The honorable member for Cunningham (Mr. Connor) has just spoken about the place that the hire purchase companies occupy in the economy. He believes that the rates of interest charged by some of them are unreasonably high. I cannot comment on individual cases without having the facts in front of me; but I would say - I am sure that the members of most Australian households would agree wilh me - that the hire purchase system has enabled a great many

Australian families to enjoy, far earlier than otherwise might have been the case, some of the amenities which either add so much to the pleasure of members of the household or ease the housewife’s tasks in the home. We have to examine the advantages that *re secured from the system in comparison with the disadvantages that some people allege the system has.

We know that it is a highly competitive system. We do not have the same direct control over it as we have over the banking system. Under the Constitution we have complete power over the banking system; but over what are called the fringe banking institutions we do not have constitutional power. Some honorable gentlemen opposite may suggest that we could secure that power at a referendum. From my own fairly lengthy experience of attempts to secure a “ Yes “ vote at a referendum in this country, I think he would be a fairly optimistic man who would claim that if the Australian people were given a chance to vote on increased Commonwealth powers in this field they would give the right answer. They might; but on all the experience of the past the probability is that they would not. Indeed, when we sought to secure some uniformity of treatment through discussions with the State Governments on this matter, we found it impracticable to get that uniformity of treatment.

Mr Crean:

– Why do you say so categorically that control cannot be exercised within the existing constitutional power?


– I am a lawyer who is a long way away from his law. Therefore, I am not quoting my own opinion in these matters. That is my understanding of the legal advice.

Mr Crean:

– How authoritative is the advice?


– It is the best legal advice that we can secure. But I will leave the honorable gentleman to argue that issue out with my colleague, the AttorneyGeneral (Mr. Snedden). I merely state this as my own understanding of our present position: We do not have adequate legal powers to give us the sort of control over the fringe banking institutions which is regarded as desirable by honorable gentlemen opposite.

Therefore, in the absence of that power of control, what 1 have done is to engage quite regularly in discussion with the spokesmen for the Hire Purchase Conference. In my experience of them, I~ have found them to be responsible people who are anxious to behave responsibly in relation to the Australian community. There is nothing in recent experience - whatever might have been the case back in the darker days of 1960 - to suggest that they would not be responsive to the general economic policy that the Government wished to pursue. I thank the Committee for having given me the opportunity to say what I have said. I repeat the assurance that I gave earlier; namely, that what has been said in the course of the discussion on these estimates will be examined carefully by the Treasury and by me.

Proposed expenditures agreed to.

Proposed expenditure - Department of Works, £24,622,000- agreed to.

Department of Defence.

Proposed expenditure, £5,279,000.

Department of the Navy.

Proposed expenditure, £69,212,000.

Department of the Army.

Proposed expenditure, £94,185,000.

Department of Air.

Proposed expenditure, £90,015,000.

Department of Supply.

Proposed expenditure, £33,044,000.

Defence Services - General Services.

Proposed expenditure, £1,379,000.


.- The defence estimates in any Budget always receive a great deal of attention; but this year they are more important than ever. They come before the Parliament at a time when we have defence forces stationed in Vietnam under our South East Asia Treaty Organisation obligations; when we have a force in Malaysia assisting that country to withstand Indonesian aggression; when there is a small contingent of police officers in Cyprus; and when we must always be prepared to supply a force if requested by the United Nations.

It was very timely that today there should have been two editorials on defence in the two newspapers published in Canberra. The leader in the “Canberra Times “ was under the heading “ Defence: A Last Chance for Australia,”, and stated -

For fifteen years the present Government has gambled on defence. It was perhaps a legitimate gamble, because there were good reasons for thinking that Australia would not be involved in a war during that period. It was certainly a profitable gamble, for Australia, like Germany and Japan, has benefited by having to spend on defence a much smaller proportion of the national income than other Western countries. But today any government that continued to gamble on defence would deserve the gravest censure, for no one can be sure that we will not be drawn into war in the next ten years. We can only hope, in fact, that it is not too late to make good the years that the locusts have eaten.

The “Australian”, in its editorial, quoted a comment by Mr. Staniforth Ricketson, who said -

The people of Australia are-

Dr Forbes:

– Give us some thoughts of your own.


– The Minister for the Army is interjecting again. The other night he referred to very special and experienced officers of the Services as “ has-beens “. One would have thought-

Mr Chaney:

– He did not.


– Now Sinbad is coming in again. After the experience of his own Prime Minister referring to him as-

Dr Forbes:

– If you are not careful, we will make a bit of reference to your wartime career.


– That would be quite in order. You can compare mine with that of the Prime Minister (Sir Robert Menzies). That would be a good comparison, because the editorial in today’s “ Australian “ pinpoints the record of the Prime Minister and points out that the real challenge - not to me but to him - is whether he can use the defence review to rid himself of the title that Mr. Ricketson gave him; namely, “ The Baldwin of our day”.

In the period since the defence estimates for last year were before the Parliament, two incidents - one the action in the Gulf of Tonkin and the other Indonesia’s action in closing certain waterways to the British Navy - have brought more than a ripple to the peace around our shores. In fact, both incidents could have quite easily finished in total war and, if they had, Australia could have been well in the middle of it. This has all happened in the period since the last Estimates were before the Parliament and in a period when, as the Prime Minister (Sir Robert Menzies) stated at the Chamber of Manufactures dinner in Sydney recently: “ Australia has never before in her history lived with a greater risk”. I think we are entitled to read into that statement that he was talking of the risk of war; the risk of enemy attack; in fact, looking at our defences, of our chances of survival. It is against that background - .the Prime Minister’s own words that never in Australia’s history have we lived with a greater risk - that these estimates are debated in this Parliament.

I do not intend to deal specifically with the three Services. My colleagues on the Opposition’s Defence Committee - the honorable member for Batman (Mr. Benson), the honorable member for Kennedy (Mr. Riordan), a former Minister for the Navy, and the honorable member for Capricornia (Mr. Gray) - will deal in more detail with the various Services. However, we take at its face value the Prime Minister’s warning that never before has Australia lived with a greater risk. In view of the Government’s actions over the years one can be forgiven for asking whether the Prime Minister is serious when he makes such a statement, because if he is serious why has there not been more activity in the matter of defence? Why are our defences so weak today? Why is it always at election time that the Government comes to life? We find that now, on the eve of a Senate election, there is a great review - a great ballyhoo - about what is going to happen with the Army. We are going to create a reserve force. That may be very good, and I do not want to anticipate a debate that will be coming on in this Parliament later, but the plain facts are that the Government has failed in its campaign to recruit personnel into Australia’s regular forces.

In the “ Sunday Mirror “ of 4th October is an article headed “ Exposed! … the disastrous lessons of Operation Long Shot. War games prove our defence botch “, which I am sure the Minister for the Army would have been most interested in reading. The article gives credit to the people who made up the contingent for the work they carried out. It states that the operation showed clearly that the Army is able to provide a very efficient force, but that when that force is supplied, that is the end of it as far as the Army is concerned. It may be nice to be able to say to our friends with whom we have alliances that this is what we can do, but we must also remember - and it is not too good to remember; in fact, it is rather frightening to do so - that once we do that, we have nothing left. Well, we hope that the new scheme will prove of some benefit and will do something, but at the present time our forces are lamentably weak.

We have a programme for our Air Force. We have been told what we will be getting in the way of fighters and so on but, as in the past, no mention is made of the TFX bomber. The “ Canberra Times “ says that no government can afford to gamble with the defence of this nation, but this Government is gambling with the defence of the nation, because it is gambling that we will not be involved in a war. It is gambling on the hope that we will not need a bomber until 1968, 1969 or 1970. I should like to know, and I hope the Minister for Air (Mr. Howson) will inform me, why the Government dismissed completely the offer of the Americans to supply the B47E as an interim bomber.

During the last election, in great haste, when the Labour Party was breathing down its neck, and when a couple of votes would have made all the difference, and the Leader of the Opposition pledged to the Australian people that if a Labour government were elected its first action would be to determine the question of a replacement for the Canberra bomber, the Government rushed the late Minister for Defence, Mr. Townley, off to Washington, and the TFX bomber was ordered quicker than the Minister for the Navy (Mr. Chaney) could go into a shop and buy a hat. But, if the danger is so great, and if the Prime Minister is sincere when he says that never has Australia been living with a greater risk, the time for an interim replacement bomber is now.

Mr Chaney:

– What would you buy?


– It is not my responsibility to buy anything, as the Minister knows full well. I suggest that the Minister ought to have a look at his own Navy, and bring it up to date without his worrying about the Air Force. With our defences in such a state requiring urgent action, if the Prime Minister is sincere about the great risks that this country faces, we need an interim bomber now. We need a replacement. If war broke out - and I do not suggest for one moment that it would - between Indonesia and Australia, would the Minister be prepared to send Australian pilots as far away as Indonesia in Canberra bombers? That is the question the Government has to answer. The Minister knows full well that the Canberra has not the range to do the job, and if he is not prepared to face up to it-

Mr Chaney:

– What about answering my question?


– I am not here to answer the Minister’s questions - the “ poor pitiful Minister “, as the Prime Minister described him. We sympathise with him for the treatment he receives, but if he is going to keep interjecting and behaving as he is behaving tonight he will have many more experiences - many more pitiful experiences - like the one that produced his performance when the “ Voyager “ report was discussed in this chamber, which is something the Minister should remember. I think that this Government has to be concerned about the seriousness of the situation. If we are in such a critical position, this Government should take the Australian people into its confidence about it. The Government has to be prepared to tax the Australian people more, if that is necessary, and to tell them the reason for doing so. I have no doubt that the Australian people would not hesitate to pay additional taxes if required to give Australia an adequate defence force. However, we will not succeed in obtaining recruits unless we are prepared to supply an ade quate bomber force first, and show in that way that the Government realises that this country does need defences.

The three Service Ministers, all of whom are now present in the chamber, could devote their attention to improving defence forces retirement benefits. The Minister for the Army knows of the criticism that has consistently appeared in correspondence published in the South Australian newspapers concerning the Defence Forces Retirement Benefits Fund. Even one of the officers of the Service that he administers has complained about the high contributions that officers are asked to pay for the benefits they receive from this Fund. Is it not obvious that the Government ought to do something about it? I know that the honorable member for Maribyrnong (Mr. Stokes) is concerned about the Fund, but the three Service Ministers particularly ought to be concerned about it and should be trying to do something to eliminate the discontent over the Fund that exists among personnel in all the Services, from the most senior officers down. In plain words, this is a retirement fund, and if the Government would introduce a decent superannuation or retirement scheme, the senior officers of the Services would at least be shown that the Ministers who control the Services are concerned about the Defence Forces Retirement Benefits Fund. This would give serving personnel some encouragement to do what they can to recruit others and would help to induce more recruits to join the forces. But while discontent over the Fund exists from top to bottom in the Services, that encouragement will be lacking.

Australia is in danger today. We all know that we face danger. We all agree on that. If the international situation in this part of the world were to deteriorate, we could easily become involved in a great conflict. This Government has the responsibility for doing something about the situation. If the Prime Minister is sincere in what he professes, let him show his sincerity by his actions. Let him make our defence forces effective. The Government should really do something about defence instead of merely talking about it as it did in the campaign for the last Federal general election and as it proposes to do in the forthcoming Senate election campaign.


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


.- Mr. Temporary Chairman, my friend, the honorable member for Kingston (Mr. Galvin), seemed to base his case on what he had read in the Press. Reading the newspapers is an interesting and entertaining pastime but I suggest to my honorable friend, with due respect, that he would probably be better off and would certainly have made a more useful contribution to this debate if he had read the Appropriation Bill, which we are supposed to be considering. Frequently, in debates such as this, the fact that the Parliament is being asked to appropriate money for certain specific purposes is overlooked in the wider scale in favour of the strategic requirements, shall I say, of political considerations and all those factors that go to make up speeches that constitute perhaps much more interesting politically, but certainly far less useful, contributions to the discussion of these financial matters. 1 venture to remind the Committee that we arc now discussing the defence estimates. Defence concerns the ability of this country to defend itself against attack. In other words, the implication is that the initiative rests with the attacker. We do not know what force may be thrown against us or against those areas to the defence of which we are committed. We can only make the best possible general appreciation of the situation and endeavour, within our own borders, in time of peace, to make preparations that will allow us to expand our forces if and when attack comes. That is the central feature of a debate such as this on the defence estimates. In Australia, defence expenditures in time of peace have never been and will never be adequate for war. That is plain common sense, because, throughout our history, we have never been an aggressor.

I now want to discuss the sort of attitude exhibited by the honorable member for Kingston. Remarks such as he made indicate thoughts and attitudes. He made a lovely, sweeping general statement when he said that we are not doing enough in defence. He then went on to say, in his peroration, that the Government should do something more. This sort of approach is not of great assistance in the discussion of a serious situation which, as we all realise, this country faces at the present time. The honorable member, after his opening remarks, went on to make a marked contribution to the constructive aspect of this debate. He stated that the Government should be prepared to tax more heavily if necessary and that the people would accept higher taxes. I am sure that it is unnecessary to remind honorable members that finance is only one of the factors involved in the defence programme. Many factors such as men, materials, munitions and transport are involved in the defence programme. In a country like this, which is endeavouring to maintain the high rate of growth that we have achieved and supported in recent years, money is not the only requirement. We need capacity on the part of our industry to produce the materials and munitions that are needed to back any realistic defence programme. This is a prime consideration in defence. Nobody would dispute that this has been the case in recent years. Unquestionably, it is so. At this point, I am not entering into the area of controversy. I am stating a cold fact. Our capacity to support armed forces has greatly increased in recent years.

I now turn to the Bill that, in theory, we are discussing. At page 107, there appears a general statement which shows that the defence appropriation sought for the current financial year totals £293,114,000. This represents an increase of £35,496,759 over the expenditure for the last financial year. I am aware that critics who are ill informed though no doubt well meaning have said that an appropriation of this magnitude falls far short of the effort that we should make in terms of money. But let us have a look at the sort of changes being made. These are revealed in the Bill, and they are stated in cold, practical financial terms. It is necessary that we deal with these matters in cold, practical terms, because war is a cold, practical and brutal business of life and death. Indulging in loose argument and hysterical attacks on the Government for what it is said to have failed to do or alleged to have done on too small a scale does not help anyone. This achieves nothing. It does not even gain a party political advantage. It merely wastes a few minutes.

Let us go through the information that appears in this Bill with respect to the defence estimates. In Division No. 652, under the Department of Defence, an appropriation of £2,067,000 is sought for defence aid for Malaysia. Expenditure last financial year was £71,953. Nobody would quarrel with the appropriation being sought this financial year and say that it was excessive. Nobody would suggest that it does not represent a reasonable step forward. At the next page of the Bill, we find stated the appropriations required for the Department of the Navy under various headings. I point out that, significantly, the first item relates to pay and allowances in the nature of pay. Under this heading, we are asked for an appropriation of £17,461,000. Expenditure last financial year totalled £14,274,294. We are being asked to appropriate this financial year £3,186,706 more than was spent last financial year on pay and allowances. These arc practical matters.

My friend from Kingston spoke of recruiting, and I shall say something about that later if 1 may. Under Division No. 670, which relates to general stores, we are asked to appropriate £10,556,000, compared to expenditure last financial year of £9,839,461. The appropriation now sought is £716,539 more than last year’s expenditure. This represents a substantial percentage, if one cares to translate these figures into percentages. Expenditure on naval construction last year totalled £11,881,616. This year, we are asked to appropriate £19,985,000. This represents a very substantial increase. The allocation for machinery and plant has increased by about 15 per cent. This pattern is revealed throughout the estimates. It is not the spectacular pattern that might emerge in a time of transition from peace to war, but it is the reasonable, sound and constructive pattern that might be expected in a time when emergency is thought to be coming closer to us. This is a basis on which we can expand - and on which we can, if an emergency does arise, take effective action.

The same pattern is revealed in the estimates for the Department of the Army. The allocation for pay and allowances has increased by £6,750,000. This is related to recruiting, because the problem of recruiting for the armed services in any country outside the Communist area is most prominent in times of full employment and of growth when the competition for man power between industry and commerce and the Government is intense. This is an expression of that competition. It is also an expression of the improved conditions given by the Government to servicemen in the three Services. The amount allotted for the maintenance of forces overseas has increased by more than 10 per cent. The amount for arms, armament and equipment has increased by £4 million.

I could go through item after item in the estimates for the armed Services and show that in every area the allocation has been increased. Honorable members may say that the increase is not significant, that it is not large enough. I would not necessarily quarrel with that contention. The only question I would pose to those who put that point of view is: Could an increase in the appropriation be put to practical use in a time of full employment without introducing conscription? That is the blunt question and anyone who faces up to reality, as my friend from Kingston does, will realise that this is the question that must arise. I make one last comment on this point. I ask honorable members to look at the estimates for the Department of Supply, which is playing an increasingly essential part of our defence programme. This is the area in which Australia has made and is making a very big contribution not only to our own defence but to the defence of the nations with whom we are in alliance. Australia is making a practical contribution and a very real contribution in the scientific field of war.

The matters I have mentioned are matters that we are asked to consider. We can approach them in one of two ways. We can say: “ This is not enough “. Or we can say: “ This is too much “. Over the years that I have been a member of the Parliament the pattern has been for members of the Australian Labour Party at the time of an election invariably to say: “ This is not enough “. Between elections, they say: “This is .too much”. The Trades Hall Council in Melbourne a few weeks ago carried a resolution that the defence vote should be reduced and more money made available for other services. That is just an illustration of the attitude. This is the sort of practical situation that we face. I sympathise with those who say we should do more and can say how we should do more. I think the Government is making a reasonable contribution. If and when I cease to think that it is, I will do what some of my friends on the other side would not do: 1 will cross the floor and defeat the Government.

Mr Gray:

– I would.


– You are one of the few who might have the courage to do it, too. There are not too many on the Opposition side who would. I have tested them and they have walked out. They will walk out again.

The reality of the situation is that we have here a reasonable scheme. The Government’s record is not a record of waste. Anyone who knows anything at all about defence knows that a large part of a defence vote is taken in pay and allowances, clothing and equipment. Money given as pay and allowances is used by the individual for his own purposes; clothing and equipment wear out. So we are committed to a heavy annual expenditure for the maintenance of defence forces. This is shown to some extent in the Estimates that have been presented over the years, and we have had evidence over the years of the increase in the Defence vote to meet the situation that is, as far as I can see, slowly but frighteningly developing. The initiative does not rest with us. As all honorable members know, it rests with the Communist powers who will attack or use other people to attack when and if it suits them. All we can do is to put our house in order arid develop productive capacity, industrial capacity, the capacity for transport and communication and a trained force which in times of emergency can be expanded. I believe that the evidence that we are doing this is contained in the Estimates before us.


.- I was interested to hear the honorable member for Deakin (Mr. Davis) say that recently in the Trades Hall Council in Melbourne a resolution that the defence vote be reduced was carried. I have heard nothing of this. The honorable member may be thinking of a remark made by a single member. This situation has arisen with statements made by honorable members opposite. Some honorable members say that the Defence vote is not enough and should be increased; others say it should be reduced. This has also happened with Opposition members; but I know of no resolution having been passed in Melbourne that the defence vote should be reduced.

I want to refer to some of the figures given in the Estimates. Under Division No. 664, Item 01 provides an amount of £17,296,000 to be spent on the permanent naval forces. Item 02 provides for £165,000 to be spent on the reserves. I will mention two other items. Under Division No. 698, Item 01 provides £34 million for tha Australian Regular Army and Item 02 provides £2,800,000 for the Citizen Military Forces and cadets. Under Division No. 732, Item 01 provides £24,889,000 for the permanent Air Force and Item 02 provides £175,000 for the Citizen Air Force. I want to refer to the amounts allotted for the Royal Australian Naval Reserve, the Citizen Military Forces and the Citizen Air Force. During the last war, the number of personnel in the Naval Reserve exceeded the number in the permanent Navy, 77 per cent, being reservists and 23 per cent, being permanent members. I do not know what the numbers in the Army and the Royal Australian Air Force were. I make the point that the Government is putting aside a miserly amount for the training of people to be ready when war breaks out. The Minister for the Navy (Mr. Chaney), who was a distinguished flyer, knows what happened when we had to form the Empire Air Training Scheme. When the scheme started, it was estimated that it would not reach its peak until three years had elapsed. This also happened with the Navy. If we are to have trained reservists, we must start to train them now and this cannot be done with only £165,000. We should make provision for the reserve to treble in time of emergency. In Britain during the last war, all the yachtsmen were brought together but it took 12 months to train them in the art of war. What are we doing about training in Australia? Not one yacht club has been asked to co-operate or to say how many young men it would have available in time of war. No yacht club has been asked whether it would like an instructor sent to show its members the latest methods. That sort of thing does not happen. Also, we are told that no more pilots are to be trained for the Air Force Reserve. Does the Government think that in every wave of aircraft that goes into the air in a future war nobody will be shot down? Where will we get our reserves from? Why can they not be trained now? Why can men not obtain licences in light aircraft so that in an emergency they can convert and fly the types of aircraft that they are expected to fly in wartime? That sort of thing does not happen, and young men can never be trained while this Government puts aside only £175,000 for the Air Force Reserve, lt is time the Government looked at this question.

I want to say something now in an endeavour to correct some of the remarks that were made during the recent debate on the “ Voyager “ incident. I want to make it quite clear that so far as I am concerned all that took place in the “ Voyager “ debate is now over. However, certain things were said and I think it is right that they should be corrected, if they are open to correction. Senator Gorton said on 23rd September, speaking of me -

He has not ever, I think, engaged in an exercise of this particular kind.

He was speaking about a ship being in plane guard station. I do not want to sound boastful, but less than two years ago I was pilot in charge of a ship in plane guard station during an American aircraft exercise in Australia. When the honorable senator speaks of my service and says that I am out of touch, he should remember that I gave 30 years of voluntary service to the Royal Australian Naval Reserve. Yet he was Minister for the Navy for five years and he did not know what his officers were doing. He said also, again referring to me: “ He lacks experience.” He should look at what his officers do. 1 hope that when the present Minister for the Navy has officers of 30 years standing, officers who go along twice a week to give lectures, as I did after the war until a few years ago, and who go along on Saturdays to train people, he will know what their careers were. The former Minister for the Navy, Senator Gorton, did not know. That is the sort of thing that is rather upsetting to me, and I am only one. I am not speaking only for myself; I am speaking for several officers who have the same experience. Senator Gorton referred also to the upset that took place in the south channel in Port Phillip Bay, a matter which I had brought to the notice of the Parliament. I had said that H.M.A.S. “ Melbourne “, the flagship, went through the channel with the captain not knowing the regulations. I brought that matter up because I thought it was a serious thing. I knew nothing about any official action on this matter until I was a member of this Parliament and found that a thick dossier had been built up about me. I learned that the captain of the “Melbourne” had seen fit to write to the Admiral and other people pointing out various things, but without having the decency to let me know about his having done so.

When I was an active pilot I had certain duties, and under the Victorian Marine Board regulations I was obliged to report any untoward incident in the bay. But I do not believe in dobbing in my mates. However, when I came into this Parliament six months after that incident I was presented with a thick file about what some captain said I had done. If he had wanted to know what had happened he could have reached me by telephone. It would not have cost him anything to ring, and I would have been able to go down and tell him where he had gone wrong. The captain had made a statement saying that he had reduced speed to seven knots in accordance with the regulations. I was prepared to leave it at that, but the matter was taken a bit further. Under the heading, “ M.P., as Pilot, ‘In Clear’” a newspaper report stated that the Secretary of the Marine Board had said on the previous day that the Marine Board had sent to the Naval Board a copy of my reply to charges by the officer who was in charge of the aircraft carrier “ Melbourne “ at the time of the incident in the channel. The report said -

The copy of this reply had been accompanied by a comment that the Marine Board would not take action on the Navy’s charges.

So far as I am concerned the matter is over, but I hope that in future every commanding officer of one of Her Majesty’s ships will take it upon himself to become conversant with the regulations.

The next day in this chamber the present Minister for the Navy spoke about this matter. I had spoken in the House about turns, and the Minister said that that matter had been brought up at page 4171 of the transcript of evidence taken before the Commission. I looked at page 4171. The matter was referred to and the transcript stated that this type of turn was used at the time. The matter was referred to, but it is not correct to say that the matter was brought up. It was never the subject of cross-examination. If it was the subject of cross-examination 1 will apologise to the Minister. If the Minister can show me anywhere in the transcript that this method of turning was the subject of cross-examination I will be very glad to see it. Honorable members will recall also that Senator Gorton, the former Minister for the Navy, mentioned that I had been concerned about the suitability of whalers and had said that in my opinion they had neutral buoyancy. He said that he was so concerned about my statement that he had had a whaler tested in Sydney. He said it had been filled with water while five men were in it to set his mind at rest and to prove that I was wrong.

In reply to those remarks I wish to make the point that I said before the Commission that when the whaler from the “Melbourne” was lowered into the water it sank. That is what appeared in the report. It makes no difference whether water comes in through a crack in a plank, through the plug holes or in any other way. It does not matter how the water gets into the whaler. If the whaler has positive buoyancy it will not sink. I was so concerned about this and for the safety of naval personnel after that unfortunate incident in the Whitsunday Passage that I asked that something be done about the whalers. That was before the “ Voyager “-“ Melbourne “ tragedy, but my remarks were disregarded.

I wanted to say more, but my time has almost expired. I hope to have a second chance to speak on this subject. I felt that these matters had to be cleared up. I hope that the naval Board will study the remarks and do something constructive as a result. I hope also that the Government will look at the Constitution of the Naval Board and will see fit to do something along the lines of what it did in wartime by putting on to the Naval Board a finance member and a business member. I hope, too, that the Government will see fit to appoint a member to the Naval Board from the Royal Australian Naval Reserve, because when the Navy is built up it will be the men from the Naval Reserve who will form the bigger part of it. If the Minister can get around to thinking along those lines it will be of great assistance to Australia. I said a long time ago that there was something wrong and that things had to be rectified.

At present we have 13,882 people in the Navy. Next year we will have two fewer. In 1945 we had one Vice-Admiral, 2 RearAdmirals, and 15 Captains, two of whom were Commodores. One was a First Class Commodore and the other was a Second Class Commodore. We had 51 Commanders and 35,000 men. We had 257 ships. Today we have one Vice-Admiral, 6 RearAdmirals, 41 Captains, 9 Acting Captains and 119 Commanders. I am not belittling the force or the numbers. But why do we have such huge numbers of officers today compared with the numbers we had in 1945 when the Navy was at its most efficient stage? I hope that the Minister will look into this matter. I want to see the Navy bigger than it is. I want to see it progress. But I do not want to see it all chiefs and no Indians. During the war we had 257 ships in commission compared with about 50 in commission at present. The number of personnel now in the Navy compared with the number engaged during wartime needs some explanation. The Minister would do well to act quickly in this matter.


.- The honorable member for Kingston (Mr. Galvin) who led for the Opposition in this debate, exemplified the attitude that some honorable members opposite adopt when the cloak of responsibility rests on the other fellow. He spoke about gambling with the defence of this country. He spoke about getting things done. He said that we must replace our obsolescent equipment with new equipment - obtained off the hook or in any way you like. He pays no regard to the fact that if his party were in office it would follow the practice that has been followed by the Government. It would be well aware that equipment was becoming obsolete. It would know the trends. It would be organising to replace equipment as the necessity arose. It takes time to order things and to be sure that the equipment you get will not be obsolescent by the time you get it.

The honorable member for Batman (Mr. Benson) disputed some of the remarks of the honorable member for Deakin (Mr. Davis) about the Labour Party’s attitude towards expenditure on defence. I would like to take the Committee and the honorable member for Kingston back to 1955 when the then Leader of the Opposition, Dr. Evatt, in his policy speech advocated greater social service benefits and indicated clearly that to obtain the finance necessary to implement his policy he would reduce the defence vote from about £200 million to about £100 million. Who was then gambling with the defence of this country? Let us get matters straight: We have been very fortunate to have managed over recent years to get by without huge expenditure on defence and heavy taxation to meet that expenditure. Despite the fact that some equipment is becoming obsolete - you will always have this situation in a transition from peace to nearness to war - never at any time in Australia’s history has it had a defence force of the quality, calibre and numerical strength of the force it has today. The honorable member for East Sydney (Mr. Devine) may laugh. He knows very little about this matter.

The honorable member for Kingston chided the Government for not having done something about the Defence Forces Retirement Benefits Act. This matter has perhaps come to the notice of some members of the Opposition only in recent times. There has been a great deal of research into this legislation. The necessity to improve the legislation has been considered by the Government. But all this takes time. You are dealing with thousands of individuals and you cannot make drastic changes quickly. The honorable member asks for a better scheme. By all means let us have a better scheme, but you cannot pluck a better scheme out of the air. The Government is examining this matter thoroughly and it is hoped that something worth while will come out of the deliberations. When the estimates for another department were before the Committee I aired my views on the subject of mobilisation for the Army of young men in the 19 years age group to do a period of militia training as a matter of conscription. I will not spend more time on that subject. I covered it fully earlier.

Perhaps I may be seen in a different role tonight because despite my service background I have always had a deep affection and “keen interest in the Navy. I would like to use the remainder of my time to deal with a few matters affecting the Navy. The booklet that has been distributed by the Department of Defence shows the strength of the Navy today. The fleet comprises the aircraft carrier “ Melbourne “, three Daring class destroyers, four Type 12 frigates, the “ Anzac “, which is a Battle class destroyer used as a training ship, six coastal minesweepers and three submarines on loan from the Royal Navy. In reserve we have the “Tobruk”, the “Arunta”, which is a Tribal class destroyer, and three Q class frigates. We have certain supporting ships - survey vessels, fleet replenishment tankers, boom vessels, and other vessels, including the former aircraft carrier “ Sydney “, which is now a fast transport. We have the “ Perth “, a Charles F. Adams class destroyer soon to be commissioned. On order we have two other Charles F. Adams class destroyers - the “Hobart” scheduled to be commissioned in 1965 and the “Brisbane” scheduled to be commissioned in 1967. We are building an escort maintenance ship and we have on order four Oberon class submarines and two Type 12 frigates. I will not go into the details of the Fleet Air Arm.

So it will be seen that at the moment we have three destroyers and four frigates and on order we have three Charles F. Adams class destroyers and two Type 12 frigates - a total of 12 vessels for anti-submarine and escort duties. The “ Sydney “ will be used mainly for carrying vehicles and equipment. She is neither intended nor fitted out for use solely as a troop carrier. Therefore, should we be faced with the necessity to move forces from Australia to a far shore we shall have to use merchant shipping to move those troops in convoy. That merchant shipping will have to be escorted. The majority of the bigger vessels will be used as escorts for the aircraft carrier. The others will be used mainly as escorts for the “ Sydney “, the fast transport vessel. Perhaps some of the others will be committed in other roles. This will leave us very short indeed of escort vessels to protect the troop convoys from Australia to a far shore. I see this deficiency as one which may need to be rectified fairly quickly. In other words, I feel that we shall have to adopt some expedient.

I know that the Naval chiefs have looked at the suggestion that I propose to make and, in the light of present technical considerations, have decided that the proposal would not make good the deficiency. I feel that the dme has come for the motor torpedo boat to have a role in our Navy. The type of craft I envisage is about 70 or more feet long, fast, mobile, and as well equipped to play an anti-submarine and anti-aircraft rote as modern sophisticated weapons can make it. With sufficient of these boats acting in a flotilla, something after the style of the chasers for whales, we could have an effective force. Of course, they would have to operate with a mother ship to give them an adequate range. Unfortunately, if you want speedy craft of this sort, you are almost forced to use petrol engines rather than diesels, and the petrol engines consume more fuel. Therefore, a mother ship would be needed to give this type of craft the required range. I believe that these torpedo boats could be used also to patrol some of the vast coastline to the north,

I remind honorable members that most of the southern rivers of the countries immediately to our north are long and deep. For instance, some of the rivers in New Guinea are navigable for from 100 to 150 miles. These craft are admirably suited for use in striking at installations. Honorable members will remember that in the emergency of 1941 or 1942, when convoys to Russia were suffering vast losses from enemy action, the British Government was forced to use motor torpedo boats for escort duty from United Kingdom waters to ports that were within their range to the north of Norway. We could build these craft here, and it is well within our capabilities to turn them out at a fast rate.

Mr Benson:

– I asked the Minister to build them last year, but he told me that it was not Government policy.


– It may not be Government policy at present, but I suggest to the Government that it have another look at the proposal because I feel that these boats would be able to play a most efficient role. They could be used around our shores for patrol purposes and also for air-sea rescue work. As a matter of fact, at the moment there is a small light gyro plane in the experimental stage. Is it possible that this will have a vertical takeoff. Such a plane could take off from or land on motor torpedo boats and give instructions for attacks on submarines and surface vessels.

I understand that the main reason why the Naval chiefs cannot see this proposal in the light in which I see it is the difficulty in giving these craft a detecting role because of the weight of the equipment that would be necessary for that purpose. They also consider - and I agree with them - that at the moment motor torpedo boats cannot be given greater anti-aircraft capacity than that needed for self protection. That is one deficiency that perhaps could be looked at. Our technical know-how is good enough to produce something practicable. We have our weapons research organisation and sd forth to look at these things. Perhaps they could come up with something. I feel sure there is a role for this type of craft in our naval organisation. I suggest that in view of our present deficiency of escort vessels the proposal should be looked at with a view to giving our Navy the extra flexibility that 1 think it needs.


.- To say that the Government’s policy on defence is inadequate would be to make an understatement. Our defence is inadequate in numbers, an inadequate amount of money is being spent on it and an inadequate return is being received for the money being spent.

The Pacific region must be our main defence consideration because we are a Pacific nation. We have a permanent Army of some 23,000 men. On the other hand, the other countries which face the Pacific - and they include China, Russia and the United States of America - have a total of 10,240,000 men permanently under arms. We spend about £230 million a year on defence as against a world expenditure of £45,000 million on armaments. Honorable members can judge from those figures whether our defence expenditure is adequate. Of course, we do not run last with our 23,000 men in the Pacific. I presume that we could defend ourselves adequately if we were attacked by Guatemala, or the Republic of Panama, or Portuguese Timor - provided they did not all attack us at once.

The only thing that is adequate in the defence force of this country today is the type of man in it. The only thing wrong with the men is the numbers we have. It is all very well to say that we have powerful and influential friends on whom we can lean, but when the day comes when we need those friends there may be nobody there to lean on.

Mr Nixon:

– How many men would you have?


– As many men as we can reasonably get. I would say that we need four or five times the number we have now. The country would simply have to pay for them.

Mr Stokes:

– What would happen to industry?


– Are you afraid to tax your friends in industry in order to give this country an adequate defence force?

Mr Stokes:

– I am not talking about a tax; 1 am talking about manpower.


– There are countries with smaller populations than ours who can find the manpower. Take Sweden as an example, According to a recently published Press report, Sweden, with a population only three quarters of ours is able to devote sufficient manpower to defence and to provide them with the necessary equipment. I point out, too, that Sweden does not buy the equipment; she builds it. Every nut and bolt is made in Sweden. We pay £1.25 million each for Mirage fighters. In Sweden they build a machine, the Saab, which is the equal of the Mirage, for half that cost.

Mr Nixon:

– So do we.


– We do nothing of the sort. The Minister told me, in answer to a question I directed to him, that not only do the Mirages cost more than £1 million each but that even in the final analysis only 85 per cent, of the Mirage fighter will be built in this country. Will somebody tell me how you are going to fly 85 per cent, of a fighter? If you do not make the lot in Australia you will find yourself eventually unable to get the other 15 per cent. If a country like Sweden can do this, we can.

We are purchasing three destroyers abroad for about £60 million. The fact that they are new does not necessarily prove that they are modern. You could build a replica of Nelson’s “ Victory “ and say on launching it- - “ This is the newest warship in the world.” These vessels that we are getting are

American models that have been in use by that country for years, and before you get the three of them you will find that the Indonesians have four of a similar type. They have them now. When we ask the question - the honorable member for Batman (Mr. Benson) for one, asked it - why we did not buy the Devonshire class vessels from England, we were told that one of the reasons was that the American vessel was two knots faster. Well, the Indonesian vessels are three knots faster than the American, so we will be down on speed. Their ships have four 5.1 inch guns while ours will have two 5 inch guns, so we will be down on gunnery. Their ships have twice as many anti-aircraft weapons, so we will be down on that score as well. Their ships have ten torpedo tubes while our vessels will have none, so we will not be in the race at all in that field.

Recently I asked the Minister for the Navy (Mr. Chaney) whether the Tartar missile with which our vessels will be armed had a range as great as 30 miles. He said that it would be 15 or 20 miles. But the official answer is that the range of the Tartar missile exceeds 10 miles. The Indonesian Navy has guided missiles with a range of 200 miles. We will be a long time getting within the 10 mile range. The only conclusion we can come to is that we are outgunned and outspeeded before the destroyers are launched.

These are facts. It is very easy to say, “ We will have other people coming to our aid.” This is what has happened in the past. We have had somebody to stand between us and our enemies, our actual enemies. We have had twelve months and more to raise, train and equip our defence forces. What happens if we do not have as much as 24 hours to do it in? Look at what we have done in the past. Look at the kind of equipment we have given to our defence forces. When the last war broke out I was in the Army, and I went to Enoggera to examine the equipment there. Out of an ordnance store we teck two horsedrawn ambulances that had been used in the Boer War, and we issued them to the troops. A few days later I went to the police depot in Brisbane to impress a number of rifles for issue to the Volunteer Defence Corps. They were Martini Henry weapons that had been used in the Zulu War. I was told only a month ago by the commanding officer of a Citizen Military Forces medical unit that he had equipment in his unit that was actually used in the Crimean War. One could be forgiven for asking where the defence authorities are hiding the muskets from Waterloo.

This kind of situation is nonsense. It beggars description. This is the kind of thing, however, that will happen again. We know all about the wooden rifles that men were trained with during the last war. We know all about those inadequacies. But nothing has been said or done by this Government to let members of this Parliament know and to let the people know - and the people are entitled to know - the extent of the equipment that we have. We have Ministers who know these things. I do not suppose they would attempt to claim that they have no knowledge of these matters. The Minister for the Army (Dr. Forbes) cannot claim to be an amateur. If he is an amateur we are wasting our money on Duntroon, and we are certainly not wasting our money on Duntroon.

Mr Kelly:

– He is an expert.


– Of course he is an expert, and when he sat on a back bench he was strongly in favour of national service training; but the first speech he made after he came to the front bench consisted of an explanation why we could not have national service training. One of the reasons why we cannot have it is that the necessary equipment is not available even if we called up the trainees. More than 100,000 men each year reach military age, and if we called them all up we would be back to the training with wooden rifles stage.

Mr Holten:

– We ought to put you in charge of it.


– That is what will be done in the long run. The honorable member will be the first joker I will call up. He is apparently on my side.

Mr Holten:

– I am glad the honorable member realises my value.


– I certainly do. The first duty of any government is to attend to the security of the nation, and the security of the nation must not be left to friends or to allies, no matter how powerful or influen tial they may be. The duty of the Government is to see that the people are able to defend themselves should the necessity to do so arise. I hate to think of the chaos that would develop immediately if we woke up tomorrow and found this country had been invaded.

Mr Jones:

– We would be in the same position as we were in 1939 and in 1914.


– Yes, when governments of the same political complexion as the present Government were in power. That is when we had the horsedrawn ambulances and the Martini Henry rifles, and it seems that we have even gone back a bit since then. The Government talks about the money it spends on defence, but I have pointed out that it could have bought equipment equally good for less money. Somebody asked one or our speakers: “ What would you buy?” It is very easy to make statements about what we would buy. I could say that we would buy the Swedish Saab. After all, it is an aeroplane that the Swedes are adapting to every use in the Swedish Air Force, apart from transport. It is a fighter, bomber, interceptor, ground strafer and reconnaissance plane, and Sweden, with only two-thirds of the number of people that we have, can afford to build no fewer than 600 of them. We buy 100 planes and we are told that that is the limit. Remember this: Your defence preparedness is your insurance, and if you do not pay the premiums on your insurance policy and your house burns down, do not be surprised if you have to live in the bush. Honorable members opposite may laugh, but they may literally have to live in the bush. I hope they all have their hollow logs marked out, because if this country is attacked tomorrow there is not adequate organisation in Australia to defend it. We have been told, in answer to questions asked in this chamber, that it would take three months to get our tanks to the Northern Territory.

Dr Forbes:

– Who told you that?


– Your predecessor as Minister for the Army told me.


– Order! The honorable member should address the Chair.


– Through you, Mr. Temporary Chairman, I inform the Minister (hat his predecessor told rae in this House, in answer to a question, that it would take three months to get his Centurion tanks into action in the Northern Territory. If the present Minister disagrees with him, I hope he has good reason for doing so.

This is not good enough. We now have tcn Bofors guns to defend Darwin, and it has been pointed out that around the northern coastline from Brisbane to Perth these are all we have. I know something about these Bofors guns. There were two batteries of them attached to my unit during World War II. They let off a lot of ammunition and, as far as I was able to see, they never brought a plane down. They kept them up. I: used to ask the battery commander: “ Why all the hubbub? “ He replied: “ They keep them up.” Well, they might have kept them up, but they did not keep the bombs up and my unit was not very happy about them.

As I pointed out at the beginning of my speech, ali we are complaining about is the inadequacy of the defence policy of this Government. Australia has insufficient equipment and insufficient numbers and there is a failure to secure the best equipment available for the money that is being spent. Men are equipped today with a particular rifle - the S.L.R - at the behest of the Americans because they thought it was a good idea that all Western nations should have it. But what do we find? We find, having got this rifle, that the Americans have not got it. They decided to get something else. Now, we might have done the same thing had we carried out our own investigations and our own research and let our own engineers loose on these problems. It is quite possible that Australian engineers could produce something of considerable value to us in the field of defence. 1 am quite satisfied that they could because they are doing it for other people abroad. There is no need for Australia to shop for secondhand equipment for its defence forces. There is every reason in the world why we should equip our own army and raise our own forces and put this country in a position, at least, to defend itself to the extent that the people would be willing to undertake if the necessity arose and if they were given the opportunity.


.- The previous speaker, the honorable member for Capricornia (Mr. Gray), devoted most of his remarks to the inadequacy of our defence preparations. 1 will not stand here and say that I consider our preparations are completely adequate by any means. I have never done so. But when we come to the question of what are adequate defences, which country will go out on a limb and say that they do have adequate defences? When you consider the defences of a country like Australia, with a terrific coastline and a terrific area, a young growing nation with a limited population, the whole problem has to be balanced. Under these conditions nobody can ever say that we are adequately defended against all eventualities.

We discuss these estimates against the background of knowledge that we are very close to being informed of the results of a comprehensive review of our military preparedness. We discuss them in the atmosphere of announcement after announcement of alterations and improvements in our defence position. We discuss them in this chamber, knowing that, in another place, legislation has already been introduced to set up a volunteer emergency reserve force and provision has been made for the calling up of citizen and reserve forces to meet requirements of the three Services in circumstances short of war. We know that the Government is also giving attention to safeguarding civil employment rights applying both to the reserves and Citizen Military Forces.

This is the background against which we discuss these estimates. We know that legislation is being introduced to cover such items as service outside Australia, the calling out of the C.M.F., the rights of discharge affecting the man himself, and penalties when dealing summarily with cases of discipline. The legislation is designed, generally, to tidy up and to modernise the Defence Act, the Naval Defence Act and the Air Force Act. Of course, we do not know the results of the review being made of our defences at the moment by our defence experts.

A study of the defence history of Australia right back to the time of the colonies is very interesting. We know full well that up till, I think, 1870 or thereabouts the defence of this country was entrusted to Imperial Forces from overseas. A study of our history shows that our defence at that time was of a sort of stop and go variety.

There was no continuity of policy. It was set up to meet the rapidly changing circumstances of the time. There were Imperial troops here back in 1800 when there was an uprising of Irish exiles and Governor Hunter raised the Loyal and Associated Corps. The following Governor, Governor King, disbanded ft. In 1803 there was a fresh outbreak of war between France and Great Britain and, this prompted further enlistments. Right up to the time of the Crimean War people volunteered to go away, or were sent away and that war resulted in a big build up of enlistments in the forces within the country. Those enlistments disappeared the following year and so it went on. Rumours of war in New Zealand and reports of more trouble between France and England in 1859 resulted in more troops being raised. Then three years later, in 1862, mounted troops were disbanded. In 1867 a problem similar to that which we have now must have arisen because it was found necessary to introduce an act which made it possible to grant 50 acres of land to a man who served for five years continuously. This scheme failed. The men who got these grants sold them to the highest bidder. So the history continues with forces going up and down throughout that period. We come to the Boer War and to the Deakin Government which accepted the principle of compulsory training which was accentuated by the Fisher Government and by the following Deakin Government. Kitchener came out and we saw the widening and extension of the compulsory training system. Then there was the time of the Great War of 1914-18 and following that there was a terrific, disbandment.

One can look through the history of defence right up to the present time and see the words “ disbandment “, “ dispersal “ and “ termination “ appearing very often. We saw the effect of the great depression in this country when the Royal Military College at Duntroon was closed and transferred to Victoria Barracks, Paddington, and Jervis Bay suffered also. We saw the retrenchment of some particularly good officers.

This is the overall picture of defence. It ls not a picture to attract volunteers for permanent enlistment. It is not a picture to attract young men to make a career in the honorable profession of arms, as I refer to it advisedly. The outlook of the people now is a result. Four years ago when I came to this Parliament I tried to talk to people outside about defence and they were not particularly interested, apart from the Returned Servicemen’s League. I think that we should not forget the R.S.L. and a few other thinking people and thinking organisations who are interested in this matter.

How rapidly things have changed. Four years ago, the defence vote was £198 million. It has since built up and in the estimates for this year, with which we are dealing at the moment, the defence vote is about £293 million. The situation has arisen where we have a common land frontier with a nation which is exhibiting characteristics which could be detrimental to us, to put it mildly. But now the range and efficiency of modern weapons and the speed of modern transport have practically said goodbye to the old on-again, off-again policy of defence. We are now faced with the need to introduce something far more permanent.

That is the task which confronts this Government and the task with which this Government is dealing at the present time. The on-again, off-again policy has gone. It has to be dispensed with for many years to come. Whatever our new defence system is, while it must allow for a rise and fall to meet changing circumstances, it has to provide room for rapid expansion and it has to provide some guarantee of continuity of service for those who wish to take up defence as a career. Despite the terrific sums spent in the recruiting campaign - and I notice in the estimates here that the outlay for recruiting this year is no less than £863,000 - we are still short of numbers. No doubt, that is due very largely to the existing economic position.

What does it mean? It means that the present voluntary system of enlistment for the Australian Regular Army and the Citizen Military Forces is not meeting the situation. What should we do about it? Should we rush into some form of compulsory training? I do not. think we should. I believe that two courses are open to us and that we should adopt them concurrently. One is to do the best we can to rejuvenate the voluntary system of enlistment for both the A.R.A. and the C.M.F. That is being done to some extent. Already we have passed legislation under which C.M.F. pay is no longer taxable. That is just a small matter, but it is a contribution. The Minister for the Army (Dr. Forbes) has foreshadowed a major reorganisation of the C.M.F.

We have problems such as the employer block. Do not let anybody tell me that there is not an employer block. We see instances of it all over the place. The people concerned are afraid to do anything about it because they have fears about their jobs in the future. Legislation is being introduced to do something about that. Has anybody considered the hardship on the small employer? That is the other side of the question. I believe that it is a matter that the Government should consider. The one employee of the small employer has every right to enlist but we can realise the hardship of such an employer. I wonder whether some form of compensation could not be considered. That is a thought. 1 believe that a national lead should be given in this matter in order to build up the morale of the C.M.F. That is one of the most important tasks ahead of us now. We should make it easier for country men to enlist in the C.M.F. It is particularly difficult for country men to train themselves to serve. At present C.M.F. training is almost confined to the provincial cities and the major towns. I hope that that type of thing will be considered in the reorganisation. Let us acknowledge to members of the C.M.F. that we realise their worth. Let us acknowledge that we realise that in the 6th Division during the Second World War, 90 per cent, of the officers and N.C.O.’s were provided quickly from the ranks of the C.M.F., and that commanding officers and N.C.O.’s were provided for other divisions, too, from the ranks of the C.M.F.

If the voluntary system continues to fail, then there is no option but to go in for some compulsory form of enlistment. In the meantime, let us do two things concurrently. Let us do all we can to boost the voluntary system, and let us adopt Lord Baden-Powell’s motto for the Scout Movement - be prepared If we were to call up large bodies of men at the moment, we would not be able to accommodate them. I am not thinking in terms of bricks and mortar; I am thinking in terms of canvas and that type of thing. Do we have the required staff available? Are arrangements being made for training, stores, clothing and the securing of instructors, should they be required in a hurry?

I refer honorable members to the remarks that I made last week in my speech on the estimates for the Department of Labour and National Service. I advocated then - and I still advocate - the setting up of a national manpower register, which is cheap and which is helpful not only for defence purposes but also for planning in industry and in the economy in general. I advocate an increase in the number of school cadets. That is something that can be pushed along. It is a shame to see boys who are anxious to join the school cadets but who cannot do so simply because the school is not authorised. This is cheap; it cost £28 a year to train a school cadet. We should raise the standards and increase the numbers.

I strongly urge this two-pronged attack: First, let us make every effort to increase the strength and efficiency of the C.M.F. and its infant brother, the school cadet corps, and to increase the strength of the A.R.A., by the voluntary method. We should be doing that now. Concurrently, we should be preparing, wherever necessary, for a quick and efficient switch over to compulsory enlistment, should that be necessary.


– Earlier tonight the honorable member for Deakin (Mr. Davis) stated that the figures contained in the defence estimates revealed a spectacular pattern. That is true. The pattern is so spectacular that all sections of the community outside the Parliament have been highly critical of the defence policy of this Administration for a very long time. That spectacular pattern to which the honorable member for Deakin referred resulted in the Government calling its advisers together and instructing them to have prepared by mid-October the details of a three year defence plan so that somewhere between mid-October and midNovember the Government can consider the recommendations.

All that the honorable member for Calare (Mr. England) could say in reply to the honorable member for Capricornia (Mr. Gray) was: “ What do you mean by ‘ adequate defence ‘? “, or words to that effect. All I can say to the honorable member for Calare is that the Government that he supports admits that its defence policy is not adequate. That is the reason why this conference is to take place sometime between mid-October and mid-November in order to deal with the question of defence.

The Australian people want to know what they have received for the £3,000 million that they have contributed in taxes towards the defence of Australia. It is true that the bulk of the money has gone in the payment of wages and salaries to the members of the Services. There is no objection to that. What the people object to is the fact that the Government has let the defence of this country run down. Is that because the Government proposes to follow a purely defensive policy based on what the United Kingdom and the United States would do for us in the event of Australia being involved in a conflict? Can any member of this Government go to bed at night satisfied that the policy of the Government is such that, if Australia became involved in a conflict akin to those that have occurred since 1945 - a small conflict - or if we became involved in a larger conflict, we would have adequate resources to repel any raids that might be made on our shores by sea, air or land forces? That is the question that the people outside the Parliament are asking. That is why they are critical of this Government’s defence policy. Is it any wonder that the Press has been featuring screaming headlines?

I felt sorry for the honorable member for Calare tonight. He was endeavouring to make out a case foi; the Government. He was suggesting that this ought to be done and that ought to be done. He even took us back to the Crimean War in 1854 and also to the depression. The honorable member for Capricornia told the Minister for the Army (Dr. Forbes) a few home truths about the Army. The question that I wish to ask the Minister in regard to the organisation of his section of the Services is this: Even in the event of trouble and even if he requisitioned every civil aircraft in Australia, would he have sufficient aircraft to provide the mobility that would be necessary to move the handful of men who comprise the Australian Army today to wherever they might have to be moved? It is all very well to talk about requisitioning civil aircraft; but I believe that they are totally unsuited for military purposes, apart from the con veyance of men. With their side-loading doorways they are certainly not suitable for the transport of vehicles. We have 17 Caribou short takeoff and landing transports with about another 30 on order. They can carry 24 men in a lift. We have 12 Hercules aircraft which can lift anything from 60 to 90 men. However, a Hercules aircraft can transport 60 to 90 men depending on the type of equipment which is required to be carried with them.

Apart from the Sabre jets which were sent to Darwin recently what defences have we between Townsville and Geraldton, quite apart from the area as far south as Fremantle? North Australia has less defences today - less defence installations - than it had on 3rd September 1939. Surely to goodness governments, like individuals, ought to learn from experience, and surely we learned something in the years 1939 to 1945. The people of north Queensland certainly did, and that is why they are highly indignant about and highly critical of the Government’s defence policy. That is why they returned three Labour men at the last election with increased majorities. This is only a small country among the nations of the world. Our population is relatively small and our defence forces must, in consequence, be small also because of the high cost involved, but at the same time our defence forces must be highly efficient and should be provided with adequate equipment to do the job to the best possible extent.

The Royal Australian Air Force technical and strategic airlift capacity must be built up with more Caribou and Hercules transports and aircraft of that type, as well as heavy lift helicopters. The Minister for Air (Mr. Howson) has had a fair run tonight. No-one has made any reference to the Air Force. After years of indecision by the Government we were told that it had decided to purchase 100 French Mirage jets to replace the Sabre jets. The order will not be completed now until January 1969. Delivery of these is currently being slowed down. The Mirage jet requires complex ground facilities and warning and guidance systems. It requires advanced radar warning intallations. Apart from those at Darwin and Sydney, what adequate radar warning installations have we?

On the eve of the 1963 House of Representatives election the Prime Minister announced than an order would be placed for the TFX bomber. Delivery was expected in 1967. It was a spectacular announcement. In the “Canberra Times” of 29th July 1964 it was announced that the delivery is now due to commence in 1968 or 1969, which is some two years behind the original schedule. So much has been said about the TFX bomber that it is not necessary for me to make any further reference to it.

I turn now to the Navy. Immediately this country becomes involved in a conflict the Navy is at war. As this is an island continent the Navy is essential to keep our sea lanes, our lines of communication, open. This is the prime job of the Navy. If we cannot keep our sea lanes open it will not be long before we have internal trouble, particularly as we have to import, except for the production from Moonie, practically all our oil and diesel requirements. As we transport most things today by diesel locomotives and diesel motor vehicles, everything would be soon brought to a standstill if our communication lines were not kept open.

In addition, the Navy must protect our shore installations and our cities from hostile attack, particularly in this day and age of the modern submarine. Incidentally, it was the Fisher Labour Government which gave us our first Navy. A short time after its establishment we had 12 vessels. Now, 50 years later, we have 14 with 9 ships in reserve. This is how we have progressed in 50 years, and in an age when we talk about the great boost that is being given to incomes all we can provide is 14 ships, and 9 in reserve. But we have 400 merchant ships on our coastline, 70 of them being tankers bringing oil to this country. Every drop of oil is necessary and vital to the continuation of our internal organisation. The “ Canberra Times “ of 12th February 1964 stated -

To defend a coastline of more than 12,000 miles we have left a combat fleet (including reserves) of five destroyers, seven frigates and six coast minesweepers, together with a few vessels in the support fleet. This is pitifully tiny.

The Minister for the Navy has adequate scope for making himself a spectacular occupant of his very high office, cod I tell him that if he does the job he will certainly get the support of the lower deck as well as the officer class in the Royal Australian Navy, because what they want - and all they want - is the equipment and the ships to do the job that they want to do, and the job that the people of Australia expect of them. Here is a “ Daily Mirror “ report on 22nd April 1964 of a statement by Rear-Admiral Oldham -

Australia’s Navy was inadequate, the Army immovable and the Air Force impotent. “The R.A.N, has been relegated to an inadequate escort force”, he said. “ Without fighter aircraft the Navy cannot approach enemy shores or enemy forces at sca except at suicidal risk.

*’ Only by the provision of a modern strikeaircraft carrier can the Navy’s full strategic mobility be restored”, he said. “ Only by the provision of such a unit can the Navy fulfil one of its roles - transport, maintenance and support of its sister services overseas.”

And so the report goes on. That was the opinion of Rear-Admiral Oldham. In other words, the policy of this Government has been one of procrastination, inactivity, indecision and neglect, particularly with regard to northern defences. The people of Australia expect some worthwhile plan to come out of the discussions that are about to take place. Judging by what has happened in the last few years with the Government’s policy and with the forecasting of the Government, we hope and pray that Australia will not become involved in any conflict in the next ten years, otherwise we will have to try to defend our country with woomeras and boomerangs. The Government has learned nothing from World War JJ.


.- Mr. Temporary Chairman, so far in this debate I have been very disappointed by what I regard as the lack of interest in the most important subject of defence, which is raised by the consideration of the estimates for the various Defence departments. I should like, honestly, to congratulate the honorable member for Kingston (Mr. Galvin), the honorable member for Batman (Mr. Benson) and the honorable member for Capricornia (Mr Gray), on the Opposition side of the Committee. They all made sincere contributions and presented some very good ideas. I realise, of course, that a lot of their colleagues on the other side of the chamber doubtless do not agree with what they said, but I consider they have done a lot of good by what they said. Government speakers have impressed me as being rather apologetic about results. They seemed to be making excuses. However, I congratulate the Government on its defence planning over the last 10 years. Its summing up of the situation in the world, stating what we may need to do and what could be expected of us, was absolutely wonderful. As a result, we have record low defence expenditure for any nation. Our defence effort has not been cluttered up with a mass of obsolete junk and, in the eyes of everybody, our national development must be regarded as having been very rapid. The money expended on defence has been well spent.

Today, many important developments are taking place in the world. We see the establishment of Indonesia as a power and Red China moving into South East Asia. We see the developments in Laos and South Vietnam. We see the confrontation of Malaysia by Indonesia, which is receiving vast aid from Soviet Russia in terms of ships, planes and arms. Indonesia, with its vast population, can mobilise tremendous resources of manpower. Therefore, the situation today is entirely different from the situation that we faced in earlier years. In the last two years, in my opinion, we have kidded ourselves that we are defence conscious. I admit that we have ordered Charles F. Adams class destroyers, Mirage fighter aircraft, Oberon class submarines, helicopters and the TFX bomber, and we have placed orders for the building of new frigates. Of all these requirements, we have So far only an odd Mirage and some helicopters in service. The rest are still to come.

If there is an onslaught on us, it will not be because somebody is pinpricking. It will be an all-out onslaught. After the first blow, we may have very little left. We may be able to get a lot more defence equipment on loan. But this raises the major point: However much we get on loan, we must have the manpower to use it when we get it. On 18th June, the Minister for Defence (Senator Paltridge), summing up the situation, said that the Regular Army, which had 22,735 men at the end of May, was well short of its planned 28,000. He added that Australia needed more well-trained men to meet its obligations in South East Asia. This is the position just of the Army. The other forces are more or less in the same predicament. The Minister continued -

In pursuance of our treaty obligations and for the protection of our own vital interests, we must be in a position to commit forces at short notice in a variety of situations. The immediate requirement is for well-trained regular forces to deal with subversion and insurgency in the so-called cold war.

More and more servicemen are being sent overseas, Mr. Temporary Chairman, I am always surprised to think that we have been able to find so many men to send overseas. As I have said, I have stated the position in only one Service. We are continually told that we have not enough men or enough of this, that and the other thing. In addition, we are at ali times told also that we cannot have a selective national service training scheme because practically all the members of our regular forces would be needed to instruct even a few trainees. Therefore, it cannot be done. But when trouble strikes, those forces either will be committed overseas or possibly lost. The question arises then: “Who is to train us?”

I am sure that honorable members from both sides of the chamber receive letters from citizen’s organisations, women’s associations and various other bodies urging that greater defence measures be taken. Surely if they can realise the seriousness of the situation - they are the people who are willing to foot the bill - it is time something was done, and it is up to us to do it. As these people in our own country are aware of our deficiencies and are urging us to do more, our potential enemies also must know our position. They have unlimited manpower and outside help. They realise that this all-out effort of which I spoke could swamp us and that it would be too late then. In any case, they are probably greatly heartened by our unpreparedness. Now is the time when definite action must be taken swiftly.

When I was a member of the Government Members Defence Services Committee, of which the present Minister for the Army (Dr. Forbes) was then the chairman, I had certain ideas and was called crazy. The committee inspected our troops. What we saw was absolutely magnificent. The equipment that they had was good. But to arrange billeting, transport and so on for a party of parliamentarians requires that a certain amount of notice be given, and what appears to be first class during an inspection might not in fact be so good. Instead of inspecting these front line troops, I believed that we should look behind them and see the stores that were held. It does not matter how trivial stores are; you must have them. The honorable member for Calare (Mr. England), who is secretary of the committee, said today that the reason why we could not call up young men was not that we did not have the bricks and mortar but that we did not have the tents, the uniforms and the equipment for them. I hope that the Minister will give us a few clues on what is behind our front line troops.

It was a little upsetting the other day to read that the ammunition which we have been making and which will be so important to us has a lot of defects. However, we have been assured that only a small amount was defective and that it is nothing to worry about. But it is something to worry about. There should not be any defective ammunition. We have virtually admitted that call-ups are impossible in peace time, but what of calling up people and training them as rapidly as possible in war time? Surely that is of paramount importance. Now is the time when we should get things started. We have been putting this off for two years. We have been told that there will be a defence review in October. I hope that it will bring some action.

Another thing about which I have been emphatic is that we should have a training corps. It may sound a silly suggestion, but if in peacetime we do not have enough people to train recruits, or those called up for selective training, we would not have enough people to train them .in wartime. In addition, the personnel in such a training corps would need to do a lot of brushing up and training, if they are to be efficient, and this again takes time. If we had a training corps we could have selective compulsory training, for which apologies have been offered and which has been said to be an impossibility, and this would swell our reserves. We would also have increased interest in, and knowledge imparted to members of, the Citizen Military Forces and the cadet corps. After all, the members of the cadet corps today are the recruits of tomorrow. Surely we need a training corps and I hope that its establishment will be considered fully when the review is undertaken. The number of people in an emergency reserve, who would be given short periods of training, would be only a flea bite when compared with the armed forces confronting us. Only a small number would join the emergency reserve, despite the encouragement of a bounty of £100.

The increases of pay and allowances are having their effect and we are getting a few more recruits, but we are not getting enough. Better housing is perhaps helping to attract some recruits. However, I would like to leave this thought in the minds of the Minister for Defence, the Minister for Supply (Mr. Fairhall), the Minister for the Navy (Mr. Chaney), the Minister for the Army and the Minister for Air (Mr. Howson): If they start to do something, I can assure them - I do not think I am wrong - that they will have behind them our allies, the people and the defence chiefs, and possibly the only people who will be against them will be our enemies and perhaps a Fifth Column. I hope that when they undertake the review they will do something, do it decisively and do it fast. If they do not, they may find themselves forever damned, because when modern war does strike us there will be no time to muddle through as we have done in the last two wars.

Progress reported.

House adjourned at 10.44 p.m.

page 2126


The following answers to questions were circulated -

New Guinea: Marine Training. (Question No. 615.)

Mr Whitlam:

m asked the Minister for Territories, upon notice -

How many New Guineans have undertaken courses of training for marine certificates of competency since his predecessor and I corresponded on the subject carty last year?

Mr Barnes:
Minister for Territories · MCPHERSON, QUEENSLAND · CP

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

None. Accommodation difficulties arising from an increased intake of trainees at an elementary level have precluded the Papua- and New Guinea Administration from conducting advanced courses of training leading to marine certificates of competency since the last course was completed in May, 1963. An advanced course of training for Coasting Masters and Third Class Engineers is due to commence at the Administration’s Nautical School in January, 1965.

Royal Australian Air Force. (Question No. 617.)

Mr James:

s asked the Minister for Air, upon notice -

  1. How many Royal Australian Air Force Sabre jet aircraft have crashed and been totally or almost totally destroyed in and out of Australia since their introduction into the Air Force?
  2. How many airmen flying these aircraft have (a) Been killed, and (b) Parachuted to safety?
  3. What has been the total cost to the Australian tax payers resulting from the crashes of these aircraft and what amount of compensation was paid to the next of kin of the deceased airmen?
Mr Howson:

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

  1. Nineteen Sabre aircraft have crashed and been totally lost to the Service.
  2. During these operations - Eight airmen were killed; nine parachuted to safety, and two escaped from the aircraft on the ground after crashing.
  3. It would be difficult to assess the total cost resulting from these crashes since this must include the value of the aircraft at the time of the crash based on the- original cost* and assessed against the time of life of the particular type of aircraft plus the cost of maintenance and spare parts provided. It would also include the cost of training of the pilots which could vary considerably depending on the length of flying experience in each case. Other factors would include compensation and pensions to dependants where applicable, insurance cover, payment in lieu of long service leave and compensation for damage to private property.

The original cost of this aircraft was £263,518.

The dependants of pilots killed in crashes of aircraft of the Royal Australian Air Force receive various benefits under the provisions of the Defence Forces Retirement Benefits Act, the Commonwealth Employees’ Compensation Act, the rules governing payments in Heu of long service leave and they would also receive the proceeds of any insurance policies taken out by the member using the allowance made by the Commonwealth for this purpose.

Information necessary to assess the value of these benefits is not readily available, but they would be substantial.

Acquisition of Works’ of Art. (Question No. 632.)

Mr Whitlam:

m asked the Prime Minister, upon notice -

  1. How many works of art were acquired by the Government in each of the last ten years and at what cost?
  2. Where are they housed?
  3. Has consideration been given to creating or sponsoring a trust fund to acquire works of art overseas for a National Gallery in Canberra?
Sir Robert Menzies:

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

  1. Over half of the paintings are on loan to Australian posts overseas. Some are in travelling exhibitions, others are in official establishments such as Government House, and the remainder are held temporarily in air-conditioned storage.
  2. No.

Universities. (Question No. 447.)

Mr Whitlam:

m asked the Prime Minister, upon notice -

  1. How many students were enrolled at each university this .year?
  2. Mow many students qualified to matriculate In each State for this year?
  3. How many new students were enrolled at each university this year?
  4. How many Commonwealth scholars were enrolled in the first year of their courses at each university this year?
  5. How many (a) full-time and (b) part-lime students hold Commonwealth scholarships this year?
  6. How many full-time scholars receive (a) part living allowances and (b) full living allowances this year?
  7. What is expected to be the expenditure on (a) fees and (b) allowances this year?
  8. How many Commonwealth scholars failed in (a) the first year and (b) the later years of their courses at each university last year?
  9. What was the student-staff ratio at each university last year?
  10. Which universities now limit enrolments?
  11. Which universities increased fees this year?
Sir Robert Menzies:

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

  1. Preliminary figures issued by the Commonwealth Statistician show -

These figures are not adjusted to avoid the double counting of students enrolled in more than one course.

  1. The numbers passing matriculation-level public examinations in 1963 were: New South Wales Leaving Certificate 17,477; Victorian Matriculation 5,948; Queensland Senior, approximately 3,750 passed in English and at least three outer subjects; South Australian Leaving 3,742; Western Australian Leaving Certificate 1,880; Tasmanian Matriculation 462. Only in Victoria and Tasmania, however, does a pass in the examination necessarily qualify the student for matriculation; precise numbers qualifying in the other States are not known, but it is estimated that they would represent some 70 per cent, of the total number of passes.

These figures are not adjusted for double counting.

  1. There are (a) 15,736 Commonwealth scholars in training full-time, and (b) 1,201 in training parttime. Of these (,a) 14,938 and (b) 1,106 were studying at universities. 6. (a) 4,534 scholars are receiving part living allowances and (b) 1,694 are receiving full living allowances. In addition there are 600 “ independent “ scholars, most of whom would be receiving full living allowances. These figures relate to all scholars, not only to those at universities.
  2. In this present financial year (1964-65) expenditure is expected to be as follows (estimates for the calendar year 1964 are shown in brackets)-
  1. On the assumptions that a part-time student is equivalent to half of a full-time student, that an external student is equivalent to one-quarter of a full-time student, -and that part-time staff may be equated to full-time staff on the basis that a fulltime member of staff spends 450 hours per annum in teaching and related duties, the staff-student ratios of the various Australian universities in 1963 were as follows -
  2. Enrolments are limited at the following universities -
  3. Universities have been asked for information on this question and I will advise the honorable gentleman when I have. received their replies.

Australian National University: Homopolar Generator. (Question No. 366.)

Mr L R Johnson:

son asked the Prime Minister, upon notice -

  1. Why was work terminated on the homopolar generator at the Research School of Physical Sciences, Australian National University?
  2. What amount has been spent on this project to date?
  3. What is the estimated expenditure to complete the generator?
  4. For what principal purposes was construction of the generator undertaken?
  5. Did Professor Sir Mark Oliphant resign as head of the Department of Particle Physics as a result of disagreements and misunderstandings with ether academics about the completion and use of the generator, if so, what was the nature of the disagreements and what progress has been made in resolving them?
  6. Has it been decided to proceed with the. completion of the generator; if so, when is it. expected to become operational?
Sir Robert Menzies:

– The following information in reply to the honorable member’s questions has been furnished by the Vice-Chancellor of the Australian National University.

  1. Work on the homopolar generator has never been terminated. It is in fact undergoing operational tests. At this stage of the experiments it is being operated in a modified form.
  2. The amount spent on the generator so far is £402,430. This figure does not include the cost of employing the scientists and craftsmen who have designed and constructed the generator. 3- The future cost of the machine will depend on the results of the programme of tests.
  3. The generator was designed to produce very powerful current pulses for the creation of high intensity magnetic fields of large volumes.
  4. No.
  5. Decisions on the future of the generator will be taken by the University after the tests now being conducted are concluded and the results assessed.

Postal Department: Capital Debt. (Question No. 523.)

Mr Reynolds:

s asked the Postmaster.General, upon notice -

  1. What is the capital debt of the Telephone Branch on which current interest charges are made?
  2. Over how many years has this capital debt been accumulated?
  3. What was the amount of capital supplied for each of those years, and what was the source of the capital in each instance?
  4. Has any repayment of capital been made over those years; if so, how much?
Mr Hulme:

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

  1. The portion of the total Post Office liability to Treasury on which interest is paid which is attributable to the Telephone Service is £351.4 million.
  2. The information sought by the honorable member is not available in the form requested. The honorable member will be aware that the amount of liability to the Treasury upon which interest is charged to the Post Office was determined by the Government in 1960 following its consideration of recommendations by an expert Ad Hoc Committee of Inquiry appointed to examine aspects of the Post Office’s commercial accounts. The report of this Committee was tabled in this House in April 1961. The liability in respect of Post Office trading activities as at 30th June 1959, was fixed at £340 million. The assessment took into account investment and cash surpluses since 1901, together with adjustments for other factors, including services supplied to other Departments at less than cost, superannuation liability and other relevant factors. Of the £340 million, £319.6 million was attributed to the Telephone Branch.
  3. In view of the basis on which the liability to Treasury was assessed as at 30th June 1959, an analysis is not available in respect of individual years prior to 1959-60. The liability has increased since 30th June 1959, as follows-

All advances since 1st July 1959, have been provided from Consolidated Revenue.

  1. No repayments of Treasury advances have been made since the initial liability was determined as at 30th June 1959.

Radiation Laws. (Question No. 449.)

Mr Whitlam:

m asked the Prime Minister, upon notice -

What progress has been made since his reply to me on 11th September 1963 (“Hansard”, page 916) on (a) the recommendation by the National Radiation Advisory Committee in July 1959, that the Commonwealth Government should seek the necessary powers to bring all uses of ionising radiation in Australia under Federal legislative control as soon as possible, and (b) the detailed statement of its reasons which the Committee gave him at his request in July 1960?

Sir Robert Menzies:

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

A number of approaches to the problems associated with the proposal for the introduction of Federal legislative control of the uses of ionising radiation are being pursued. The National Health and Medical Research Council which, inter aiia, advises Commonwealth and State Governments on all matters of public health legislation, at Us meeting in May 1964, recommended the adoption and application in Australia of the radiation and protection standards specified in a detailed statement which was appended to its report. The standards specified in this statement are based on the most recent recommendations of the International Commission on Radiological Protection: the statement is being circulated to all authorities and organisations concerned throughout Australia and a copy is being forwarded to the honorable member for his information. It is believed that the adoption by the National Health and Medical Research Council of these standards will represent an effective praccal measure towards the development of uniform measures of control in this field.

Through several of its Committees and Subcommittees, the National Health and Medical Research Council has already taken, or is taking, action to prepare and publish Codes of Practice with respect to certain aspects of the use of radioactive substances and/ or irradiating apparatus. The Council believes that these Codes of Practice are also a valuable adjunct to legislation in the field of radiation protection.

Nuclear Tests.

Sir Robert Menzies:

– On 17th September, the honorable member for Mackellar (Mr. Wentworth) asked whether there was any instance known to me in which an Australian Communist or Communist sympathiser, took an active part in organising opposition to the recent Russian nuclear tests.

My answer to this question is that there are no recorded instances of Communist Party of Australia members or Communist sympathisers actively organising a campaign against the unilateral resumption of nuclear testing by the Government of the Soviet Union in August 1961.

South East Asia Collective Defence Treaty. (Question No. 408.)

Mr Whitlam:

m asked the Minister for External Affairs, upon notice -

  1. On what dates has the Government of South Vietnam invited Australia to take action on its territory under paragraph 3 of Article IV of the South. East Asia Collective Defence Treaty?
  2. On what dates did Australia decide to act on the invitations under paragraph 1 of Article IV?
  3. On what dates did Australia report the measures it took to the Security Council of the United Nations under paragraph 1?
Mr Hasluck:
Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– The answers to the honorable member’s questions are as follows - t and 2. The Government of the Republic of Vietnam has not invited Australia to take action on its territory under any specific article of the South East Asia Collective Defence Treaty. See answer to Question No. 392 on the Notice Paper No. 33.

As the various appeals for assistance made by the Republic of Vietnam were addressed to non- S.E.A.T.O., as well as S.E.A.T.O. countries, these appeals were not related to any particular paragraphs of the S.E.A.T.O. Treaty.

The S.E.A.T.O. countries have frequently consulted on the dangers facing the Republic of Vietnam. The S.E.A.T.O, Council, in March 1961, expressed its determination not to acquiese in the take-over of that country by an armed minority supported from outside in violation of the Geneva Accords. The Council also, in March 1964, called on Member States to take concrete steps within their respective capabilities to fulfil their obligations under the Treaty to Vietnam as a Protocol State.

Consistent with these statements, and with the accepted view that obligations under S.E.A.T.O. are individual as well as collective, the Australian Government decided, after due consultation with the Government of the Republic of Vietnam, to assist it in its right of self-defence against Communist insurgency and terrorism.

  1. In the absence of a specific approach from the Government of the Republic of Vietnam invoking paragraph 1 of Article IV of the Treaty, the question of a report to the Security Council has not arisen.

United Nations. (Question No. 656.)

Mr Whitlam:

m asked the Minister for

External Affairs, upon notice -

What amounts does the United Nations (a) receive from Australia and (b) spend in Australia?

Mr Hasluck:

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

The United Nations, whose financial year is the period 1st January to 31st December, does not have readily available records of all expenditure in individual countries. The following information, however, has been made available by the United Nations Representative in Australia -

South Vietnam. (Question No. 395.)

Dr J F Cairns:

rns asked the Minister for External Affairs, upon notice -

  1. What is the legal basis for the presence in South Vietnam of instructors, advisers and other personnel, and arms and equipment from (a) the United States of America and (b) Australia?
  2. What are the provisions of the Agreement on the cessation of hostilities in Vietnam entered into at the Conference on Indo-China at Geneva 1954, Chapter III, Articles 16 and 17?
  3. Does the Australian Government consider itself bound by these Articles?
  4. Is the provision of personnel, arms and equipment by (a) the United States and (b) Australia for use in South Vietnam contrary to these Articles?
  5. If hot, what are the reasons?
Mr Hasluck:

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

  1. The legal basis of the Australian position rests upon the invitation of the Government of the Republic of Vietnam to Australia to make a contribution to their security and its willingness to accept what Australia has been in a position to provide. The status of Australian instructors and other personnel in Vietnam is covered by technical bilateral arrangements between the Government and the Commonwealth Government. As pointed out by the Prime Minister in his statement in the House of Representatives on 13th August 1964, the Australian commitment in Vietnam flows from the general obligations assumed under the South East Asia Collective Defence Treaty to resist armed attack and to counter subversive activities within the Treaty area. See also the answer to question 392 on the notice paper.
  2. The text of the Geneva Agreements on Vietnam is reproduced in Current Notes for July 1954 produced by the Department of External Affairs. This is available in the Parliamentary Library.
  3. The Australian Government was not a signatory to the Geneva Agreements of 1954. Its attitude towards them was expressed by the Prime Minister in his statement of 22nd July 1954, which is also printed in Current Notes of July 1954. In this the Prime Minister welcomed the cessation of hostilities as well as the undertaking by members of the Geneva Conference to respect the sovereignty, independence, unity and integrity of Cambodia, Laos and Vietnam and to refrain from any interference in their internal affairs. He made it clear that, in regard to the settlement, Australia would apply the principles of the Charter of the United Nations, including Article 2(4) in which all members have pledged themselves to refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any State. 4 and 5. Neither the United States nor Australia was a signatory to this Agreement These Articles (16 and 17) have been persistently violated, and are still being violated, by the authorities in North

Vietnam who did sign the Agreement. The assistance which the United States and Australia have extended to Vietnam has no other purpose than to assist the Republic of Vietnam in its legitimate right of self defence against the military and subversive campaign directed by the authorities in North Vietnam. (Question No. 392.)

Dr J F Cairns:

rns asked the Minister for External Affairs, upon notice; -

  1. Has the Congress or Government of the United States decided to take military action in South Vietnam under the South East Asia Collective Defence Treaty?
  2. Has the Australian Government sent (a) barbed wire and other materials, (b) military materials and (c) other assistance to South Vietnam under the South East Asia Collective Defence Treaty?
  3. If so, when was the decision to take action under the South East Asia Collective Defence Treaty made by (a) the United States and (b) Australia, and when, and in what form, was a request for assistance made by the Government of South Vietnam?
Mr Hasluck:

– The answers to1 the honorable member’s questions are as follows -

  1. The United States has not taken any decision to “take military action” in South Vietnam under the South East Asia Collective Defence Treaty or otherwise. The United States has taken action to give assistance to the Government of the Republic of Vietnam in military and civil operations for which that Government itself is responsible.

The assistance in the military and other fields, which the United States has extended to the Republic of Vietnam, at its request, is given on a bilateral basis. It derives initially from an appeal made by the Vietnamese Government soon after the 1954 Geneva settlements, to which President Eisenhower responded on 25th October 1954. Until 1960 United States aid was principally in the economic field. Following the serious intensification in 1960-61 of the Communist campaign of terrorism and subversion, the Vietnamese Government appealed for additional assistance from the United States. On 14th December 1961, President Kennedy agreed again on a bilateral basis, to meet this request with American advisers, arms and additional economic and other aid.

Although United States activities in Vietnam take the form of bilateral arrangements, the United States, like other S.E.A.T.O. members, is deeply concerned with the security of the Republic of Vietnam, which is one of the states designated in the Protocol to the S.E.A.T.O. Treaty. The concern of the S.E.A.T.O. Council about the situation in Vietnam has often been expressed, and was reiterated at the last meeting of Ministers at Manila in April this year, when it was agreed that member states should remain prepared, if necessary, to take further concrete steps within their respective capabilities in fulfilment of their obligations under the Treaty. The action taken by the United States on a bilateral basis and their obligations under S.E.A.T.O. are thus very closely linked.

  1. In addition to assistance given to the Republic of Vietnam under the Colombo Flan, Australia has given that Government, at its request, other aid which has been designed to assist it in coping with the Communist directed campaign of terrorism and subversion designed to undermine it. This aid is given on a bilateral basis and is charged against the Australian S.E.A.T.O. Aid Programme. The expansion of this programme to include Vietnam was outlined by the Minister for External Affairs at the time, Sir Garfield Barwick, in his statement on 7th May 1962, which is available in the Parliamentary Library.

The Australian aid given to Vietnam has included tents, galvanised roofing iron, barbed wire and pickets, generators and switchboards, blacksmith’s sets and road building equipment. In addition, training assistance has been given through the provision of army instructors in the fields of jungle warfare and village defence.

  1. As to the United States see 1. above. The general attitude of the Australian Government in regard to the relationship between its S.E.A.T.O. obligations and its Vietnam commitment was expressed by the Prime Minister in his statement to the House of Representatives on 13th August 1964.

The Government of the Republic of Vietnam has not made any particular request to S.E.A.T.O. collectively to take action on its behalf. It has addressed various appeals from time to time to both S.E.A.T.O. and non-S.E.A.T.O. members. For example, apart from the individual appeals to the United States in 19S4 (before S.E.A.T.O. was established) and in 1961 (see above), the Vietnamese President on 31st March 1962, in a message to 93 Heads of State of non-Communist countries, appealed for increased military assistance and support from all free world countries. In July 1964, the Vietnamese Prime Minister, General Nguyen Khanh, addressed an appeal to the Heads of State of 34 countries (including Australia) for increased aid towards his country in its struggle against Communist subversion and terrorism.

The Australian aid contribution in Vietnam has flowed from these appeals and from detailed consultations in pursuance of them which have taken place with the Vietnamese Government.

Civil Aviation. (Question No. 638.)

Mr Clyde Cameron:

n asked the Minister representing the Minister for Civli Aviation, upon notice -

  1. Have any representations been made on behalf of any Ansett Transport Industry group of air lines for a licence to operate the Australia-Hong Kong and the Australia-New Zealand air routes which are now reserved for Qantas?
  2. If so, what was the result of these representations?
Mr Fairbairn:
Minister for National Development · FARRER, NEW SOUTH WALES · LP

– The Minister for Civil Aviation has supplied the following answers -

  1. No.
  2. No. (Question No. 669.)
Mr Whitlam:

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

Why, in his reply of 29th September (“ Hansard “ page 1615) did the Minister omit Alitalia from the list of Airline members of the International Air Transport Association which operates services to both the United Arab Republic and Israel and have sales offices in both countries?

Mr Fairbairn:

– The Minister for Civil Aviation has supplied the following answer -

I regret that the name of the Italian Airline, Alitalia, was inadvertently omitted from the list in the course of preparing the answer.

Uniform Companies Legislation. (Question No. 613.)

Mr Whitlam:

m asked the AttorneyGeneral, upon notice -

  1. When did the Commonwealth and States agree to make amendments to the uniform companies legislation along the lines of the Companies (Public Borrowings) Act 1963 of Victoria?
  2. When were the amendments, enacted, or when is it expected that they will be enacted, by each State and Territory?
Mr Snedden:

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

  1. Proposals for amendments along the lines of the Companies (Public Borrowings) Act 1963 of Victoria were approved in principle at a meeting of the Standing Committee of the Commonwealth and State Attorneys-General in July 1963.
  2. The amendments were enacted in Victoria on 5th December 1963, in Queensland on 3rd April 1964, and in New South Wales on 12th May 1964. They came into force in Victoria on 1st February 1964, and in Queensland and New South Wales on 1st July 1964. In South Australia the amendments are now before Parliament, and notice of the intention to introduce the amendments has been given in the Western Austraiian Parliament. It is not possible to say at this stage when the amendments will be enacted or brought into operation in the Territories and States other than New South Wales, Victoria and Queensland.

Cite as: Australia, House of Representatives, Debates, 20 October 1964, viewed 22 October 2017, <>.